Social Enterprise

Social Enterprise is a featured research topic and an initiative at Harvard Business School.

HBS pioneered the concept of “social enterprise” with the founding of its Social Enterprise Initiative (SEI) in 1993. Under the early leadership of James Austin on the importance of collaborative relationships to the success of nonprofits and Allen Grossman and V. Kasturi “Kash” Rangan on new directions in nonprofit strategy, we adopted a problem-focused approach toward understanding the challenges associated with driving sustained, high-impact social change. Current research focuses on leadership of socially mission-driven organizations; the role of business leaders and corporate citizenship in driving social change; business models that address poverty; management of high-performing K-12 public school districts; and financing models for the non-profit sector.

  1. Code.org

    John J-H Kim, Lauren Barley and Allison M. Ciechanover

    The case explores Hadi Partovi’s mission to provide every K-12 student in the United States the opportunity to learn computer science. Students can assess how Partovi transformed his passion into an organization that reached millions around the globe through the launch of not-for-profit, Code.org, and its well-known awareness building event entitled “The Hour of Code." The case provides students the opportunity to consider the organization’s multi-faceted approach, its team, and partnerships strategy. A particular focus is on the path taken by this relatively young social enterprise to address issues of scalability and sustainability.

    Citation:

    Kim, John J-H, Lauren Barley, and Allison M. Ciechanover. "Code.org." Harvard Business School Case 317-008, July 2016. View Details
  2. Shareholder Activism on Sustainability Issues

    Jody Grewal, George Serafeim and Aaron Yoon

    Shareholder activism on sustainability issues has become increasingly prevalent over the years, with the number of proposals filed doubling from 1999 to 2013. We use recent innovations in accounting standard setting to classify 2,665 shareholder proposals that address environmental, social and governance (ESG) issues as financially material or immaterial, and we analyze how proposals on material versus immaterial issues affect firms’ subsequent ESG performance and market valuation. We find that 58 percent of the shareholder proposals in our sample are filed on immaterial issues. We document that filing shareholder proposals is effective at improving the performance of the company on the focal ESG issue, even though such proposals nearly never received majority support. Improvements occur across both material and immaterial issues. Proposals on immaterial issues are associated with subsequent declines in firm valuation while proposals on material issues are associated with subsequent increases in firm value. We show that companies increase performance on immaterial issues because of agency problems, low awareness of the materiality of ESG issues, and attempts to divert attention from poor performance on material issues.

    Keywords: sustainability; activism; Activist Investors; Activist shareholder; corporate social responsibility; corporate accountability; environment; Corporate performance; corporate governance; Corporate Accountability; Corporate Social Responsibility and Impact; Performance; Environmental Sustainability; Corporate Governance; Business and Shareholder Relations; Investment Activism;

    Citation:

    Grewal, Jody, George Serafeim, and Aaron Yoon. "Shareholder Activism on Sustainability Issues." Harvard Business School Working Paper, No. 17-003, July 2016. View Details
  3. Beyond Symbolic Responses to Private Politics: Examining Labor Standards Improvement in Global Supply Chains

    Andrea R. Hugill, Jodi L. Short and Michael W. Toffel

    Worker rights advocates seeking to improve labor conditions in global supply chains have engaged in private political strategies prompting transnational corporations (TNCs) to adopt codes of conduct and monitor their suppliers for compliance, but it is not clear whether organizational structures established by TNCs to protect their reputations can actually raise labor standards. We extend the literature on private politics and organizational self-regulation by identifying several conditions under which codes and monitoring are more likely to be associated with improvements in supply chain working conditions. We find that suppliers are more likely to improve when they face external compliance pressure in their domestic institutional environment, when their buyers take a cooperative approach to monitoring, and when their auditors are highly trained. We find, further, that a cooperative approach to monitoring enhances the impact of auditor training, and that auditor training has a greater impact on improvement when coupled with a cooperative approach than with external compliance pressures. These findings suggest key considerations that should inform the design and implementation of monitoring strategies aimed at improving conditions in global supply chains as well as theory and empirical research on the organizational outcomes of private political activism for social change.

