Profit and Shareholder Value

Profit and shareholder value are the two goals that organizations pursue. Exploiting an industry’s resources and achieving and sustaining competitive advantage have always been the drivers to profitability. Traditionally being a corporate social responsible company meant sacrificing profitability and thus there was a trade off. Through specific examples and concrete reasoning Prahalad and Hammond suggest how companies can achieve both. I was impressed with the example about making a developing community the target of the investment, in particular; the internet-based kiosks. There are benefits and weaknesses of the program. It seems evident that one of the main needs of human beings -whether in the developing world or in the developed world- is communication. Setting-up kiosks that can serve more than 600 villages and allow them to communicate between each other and the rest of the world is indeed an achievement. From the point of view of the business, it is also a perfect strategy because of the wide array of customers that their service can serve (marketing channels for firms, learning for the population, communication, farmers). Therefore there is a huge growth potential and they would also benefit from a first-mover advantage. On the other hand, providing internet service to developing countries could pose a threat to western consumers. There have been many cases where people in developing