Business legitimacy through Creating Shared Value

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By Dr. Emmanuel Dei-Tumi, Founder& President, Human Capital international (HCI)

Most businesses and corporations have been accused of prospering at the expense of the larger society and the environment. To many communities, businesses exist only to garner maximum profits and nothing else. Global challenges such as climate change, poverty, and crime, among others, have not yet become part of the core strategic agenda of these corporations. Their only contribution to most of the members of the community comes in the form of hyped corporate social responsibility (CSR) largely overcommunicating activities which have little impact on the communities they derive most of their profits from.

However, many businesses are now coming to terms with the fact that societal problems may stall a company’s growth by curtailing markets access, productivity or restricting supply chain. The recent uproar between the local potato farmers in Kenya is a typical example that comes to mind.

Therefore, finding joint solutions that are derived from shared value partnerships and collaborations to tackle the challenges of the global community, is the only viable way to legitimatising businesses and reducing societal challenges; not hyped CSR programs. For example, when HIV/AIDS became a global pandemic, the first large-scale program to diagnose and treat the disease in South Africa was introduced by Anglo American to protect its mining workforce.

A 2018 World Bank report illustrates how one such partnership has boosted the fortunes of all parties. The Nile Breweries Limited can now boast of a 60% share of the Ugandan beer market because it partnered with Afro-Kai Ltd, an SME input distributor with expertise in grain trading and processing. The brewery has an assured supply of quality grain for raw material, while at the same time, farmers also benefit tremendously from improved seeds and a ready market, increased profit margins in addition to skills in modern farming technology transfers.

Another example of shared valued partnerships that have positively impacted communities and all stakeholders is that of Adidas Group and Grameen Bank in Bangladesh. What Adidas Group did was to partner with Grameen Bank to manufacture a low-cost shoe for the poor in Bangladesh. In the end, Adidas gained access to a bigger market in Bangladesh, and the community equally became winners with the business giants.

In a bid to become part of the solution to global warming, traditional names in car manufacturing, including Nissan and Toyota, are now providing low-emissions vehicles. They are realising that addressing societal problems by redefining their purpose as companies is now necessary to their business continuity. This approach to diversify into green vehicles has given rise to new businesses such as battery charging centers, and government policies that will promote the sale of these vehicles. This reflects the views of Mark R. Kramer and Marc W. Pfizer, who state that sometimes companies must team up with governments and even rivals to capture the economic benefits of social progress. 

Before you even think of finding solutions, remember that other people or organisations have similar problems in mind. An instance is the strategic partnership between Shared Value Africa Initiative (SVAI) based in South Africa and Human Capital International (HCI), in Kampala, Uganda. Through their shared purpose of providing young African entrepreneurs with skills and technology transfer, they have partnered to organise the 4th edition of the Strategic Leaders’ Summit, an SME-focused engagement platform reaching thousands of emerging startups and SME entrepreneurs across the continent.

Both SVAI and HCI believe that creating shared value must become the concern of every business, large or small. In fact, the very purpose of the SVAI is to build Africa’s most impactful Shared Value network in partnership with like-minded organisations across the continent.

Wherever your business is located, it is important to note that a lot of the global challenges can be resolved, or its impact reduced, thereby stimulating social progress across the world, and consequently causing corporate profits to rise.

Shared value must therefore be seen as the intersection between social need, business opportunities, and expertise, and should be core to any organisational partnership and to give legitimacy to the existence of businesses in our global communities.