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Publications
  • 2019
  • Working Paper
  • HBS Working Paper Series

Intelligent Design of Inclusive Growth Strategies

By: Robert S. Kaplan, George Serafeim and Eduardo Tugendhat
  • Format:Print
  • | Language:English
  • | Pages:22
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Abstract

Improving corporate engagement with society, as advocated in the Business Roundtable’s 2019 statement, should not be viewed as a zero-sum proposition where attention to new stakeholders detracts from delivering shareholder value. Corporate programs for sustainable and ethical sourcing practices, however, have fallen far short of solving the underlying causes of extreme poverty, extensive use of child labor, and threats to the environment and human health. We identify several causes to explain this disappointing shortfall in societal performance, including traditional company policies and incentives that inhibit the implementation of innovative, inclusive growth strategies. We propose the role for a new actor, a catalyst, to help companies forge new relationships with external funders, local intermediary companies, NGOs, and community leaders. The catalyst aligns the multiple stakeholders from multiple sectors into enduring, mutually beneficial relationships that produce more value than that currently produced when stakeholders connect only by transactional relationships. The catalyst attracts funding from public and private sources to invest in the new ecosystem, which can generate attractive financial returns while alleviating poverty and environmental degradation. Finally, the catalyst engages the multiple participants to collectively co-create explicit strategies and scorecards of metrics, which serve to motivate, create accountability, and enable an enduring governance model for a multi-stakeholder ecosystem.

Keywords

Inclusion; Sustainability; Performance Measures; Environmental Sustainability; Social Issues; Strategy; Governance; Corporate Social Responsibility and Impact; Business and Stakeholder Relations

Citation

Kaplan, Robert S., George Serafeim, and Eduardo Tugendhat. "Intelligent Design of Inclusive Growth Strategies." Harvard Business School Working Paper, No. 20-050, October 2019.
  • SSRN
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About The Authors

Robert S. Kaplan

Accounting and Management
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George Serafeim

Accounting and Management
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More from the Authors
  • A Conceptualization of Sub-Living Wages: Liabilities, Leverage, and Risk By: Drew Keller, Katie Panella and George Serafeim
  • Business Implications from Regulating Carbon Emissions in the EU By: George Serafeim and Benjamin Maletta
  • Variance Analysis: New Insights from Health Care Applications By: Robert S. Kaplan and Susanna Gallani
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