| Usually channelling funds into non-profit alliances or activities goes against profit maximization norms. However, Corporate Social Responsibility (CSR) is fast becoming a necessity in today’s global economy and has proven to have positive effects on the contributing company as well as the local community. |
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Saudi Arabia based, Abdul Latif Jameel (ALJ) Group of companies is one such major business enterprise that has taken a passionate and innovative approach to social responsibility.
ALJ is a multi-national diversified conglomerate with estimated revenue of more than US$ 3.3 billion annually (#65 on the 2007 DS100 ranking).
Known as the largest independent Toyota distributor in the world, the group also operates in real-estate, financing, consumer electronics and logistics scetors, just to name a few. Meanwhile its unique subsidiary, Abdul Latif Jameel Community Service Program acts as the philanthropic channel of ALJ, to continuously pursue socially responsible initiatives.
Through its impressive array of result oriented programs such as -- launching a Food Force video game for poverty awareness amongst youth; disbursing millions of dollars of micro-financing through its initiative with Grameen Foundation; supporting women in the workforce through its Productive Family Programme; and many more such initiatives -- ALJ has defied the myth that corporate success and CSR cannot go hand-in-hand.
ALJ Initiatives/ Role in CSR
Dr Fatih Mehmet Gul, Network and Communication Manager of CSR Middle East Platform and an ALJ CSR Co-ordinator relays through his blog, that “CSR is essential to the long prosperity of companies as it provides the opportunity to demonstrate the human face of business.” Dr Fatih views CSR as a vital link to society in which businesses are located:
“CSR is about how businesses align their values and behaviour with the expectations and needs of stakeholders - not just customers and investors, but also employees, suppliers, communities, regulators, special interest groups and society as a whole.”
There is uniqueness about ALJ’s initiatives, as they are not required to provide local charitable donations in the form of money or food. According to many successful business owners, investing in education and skills is far more charitable than an envelope of money that will inevitably run dry (especially if not used wisely). ALJ’s initiatives are focused on allowing individuals to grow into active members of society, and eventually, benefit the community they live in through economic and social benefits.
Entrepreneurship and Job Creation Programmes
One of ALJ’s important initiatives is to champion entrepreneurship in the region. With unemployment becoming a problem in Middle East & North African (MENA) countries, entrepreneurship is proving to be a viable option for those who are (or have been) unemployed.
ALJ is looking forward to creating 50,000 jobs by the year 2011. The initiative is based on helping small projects with high growth potential. This year alone, ALJ forecasts an initiative for 25,000 more jobs in addition to those 42,000 jobs that they were able to create at the end of 2007.
Unemployment is both an economic and social threat in the MENA region and entrepreneurship programmes that have been formulated with training and financial courses reduce the risk of rising crime rates and economic deterioration. There are many advocates of entrepreneurship who believe that self-employment acts as an important commercial practice which will fulfil the need for strong networks, local competition, job creation, and reinvestment of wealth.
ALJ recognises, however, that not all individuals are inclined to entrepreneurship and would rather benefit from a salary-based job in the corporate sector. Their recent initiative, in collaboration with the Human Resources Development Fund (HRDF), trained and prepared local salesmen to partake in the market via the private sector. Nevertheless, ALJ is pursuing the need to create jobs in the market, entrepreneurial-based or full-time employment, with their efforts and the full-participation of established corporations. The underlying benefits will be a complete representation of those with the right talent and skills to their respective job(s).
Encouraging a Dual Income-based Household
Homemakers have always lacked full-recognition for the amount of work that goes into child-rearing and house-keeping. In fact, the work contributions of stay-at-home mothers have routinely been excluded from much economic research. Today, the family home has become a hub of opportunities for income earners, especially women.
ALJ has women-focused programmes for entrepreneurs entitled Productive Family Programmes. Based on an individual’s expertise, this programme’s goals include encouraging a dual income system per household by allowing wives and mothers active participation in economic activity. This programme also includes adequate training and financing to allow participants to fully embrace the entrepreneurship dominion.
Dr Fatih’s blog post “Self-Employment in the Middle East” describes different entrepreneurship packages that are offered by ALJ (depending on their need), regardless of the applicant’s gender. “We believe the power of self-employment and supporting an entrepreneurship spirit with our programs, since 2003, thousands of entrepreneurs received support through our programs.”
Eradicating Poverty through Profits
Poverty speaks volumes about a country’s economic structure and the distribution of wealth. Microfinancing is an important aspect of combating poverty as the poorer members of society are usually turned away from major financial institutions. Micro-financing can be a difficult business to model as it is profit-oriented in nature but is generally focused on philanthropy.
A partnership
between microfinance pioneer Dr. Mohammed Yunus's Grameen Foundation
(GF) and the Abdul Latif Jameel Group to alleviate poverty in the Arab
world. An estimated 59 million people in the region are living
on less than US $2 a day.
>> Click to View Photo Journal
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The synergy of two very different companies may turn micro-financing into a reality. In June of last year, ALJ teamed up with Grameen Foundation to create Grameen-Jameel Pan-Arab Microfinance Limited (Grameen Jameel). Grameen Foundation, a non-for-profit, is the brainchild of Nobel Peace prize winner, Professor Muhammad Yunus, the founder and managing director of Grameen Bank and credited with launching the global "microfinance movement."
