BUSS1000 Future of Business - Role of business in society

MEGATREND
Megatrends, a term coined by John Naisbitt in the 1980s: large, transformative processes with
global reach, broad scope, and dramatic impact. They are the fundamental forces that are
changing our world.

There are six megatrends that are shaping the world in the first half of the 21st century.

Impactful Technology:
 The acceleration, distribution and application of computing power, coupled with the
exponential growth of data, are enabling extraordinary technological advances.
 The pace of change is astonishing.
 90% of the world’s data has been created in the past 2 years. 
 Almost 60% of the world’s population is now connected and almost 50% use social
media.
 2030: 50 billion connected devices around the world.
 Machines are getting faster and better. AlphaGo Zero, an AI program, has mastered the
game by playing against itself. 
 Challenges: from cybersecurity and privacy, to rising inequality and job automation.
 The necessary response to impactful tech is to refine our understanding of what it means
to be human.

Demographic change/Evolving communities:

 Communities around the world are experiencing rapid and profound demographic
change, creating new challenges for businesses and individuals alike.
 People are living longer and are having fewer children. As populations age, there will be
fewer workers to support the growing number of people in retirement.
 2020: 4 working people for 1 retired.
 2050: 2 working people for 4 retired.
 We must address global needs for more women joining the workforce, lifelong learning,
and adequate healthcare.

Rapid urbanisation:
 The future is one of cities. Today more than half the world’s population live in cities,
generating 85% of global GDP.
 2030: 60% urbanisation, 81% of the population living in cities. The majority of this will
happen in Africa and Asia.
 Challenges: tremendous demands on infrastructure and the environment, provision of
services and job creation.
 Cities consume three quarters of the world’s natural resources.
 Healthy cities are about everything we do in our urban lives: our work and our
communities, our natural and built environment, the social, digital and financial layers
around them. 

Amplified individuals/Empowering individuals:

 We are witnessing the rise of the individual like never. Tremendous technological
advances and connectivity are empowering individuals across the world.
 Almost 5 billion people are using mobile phones, more than half are smartphones.
BUSS1000 Future of Business - Role of business in society

 Access to information changes not only the way we consume but also the way we interact
with companies and the influence we have over products and services.
 Those who do not have access to technology and connectivity, available to most, will feel
increasingly disempowered. 
 Pros: Technology could be an opportunity for improved individualised delivery for
mental health.
 Cons: Misinformation and disinformation, harmful and extremist content. Rising rates of
depression, stress and anxiety amongst adolescents are linked to increased use of social
media and the introduction of smartphones.
 We need to understand the trade-offs between access and privacy, between empowerment
and isolation.

Economic power shift:

 The world economy is set to shift as Asia becomes the largest trading region, fueling the
rise of a mass affluent community and a new breed of corporations.
 Just 2 countries, China and India, will account for 35% of the world’s population and
25% of global GDP. 
 2030: 5 billion people will be middle class.
 Challenges: Globalisation itself has produced unequal returns. More frequent trade wars
and rising protectionism will drive uncertainty and instability.
 Economic power shifts of this magnitude will fundamentally change individual and
nations’ prosperity – these opportunities, along with significant risks, will play out on the
world stage.

Climate and resource security:

 The climate and resource security megatrend captures the increasing pressure on critical
resources within the mega-ecological narrative of climate change.
 By mid-century demand for food and water will place these resources under stress. 
 2050: 88% of stock will be over-fished, demand for energy will increase by 30% above
current global use.
 Climate change is not a prediction, it is our new normal.
 This megatrend contains the “environmentalist’s paradox”: the more we deplete our
resources and degrade our ecosystems, the more average human well-being improves
globally.
 Corporations are principal agents in the production of greenhouse gas and can no longer
ignore the trade-off between economic and environmental well-being.

WICKED PROBLEMS
Wicked problems are problems with many interdependent factors making them seem
impossible to solve.

Horst Rittel in the paper “Dilemmas in a General Theory of Planning”, he describes ten
characteristics of wicked problems:
 There is no definitive formulation of a wicked problem.
 Wicked problems have no stopping rule, i.e., there is no point in time at which the
process of addressing a problem is completed.
 Solutions to wicked problems are not true-or-false, but good-or-bad.
BUSS1000 Future of Business - Role of business in society

 There is no immediate and no ultimate test of a solution to a wicked problem.

