Business Model

Based on your life experience, skills and interests, what would a design process that is both uniquely yours and effective look like?

How will you validate your project concept, technology, usability, operational / business model?

Articulate your philosophy of engagement with communities, partners, and markets.

I think like most people, my design process will probably have a waves of messiness and organization. When we were brainstorming during the Saturday workshop, we started just by asking a lot of questions. We wrote down all of the questions we had on the white board, and then we divided up the process we would go through to research and answer those questions. The first part of our research process, before we go to India, included doing deeper research into the Indian legal and financial system, which will probably lead to more questions. We will also engage in preliminary research by speaking with companies before we to India. This will deepen our understanding of what it takes to get answers from people in Indian companies. The next two phases include the questions we will answer when we are in India, and then finally how we will make it come together in a deliverable afterwards.

I think our design process will be messy because there is not a clear cut problem. Our job is to define the problems. So first we need to know what has been answered by previous researchers, what information previously researched needs to be deepened or updated, and what questions of our own will we be able to pursue for a fresh perspective on the issue. Because we will be categorizing, defining, and updating our information throughout the process, it will be difficult to stay by one process. However, I think personally, developing a constant list of questions I have, definitions and examples we have, and then blank spaces of information we are lacking to keep things organized will be effective for me in continuing research and creating deliverables. We also have a general timeline of when we would like to have certain information by that we will do our best to stick to as well.

To me, this project is inherently validated by the importance of the issue. However, to those who may not be fond of the law or those who aren’t able to clearly see the issues that can arise with this kind of a law, or to stakeholders who see little room or need for improvement in how they are managing their CSR relationships, our project must be validated. An important peace of information that I have found is that many companies have reduced spending on marketing because they are engaged with more CSR. This kind of communal engagement may not work for companies of all industries, but many companies can certainly benefit from becoming involved in CSR. Particularly for companies that give aid to local non-profits, this law has been somewhat of a blessing in disguise. Local customers look on these companies more favorable when they see that they are a positive force within their community. As I have learned from my marketing courses, many companies work tirelessly on marketing efforts to make customers associate their product with happiness or a good feeling. Many successful marketing efforts are indirect, and corporate engagement with CSR are an example of indirectly creating a positive brand association among customers. I think showing these companies the benefits they will experience as a result of CSR engage will be key to motivating them to engage with our research. We will also validate our research just by organizing it in a format that is engaging, professional, accessible, and specific.

It is difficult for me to dedicate myself to a ‘philosophy of engagement’ because I usually prefer not to set expectations for the unknown. I think I worry too much that developing my own standards is wasteful because they may be let down or changed in the process depending on the types of people or situations I encounter.  However, this project obviously requires a degree of planning, and we will need to anticipate our interactions with these companies. I think areas that will come more naturally to me in terms of working with these companies are remaining open-minded and inquisitive about the types of CSR these companies are engaged with or their reasons for not choosing to engage with CSR (it turns out this is a common problem based on the research we have done so far). What may come less naturally is maintaining a serious composure in developing relationships with these companies, because it is usually my nature to build relationships with others based on humor. I think it will also be hard for me to let go of other research routes we could have gone down once ours becomes very narrow. I think the primary values I will try to stick by for this project are curiosity, a dedication to results, and open-mindedness.

