So this is very interesting: As today, MNEs have substituted public companies in the developing world because of their competitiveness but they have also elaborate complex programs to tackle global issues through their CSR program. They have indeed contributed in the mission of international agencies such as The World Bank, or UNDP. They will never substitute those agencies since they are funded by governments from rich countries (G20).
But still, the main purpose of an MNE is to maximize their profits in order to satisfy the interest of their shareholders. They are running Corpoarte Social Responsibility Programs because if they don't they will be perceived negatively by their customers, and so loose profit and market share.
So here come my equation of competitiveness and economic development: Can an International Social Enterprise (ISE) be more competitive than an MNE? An International Social Enterprise is a social venture that has operations in more than one country. If it is the case, then an ISE could be able to pursue their interests on a global level:
- maximize profits
- impact positively the poorest and weakest
As today, I haven't found the business model that will allow competitiveness and economic development (social progress). Indeed, if an ISE use the same structure than an MNE then an ISE won't be as competitive as an MNE. Why? An MNE is distributing its profit into two channels: a percentage for their shareholders (investors), and another percentage is reallocated to grow their operations. An ISE would have to distribute its profits into three channels: shareholders, reinjection into operations, and the society to achieve direct and positive impact on the poorest and weakest.
The only solution for an ISE to reach competitiveness and social impact (economic development) is to synergize the social impact with business model. As far as I know, no ISE exists today. Just some social ventures successful at the national level (E.J Grameen Bank in Bangladesh).
Summary on ISE and MNE:
1. An MNE pursues only profit and uses CSR programs as a marketing and ethical tool.
2. An ISE pursues profit and social impact.
keep going forward mon Jeannot!!
See you soon.
Lolo