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. What's the Value of a Like?: Social Media Endorsements Don't Work the Way You Might Think

    Leslie John, Daniel Mochon, Oliver Emrich and Janet Schwartz

    Brands spend billions of dollars a year on lavish efforts to establish and maintain a social media presence. But do those campaigns actually increase revenue? New research provides an answer to this question, which has vexed marketers ever since social media burst upon the scene. In a series of experiments, the researchers tested four increasingly interactive ways in which Facebook might affect customers’ behavior. First, they explored whether liking a brand—passively following it—makes people more likely to purchase it. Second, they examined whether people’s likes affect their friends’ purchasing. Third, they looked at whether liking affects things other than purchasing (for example, whether it can persuade people to engage in healthful behaviors). And fourth, they tested whether boosting likes by paying to have branded content displayed in followers’ news feeds increases the chances of meaningful behavior change. The results were clear: Merely liking a brand neither increases purchasing nor spurs friends to purchase more. Supporting likes with branded content, however, can prompt meaningful behavior change.

    Keywords: Social Enterprise; Social and Collaborative Networks; Consumer Behavior; Marketing Strategy; Online Advertising;

    Citation:

    John, Leslie, Daniel Mochon, Oliver Emrich, and Janet Schwartz. "What's the Value of a Like? Social Media Endorsements Don't Work the Way You Might Think." Harvard Business Review 95, no. 2 (March–April 2017): 108–115. View Details
  2. Gapponshugi in Global Perspective: Debating the Responsibility of Capitalism

    G. Jones

    This chapter places the concepts of ethical capitalism developed by the nineteenth century Japanese venture capitalist Shibusawa Eiichi in a global historical perspective. The chapter reviews the similarities and differences over time and between countries of proponents of corporate responsibility, including Andrew Carnegie and Robert Anderson in the United States, Paul Rijkens in Europe, and Jamnalal Bajaj in India, as well as HBS Deans Wallace Donham and Donald David. It shows that there were quite different drivers which led business leaders to advocate corporate responsibility. Often strong religious and spiritual values were the principal justification, although Shibusawa Eiichi himself framed his arguments in secular terms. In the United States, fears of government intervention if business was perceived as acting badly also drove some to advocate corporate responsibility.

    Keywords: corporate responsibility; Business ethics; business history; Ethics; Business and Stakeholder Relations; Business History; Corporate Social Responsibility and Impact;

    Citation:

    Jones, G. "Gapponshugi in Global Perspective: Debating the Responsibility of Capitalism." Chap. 7 in Ethical Capitalism: Shibusawa Eiichi and Business Leadership in Global Perspective, edited by Patrick Fridenson and Takeo Kikkawa, 144–169. Toronto: University of Toronto Press, 2017. View Details
  3. Akshaya Patra: Impact at Scale

    V. Kasturi Rangan and Sarah Appleby

    Keywords: social enterprise; scaling; Public-private partnership; operational excellence; Social Enterprise; Growth and Development Strategy; Business and Government Relations; India;

    Citation:

    Rangan, V. Kasturi, and Sarah Appleby. "Akshaya Patra: Impact at Scale." Harvard Business School Case 517-028, February 2017. (Revised February 2017.) View Details
  4. Royal DSM: From Continuous Transformation to Organic Growth

    William W. George, Carin-Isabel Knoop and Amram Migdal

    Royal DSM CEO Feike Sijbesma was pondering the challenges of shifting DSM’s global organization from the constant transformations of the past 100 years to creating organic growth. When Sijbesma took the helm as CEO in 2007, he further pushed and completed the company’s final moves away from commodity chemicals and toward more sustainable businesses whereby DSM could create value with differentiated offerings. Sijbesma emphasized innovation and moving into “sunrise” businesses that would fuel future growth by playing a positive role in the broader society. Sijbesma asked himself, did DSM’s current portfolio in life sciences and materials sciences provide sufficient growth opportunities to sustain consistent and superior performance? Would DSM’s 21,000 employees worldwide embrace the DSM Strategy 2018: “Driving profitable growth through science-based sustainable solutions,” anchored via the Lead & Grow support and development program for key managers of the company? Should DSM continue making moves in mergers and acquisitions (M&A) to complement organic growth, or could its growth goals be achieved by focusing on organic growth for now, followed later by M&A activities again? What new markets should it look to in order to ensure sustainable growth? Sijbesma felt that after a decade of transformations (divestments and acquisitions), it would be healthy for the company to focus fully on organic growth for several years. During that period the company had already indicated it would divest three of its major holdings in joint venture (JV) companies, which would generate the financial capacity for M&A activities again in later years. In the meantime, Sijbesma wanted the company to prove it could grow organically as well.