Natural Inspiration

With our project, CSR in Inida, it is difficult to inspire the design of our project with nature. However, I think that there are some lessons that we can take from natural behavior. I think that there is definitely an element of biology for many organisms, and definitely many mammals, that entails taking care of one another. I think business by nature tends to take out this human factor in its design, but this law, if businesses execute on it properly, adds back some of that natural element to life. I think we will find throughout this project that appealing to peoples’ emotions and more human side, despite the professional setting, will help to get people to talk more. There is a dominant rhetoric within business of ‘survival of the fittest’, but this rhetoric tends to ignore the species that have higher survival because of how social they are. Many animals work as a pack and refuse to leave members of their pack behind, and this part of their nature enhances their ability to survive. The same concept can be applied to business if businesses take on the philosophy that the demand for their product comes from every day people outside of their business, and if they are more well off, then they will be more likely to spend their money on what they have to offer. Another element of nature that could be incorporated to this philosophy is ecosystems. In ecosystems, every element of life affects other elements. When one species dies, this will negatively effect the species that feeds off of it. Society can be thought of in the same way, it needs the conditions to be healthy for all in order for anyone to have the best circumstances. Nature will probably also effect our work in assessing companies that work with nonprofits on sustainability. If we assess this kind of a company, it will be interesting to take note of whether or not they practice sustainability in their own offices beyond working with a nonprofit that promotes sustainability.

I think the Life principle that will apply to our project the most is “Be Locally Attuned and Responsive”. Beyond being encouraged by the writers of the 2% policy to give their money to local nonprofits, this strategy is also likely to have the best results for the companies. Giving their money locally will improve the impression that locals have of the company and its worth, so they will be under less scrutiny. On top of that, if the connection between corporation and nonprofit is obvious because it is seen at play by people nearby, they will be more likely to look on the company fondly and buy their products.

It will probably be difficult to incorporate the ‘Cradle to Cradle’ design concept into our project because we are not working with a lot of physical material. However, I think the idea of making the most of every element of your resources could be used in our project. I think a strong assessment of every way in which nonprofits and businesses can benefit from having a relationship will help our research dramatically. If corporations can gain publicity or customers while nonprofits are able to gain management knowledge or other resources from corporations, this could be very beneficial to both ends of the relationship. Instead of ‘reducing waste’ by keeping ties limited between nonprofits and corporations, they can make the most of this law and their relationships and seek out overlap in their goals. Another element that was discussed in the Cradle to Cradle Ted Talk was competing together. I think it is important for us to take note of whether or not businesses are teaming up to work with nonprofits together and if they are getting strong results from doing so.

It is difficult to simply list three things I’ve learned from friends that I never knew before. I would say one of my friends has introduced me to a lot of interesting random groups that I did not know existed on facebook, which has helped broaden my awareness of the ways social media has been used outside of how I understand it and also the issues of cultural relevance in other regions. A lot of my friends have introduced me to music that I did not think I would ever like at first. Over time I have come to appreciate, enjoy, and pursue these types of music and explore their genres, and this has been very important for me. Perhaps the most important thing that a friend ever introduced me to was ‘It’s Always Sunny in Philadelphia’. This completely opened up my concept of humor.

Result Tangibility

I think I speak for everyone involved with the Global Social Impact Fellows when I say that I wanted to become involved for the primary objective of seeing real results. With the Corporate Social Responsibility project in India, it is difficult to know what kind of results we can expect because we have no way of knowing how important our findings will be to the people they are meant to affect. However, I think the harder we work to understand our stakeholders and the more specifically we outline and define our project, the more valid our findings will be to our stakeholders.

The policy makers that passed this law are an obvious stakeholder in this project. A large part of the reason that this law passed in the first place is that the Indian government has had a turbulent history of passing policies that work towards enhancing the country’s infrastructure and social welfare. This law came as a bit of a solution to that problem. Policy makers want to see non-profits filling the gaps in providing services for the well-being of Indian citizens that the government has not been able to provide. In order to make this more possible, the Indian government sought to create a source of reliable funding for Indian NGOs. Policy makers will want to see that what they come up with is effective at achieving these goals.

Another stakeholder in our research are the corporations that must give 2% of their profits. While it is a law that they can abide by and choose to largely ignore, many companies will want to see that their money is not going to waste. On top of that, if there is a way that this law could actually be helping their business they would probably also like to know this information. Perhaps interaction with NGOs can be used for marketing material, and if not directly for marketing material, contacts with NGOs can give businesses more attention and in turn more customers. If we conduct research that demonstrates any correlation between the amount of positive attention that companies receive and their cooperation with NGOs, this information could be valuable to them.