April 2008 marked a Grameen-Jameel milestone as the company announced the disbursement of USD 15.3 million worth of business financing to its microfinancing partners FONDEP (Morocco) and Tanweelcom (Jordan).
Grameen-Jameel General Manager Heather Henyon described that they were “pleased to support their [micro-financing partners] efforts to expand the economic opportunities available to the poor in Morocco and Jordan,” This coalition is seeking to create 1 million jobs by the end of 2011.
Creating Awareness amongst Future Generations
ALJ’s humanitarian approaches also seek to impart their values on the youth of today. The best way to engage the young is by piquing their interests. Recently, an interactive computer game, Food Force, was created. It was launched by the United Nations World Food Programme (UNWFP) in order to combat the problems of food shortages. The game educates the player of hunger-stricken countries around the world. Through this game, children band together with rescue teams to provide for the poor and needy. In tandem with the growing need of sensitivity towards the less fortunate, ALJ funded the translation of Food Force into Arabic.
Another interesting initiative is described by Dr Fatih in an interview with Gulf News. “We have signed a pact with RainTrust Foundation, an organisation dedicated to combating global warming by protecting the Amazon Rainforest.” Through this initiative, ALJ is committed and supports the United Nations’ clean energy carbon credit programmes.
“We are also initiating the region's first Carbon Mercantile Exchange to facilitate the transfer of knowledge and channel revenues towards renewable energy programmes,” he adds, reinforcing the vital preservation of the environment and generations to come.
ALJ’s Approach and Strategies
ALJ’s profit maximisation strategies are reflected in their CSR initiatives, along with their desire to continue to carefully cater to those in need of social welfare in society. Similarly, their strategies address the prevailing issues that rise for those concerned. ALJ also strikes a balance between current needs and sensitising future generations with the need to be socially responsible.
ALJ Emphasises on Target Markets for CSR as well as in Business
ALJ focuses on certain target markets that they deem will benefit the most with respect to CSR.
A major target market is the youth. The Food Force video game not only carries an important message for generations to come but it is vital component as a communication tool for the young.
Newer generations (Y and Z) are growing in accordance with the advent of more efficient technology. These generations are more sceptical than those of the past, and tend to research queries by accessing multiple streams of information (mainly through the internet). The macro-approach to problems is a signature of these generations, and therefore, they are more open to CSR or social responsibility. By supporting Generation Y and Z’s interest, especially through the use of the game Food Force, ALJ is helping bridge a gap between business and future leaders.
Another smart target market are women (and their families). Rising social problems can be attributed to the global need of women seeking employment away from the home and children. In lieu of Qur’anic directive to aid women and to protect the sanctity of marriage, ALJ’s strategy provides an untapped market of homemakers the opportunity for economic, social and intellectual development. Women working from home are becoming an international trend and ALJ has taken steps to support this new global trend.
ALJ’s concern towards eradicating poverty can be seen through their efforts to identify and to help provide assistance to the impoverished members of society, especially women. ALJ has customised their facilities to provide skills and avenues for the less fortunate to become their own entrepreneurs.
ALJ Addresses Current Issues that Affect MENA
ALJ strategizes to keep themselves relevant to the needs of the people.
MENA is said to face an unemployment phenomenon of 80 million young Arabs in the next 20 years. Though this can be seen as a daunting task, ALJ has proactively contributed to job creation in society. Their long-term vision in creating a better cost-effective community, sans the wastage of human capital, reflects their determination in building an economically and socially balanced society.
Food shortage is currently in the news as a major problem affecting developed and developing nations alike. By investing in projects like Food Force and with the help of the UN, ALJ will selflessly continue to support the humanitarian approach towards global hunger.
CSR as a Long-term Strategy
ALJ’s initiatives are not a one-time offer. Their strategies to create a socially responsible environment stems from long-term planning. Through their educational schemes, individuals have a lot more to benefit, as compared to receiving charitable contributions (especially monetary ones). By creating skilled labour and entrepreneurial awareness, ALJ can be easily recognised as a symbol of hope of CSR.
Dr Fatih Mehmet describes ALJ’s programmes as those that “keep the community happy”. By periodically reviewing the effectiveness or efficiency of each programme through statistics and reports, ALJ maintains their credibility in the much needed obligatory support for the community.
CSR and its Benefits for Society
Regardless of the controversy of the effect of charity on a business, corporations like ALJ have contributed to chastising sceptics who have disregarded business ethics as an integral part of profit maximisation. Many economies heavily rely on government aid to resolve problems such as unemployment, training, financing and education. However, with the new generations of business leaders vying for the bigger picture, CSR is becoming a social norm that helps eradicate problems in society.
Through ALJ initiatives, the benefits for society are. The need for economic and social stability is an utmost concern for ALJ as they concentrate on building confident and competent individuals who will continue to contribute to society. The benefits do not cease there – from a business perspective - philanthropic endeavours have always had a role for the corporation, in building an image of a good corporate citizen. Dr Fatih talks about the bigger picture: “True, we are in business (of making money) but how you make money is equally important.”
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