The bottom of the Pyramid approach (BOP) focuses on the billions of people who live on below $2.5 every day. The term was introduced in 1932 by President Franklin Roosevelt. BOP concept has been widely accepted and used to refer to poor individuals in the developing nations including Asia, Eastern Europe, Africa and Latin America. The approach operates based on the idea that the poor are underserved or even unserved by various organizations especially those in the private sector. The BOP approach holds that there are enormous and unexploited opportunities available for working with the poor populations. The opportunities flow in both directions, the companies will benefit from increased revenue while the poor will benefit from empowerment, poverty reduction, and increased productivity (Prahalad 2004).
The population at the BOP is not homogeneous; it is composed different segments of people. For example, the population can be divided up into groups depending on religion, income levels, literacy levels, geographical mix and cultural differences. The companies that desire to exploit the opportunities at the BOP cannot ignore these segmentations if they are to be effective. They must develop business models suited for these markets and also develop products that will meet the demand at the BOP. Although the low individual incomes have in the past been a major limitation for the persons at the base of the pyramid, the renewed focus on the group has sparked interest from different organizations. The win-win approach has increased the acceptability of the concept mainly where the companies view the venture as a way of building the firm’s future markets.
The BOP approach has been applied extensively in trying to solve global societal problems. It has been used in microcredit industry where technology has allowed lending of little amounts of money to people with few assets in an economical way. The approach has also been used in developing innovations that will suit the clientele at the BOP such as mobile banking. It has also been used in creating partnerships between businesses and communities that help alleviate poverty amongst the poor. Finally, the approach has been used in designing and availing of market specific products that will meet the needs of the majority in the group. For Example, the products are packaged in small sizes that the poor can afford based on their income levels. The BOP approach does not compromise on business profits in the name of making the world a better place rather it tries to benefit all the parties involved.
There are controversies surrounding the BOP approach and its application in solving problems in the world. Those in support of the approach argue that the firms will make their profit while at the same time empowering the poor and meeting their needs. Those against the approach argue that the approach is a mirage. The efforts of the companies will either be profitable and not socially beneficial or socially beneficial but not profitable to the organizations. The BOP approach becomes an enormous problem because almost all businesses operate with the aim of making a profit. This is with the exceptions of some organizations such as non- governmental organizations that aim at other goals. There are few if any private organizations that provide socially useful goods at the BOP markets and still operate at a large scale.
The controversy in the BOP approach is also seen in that the poor are vulnerable due to limited information and education in addition to social, economic and cultural deprivations. The vulnerabilities mean that they can be easily exploited by businesses even those that have adopted the BOP. For example, the poor spend a significant percentage of their income on alcohol and tobacco, although this is a BOP opportunity that is profitable to the firms, it has negative results for the society. In other cases, the controversy is seen in that the results of the BOP approach may not necessary be negative, rather they might be dubious with no real benefits to the society. When the firms adopt the BOP approach, they fail to differentiate the poor’s priority and non-priority areas. Since they are profit driven, they market and entice the poor into buying their products that in some cases do not fall within their priority needs. For example, spending on beauty products is of lower priority to the poor while spending on health care and nutrition is of higher priority.
Freedom of speech is a human right. Every human being deserves the right to express what they want without being censored. They have the right to receive, seek and impart information, ideas in different mediums as they desire. Although the right is universally recognized its application is not absolute and differs from country to country. Every corporate has the responsibility of preserving the freedom of speech of the stakeholders they interact with. This includes employees, investors, public and clients. For example, the employees have the freedom of speech and can seek information regarding their terms of employment with the company. The employees can communicate with each other when deciding on the best way to negotiate with their employer.
Another human right is the freedom of religion, conscience and thought. Every human being has the right to choose or change their religion or belief and also the freedom to practice, teach, observe or worship. For example, every person has the right to choose the religion they will follow such as Christianity, Muslim and Hinduism among others. For example, employees and suppliers have the right to decide what beliefs to uphold. Every corporate has the responsibility of ensuring that this freedom is not violated when conducting their business. Recruitments, promotions and assignments of tasks for employees should not be biased based on their religious choices. This right means that employees and suppliers cannot be discriminated based on the choice of beliefs they observe or practice. Equal treatment should be accorded to all regardless of whether their religious beliefs agree or disagree with those of their leaders. The corporate should be neutral and avoid taking sides when it comes to religious matters so as not to be perceived as being partisan in their operations.