The primary stakeholder in this research is probably the NGOs. We would like to find out how integrated relationships between businesses and NGOs have become as a result of this law passing. If businesses are sharing tactics, resources, and management advice with NGOs, this could go a long way with the success of these nonprofit organizations. If our group creates a rubric that measures the success of these relationships, it could help NGOs understand how to manage these relationships better in order to glean the strongest results.

Other stakeholders in our project include Indian citizens and other countries taking note of the policy. Indian citizens have a stake in the success of their NGOs because NGOs are largely responsible for filling gaps that the Indian government does not cover with infrastructure and welfare. If NGOs are able to substantially improve welfare and infrastructure in India with increased funds, this will improve the quality of life for many Indian citizens. This could come in the form of cleaner water, easier transportation, care for students or workers with special needs, or many areas that are commonly covered with government resources in other countries. Other countries may also be considering passing a similar law. The more successful this law is in improving the quality of non-profit work, the more interested policy makers in other countries will be in passing similar legislation.

We will want to make our work as valuable as possible to these stakeholders. We want our conversations with companies before the trip and during the trip to be as beneficial as possible. One way of doing this would be to make our findings as appealing and widely available as possible to all stakeholders. The more people are informed about how to measure and define the success of this law, the more it could increase a dialogue among stakeholders about the strongest methods. We are considering accomplishing this in the form of a documentary or website. The appeal of a documentary is that it requires little effort on the part of the stakeholders to inform themselves of our research. If it is made in an engaging an entertaining format, more people will want to inform themselves of our research. Another element to our research will be developing a rubric that we can compare all companies or NGOs on. This will help to universalize our findings.

Cultural Issues

One of the cultural issues our group is very concerned with is caste. Because it is a discrete factor affecting personal relations in India, we are worried that it may have a strong effect on the NGOs that companies are picking to work with that we simply would not be able to see or understand. From our research and understanding, it seems that caste has a profound effect on Indian society but it is hard for outsiders to measure its effects because it is a complicated and discrete system. I think India is probably generally effected by the cultural norm of ‘keeping things in the family’, which would be difficult for us to measure and inquire about.

On the flip side, it could be beneficial for caste to have an effect on business relations with NGOs. Perhaps familial relations between corporations and NGOs ensure greater progress for NGOs because businesses have more of a personal stake with the NGO. Either way, if this is a factor in the relationships behind the law we are studying, it will probably be difficult for us to get a thorough understanding of the way it effects these relationships.

The caste system is extremely different from the values that dictate American culture. Although there are undeniably benefits from coming from a well off family that are heavily institutionalized in the United States, the culture in American society has a lot of pride in ‘working for what you earn’ and ‘working your way up the ladder’. It is considered very noble in American society to come from an unfortunate situation and work your way into some wealth. These notions have probably deeply worked their way into our groups reasoning skills, as we have grown up in the United States, so values that may come as common sense to us may not exist in Indian culture.

I think that another implication of the caste system that affects cultural differences is the emphasis on family versus the individual. In the United States, there is a strong belief in individual freedom and bringing honor to your own name. In Eastern societies, the focus shifts to living life in order to bring honor to your family. Although we may not run into any issues regarding these beliefs, the nature of our project includes measuring the progress of social welfare, so these inherent biases may come out through a different understanding of social welfare than Indians.

Another issue that we discussed is the poor infrastructure of roads and transportation throughout much of India. Mumbai is highly developed, but the issue may also affect who corporations are lending their money or the strength of their relationships with their chosen NGOs in ways that we may not be able to fully understand initially. Transporting resources may be riskier and more problematic with weak government infrastructure. The lack of government interference into social welfare in India is something we will need to deepen our understanding of as a group in order to understand the holes that need to be filled by Indian NGOs. However the weaker infrastructure and government services affects these companies, it will be something that would not come as common sense to Americans and that we will have to remember to remind ourselves is a factor that plays into these relationships.

