Social Enterprise

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 managerial, leadership, and governance challenges associated with driving sustained, high-impact social change. From the outset, our faculty focused on societal needs and, through that vantage point, pursued an exploration of the organizational forms or processes that would most effectively mobilize resources to address those needs, with a concentration on the following major topics:

  • Leadership, strategy, and governance of socially mission-driven organizations across the spectrum from entrepreneurial to established
  • The role of business leadership and corporate citizenship in driving social change
  • Business at the Base of the Pyramid—business models that address the needs and wants of the four billion people living on less than $5/day
  • Management levers needed to create and sustain high-performing K-12 public school districts in the United States
  • Evolving models being deployed to mobilize financial resources, including venture philanthropy; impact investing; and capital flows within the nonprofit sector

Defined by a cross-disciplinary, multi-sectoral approach, our research framework encompasses nonprofits, corporate involvement in the social sector, cross-sector collaboration, hybrids that were nonprofits with for-profit dimensions, and for-profits with nonprofit dimensions. For example, Alnoor Ebrahim and Michael Chu in General Management collaborate with Shawn Cole in Finance to explore impact investing’s performance metric, optimization, and structural challenges, while General Management Professors Joseph Bower, Herman B. “Dutch” Leonard, and Lynn Paine develop frameworks for rethinking the role of business in society. Through such research, we are helping to stimulate the adaptation of innovative business practices across the public, non-profit, and for-profit sectors, serving as a catalyst to creating social value worldwide.
 

Keywords: business and societybusiness at the base of the pyramidcause marketingcorporate citizenshipcorporate social responsibilitycross-sector collaborationeconomic developmentglobal povertyimpact investingnonprofit governancenonprofit marketingnonprofit strategypublic educationsocial capitalsocial developmentsocial entrepreneurshipsocial marketingsocial valueventure philanthropy

  1. Green Mountain Coffee Roasters, Inc.: Taking on seasonal starvation in Latin America

    A company with a strong commitment toward corporate social responsibility since its founding days, Green Mountain faced an ethical decision point in 2007 as new information from the field uncovered a chronic dire problem facing coffee communities - seasonal starvation. Company leaders are driven to re-assess their social impact and address this widespread problem while aligning their efforts with their broader, rapidly expanding business of selling coffee.

    Keywords: Fair Trade; coffee; Corporate Social Responsibility and Impact; Environmental Sustainability; Food and Beverage Industry; Consumer Products Industry; Latin America; Central America; Mexico; Guatemala; Nicaragua;

    Citation:

    Marquis, Christopher, and Zoe Yang. "Green Mountain Coffee Roasters, Inc. Taking on seasonal starvation in Latin America." Harvard Business School Case 414-065, April 2014.
  2. The Tate's Digital Transformation

    John Stack was the visionary Head of Digital Transformation at the Tate, a collection of four major art galleries in the UK, including Tate Modern, the most visited gallery devoted to modern and contemporary art in the world. Stack was the architect of the Tate’s “fifth gallery,” its online presence. Stack had guided the Tate through two digital strategy planning processes and his team had experienced much success in developing the Tate’s fifth gallery into a virtual place filled with immersive and engaging content, activities, experiences, and communities. Looking to the future, Stack was working to execute a new digital strategy, one that included digital as a dimension of everything the Tate did, both physically and virtually. This effort was raising important questions about organizational structure, marketing strategy, product and service design, and return on investment. What would it take to be a truly digital organization where digital was the norm?

    Keywords: marketing; digital; social media; marketing strategy; marketing communication; non-profit managment; Marketing; Marketing Strategy; Nonprofit Organizations; Entertainment and Recreation Industry; Tourism Industry; United Kingdom;

    Citation:

    Avery, Jill. "The Tate's Digital Transformation." Harvard Business School Case 314-122, April 2014.
  3. Corporate and Integrated Reporting: A Functional Perspective

    In this paper, we present the two primary functions of corporate reporting (information and transformation) and why currently isolated financial and sustainability reporting are not likely to perform effectively those functions. We describe the concept of integrated reporting and why integrated reporting could be a superior mechanism to perform these functions. Moreover, we discuss, through a series of case studies, what constitutes an effective integrated report (Coca-Cola Hellenic Bottling Company) and the role of regulation in integrated reporting (Anglo-American).

    Keywords: sustainability; sustainability reporting; integrated reporting; corporate reporting; corporate accountability; corporate social responsibility; Corporate Disclosure; disclosure; accounting; Corporate Accountability; Corporate Disclosure; Integrated Corporate Reporting; Corporate Social Responsibility and Impact;

    Citation:

    Eccles, Robert, and George Serafeim. "Corporate and Integrated Reporting: A Functional Perspective." Harvard Business School Working Paper, No. 14-094, April 2014.
  4. Corporate Social Responsibility and Access to Finance

    In this paper, we investigate whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to a) reduced agency costs due to enhanced stakeholder engagement and b) reduced informational asymmetry due to increased transparency. Using a large cross-section of firms, we find that firms with better CSR performance face significantly lower capital constraints. Moreover, we provide evidence that both of the hypothesized mechanisms, better stakeholder engagement and transparency around CSR performance, are important in reducing capital constraints. The results are further confirmed using an instrumental variables and a simultaneous equations approach. Finally, we show that the relation is driven by both the social and the environmental dimension of CSR.

