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.

Featured Works

Article | Strategic Management Journal | April 2013
Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms
We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is our setting to study how a differentiated structural element—the corporate foundation—constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that leader characteristics at both the senior management and director levels affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members but not of senior managers, a result that is contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact and of how organizations can more effectively realize the strategic value of corporate social responsibility activities.
Keywords: Organizational Structure; Corporate Strategy; Philanthropy and Charitable Giving; Leadership; Governing and Advisory Boards; Corporate Social Responsibility and Impact; United States;

Citation:
Marquis, Christopher, and Matthew Lee. "Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms." Strategic Management Journal 34, no. 4 (April 2013): 483–497. (Earlier version distributed as Harvard Business School Working Paper No. 11-121.) View Details
Cite View Details Find at Harvard Read Now Related
Article | Strategic Management Journal
Corporate Social Responsibility and Access to Finance
Beiting Cheng, Ioannis Ioannou and George Serafeim
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 (January 2014): 1–23. View Details
Cite View Details SSRN Find at Harvard Related
Article | California Management Review | Spring 2014
What Impact? A Framework for Measuring the Scale & Scope of Social Performance
Alnoor Ebrahim and V. Kasturi Rangan
Organizations with social missions, such as nonprofits and social enterprises, are under growing pressure to demonstrate their impacts on pressing societal problems such as global poverty. This article draws on several cases to build a performance assessment framework premised on an organization's operational mission, scale, and scope. Not all organizations should measure their long-term impact, defined as lasting changes in the lives of people and their societies. Rather, some organizations would be better off measuring shorter-term outputs or individual outcomes. Funders such as foundations and impact investors are better positioned to measure systemic impacts.
Keywords: Nonprofit Organizations; Performance Evaluation;

Citation:
Ebrahim, Alnoor, and V. Kasturi Rangan. "What Impact? A Framework for Measuring the Scale & Scope of Social Performance." California Management Review 56, no. 3 (Spring 2014): 118–141. View Details
Cite View Details Find at Harvard Read Now Related
Article | Harvard Business Review | July–August 2014
Sustainability in the Boardroom: Lessons from Nike's Playbook
Lynn S. Paine
One surprising role of Nike's corporate responsibility committee is to provide support for innovation. More and more companies recognize the importance of corporate responsibility to their long-term success—and yet the matter gets short shrift in most boardrooms, consistently ranking at the bottom of some two dozen possible priorities. Many years ago labor conditions in Asian contract factories prompted Nike board member Jill Ker Conway to lobby for a board-level corporate responsibility committee, which the company created in 2001. In the years since, the committee has steadily broadened its purview, now advising on a broad range of issues including innovation and acquisitions in addition to labor practices and resource sustainability. A close examination of Nike's experience has led the author to conclude that a dedicated board-level committee of this sort could be a valuable addition to many if not most companies in at least five ways: as a source of knowledge and expertise, as a sounding board and constructive critic, as a driver of accountability, as a stimulus for innovation, and as a resource for the full board. In an accompanying interview with Paine, Conway discusses the committee's creation and provides an insider's perspective on what has made it so effective.
Keywords: Corporate Governance; Corporate Accountability; Globalized Firms and Management; Corporate Social Responsibility and Impact; Environmental Sustainability; Apparel and Accessories Industry; Sports Industry;

Citation:
Paine, Lynn S. "Sustainability in the Boardroom: Lessons from Nike's Playbook." Harvard Business Review 92, nos. 7/8 (July–August 2014): 87–94. View Details
Cite View Details Find at Harvard Related
Article | Organization Science | 2014
Corporate Social Responsibility Reporting in China: Symbol or Substance?
Christopher Marquis and Cuili Qian
This study focuses on how and why firms strategically respond to government signals regarding appropriate corporate activity. We integrate institutional theory and research on corporate political strategy to develop a political dependence model that explains (a) how different types of dependency on the government lead firms to issue corporate social responsibility (CSR) reports and (b) how the risk of governmental monitoring affects the extent to which CSR reports are symbolic or substantive. First, we examine how firm characteristics reflecting dependence on the government—including private versus state ownership, executives serving on political councils, political legacy, and financial resources—affect the likelihood of firms issuing CSR reports. Second, we focus on the symbolic nature of CSR reporting and how variance in the risk of government monitoring through channels such as bureaucratic embeddedness and local government institutional development influences the extent to which CSR communications are symbolically decoupled from substantive CSR activities. Our database includes all CSR reports issued by the approximately 1,600 publicly listed Chinese firms between 2006 and 2009. Our hypotheses are generally supported. The political perspective we develop contributes to organizational theory by showing (a) the importance of government signaling as a mechanism of political influence, (b) how different types of dependency on the government expose firms to different types of legitimacy pressures, and (c) that firms face a decoupling risk that leads them to be more likely to enact substantive actions in situations where they are likely to be monitored.
Keywords: institutional theory; political strategy; Non-market Strategy; emerging markets; China; corporate social responsibility; Corporate Disclosure; Corporate Social Responsibility and Impact; Emerging Markets; Government and Politics; China;

