option for the bottom of the pyramid.1

Option for the Bottom of the Pyramid

OPTION FOR THE BOTTOM OF THE PYRAMID

“Let us not belittle our fellow countrymen depicted by poverty, for these are not problems but opportunities to empower, alleviate

and bestow effective solutions.”

Elcid Aleman

Moral Theories and Principles MBM - 102


FACES OF POVERTY


Definition of Poverty1

Poverty Status 2

Development Programs4

Purpose and Trend3

On Social Justice5

The Business Role in Alleviating Poverty6

Causes of Poverty7

Preferential Option of the Poor9

Dependency Theory8

Examples10

Report Agenda


What is Poverty?

Poverty is a human condition of having insufficient resources or

income. In its most extreme form, poverty is a lack of basic human

needs, such as adequate and nutritious food, clothing, housing, clean

water, and health services.

DEFINITION


POVERTY STATUS

While the world is globalizing and the mainstream media in many developed

nations are pointing out that economies are booming, half the world or

nearly three billion human beings live on less than two dollars a day.


The gross domestic product (GDP) of the poorest 48 nations (that is, a quarter of the world’s countries) is less than the wealth of the world’s three richest people combined.

Democratic Republic of Congo

Zimbabwe

Liberia

Guinea-Bissau

Somalia

Comoros

Solomon Islands

Niger

Ethiopia

Central African Republic

POVERTY STATUS

Carlos Slim HeluNet Worth: $53.5 billionSource: TelecomResidence: Mexico

Bill GatesNet Worth: $53 billionSource: MicrosoftResidence: U.S.

Warren BuffettNet Worth: $47 billionSource:InvestmentsResidence: U.S.


In the area of education, adult literacy improved to 79% from 48% over a 25-year

period, and yet nearly a billion people entered the 21st century unable to read

a book or sign their names.

POVERTY STATUS


stop the method of “fish giving” and improve the “fishing skills training” business.

THE PURPOSE

Option for the bottom of the pyramid does not mean a dole-out approach to poverty reduction. It is the promotion of pro-poor economic growth with the private business sector as leader.

World bank Chief

Economist Nicholas

Stern and other

researchers in

development

economics

concurred to:


The economic development of those Asian nations mentioned above is characterized as “pro-poor growth”.

THE PURPOSE

South Korea Taiwan Malaysia

Thailand Indonesia Singapore


NATIONAL STATISTICAL COORDINATION BOARD

0

5

10

15

20

25

30

35

Families Individuals

200020032006

POVERTY TRENDS IN THE PHILIPPINES


United Nations Development Program

United Nations Children’s Fund, which provides food, medicine, and education programs for children worldwide.

Millennium Development Goals, a universal and urgent call to action has been made to achieve a 50% reduction in poverty by the year 2015

United Nations Food and Agriculture Organization, which supports increased agricultural productivity and improved food distribution and nutrition.


On Social Justice

This requirement of social justice is realized in the fundamental principle otherwise known as the preferential option for the poor, which is a kind of empowerment for those in the bottom of the pyramid.

The Last

Less Fortunate

Least Advantages

Greatest benefits should go to the four L’s

The Lost


The Business Role in Alleviating Poverty

1. Reputational capital.

The first reason has got to do with the quality of a company’s environmental and community management that provides a good indicator of the overall quality of its business.

2. Sustainability premium.

It seems that the social and environmental sustainability forms part of a firm’s competitive advantage, which is actually linked to profitability. The company’s share in citizenship, particularly in the role of business in reducing poverty, creates a sustainability premium on earnings due to higher stakeholder satisfaction, reduced cost of transaction, and guaranteed quality human capital coupled with reduced social risks.

3. Social investment.

The allocation of business resources will not be driven only by shareholder value but also by stakeholder value. It is now imperative for business to see its role in poverty eradication as a “social investment” rather than a simple act of philanthropy.