    Keywords: corporate social responsibility; sustainability; capital constraints; "ESG (environmental, social, governance) performance"; stakeholder engagement; disclosure; Corporate Disclosure; Corporate Social Responsibility and Impact; Environmental Sustainability; Capital;

    Citation:

    Cheng, Beiting, Ioannis Ioannou, and George Serafeim. "Corporate Social Responsibility and Access to Finance." Strategic Management Journal 35, no. 1 (2014): 1–23.
  5. Aspada: In Search of the Right Structure for Impact Investing

    Citation:

    Chu, Michael, and Rachna Tahilyani. "Aspada: In Search of the Right Structure for Impact Investing." Harvard Business School Case 314-099, April 2014.
  6. Teach For China and the Chinese Nonprofit Sector

    Teach For China was founded in 2008 with the mission of expanding educational opportunity across China. By 2013, Andrea Pasinetti’s lofty dream had taken flight: over 300 graduates from top American and Chinese universities were participating in its 2-year teaching fellowships in more than 87 rural Chinese schools. The organization had grown from a founding team of three in a shoebox office to an 80-person operation headquartered in Beijing with teams in six other locations across China. Teach For China adapted the model pioneered by Teach For America to meet the needs of the educationally under-resourced of rural China. Led by an American, could Teach For China reshape its international identity and become an enduring Chinese institution? Could Teach For China manage regulatory risks and challenge public and government skepticism of the still-nascent and highly volatile nonprofit sector? Would Teach For China be able to sustainably scale its model to truly end educational inequality in China?

    Keywords: nonprofit; China; education; Business and Government Relations; business and poverty; business and society; social enterprise; entrepreneurship; emerging market entrepreneurship; emerging market; NGO; Education; Entrepreneurship; Social Enterprise; Emerging Markets; Non-Governmental Organizations; Nonprofit Organizations; Education Industry; China;

    Citation:

    Kirby, William C., and Erica M. Zendell. "Teach For China and the Chinese Nonprofit Sector." Harvard Business School Case 314-052, March 2014.
  7. Speaking of Corporate Social Responsibility

    We argue that the language spoken by corporate decision makers influences their firms' social responsibility and sustainability practices. Linguists suggest that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future. Prior research has shown that speakers of strong FTR languages (such as English, French, and Spanish) exhibit less future-oriented behavior (Chen, 2013). Yet, research has not established how this mechanism may affect the future-oriented activities of corporations. We theorize that companies with strong-FTR languages as their official/working language would have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR) compared to those in weak-FTR language environments. Examining thousands of global companies across 59 countries from 1999 to 2011, we find support for our theory and further that the negative association between FTR and CSR performance is weaker for firms that have greater exposure to diverse global languages as a result of (a) being headquartered in countries with a higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. Our results suggest that language use by corporations is a key cultural variable that is a strong predictor of CSR and sustainability.

    Keywords: language; Future-Time-Reference; Categories; culture; corporate social responsibility; sustainability; Communication; Corporate Social Responsibility and Impact;

    Citation:

    Liang, Hao, Christopher Marquis, Luc Renneboog, and Sunny Li Sun. "Speaking of Corporate Social Responsibility." Harvard Business School Working Paper, No. 14-082, March 2014.
  8. Integrated Reporting and Investor Clientele

    In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm’s investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not controlled by a family, operating in ‘sin’ industries, and exhibiting more stable IR practice over time. I find that the results are robust to the inclusion of firm fixed effects, controls for the quantity of sustainability disclosure, and alternative ways of measuring IR. Moreover, I show that investor activism on environmental or social issues or a large number of concerns about a firm’s environmental or social impact leads a firm to practice more IR and that this investor or crisis-induced IR affects the composition of a firm’s investor base.

    Keywords: sustainability; sustainability reporting; integrated reporting; reporting; disclosure; disclosure strategy; investor behavior; investor communication; investment management; corporate accountability; corporate social responsibility; Behavior; Integrated Corporate Reporting; Corporate Social Responsibility and Impact; Investment;

    Citation:

    Serafeim, George. "Integrated Reporting and Investor Clientele." Harvard Business School Working Paper, No. 14-069, February 2014. (Revised April 2014.)
  9. The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

    The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innoviations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end wold poverty and promote female empowerment, others condemned it as a disaster for the poor. Female empowerment has often been seen as one of the key promises of the industry. In part, this is based on the fact that more than 80% of its poorest clients, i.e., those who live on less than $1.25/day, are women. This paper discusses what we have learned so far about the potential and limits of microfinance and how insights from research and practice can help inform the industry’s current products, policies and future developments.

    Keywords: Microfinance; Entrepreneruship in emerging markets; entrepreneurship; gender; Women's Empowerment; entrepreneurs; Saving; savings; credit; credit supply; Insurance; Development economics; development finance; Behavioral economics; Microfinance; Developing Countries and Economies; Social Entrepreneurship; Gender Characteristics; Banking Industry; Financial Services Industry; Insurance Industry; Public Administration Industry; Africa; India; Asia; Latin America; Chile; Kenya;

    Citation:

    Pomeranz, Dina D. "The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?" EY Thought Leadership Series, February 2014.
  10. Anglo American: Implementing a 'Social Way' for Global Mining

    The mining giant Anglo American attempts to differentiate itself through its social performance, yet public expectations are still growing. Maintaining a "social license" to operate was increasingly challenging and critical to business success.

    The case considers Anglo American's options to stay in front of these trends. How can the protagonist promote greater professionalization of social performance inside the organization, and greater integration with business decisions?

    The organization was also under pressure to increase social investments as part of the company's social license. Could significantly more value—for the company, host governments, and local communities—be created by leveraging the company's core operations, such as increasing the amount of goods and services purchased from local suppliers?

    Keywords: Global Mining; Localization; socioeconomic issues; procurement; Corporate Social Responsibility and Impact; Supply Chain Management; Globalization; Reputation; Emerging Markets; Mining Industry; South Africa;

    Citation:

    Marquis, Christopher, David Plumb, Tom Blathwayt, and Zoe Yang. "Anglo American: Implementing a 'Social Way' for Global Mining." Harvard Business School Case 414-063, January 2014.
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