    Keywords: organic growth; Organizational change; M&A; mergers and acquisitions; divestment; Business Ventures; Business Divisions; Business Growth and Maturation; Restructuring; Change; Change Management; Transformation; Transition; Engineering; Chemicals; Mining; Ethics; Values and Beliefs; Finance; Capital Markets; Financial Markets; Food; Globalization; Global Strategy; Globalized Firms and Management; Globalized Markets and Industries; Health; Nutrition; History; Leadership; Leadership Development; Leadership Style; Leading Change; Management; Business or Company Management; Growth and Development Strategy; Growth Management; Management Practices and Processes; Management Style; Organizations; Corporate Social Responsibility and Impact; Mission and Purpose; Organizational Change and Adaptation; Organizational Culture; Organizational Design; Ownership; Public Ownership; Performance; Strategy; Adaptation; Consolidation; Corporate Strategy; Value; Value Creation; Biotechnology Industry; Chemical Industry; Food and Beverage Industry; Mining Industry; Pharmaceutical Industry; Europe; Netherlands;

    Citation:

    George, William W., Carin-Isabel Knoop, and Amram Migdal. "Royal DSM: From Continuous Transformation to Organic Growth." Harvard Business School Case 317-063, January 2017. (Revised March 2017.) View Details
  5. Vox Capital: Pioneering Impact Investing in Brazil

    Julie Battilana, Marissa Kimsey, Falko Paetzold and Priscilla Zogbi

    Vox Capital was the first certified impact investing fund in Brazil. Founded in 2009, it provides early-stage capital for companies offering innovative and scalable solutions to enhance the lives of low-income Brazilians, while aiming to simultaneously generate attractive market-rate financial returns for investors. This case examines the evolution of Vox Capital, across understanding the landscape, launching, raising funds, selecting investees, structuring deals, building investee capacities, tracking performance, developing internal systems, and advancing the field of impact investing.

    Keywords: impact investing; Brazil; social enterprise; social performance measurement; Social Entrepreneurship; Investment Funds; Brazil;

    Citation:

    Battilana, Julie, Marissa Kimsey, Falko Paetzold, and Priscilla Zogbi. "Vox Capital: Pioneering Impact Investing in Brazil." Harvard Business School Case 417-051, January 2017. View Details
  6. United Housing — Otis Gates

    Steven Rogers and Mercer Cook

    Otis Gates has built a successful affordable housing firm. Along the way, he and his partners have engaged in large amounts of community service in the neighborhoods wherein they own properties. Now 80 and ready to retire, Gates is creating a request for proposal for his firm. In doing so, he has to evaluate his firm’s total value and decide whether their social-good mission is helping or harming their bottom line.

    Keywords: affordable housing; real estate; community engagement; social-good; request for proposal; diversity; entrepreneurship; Social Entrepreneurship; Moral Sensibility; Fairness; Corporate Entrepreneurship; Housing; Real Estate Industry;

    Citation:

    Rogers, Steven, and Mercer Cook. "United Housing — Otis Gates." Harvard Business School Case 317-059, January 2017. View Details
  7. Nutrition Science Initiative: Are All Calories Created Equal?

    Kevin Schulman and Matan Dabora

    In 2012, Gary Taubes lunched the Nutrition Science Initiative (NuSI), a not-for-profit organization aiming to question the mainstream scientific paradigm regarding obesity and dietary recommendations. This case provides a brief scientific background on obesity and its causes, comorbidities, and the economic cost of this epidemic. It then discusses the two main hypotheses of diet and the formation of NuSI. Finally, it describes the unique challenges and hurdles NuSI has faced both with funding and with impacting the mainstream scientific community. Could this NGO model of funding the “right” clinical trials be successful? Could it be duplicated across other scientific areas? What can be learned from NuSI’s experience? And what is the roadmap for NuSI going forward?