Asian business relationships also operate very differently than American business relationships. Americans are quick to come to decisions and make deals because of an emphasis on speed and innovation and an intense focus on spending time wisely. Asian marketplaces work differently because it takes time to build trust. This could affect the way we are treated by the companies we are studying, or it could be a major factor that affects the success of the relationships between corporations and NGOs. It will be important for us to keep this in mind when we are studying these relationships.

Another business factor we will have to consider is whether or not work with NGOs can be used as marketing material in India. Perhaps this law has detracted from work with NGOs affecting consumers perceptions of the company. It could also be the case that publicizing CSR never had much of an effect on consumer preference in Indian culture. We will need to make sure we try to measure this before we begin work with them. If promoting these relationships can aid the marketing for these corporations, that will be a major incentive for them to give us their best in working with them.

 

Passion for CSR in India

Coming out of our first class, I felt like I had a much better understanding of the gravity of the commitment and the real chance to make an impact. I was worried that this work would not really serve anyone but ourselves, deepening our knowledge and our skillset. While I am confident that I will come out of this experience with a wide new range of skills and a much deeper knowledge of business in India, after our first class I feel much more responsible for making an impact on the companies that we are working with as well. I think that this kind of a study is very necessary in order to make that kind of a law actually have the kind of results that the Indian government probably wanted to see.

The panel discussed the real business of performing research on site. Although I will not be able to travel to India to conduct this research, I think having this perspective really made me think of this project as much more than a class. It is a chance to conduct meaningful research and learn about gathering, organizing, and publishing effective research.

My passion for this work comes from a topic that we discussed in class but that I had also learned about before. When I was in Belgium this summer, I took a global marketing class in which we learned about reverse innovation. I had heard about microfinance before, but this is really where I began to think of it as the career path for me. We read about the ways in which microfinance implements reverse innovation in order to give customers in emerging economies the kind of financial tools that they need. It requires looking at these markets in an entirely new way with a thorough understanding of the culture, not just taking a concept that has worked in the west an assuming you can adapt it to foreign economies.

We learned about an example of microfinance in which loans were given out to people in groups, and then it was up to the group to pay it back. This model would be unpopular in a individualistic society like the United States, but in collectivist cultures, this model solves many of the problems that can arise when trying to implement a traditional western financial model in less developed economies. I fell in love with the idea of effective cultural understandings creating market potential that has not yet been realized. This is especially needed in finance, because foreign direct investment can create a culture of dependence that can harm countries in their economic development.

Since then I have done some of my own research on the topic. I’ve learned about the reassessment of traditional risk models because in new cultures, different individual traits can have different implications for financial risk. I’ve learned about new ways of assessing financial metrics in order to evaluate performance in the impact investing space. I think most importantly I’ve learned that this space is still very young with a lot of potential. As an economics and marketing major, I want to be involved in the kind of consumer research necessary to create these new and more effective financial products that can help bring impoverished peoples out of poverty with opportunities made possible with new forms of loans.

So how does this relate to the research in Indian corporate social responsibility? First, microfinance is still largely considered charitable. While I hope that one day it can be looked at as a viable investment option for profit, there is lots of opportunity for companies to build out corporate social responsibility through microfinance. I think that this could be an exciting option for companies, because until microfinance becomes realistically profitable, companies can invest in building out loan options for the poor, and then one day it may become a profitable business venture. Until then, they can use this portion of their profits to do good and observe best practices.

Another way that this research relates to a future career in social research, hopefully in microfinance, is that I want to develop my statistical skills in the space of human based research. I also want to learn effective business practices in businesses that are looking to aid a cause. I am really passionate about learning about all economic policies and practices that can aid the financial standing of the poor, and India is a very exciting place to do this research because of the allocation of wealth throughout the country.