CSR in Action

CSR in Multinational Companies

Radically improving the lives of billions of people and help create a more stable, less dangerous world does not require MNCs to spearhead global socialdevelopment initiatives for charitable purposes. They need only act in their own self-interest. How?

CSR in Multinational Companies

C.K Prahalad and Allen Hammond (Serving the Worlds Poor Profitably, 2002) By stimulating commerce and development at the bottom of the pyramid.

Bottom of the Pyramid

>$20,000 $2,000- 20,000 100 million 200 million

4 billion
< $2,000

Misconceptions in the BOP Market

Companies take the assumption that the poor have no money. Companies assume that people with such low incomes have little to spend on goods and services and what they do spend goes to basic needs like food and shelter. People assume that the goods and services sold in the developing world are cheap and, hence theres no room for a new competitor to come in and turn a profit.

Misconceptions in the BOP Market

They also assume that various barriers to commerce (i.e. corruption, illiteracy, inadequate infrastructures, currency fluctuations, bureaucratic red tape) make it impossible to do business profitably in these regions. Conventional wisdom says that people in the bottom of the pyramid markets cannot use advanced technologies. The highly charged issue of exploitation of the poor.

Advantages of Serving the Poor

New source of revenue growth Example: Suvidha, ATM-based banking of Citibank in India. Reduced Cost Cheap labor pool Maintaining a low cost structure e-Choupal agribusiness information kiosks Innovation

Strategies for Serving BOP Markets

Change in attitude and practices of the executives. Educate the managers through engagement with the local population. Companies will need to make structural changes Set up R&D units in developing countries that are specifically focused on local opportunities. MNCs should consider creating a business development task force aimed at the BOP market i.e. HPs e-Inclusion division

Strategies for Serving BOP Markets

Foster partnership with local small entrepreneurs MNCs to take on mentoring roles Companies will need to make structural changes Set up R&D units in developing countries that are specifically focused on local opportunities. MNCs should consider creating a business development task force aimed at the BOP market i.e. HPs e-Inclusion division

Is Serving BOP Markets Worth the Effort?