    Keywords: Nonprofit Organizations; Nutrition;

    Citation:

    Schulman, Kevin, and Matan Dabora. "Nutrition Science Initiative: Are All Calories Created Equal?" Harvard Business School Case 317-033, December 2016. (Revised January 2017.) View Details
  8. Selective Regulator Decoupling and Organizations' Strategic Responses

    Jonas Heese, Ranjani Krishnan and Frank Moers

    We posit that nonprofits that provide a greater supply of unprofitable services (beneficent nonprofits) face lenient regulatory enforcement for mispricing in price-regulated markets. Consequently, beneficent nonprofits exploit such regulatory leniency and exhibit higher mispricing. Drawing on organizational legitimacy theory, we argue that both regulators and beneficent nonprofits seek to protect their legitimacy with stakeholders, including those who demand access to unprofitable services. Using data from hospitals, we examine mispricing via "upcoding," which involves misclassifying ailment severity. Archival analysis indicates less stringent regulatory enforcement of upcoding for beneficent nonprofit hospitals, defined as hospitals that provide higher charity care and medical education. After observing regulator leniency, beneficent hospitals demonstrate higher upcoding. Our results suggest that lenient enforcement assists beneficent nonprofits to obtain higher revenues in price-regulated markets.

    Keywords: Regulator leniency; nonprofit organizations; beneficence; mispricing; upcoding; Nonprofit Organizations; Health Care and Treatment; Revenue; Health Industry;

    Citation:

    Heese, Jonas, Ranjani Krishnan, and Frank Moers. "Selective Regulator Decoupling and Organizations' Strategic Responses." Academy of Management Journal 59, no. 6 (December 2016). (Selected for Best Paper Proceedings of the 2015 Academy of Management Annual Meeting. Winner of the Healthcare Management Division of the Academy of Management 2015 Best Paper Award.) View Details
  9. Corporate Sustainability: First Evidence on Materiality

    Mozaffar Khan, George Serafeim and Aaron Yoon

    Using newly available materiality classifications of sustainability topics, we develop a novel dataset by hand-mapping sustainability investments classified as material for each industry into firm-specific sustainability ratings. This allows us to present new evidence on the value implications of sustainability investments. Using both calendar-time portfolio stock return regressions and firm-level panel regressions we find that firms with good ratings on material sustainability issues significantly outperform firms with poor ratings on these issues. In contrast, firms with good ratings on immaterial sustainability issues do not significantly outperform firms with poor ratings on the same issues. These results are confirmed when we analyze future changes in accounting performance. The results have implications for asset managers who have committed to the integration of sustainability factors in their capital allocation decisions.

    Keywords: sustainability; Investments; corporate social responsibility; accounting; corporate reporting; regulation; Corporate Social Responsibility and Impact; Integrated Corporate Reporting; Investment; Corporate Governance;

    Citation:

    Khan, Mozaffar, George Serafeim, and Aaron Yoon. "Corporate Sustainability: First Evidence on Materiality." Accounting Review 91, no. 6 (November 2016). View Details
  10. Alternative Paths of Green Entrepreneurship: The Environmental Legacies of The North Face's Doug Tompkins and Patagonia's Yvon Chouinard

    Geoffrey Jones and Ben Gettinger

    This working paper examines the impact of two entrepreneurs who offered alternative paths to reach their shared goal of a more sustainable world. Yvon Chouinard and Doug Tompkins were respective founders of the prominent outdoor apparel brands Patagonia and The North Face. Chouinard pursued incremental sustainability strategies over decades at his firm. Tompkins, who went on to manage the fashion company Esprit, opted in 1989 to exit business entirely having concluded that capitalism could never be sufficiently sustainable to reverse environmental degradation. He purchased 1.5 million hectares of land in Chile and Argentina that he converted to protected areas and national parks. The Chouinard strategy represented best practice green entrepreneurship, which if widely adopted might markedly reduce the environmental impact of business, but its full execution appeared possible only because Patagonia was a private company. The Tompkins dual strategy of exit from business and application of entrepreneurial skills to conservation resulted in large environmental gains, including sequestering and storing an estimated 80 million tons of carbon. We lack the metrics and methodologies to compare rigorously which offers the better path to sustainability, but a case can be made that the application of entrepreneurial talents to activities beyond for-profit business (of which conservation is one example) might be a more effective strategy.

    Keywords: Corporate Social Responsibility and Impact; Entrepreneurship; Environmental Sustainability; Apparel and Accessories Industry;

    Citation:

    Jones, Geoffrey, and Ben Gettinger. "Alternative Paths of Green Entrepreneurship: The Environmental Legacies of The North Face's Doug Tompkins and Patagonia's Yvon Chouinard." Harvard Business School Working Paper, No. 17-034, October 2016. View Details
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