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Unilever and Oxfam: understanding the impacts of business on poverty (AandB)

Author: Smith, Craig ; Crawford, Robert J.INSEAD Area: Faculty at LargePublisher: INSEAD 2008 ; European Academy of Business in Society (EABIS) 2008Language: EnglishDescription: 30 p. + 18 p.Type of document: INSEAD CaseNote: Latest version available via https://publishing.insead.eduAbstract: In 2003, Unilever and Oxfam embarked on a groundbreaking "learning project" designed to better understand the impacts of business on poverty. Developing countries were seen as an essential component of Unilever's corporate strategy, with developing and emerging markets forecast to account for 90% of the world's population by 2010. Given its long-term presence in many of these markets, it was increasingly aware that its future would depend upon its ability to address issues of social and economic development in developing countries, including poverty. Oxfam, one of the world's most prominent nongovernmental organisations (NGOs), focused its campaigning and other activities on the alleviation of poverty. Thus, despite the often adversarial relationship between corporations and NGOs, the two shared a common interest which formed the basis for a collaboration. The goal was to examine the role of business in reducing poverty, specifically by studying Unilever's operations in Indonesia. Case A describes how this collaboration came about and provides background on Unilever, Unilever Indonesia (UI), and Oxfam, including its campaigns against the pharmaceutical and coffee multinationals. It also examines the role of NGOs, the challenge of tackling poverty in developing countries, the Millennium Development Goals, and the UN Global Compact. It highlights the difficulties inherent in understanding the role of MNCs in poverty alleviation as well as in forging effective collaboration with NGOs. In 2005, Unilever and Oxfam reported on their collaboration to understand the impacts of business on poverty, based on a study of Unilever Indonesia (UI). Case B identifies the key learning from the project both in this respect and in what the two organizations learnt from each other. Business impacts were assessed at the macroeconomic level (e.g., tax revenues, UI's role during the Asian financial crisis) and in terms of the effect on employment (e.g., number of jobs provided, conditions of employment). The UI value chain was studied from supply through distribution (e.g., sourcing implications for small farmers, share of value created through the chain), as well as UI's impact on low-income consumers (e.g., advertising and whether UI was meeting or creating needs). Oxfam developed a better grasp of the potential of value chains to generate employment and income (especially at the retail distribution end) and of the differences in social performance among MNCs. Unilever gained a better appreciation of its impact on the value chain, especially as a "job multiplier", and hence its social contribution. Both parties felt the project had established a precedent and a set of processes for future corporate-NGO collaboration.Pedagogical Objectives: 1. To examine the role of MNCs in poverty alleviation in developing countries and its implications for corporate social responsibility (CSR). How much is enough? What are the limits of CSR? 2. To explore stakeholder engagement in the form of corporate NGO cooperation and, more specifically, the scope and mechanisms for effective collaboration between corporations and NGOs. 3. To consider the implications of CSR for corporate strategy and marketing practices in the particular context of corporations operating in developing countries.
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Latest version available via <a href=https://publishing.insead.edu>https://publishing.insead.edu</a>

In 2003, Unilever and Oxfam embarked on a groundbreaking "learning project" designed to better understand the impacts of business on poverty. Developing countries were seen as an essential component of Unilever's corporate strategy, with developing and emerging markets forecast to account for 90% of the world's population by 2010. Given its long-term presence in many of these markets, it was increasingly aware that its future would depend upon its ability to address issues of social and economic development in developing countries, including poverty. Oxfam, one of the world's most prominent nongovernmental organisations (NGOs), focused its campaigning and other activities on the alleviation of poverty. Thus, despite the often adversarial relationship between corporations and NGOs, the two shared a common interest which formed the basis for a collaboration. The goal was to examine the role of business in reducing poverty, specifically by studying Unilever's operations in Indonesia. Case A describes how this collaboration came about and provides background on Unilever, Unilever Indonesia (UI), and Oxfam, including its campaigns against the pharmaceutical and coffee multinationals. It also examines the role of NGOs, the challenge of tackling poverty in developing countries, the Millennium Development Goals, and the UN Global Compact. It highlights the difficulties inherent in understanding the role of MNCs in poverty alleviation as well as in forging effective collaboration with NGOs.
In 2005, Unilever and Oxfam reported on their collaboration to understand the impacts of business on poverty, based on a study of Unilever Indonesia (UI). Case B identifies the key learning from the project both in this respect and in what the two organizations learnt from each other. Business impacts were assessed at the macroeconomic level (e.g., tax revenues, UI's role during the Asian financial crisis) and in terms of the effect on employment (e.g., number of jobs provided, conditions of employment). The UI value chain was studied from supply through distribution (e.g., sourcing implications for small farmers, share of value created through the chain), as well as UI's impact on low-income consumers (e.g., advertising and whether UI was meeting or creating needs). Oxfam developed a better grasp of the potential of value chains to generate employment and income (especially at the retail distribution end) and of the differences in social performance among MNCs. Unilever gained a better appreciation of its impact on the value chain, especially as a "job multiplier", and hence its social contribution. Both parties felt the project had established a precedent and a set of processes for future corporate-NGO collaboration.

1. To examine the role of MNCs in poverty alleviation in developing countries and its implications for corporate social responsibility (CSR). How much is enough? What are the limits of CSR?
2. To explore stakeholder engagement in the form of corporate NGO cooperation and, more specifically, the scope and mechanisms for effective collaboration between corporations and NGOs. 3. To consider the implications of CSR for corporate strategy and marketing practices in the particular context of corporations operating in developing countries.

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