Causes of Widespread Poverty

1. One undeniable factor is the unequal distribution of global resources.

2. Favorable trade means that developed nations are able to get inexpensive

natural resources from poorer countries in Asia, Africa, and Latin

America, including oil for power, ores and minerals for manufacturing

durable goods, and manufactured goods made by low-wage workers in

factories operated by multinational corporations.

3. Some people see neocolonialism effecting the uneven distribution of

resources around the world, which helps explain why fewer people are

becoming wealthier while a disproportionately larger population is

becoming poorer. This cause of poverty, experts say, is called global

inequality.


Causes of Widespread Poverty


Dependency Theory

Dependency theory says that poor (and the poor nations), who are beggars, depend on the rich (and the rich nations), who are donors, in an endless cycle of begging and donating.

If the poorer nations are not given the sufficient means to produce their own food, if they are not allowed to use the tools of production for themselves, it is a possibility that poverty will continue.


Preferential Option of the Poor

1. More than dole-outs. The principle goes beyond doling out company donations as an act of philanthropy. Leading and cutting-edge corporations and enterprises have graduated from that. 2. Transcends public relations. Option for the dirt-poor surpasses the key result areas of the public relations office. It is more than corporate-image building that ends up neatly in an increase in sales. CSR champions do not do what is good and ethical primarily to project angelic images. It is “beyond form” and publicity gimmick.

3. Genuine commitment to grassroots development. The only motivation why we opt for the poor is to prevent the widening gap between the haves and have-nots, to arrest the growing gap between the elite and the masses (Narayan et al., 2000). The only underlying motive is to serve, “serviam,” as written in the coat of arms of Jaime Cardinal Sin, former archbishop of Manila.

4. A personal philosophy. It is a philosophy rooted in business ethics. A moral leader, seeing abject poverty, cannot but opt for those who have less in life. But this principle is also by-product of the evolution of CSR, from company philanthropy to direct social engagement.


5. Corporate decision. Preferential option for the poor is a personal choice of an individual. Besides being a personal disposition, however, it can also be a corporate decision of any business community concerning the issue of ownership, use, and sharing of goods and resources. Not only the boss but the whole company may opt for the poor, hence corporate social responsibility and corporate citizenship.

6. Also an opportunity. The “option” or “love of preference” is a choice, a decision, a special form of primacy and an opportunity as well in the exercise of other-centeredness. The company decides in favor of the poor, and grabs the opportunity to alleviate poverty.

7. But not exclusive. This preferential option is neither an exclusive nor an excluding interest, in such a way there’s no more room for those who are not poor. The corporate decision to opt for the poor excludes no one and, far from being a sign of particularism or sectarianism, it can manifest the universality of the company’s vision-mission.

8. Witness to human dignity. Finally, preferential option for the poor is a kind of witnessing. When the company opts for the poor it gladly affirms that the homo sapiens is worth for what he/she has, and that “being” is more important that “having”. This principle can finally demonstrate the truth that human dignity cannot be destroyed in whatever situation of poverty, rejection, or powerlessness to which the poor has been reduced (Narayan et al, 2000).

Preferential Option of the Poor


The business option for the bottom of

the pyramid, as proposed by C.K.

Prahalad (2005), is a revolutionary

strategic model for alleviating world

poverty and is a win-win relationship

between business and the poor.

Business Opportunity for the Bottom of the Pyramid

The emergence of the four billion people, the bottom of the pyramid, whom

Prahalad calls the tier 4 market, is a global opportunity for businesses.

Coimbatore Krishnarao Prahalad


Example

Hindustan Lever Ltd (HLL) is India's largest Fast Moving Consumer Goods (FMCG) company.

Nirma, the proverbial ‘Rags to Riches’ saga of Dr. Karsanbhai Patel


This is Reality 101


There is undoubtedly so much potential

wealth at the bottom of the pyramid, but

businesses must begin to articulate

strategic plans that will facilitate the

harnessing of these resources.

Points to Ponder


THANK YOU AND GOOD EVENING!

option for the bottom of the pyramid.1

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