CSR and Partnerships

partnership agreement

partnership agreement (Photo credit: o5com)

One of the more resent developments within the field of CSR has been the emergence of strategic partnerships. Ever since the start of business there have been different forms of partnerships from small business franchises to large-scale outsourcing. In the last decade there have been an emergence of other forms of partnerships such as business and governmental institutions and in the last few years between Business and NGOs. While the first form of partnership is relative unproblematic as it is assumed that both parties have similar end goals in their efforts to maximize return on investment it is another case for the two last forms of partnership.

Business and Governmental partnerships have been seen in areas were both parties could see synergies. This could be in cases were companies wanted to explore markets in developing countries but needed support in-order to get a foothold in the market. In both Sweden and Denmark business partnerships are promoted by governmental development agencies like SIDA Business-4-Devlopment and DANIDA Business-2-Business programs (SIDA, 2012, DANIDA, 2012).

Connection between Business and Peace

There is a long-lived myth that there is a direct connection between peace and business, but to what extend is this myth really true? I have looked at two different indexes to investigate how close the connection really is.

First of all I have looked at the Global Pease Index that is issued on the Vision of Humanity index. The index looks at 23 different indicators for peace from the level of organised conflict over level of violent crime and weapons exports to perceived level of crime in society. In short is the ten most peaceful and most violent countries in the world comprised by these two lists.

Rank Most peaceful Country Most Violent Country
1 Iceland Somalia
2 New Zealand Iraq
3 Japan Sudan
4 Denmark Afghanistan
5 Czech Republic Korea
6 Austria Congo, DRC
7 Finland Russia
8 Canada Pakistan
9 Norway Israel
10 Slovenia Central African Republic

I guess that none of these countries on the list comes as much of a surprise. As always are the Scandinavian countries scoring high on the list as well as a number of European countries. Only country on the top performer list that is not European is Canada, New Zeeland and Japan that are all considered western economies. In the bottom of the list we find the regions where the world traditionally have seen a lot of armed conflict and in most cases are currently in some state of war.

In the list of countries produced by the World Bank and International Finance Corporation (IFC) we find a similar ranking but of countries were the business climate is considered to be either the best or worst in the world. The indicators that are used range from how easy it is to start a business over taxes to employing workers.

Rank Best Country to do business Worst Country to do business
1 Singapore Chad
2 Hong Kong, China Central African Republic
3 New Zeeland Burundi
4 United Kingdom Eritrea
5 United States Guinea
6 Denmark Sao Tomé and Principe
7 Canada Congo, Republic
8 Norway Guniea-Bissau
9 Ireland Congo, DRC
10 Australia Timor

What is interesting to see is that there is a great deal of correspondence between the two lists even though they do measure different parameters there are some similarities that seem the confirm the myth of a connection between peace and business.

For instance are Denmark, New Zeeland, Norway and Canada on top of both lists as the best performance when it comes to maintaining a peaceful business environment while on the negative list only Congo and the Central African Republic are present both places.

Logic would dictate that there should be a connection between a stable and safe working environment for business to operate in. On the other hand is there many business opportunities to be found in areas were competition is scares and there are little in the way for the corporation that is willing to take a risk.

This could also explain why there are only a few of the really dangerous places on the hard to do business part of the ranking that at the same time is a active conflict zone. So while it is very dangerous to be present in Iraq or Sudan it might not be the worst place to start a business and it might even present some opportunities which other might miss. Not saying that doing business in these areas are easy Sudan is number 154 on the list and Iraq is 166 there are places on the planet were the business environment is worse.

If I should make some sort of conclusion it would be that while peace is good for business it is not a pre-condition. Business can thrive and prosper even though there is armed conflict, we might not think that is the right form of business that the ethics are flawed or have other issues with business, but this is not what we are looking at in this case.

Doing business in Africa

Thinking about starting a business? Well Africa looks promising and you might consider giving the place another look. I just saw a TV program on how farmer entrepreneurs from Denmark are setting up shop in central Africa and it does seem that our stereotypical notion of Africa as an in need of development could change into an engine for consumer goods. According to the US commercial service are the prospects within central and West Africa very promising and definitely worth another look. Especially within these areas there are some big prospects.

  • Oil and gas extraction and refining equipment industries

Nothing new in this where Nigeria and the Niger delta have been prospected for oil for several decades. While there have been major human rights issues there is room for companies who have high ethical standards.

  • Mining

The list of countries that have a poor record on mining activities within the region is very long. But now is companies like Nokia, Ericsson and other leading users of minerals looking for mining companies who can guarantee that prospecting is done to certain ethical standards and that they are conflict free. Entrepreneurs with contacts will be able to make a serious profit in these areas in the coming years.   

  • Agro-industrial machinery and chemical

It is no big news that many African countries need improved productivity and yield in their agricultural production. The news is that large scale farming is finding its way into Africa and that producers of specialized equipment can make a real impact in this area if they can match quality and cost.

  • Food processing equipment and technology

With increased productivity comes the need for high quality refinement equipment. Linking the production and refinement can transform the entrepreneurial business into highly productive and profitable business.  

  • Telecommunications

Telecommunication has become one of the biggest growth markets in what is known as the developing world. It has transformed how people communicate and get information in an unprecedented way. More and more African consumers get access to telecommunication and so does their need for additional services where a mobile telephone can be ideal to use. This could be for home banking, as a tool for payment like credit cards or a source of revenue in itself. While the market for telecommunication in Africa is highly competitive there are openings in the world of low cost apps or creating tailor made programs that can be filled by the fast moving entrepreneur.     

  • Cosmetics and consumer goods

A few years ago it would be strange to think about Africa as a target for consumer goods but in certain areas of the continent there are a growing middle class who wants some of the same goods as we are getting used to.

The markets that is regarded as the most lucrative are:

Ghana, Senegal, Kenya, Tanzania, Mozambique and The Gambia can be regarded as good markets with relative political stability and relatively easy entry.

Nigeria, Liberia and Cameroon are looked at as good markets that may pose more of a challenge but could present more opportunities as the markets are still maturing.

Togo, Benin, Gabon, Cote d’Ivoire and Guinea can be good markets but where entry into the market may require extra effort and comprehensive local knowledge about the business culture.