    Keywords: Monitoring; supply chain; supplier relationship; supply chain management; corporate social responsibility and impact; labor; Working Conditions; sustainability; Sustainability Management; Sustainable Operations; sustainable supply chains; NGO; Globalization; Corporate Accountability; Operations; Supply Chain; Supply Chain Management; Business Processes; Corporate Social Responsibility and Impact; Performance Evaluation; Safety; Risk and Uncertainty; Apparel and Accessories Industry; Electronics Industry; China; Indonesia; India; Bangladesh;

    Citation:

    Hugill, Andrea R., Jodi L. Short, and Michael W. Toffel. "Beyond Symbolic Responses to Private Politics: Examining Labor Standards Improvement in Global Supply Chains." Harvard Business School Working Paper, No. 17-001, July 2016. View Details
  4. World Wildlife Fund (WWF)

    Ramon Casadesus-Masanell and Jordan Mitchell

    Nearly all environmental organizations have a similar aim: to stop the degradation of the natural environment. However, the strategies which environmental organizations choose to employ are sometimes starkly different. Compares the models of two dissimilar environmental powerhouses: Greenpeace and World Wildlife Fund for Nature (WWF). Active in 100 countries, WWF works with governments, businesses, other NGOs, and communities to set up conservation programs to preserve natural habitat. In contrast, Greenpeace works to campaign for environmental change against governments and corporations and accepts funding only through individuals and foundation grants. Explores the detailed history and business models of both organizations.

    Keywords: Business Model; Business and Community Relations; Business and Government Relations; Environmental Sustainability; Non-Governmental Organizations; Business Strategy;

    Citation:

    Casadesus-Masanell, Ramon, and Jordan Mitchell. "World Wildlife Fund (WWF)." Harvard Business School Case 716-468, June 2016. View Details
  5. Revitalizing State Bank of India

    Srikant M. Datar, N. M. Bhatta, Rishikesha T. Krishnan and Rachna Tahilyani

    State Bank of India is India’s oldest and largest bank with the government of India as its majority shareholder. Arundhati Bhattacharya, a 35-year old veteran of the bank, is appointed as its chairman in October 2013. Her appointment coincides with Moody’s downgrading the bank’s debt due to rising non-performing assets. She embarks on a mission to improve the bank’s risk taking and management abilities, ensure uniform customer experience, and encourage greater collaboration among various verticals. Her efforts help the bank reduce its non-performing assets and improve its profitability. However, Bhattacharya knows that these gains will be fleeting without the development of a trained workforce who can address 21st century industry problems with speed and creativity. This requires transforming SBI into a performance-oriented bank supported by a new career development and remuneration system. Bhattacharya wonders if attempting to change the culture of a 206-year old mammoth organization is feasible or a mere pipe dream.

    Keywords: change management; transformation; Communication strategy; Leadership Style; organizational culture; Organizational Change and Adaptation; Performance Evaluation; culture; corporate social responsibility and impact; human resources; employees; Compensation and benefits; recruiting; capital markets; Performance Expectations; Financial Services Industry; Asia; India;

    Citation:

    Datar, Srikant M., N. M. Bhatta, Rishikesha T. Krishnan, and Rachna Tahilyani. "Revitalizing State Bank of India." Harvard Business School Case 116-043, May 2016. View Details
  6. Strategy Beyond Markets

    John de Figueiredo, Michael Lenox, Felix Oberholzer-Gee and Rick Vanden Bergh

    Strategy beyond markets has been an active area of research inquiry since the early 1990s. Since its inception, the scholarship emanating from this research stream has grown substantially in quantity, quality, and breadth. Likewise, firms across the world have increasingly implemented broad and sophisticated non-market strategies. Within strategy beyond markets, there are a handful of focus areas. In Private Politics we observe firms working more closely with NGOs and other special interest groups to preempt unfavorable policy choices, react swiftly to crises, and proactively develop socially responsible strategies. In Public Politics, firms have become increasingly sophisticated in using campaign funding, lobbying, committee participation, and other instruments to influence local, national, and international political environments. Also firms that are heavily influenced by politics are more likely to craft Integrated Political Strategy as part of a more comprehensive competitive strategy and/or international expansion strategy. Despite significant progress in the literature, we have identified three areas for extension and enhancement in understanding strategy beyond markets. First, we currently have limited understanding of the critical attributes for firms to establish a sustainable non-market strategy. While there have been excellent studies highlighting the importance of preemption in Private Politics, political ties in Public Politics, and forum shopping in Integrated Political Strategy, it is unclear if these types of factors are sustainable in the context of political or market dynamics. Furthermore it is unclear whether these factors differ significantly from those identified in the broader competitive strategy literature (e.g., Are political resources different fundamentally from market resources? Do firms organizing political resources use a fundamentally different logic than firms utilize to organize market resources?) Second, there has been very little (if any) significant research linking firm strategy to both nonmarket outcomes and firm performance. Most research has developed theories and/or empirical analyses that explore the determinants of a firm's strategy beyond markets. Very few studies have shown that a firm's strategy increases policy performance; almost none have demonstrated a link between policy and firm profitability. Third, the topical areas of analysis appear to be limited. Environmental issues and corporate social responsibility dominate Private Politics research, heavily regulated firms dominate Public Politics studies, and theoretical studies dominate research on Integrated Political Strategy. With this AiSM volume we seek theoretical and/or empirical articles that extend and/or enhance the literature by addressing strategy beyond markets in the three areas discussed above in the context of Private Politics, Public Politics or Integrated Political Strategy.

