Moral Principle 5: Option for the

Bottom of the Pyramid

 Is Poverty a global issue?

 Poverty is a human condition of having insufficient sources or income.

 In most extreme form, poverty is a lack of basic human needs such as adequate and
nutritious food, clothing, housing, clean water and health services

 The world’s poorest people struggle daily for food, shelter, and other necessities

 They often suffer from malnutrition, epidemic disease outbreaks, famine, and war

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
 Is Poverty a global issue? (cont’d)
 In wealthier countries-such as US, Canada, Japan and those in Western Europe-the
effects of poverty may include poor nutrition, mental illness, drug dependence, crime,
and high rates of disease.

 They are the countless homeless street children and beggars, the jobless,
underemployed, the orphans, the elderly who are alone and abandoned, whom the late
US President Roosevelt identified as “the forgotten man at thebottom of the economic
pyramid”.

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
The Pandemic Pushed 4 Million More Filipinos
Into Poverty in First Half of 2021
 The first six months of last year saw 3.9 million more Filipinos pushed into
poverty, with economic officials laying the blame squarely on pandemic-
related lockdown measures, job losses, cuts in household consumption, and
forced business closures.
 Poverty in the country grew to 23.7%, against 21.1% in the same six-month
period in 2018, Channel News Asia reports.
 The number of Filipinos in poverty has now risen to over 26 million, just under
25% of the population.

https://www.globalcitizen.org/en/content/philippines-poverty-covid-19/
Living in extreme poverty
How poor are these in the bottom of
the pyramid?
 Nearly 3B human beings live on less than $2/day
 One in two children in the world live in poverty
 More than 600M of these children are presently
roaming the streets without adequate shelter
 Lack or no access to basic health services has
brought about the epidemic of HIV/AIDS,
malaria, and tuberculosis
 Poverty is a major stumbling block to total human
development
 400 million people with no access to
safe water.
 270 million people with no access to
health services.

 10 million number of children

who die even before reaching
the age of 5.
Why is it important to know this principle?

 Option for the bottom of the pyramid does not mean a dole-out approach to poverty
reduction. It is the promotion of pro-poor economic growth with the private
business and other sector as active partners.
 “Fishing skills training than fish giving.”
 South Korea, Taiwan and Malaysia have been able in just two decades to bring
down their poverty levels close to those Western Countries. Thailand and
Indonesia which had poverty rates above 40% in the early 80's have reduced those
rates below 10% and 20% respectively while Philippine poverty incidence is 30%
(Pernia 2006)
 The economic development of those Asian countries mentioned above is
characterized as “pro-poor growth”

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
What is the UN Sustainable
Development Goals?

The Sustainable Development Goals (SDGs), also known as the

Global Goals, were adopted by the United Nations in 2015 as a
universal call to action to end poverty, protect the planet, and
ensure that by 2030 all people enjoy peace and prosperity.
Why should business play its role in poverty
alleviation?

Reasons why business should get involve in alleviating poverty.

 Reputational Capital - the company's environmental and community

management that provides a good indicator of the overall quality of its
business

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Why should business play its role in poverty
alleviation?

Reasons why business should get involve in alleviating poverty.

 Sustainability Premium - the company's share in corporate citizenship,

particularly in the role of business in reducing poverty, creates a
sustainability premium on earnings due to higher stakeholder
satisfaction, reduced cost of transaction, and guaranteed quality human
capital coupled with reduced social risks

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Why should business play its role in poverty
alleviation?

Reasons why business should get involve in alleviating poverty.

 Social Investment - external stakeholder engagement, such as
community involvement is increasingly becoming critical to the corporate
world

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Can we help in the empowerment of the poor?

What is the preferential option for the poor?

 More than dole-outs. goes beyond doling out company donations as an

act of philantrophy
 Trancends public relations. it is more than the corporate-image
building that ends up neatly in an increase in sales
 Genuine commitment to grassroots development. to prevent the
widening gap between the haves and have-nots, to arrest the growing gap
between the elite and the masses.

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Can we help in the empowerment of the poor?
What is the preferential option for the poor? (cont'd)

 A Personal Philosophy. A philosophy rooted in business ethics. A

moral leader, seeing abject poverty cannot but opt for those who have less
in life . This principle is also by-product of the evolution of CSR, from
company philosophy to direct social engagement.
 Corporate Decisions. preferential option for the poor is a personal
choice of an individual. However, it can also be a corporate decision of
any business community concerning the issue of ownership, use and
sharing of goods and resources. Not only the boss but the whole company
may opt for the poor
Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Can w e help in the empowerment of the poor?

What is the preferential option for the poor? (cont'd)

 Also an opportunity. The “option” or “love of preference” is a choice, a

decision, a special form of primacy and an opportunity as well in the
exercise of other-centeredness. The company decides in favor of the poor,
and grabs the opportunity to alleviate poverty
 But not exclusive. the preferential optionis neither exclusive or an
excluding interest, in such a way there's no more room for those who are
not poor

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Can we help in the empowerment of the poor?

What is the preferential option for the poor? (cont'd)

 Witness to human dignity. this principle can finally demonstrate that

the truth that human dignity cannot be destroyed ni whatever situation
of poverty, scorn, rejection, or powerlessness to which the poor has been
reduced

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
When is the option for the bottom of the pyramid
an opportunity for business?
The business option for the bottom of the pyramid as proposed by C.K Prahalad(2005) is a
revolutionary strategy model for alleviating world poverty and is win-win relationship
between business and poor. The bottom of the pyramid is a global opportunity for
business

The bottom of the pyramid represents a humongous opportunity for “high-tech”

businesses such as cellular phones, financial services, and low-end computers. Added to
these are businesses serving basic needs such as food, housing, and personal care.
Business should stop thinking of the poor as burdens and starts recognizing them as
value (conscious consumers)

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
What are the concrete ways to strategize in favor
of the bottom of the pyramid?

1. Microfinancing - empowering poor people with entrepreneural opportunities and

challenges can usher the growth and prosperity that poor countries desperately
endeavor to attain

1. Social Investment in Education. Many studies have shown that the best CSR
practices on poverty alleviation and grassroots development has to start with
education. Investments in health and education are crucial in any attempt to
reduce human misery.

Source: Maximiano, Jose (2014) Business Ethics and Corporate Social Responsibility
Philippines: What does it take to end poverty?