 Every solution to a wicked problem is a ‘one-shot’ operation.
 Wicked problems do not have an enumerable or exhaustively describable set of potential
solutions, nor is there a well-described set of permissible operations for addressing
wicked problems.
 Every wicked problem is essentially unique.
 Every wicked problem can be a symptom of another problem.
 The analyst’s world view is the strongest determining factor for explaining differences in
descriptions of wicked problems and preferences for how they should be addressed.
 The planner has no right to be wrong.

STAKEHOLDERS AND STOCKHOLDERS

Stakeholder is an organisation or a person, such as an employee, customer, or citizen who is
involved with an organisation, society, etc. and therefore has responsibilities towards it and an
interest in its success. Basically, a stakeholder is anyone who is impacted by the organisation.
Stockholder is a person who owns shares in a company and therefore gets part of the company’s
profits and the right table vote on how the company is controlled. Stockholders are often
referred to as shareholders. 

Identify a stakeholder:
 Step 1: List the Stakeholders.
 Step 2: Collect information.
 Step 3: Classify them.

MISSION, VISION AND VALUES

Mission statement: short written description of the aims of a business, charity, government
department or public organisation.

Vision statement: a statement of what a company or an organisation would like to achieve in the
future.

Values: the principles that help you to decide what is right and wrong, and how to act in various
situations.

Organisational culture is defined as “the types of attitudes and agreed ways of working shared
by the employees of a company or organisation”.
The challenge is often how to:
 communicate ‘desired’ organisational culture
 build organisational culture
 adhere to the communicated culture.

BUSINESS PERSPECTIVES
Profit Maximisation (PM)
BUSS1000 Future of Business - Role of business in society

 Value: Profit maximisation.

 Free-enterprise, private property system.
 Bottom-line focussed.
 Employee is responsible to owners. Business is responsible to stakeholders.
 Must operate within the rules of the game, including all levels of law.
 Organisations have a moral and ethical responsibility to maximise profit.
 Social responsibility is an ethical issue owned by the people, not the organisation.
 Example: Offshoring production.

Corporate Social Responsibility (CSR)

 Value: Doing good
 Citizenship, philanthropy, sustainability.
 Discretionary or in response to external pressure.
 Separate from PM.
 Agenda is determined by external reporting and personal preferences.
 Impact limited by corporate footprint and CSR budget.
 Example: Fair trade purchasing.

Creating Shared Value (CSV)

 Value: Economic, societal and sustainability benefits relative to cost.
 Joint company and community value creation.
 Integral to competing, PM.
 Agenda is company specific and internally generate.
 Realigns the entire company budget.
 Example: Transforming procurement to increase quality and yield.
 Three key ways of engaging in CSV are:
o Reconceiving products and markets 
o Redefining productivity in the value chain 
o Local cluster development

Strengths
 Successfully appeals to practitioners and
scholars.
 Elevates social goals to a strategic level.
 Articulates a clear role for governments in
responsible behaviour.
 Adds rigour to ideas of “conscious capitalism”
and provides an umbrella construct for loosely
connected concepts.
Weaknesses
 Unoriginal.
 Ignores tensions between social and economic
goals.
 Naive about the challenges of business
compliance - presumptions.
 Based on a shallow conception of the
corporations’ role in society

Social Enterprise (SE)

 Value: Social change and innovation.
 Sustainable blended value creation.
 Integral to mission, impact maximisation.
 Agenda responds to complex social problems.
 Whole of budget.
 Example: Microfinance in remote and rural areas.
Differences between social and commercial entrepreneurs:
Social Entrepreneurs Commercial Entrepreneurs
BUSS1000 Future of Business - Role of business in society
 Deliberate delivery of social and economic
value, declared social mission.
 Operate in constrained environment eg
resources, skills and access to markets.
 Hybrid business models (for profit and non for
profit organisational structures).
 Can access hybrid funding types.
 Meet basic needs.
 Conduct deals across multiple dimensions.
 Deliberate delivery of economic value.
 Operate in opportunity rich environments.
 For profit models.
 Unlikely to quality for grant funding as a for
profit.
 Spots new needs or new ways of meeting
needs.
 Less complex approach to deal making.