M2022090 HARSHAD KOYANDE OPERATIONS

Ethos in Indian Management

Assignment-5 – Social Responsibility
In his talk, Michael porter asks us the following questions: Why do we turn to nonprofits,
NGOs, and governments to solve society's biggest problems? Michael Porter admits he's biased,
as a business school professor, but he wants you to hear his case for letting businesses try to solve
massive problems like climate change and access to water. Why? Because when a business solves
a problem, it makes a profit — which lets that solution grow. So that’s what Michael Porter’s case
is. Essentially, Michael confronts the conventional wisdom that businesses profit by causing social
problems like exploiting their workers, harming the environment, etc.

Instead, he argues that businesses profit by solving social problems. There are tons of
examples of this. Way back when Henry Ford proved that by investing in his workers (he doubled
their salary) he was able to decrease costly turnover and increase productivity. Similarly, studies
have shown that when companies invest in the health of their workers, the same workers take fewer
sick days, and are more productive. And, what surprised me most, was learning that companies
that make environmentally sustainable choices actually benefit from more than just good PR.
Clean energy sources are sometimes more expensive upfront, but often end up being cheaper in
the long run, and environmentally conscious companies save themselves from having to deal with
future governmental regulations and fines down the line.

Now that we’ve established why it’s in businesses’ best interest to act responsibly, let’s
talk about the one thing that they have over the public sector- MONEY. I can tell you from
experience (not that it should be surprising) that nonprofits, NGOs, and governments are in a
constant uphill battle when trying to finance projects. It never ends. Successful businesses,
however, generally have more financial resources available to them (this may not be true in
absolute dollar per dollar comparison, but large, successful companies do have more spare capital
than many governments and definitely have more than nonprofits and NGOs). So what would
happen if they used their power for good? Already, tons of businesses have a shared goal of earning
profits while doing good. This concept, described by the Harvard Business Review, is called
Shared Value. HBR defines it as “policies and operating practices that enhance the competitiveness
of a company while simultaneously advancing the economic and social conditions in the
communities in which it operates.”

Ever heard of TOMs shoes? Warby Parker sunglasses? or THINX underwear? Each of
these companies sells a product while creating an impact. However, instead of relying on the
generosity of donors, they’re self-sustaining through sales. This is the direction where we need all
companies to head! Then, you have companies like Unilever- one of the world’s largest soap
manufacturers. Unilever realized that India was a major, untapped market- with approximately 70
million people who never use soap. According to its website, it was decided to create a new
program with the bold objective of educating 200 million Indians – 20 percent of the population -
to wash their hands with soap after defecating and to achieve this goal within five years.

The campaign, called Swasthya Chetna, meaning ‘Health Awakening’, is the single largest
rural health and hygiene education program ever undertaken in India. Speaking about the program,
Hindustan Lever Lifebuoy Brand Manager Harpreet Singh Tibb adds, “Swasthya Chetna is not
about philanthropy. It’s a marketing program with social benefits. We recognize that the health of
our business is totally interconnected with the health of the communities we serve and if we are to
grow sales of our brand, we have to increase the number of people who use soap”. Shared value.
So awesome!

It blows my mind when I imagine what kind of world we could create if more businesses
followed the examples of these incredible companies. And what better time than now? The rivalry
between public and private is officially over. Together, we can create the world we want to live in.