    Citation:

    Figueiredo, John de, Michael Lenox, Felix Oberholzer-Gee and Rick Vanden Bergh, eds. Strategy Beyond Markets. Vol. 34, Advances in Strategic Management. Emerald Group Publishing, 2016. View Details
  7. The Power of C.E.O. Activism: How Politically Outspoken Executives Sway Public (and Consumer) Opinion

    Aaron K. Chatterji and Michael W. Toffel

    Some CEOs are making news by taking public stances on controversial social issues largely unrelated to their core business. This article summarizes the insights from our research paper that shows that such "CEO activism" can influence public opinion and consumer attitudes.

    Keywords: leadership; Leadership &Corporate Accountability; Non-market Strategy; corporate social responsibility; politics; political influence; political strategy; political risk; equity; gender; climate change; Communication Strategy; Law; Leadership; Brands and Branding; Media; Problems and Challenges; Civil Society or Community; Social Issues; Public Opinion; United States; Georgia (state, US); North Carolina; Indiana; Indianapolis;

    Citation:

    Chatterji, Aaron K., and Michael W. Toffel. "The Power of C.E.O. Activism: How Politically Outspoken Executives Sway Public (and Consumer) Opinion." Grey Matter. New York Times (April 3, 2016), SR10. View Details
  8. Apple: Privacy vs. Safety?

    Henry McGee, Nien-hê Hsieh and Sarah McAra

    In 2015, Apple CEO Tim Cook debuted the iPhone 6S with enhanced security measures that enflamed a debate on privacy and public safety around the world. The iPhone 6S, amid a heightened concern for privacy following the 2013 revelation of clandestine U.S. surveillance programs, employed a default encryption system that prevented both Apple and government authorities from accessing data stored on the device. Law enforcement officials warned that the encryption hindered investigations for criminal cases and international terrorism and called on Apple to build a backdoor, a way to bypass the encryption. But Cook maintained that any backdoor would compromise customers' privacy and security. In 2016, a federal judge ordered Apple to provide technical assistance to unlock the iPhone used by one of the two terrorists who killed 14 people in San Bernardino, California. Apple refused to comply with the order and asked the government to withdraw its demand. As the court case unfolded, Cook considered his responsibilities to the U.S. government as well as to Apple's customers, employees, and shareholders.

    Keywords: iphone; encryption; data privacy; Safety; Corporate Social Responsibility and Impact; Mobile Technology; Civil Society or Community; National Security; Leadership; Technology Industry; Consumer Products Industry; United States;

    Citation:

    McGee, Henry, Nien-hê Hsieh, and Sarah McAra. "Apple: Privacy vs. Safety?" Harvard Business School Case 316-069, March 2016. (Revised May 2016.) View Details
  9. Advanced Leadership Pathways: Doug Rauch and the Daily Table

    Rosabeth Moss Kanter, Peter Zimmerman and Penelope Rossano

    Former Trader Joe’s President Doug Rauch developed an innovative idea to address the challenge of food insecurity, food waste, and nutrition. His concept was a new retail grocery model, offering nutritious affordable food to a food insecure population in the inner city using excess inventory. His path was not an easy one, but by April 2015, Rauch was celebrating the upcoming launch of his Boston pilot and flagship store, Daily Table. Daily Table would be able to test its operating model and impact, better understand its customer base, and establish community partnerships. After further expansion to other sites in Boston, Daily Table planned to expand nationally. But there were questions about whether acceptance by one community would transfer to others and what could Rauch do to prepare himself and his team.

    Keywords: food waste; Poverty; health; food security; nutrition; food labeling; nonprofit; Food; Social Entrepreneurship; Social Enterprise; Nonprofit Organizations; Nutrition; Health;

    Citation:

    Kanter, Rosabeth Moss, Peter Zimmerman, and Penelope Rossano. "Advanced Leadership Pathways: Doug Rauch and the Daily Table." Harvard Business School Case 316-105, March 2016. View Details
  10. The Globalization of Corporate Environmental Disclosure: Accountability or Greenwashing?

    Christopher Marquis, Michael W. Toffel and Yanhua Zhou

    This article is a layman summary of "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," forthcoming in Organization Science.

    Keywords: reporting; environmental performance; environmental sustainability; civil society; Corporate Disclosure; Integrated Corporate Reporting; Corporate Social Responsibility and Impact; Civil Society or Community; Environmental Sustainability;

    Citation:

    Marquis, Christopher, Michael W. Toffel, and Yanhua Zhou. "The Globalization of Corporate Environmental Disclosure: Accountability or Greenwashing?" Work In Progress (American Sociological Association blog) (March 22, 2016). (Reprinted as Environmental disclosure: corporate accountability or greenwashing?” LSE Business Review, June 9, 2016.) View Details
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