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. 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
  2. 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
  3. The Organization of Non-market Strategy

    Dylan B. Minor

    The purpose of this paper is to explore how firms organize to engage in non-market strategy. To achieve this end, we explore the organization of non-market strategy via a formal model of the firm. The model is motivated by a qualitative study of the organization of non-market strategy of 25 large, U.S. firms. We found that firms either integrate non-market strategy activities throughout the firm or create stand-alone business units that specialize in non-market strategy activities. We find that the advantage of integration over specialization is U-shaped in the importance of non-market strategy to the firm's market strategy. We identify several other factors that predict the advantage (and disadvantage) of integration over specialization. The value of this paper is that it is (to the best of our knowledge) the first to identify the factors that should cause a firm to either integrate or specialize the organization of its non-market strategy. It also develops an original typology of the organization of non-market strategy.

    Keywords: Non-market Strategy; corporate social responsibility; organizational design; Strategy; Organizational Design; Corporate Social Responsibility and Impact;

    Citation:

    Minor, Dylan B. "The Organization of Non-market Strategy." In Strategy Beyond Markets. Vol. 34, edited by John de Figueiredo, Michael Lenox, Felix Oberholzer-Gee, and Rick Vanden Bergh, 413–436. Advances in Strategic Management. Emerald Group Publishing, 2016. View Details
  4. 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
  5. 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
  6. 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). https://workinprogress.oowsection.org/2016/03/22/the-globalization-of-corporate-environmental-disclosure-accountability-or-greenwashing/View Details
  7. 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; Social Entrepreneurship; Social Enterprise; Nonprofit Organizations;

    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
  8. Advanced Leadership Pathways: Harvey Freishtat and Conversations about End-of-Life Care

    Rosabeth Moss Kanter, Ai-Ling Jamila Malone and Oludamilola Aladesanmi

    Former law firm chairman/CEO Harvey Freishtat was actively involved in the formation of The Conversation Project, a national public engagement campaign to promote earlier end-of-life care discussions among loved ones and then with providers to ensure that end-of-life care wishes were both expressed and respected. The Conversation Project’s media campaign and three-pronged strategy of targeting people where they live, work, and pray, was beginning to yield results. However, questions still remained. Would the health care industry create the mechanisms needed to follow people’s end-of-life wishes? Was The Conversation Project taking the right steps to fulfill its mission of culture change?

    Keywords: leadership; social enterprise; Health; Health Care and Treatment;

    Citation:

    Kanter, Rosabeth Moss, Ai-Ling Jamila Malone, and Oludamilola Aladesanmi. "Advanced Leadership Pathways: Harvey Freishtat and Conversations about End-of-Life Care." Harvard Business School Case 316-050, March 2016. View Details
  9. Do CEO Activists Make a Difference? Evidence from a Field Experiment

    Aaron K Chatterji and Michael W. Toffel

    Several CEOs are receiving significant media attention for taking public positions on controversial social and environmental issues largely unrelated to their core business, ranging from LGBT rights to race relations to gender equality to climate change. We provide the first evidence that such "CEO activism" can influence public opinion and consumer attitudes. Our field experiment examines the impact of Apple CEO Tim Cook’s public statements opposing a pending religious freedom law that critics warned would allow discrimination against same-sex couples. Our results confirm the influence of issue framing on public opinion and suggest that CEOs can sway public opinion, potentially to the same extent as prominent politicians. Moreover, Cook’s CEO activism increased consumer intentions to purchase Apple products, especially among proponents of same-sex marriage.

    Keywords: politics; policy; policy-making; corporate social responsibility; lobbying; campaign contributions; regulation; Leadership; Policy; Ethics; Governance; Social Issues; United States;

    Citation:

    Chatterji, Aaron K., and Michael W. Toffel. "Do CEO Activists Make a Difference? Evidence from a Field Experiment." Harvard Business School Working Paper, No. 16-100, March 2016. (Revised June 2016.) View Details
  10. Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing

    Christopher Marquis, Michael W. Toffel and Yanhua Zhou

    Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms' use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters' countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004–2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.

    Keywords: disclosure strategy; disclosure; environmental performance; environmental strategy; environment; symbolic; reporting; Corporate Disclosure; Integrated Corporate Reporting; Corporate Social Responsibility and Impact;

    Citation:

    Marquis, Christopher, Michael W. Toffel, and Yanhua Zhou. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing." Organization Science 27, no. 2 (March–April 2016): 483–504. (Formerly titled "When Do Firms Greenwash? Corporate Visibility, Civil Society Scrutiny, and Environmental Disclosure.") View Details
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