By José Vázquez
Big for-profits are ‘going good’ by infusing existing business models to address and mitigate social inequalities. Goldman Sachs elevates impact on social challenges in its 2014 Environmental, Social and Governance Report. Unilever intends to grow business while reducing environmental footprint and increasing positive social impact through its Sustainable Living Plan. Chevron is empowering women through business skills development in Brazil.
Going good, going social, what have you, is trending. And with new trends comes new research analyzing the advantages and limitations of this more ‘socially conscious’ way of doing business.
Some of this research is happening at Oxford University where the Saïd Business School and Mars Inc. have tied the research knot in a private-academic partnership intended to “... better understand the value of mutuality and its application in different organizational and economic contexts.”
Saïd and Mars should consider mitigating the potential for any ‘big brother’ effect and address other, non-economic needs of local communities in experimenting with different applications of mutuality, particularly toward supply chains
What is mutuality?
The concept of mutuality applies to a range of situations within the context of a business relationship. Mutuality is flexible, describing items such as alignment of interests between business partners, interpersonal connections between stakeholders or the logistics of profit-sharing for shareholders as is typical with a public limited company.
Mutuality, with a twist
In the traditional sense, mutuality would be equal seats at the same table. For Mars and its supply chains, this is not the case. Instead, Mars’ approach to mutuality is investing in new technology for cacao farmers. Already, the investment in new technology has resulted in almost triple yield, increasing both Mars’ access to more cocoa and income for farmers.
Mars isn’t the only one interested in making its supply chains more robust through investment. Amy Haimerl writes about Whole Foods and its loan fund which helps vendors finance their growth. Whole Foods has directly invested about $20 million so far. Consider this mutuality, but with a twist.
Mitigating the big brother effect
But wait a second. Step back and let’s soak this all in. A big for-profit is pumping money into impoverished, resource-deficit communities. And now what? Reframing the question: So what?
With this investment, Mars risks producing a ‘big brother’ effect. Poor supply chains may experience pressure to accept new investment and in turn produce higher yields. Since Mars is not providing seats at the table, how will this redefined form of mutuality assure some balance of power between the huge company and local farmers?
Mars should conduct public engagement to reduce a big brother effect. Engaging at the local level first provides a venue by which local farmers understand the intentions behind this research, rather than limiting mutuality to academic jargon between Mars and Saïd. Second, obtaining feedback at the local level makes this experimentation more significant in understanding other community needs and perhaps focus Mars’ efforts at investment.
Need for more than just economic investment
And continuing with that last thought for investment, is Mars’ application of mutuality just another phony attempt by a big for-profit to change the world? Okay, that question is too broad, scratch it. New question: Is economic investment enough to create paths toward general upward mobility in traditionally impoverished farming communities?
The short answer is no. Apart from direct investment in new technology, Mars should also consider other, non-economic needs of local farmers in experimenting with mutuality. A glance toward the competition may be necessary, particularly Nestle’s Creating Shared Value program, which addresses social disparity in items such as: nutrition, water, the environment, and even corruption and bribery. Or, if Mars doesn’t want to go ‘too broad’ in identifying all social disparities faced by its supply chains, then maybe a more targeted approach to mutuality is a better fit. Similar to a Fair Trade model, such an approach attempts to incentivize producer activity when meeting labor, environmental and production standards.
So, what’s next?
For Saïd and Mars, experimentation with a redefined version of mutuality is a step in the right direction. Moving forward, there should be consideration for any pressure experienced by local farmers in producing, after ‘investment from above.’ Furthermore, Saïd and Mars should account for items outside of a rigid business structure and how greater livelihood may be achieved.
Mars can really be a game-changer in applying mutuality -- again, not in giving shares of profit, or seats at the table, but in addressing social needs affecting the livelihood of communities such as healthcare or education.
Mars could start by gathering the opinions of local farmers, asking farmers: What’s in it for you? Back to the general sense of mutuality in business, this would be the starting point in developing a business relationship, right? And so, in not just redefining, but also in reframing mutuality, Mars’ approach becomes a trend worth supporting.
Image credit: Flickr/Department of Foreign Affairs
José Vázquez is a Master of Public Affairs Candidate at the LBJ School of Public Affairs specializing in Public Management and Leadership. Vázquez is interested in innovative solutions to address social disparities locally and abroad. Vázquez lives in Austin, Texas.