The precautionary principle holds that in the absence of scientific consensus regarding the suspected environmental or public harm that might be caused by an action or a policy, those taking the action bear the burden of proving that there is no harm. The principle is especially applicable in cases where there is insufficient information regarding a particular action. When actions are suspected to pose some form of risk to the public research and studies, need to be conducted in order to create a deeper understanding of the matter before the protecting measures can be relaxed. The primary idea behind the principle is that whenever there is an a plausible risk resulting from the scientific investigation, then protecting the public from harm is a social responsibility.
Environmental concerns are an issue where the precautionary principle is applied. For example, the development and introduction of products that have the potential of harming the environment are guided by this principle. The development of organism such as genetically modified organisms is aimed at providing human beings with many benefits including alleviating hunger. However, the introduction of such organism may result in some negatives such as threatening biodiversity. The precautionary principle is applied, in this case, to ensure that the possible harm is explored extensively before the adoption of the organism in the environment. The people who develop such organisms have the responsibility of proving that the organisms will not cause threats to the environment as well as to humans. The developers will have to provide scientific facts gained through research that show that the organisms they have developed will not harm the environment or show that possible risks can be successfully mitigated.
Bribery is a crime and involves the offering or soliciting of items of value or money in exchange for the alteration in the recipient’s behavior that would not have happened in the absence of the gift. The change in behavior occurs to the favor of the giver. The bribery can be immediate or in the form of a promise to pay later. The parties involved in a bribery crime can be found guilty of the crime regardless of who initiated the action and also independently of each other. In addition, it is not necessary to have a written agreement in order to prove the crime of bribery. One of the reasons why companies should not engage in bribery is because it creates a conflict of interest. The officer who has been bribed is compromised and cannot discharge his responsibilities as he should because he has to accommodate the interests of the party that has bribed them.
Another reason companies should avoid bribery is because it can damage the company’s reputation. When companies engage in bribery, their image is tainted. This means they can lose potential clients because of the perception they have about the company. For example, customers may decline to purchase the products of a company whose bribery scandals have been exposed. Companies should also avoid bribery because when exposed it can lead to lawsuits as it is a violation of the law. Cases of corruption may cause the company to spend vast sums of money in unnecessary expenses in the form of fines and barns. This is money that the company could have used in improving themselves ways such s conducting market research, innovations or even improving employees compensation. Finally, it is wrong for companies to engage in bribery because it can create a deeply embedded culture in the organization that can be hard to break. This can translate into problems since normal business activities cannot happen without bribery taking place.
According to Klein, one of the forms of corporate complicity with governments is silent complicity. In this form of complicity, the government takes a passive role towards the violation of human rights. Silent complicity is seen when the government looks the other way when fundamental rights are not upheld. In extreme cases, the silent complicity also involves silent support of the violation of rights. Although the government does not actively participate, they are aware of what is happening and possess some form of ability that they can use to assist the victims but instead choose not to help. For example, when there is war in South Sudan, and many people are killed most western countries show silent complicity.
Another form of complicity is active complicity. This is where the government takes an active role and contributes to the violation of human rights. The government makes decisions and takes actions that are aimed at protecting its interests and protecting its citizens. Although this is the case, the actions cause detrimental effects on other people and compromise their rights. For example, the involvement of the United States of America in Afghanistan caused the death of many people violating their right to life.
One of the tactics that civil society organizations use to influence corporate behavior is rational persuasion. The tactic involves the use of data, logical arguments and facts to convince participants of the best alternative. The effectiveness of the rational persuasion tactic depends on the timeliness, clarity and relevance of the information presented. The method is effective in influencing behavior because it receives less resistance and more commitment because the members understand why they should cooperate. For example, when the project is behind in time, explaining the facts to the project team will make them understand why they need to improve on delivery time and even persuade them to work extra hours to meet deadlines.
Another tactic used to influence behavior is Inspirational appeals. This tactic involves tapping into the emotions, beliefs and values of the participants in order to gain their support for a course of action or request. The effectiveness of the tactic is dependent on authenticity, personality, enthusiasm and big thought of the inspirational appeal. For example, an organization can call its employees to help it meet its objectives because the firm provides the employees with challenging, satisfactory work and suitable compensation for services rendered. The employees will feel obligated to support the organization because it helps them in return.
Prahalad C. (2004) Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Upper Saddle River: Prentice Hall.