Monday, July 7, 2008

Corporations and NGOs are Collaborating

Cocreating Business's New Social Compact.
By: Brugmann, Jeb, Prahalad, C. K.,
Harvard Business Review,
Feb 2007, Vol. 85, Issue 2

Corporations and NGOs are together creating innovative business models.

First, NGOs emerged as the corporate sector's de facto regulators, occupying the vacuum that governments were leaving behind. They aren't newcomers to the task; for many years, NGOs have influenced markets in areas such as chemical regulation, oil spill liability, air emissions, liquid waste, pharmaceutical and food standards, child labor, and employment discrimination. Their influence has created a regulatory framework tougher than the legal requirements corporations face.

Second, companies have invested heavily to develop expertise to cope with NGOs. They have spent time and money launching countercampaigns to protect their reputations.

Third, markets are emerging as an arena in which companies and NGOs interact.

While companies have discovered the importance of NGOs as paths to markets, social groups have realized that carefully calibrated business models can unleash powerful forces for good.

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