Citation:
Marquis, Christopher, and Cuili Qian. "Corporate Social Responsibility Reporting in China: Symbol or Substance?" Organization Science 25, no. 1 (January–February 2014): 127–148. View Details
Cite View Details Find at Harvard Read Now Purchase Related
Working Paper | HBS Working Paper Series | 2014
The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research
George Serafeim
A long-standing ideology in business education has been that a corporation is run for the sole interest of its shareholders. I present an alternative view where increasing concentration of economic activity and power in the world's largest corporations, the Global 1000, has opened the way for managers to consider the interests of a broader set of stakeholders rather than only shareholders. Having documented that this alternative view better fits actual corporate conduct, I discuss opportunities for future research. Specifically, I call for research on the materiality of environmental and social issues for the future financial performance of corporations, the design of incentive and control systems to guide strategy execution, corporate reporting, and the role of investors in this new paradigm.
Keywords: corporate accountability; corporate social responsibility; corporate social responsibility and impact; corporate governance; environment; environmental and social sustainability; sustainability; sustainability reporting; Sustainability Research; sustainability targets; Corporate performance; Corporate Accountability; Corporate Social Responsibility and Impact;

Citation:
Serafeim, George. "The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research." Harvard Business School Working Paper, No. 14-110, May 2014. View Details
Cite View Details SSRN Read Now Related

Recent Publications

Working Paper | HBS Working Paper Series | 2020
Accounting for Product Impact in the Airlines Industry
George Serafeim and Katie Trinh
We apply the product impact measurement framework of the Impact-Weighted Accounts Initiative (IWAI) in two competitor companies within the airlines industry. We design a monetization methodology that allows us to calculate monetary impact estimates of fare affordability, timeliness and gate control, among other factors. Our results indicate substantial differences in the impact that competitors have through their products. These differences demonstrate how impact reflects corporate strategy and informs decision-making on industry-specific areas, including airline route structure choices.
Keywords: Product Innovation; Product design; Impact; impact investing; impact measurement; ESG; ESG (environmental, social, governance) performance; ESG (environmental, social, governance) performance; ESG ratings; social corporate responsibility; corporate social responsibility; social impact; air transportation; aviation; Product; Product Design; Product Positioning; Society; Air Transportation Industry;

Citation:
Serafeim, George, and Katie Trinh. "Accounting for Product Impact in the Airlines Industry." Harvard Business School Working Paper, No. 21-066, November 2020. View Details
Cite View Details SSRN Read Now Related
Working Paper | HBS Working Paper Series | 2020
Accounting for Product Impact in the Consumer Finance Industry
George Serafeim and Katie Trinh
We apply the product impact measurement framework of the Impact-Weighted Accounts Initiative (IWAI) in two competitor credit card providers within the consumer finance industry. We design a monetization methodology that allows us to calculate monetary impact estimates on cardholder access to credit, affordability for merchants, financial health, and recyclability, among other factors. Our results indicate substantial differences in the impact that competitors have through their products. These differences demonstrate how impact reflects corporate strategy and informs decision-making on industry-specific areas.
Keywords: Product Innovation; Impact; impact investing; impact measurement; ESG; ESG (environmental, social, governance) performance; ESG (environmental, social, governance) performance; ESG ratings; social corporate responsibility; corporate social responsibility; social impact; consumer finance; financial services; Financial inclusion; Product; Product Design; Product Positioning; Society; Corporate Social Responsibility and Impact; Personal Finance; Credit Cards; Financial Services Industry;

Citation:
Serafeim, George, and Katie Trinh. "Accounting for Product Impact in the Consumer Finance Industry." Harvard Business School Working Paper, No. 21-061, November 2020. View Details
Cite View Details SSRN Read Now Related
Case | HBS Case Collection | November 2020
Guild Education: Unlocking Opportunity for America's Workforce
William A. Sahlman, Michael D. Smith, Nicole Tempest Keller and Alpana Thapar
Founded in 2015, Guild Education is an education marketplace that connects employers and universities to provide employees with ‘education as a benefit.’ The Denver-based company is transforming traditional tuition assistance programs by facilitating direct payment by the employer to the academic institution and by supporting students with coaching and advising. By October 2020, Guild had gained market traction and demonstrated impressive results. Rachel Carlson, CEO and cofounder of Guild, must decide how to manage the company’s future growth. She believes there is great potential within its core education marketplace to expand the network of academic institutions and portfolio of company partners. Carlson also envisions extending the business model and entering the career placement market. To successfully do that, she needs to find the same incentive alignment in these new businesses as in Guild’s core education platform. Would it be possible to find a solution that would result in a win-win outcome for all?
Keywords: Education; Market Platforms; Technology; Employees; Social Enterprise; Education Industry; Technology Industry; Colorado;

Citation:
Sahlman, William A., Michael D. Smith, Nicole Tempest Keller, and Alpana Thapar. "Guild Education: Unlocking Opportunity for America's Workforce." Harvard Business School Case 821-050, November 2020. View Details
Cite View Details Educators Related
Case | HBS Case Collection | October 2020 (Revised October 2020)
AfricInvest: A Pan-African Investment Platform
Victoria Ivashina and Youssef Abdel Aal
The case is set in December 2018, when Ziad Oueslati, co-managing director and co-founder of AfricInvest, a leading pan-African private equity firm headquartered in Tunisia, was reflecting on the future direction of his firm. AfricInvest started as a traditional small and mid-cap private equity fund, but over the years had expanded into multiple adjoined investment strategies. At the end of 2018, the team saw an opportunity in the venture capital (VC) space, but while some were adamant about the need to raise a VC fund, others were reluctant to add yet another strategy to AfricInvest's diverse investment strategies. The case presents a detailed insight into AfricInvest's journey from a $10 million Tunisian fund, to becoming a prominent regional player operating throughout the African continent with $1.5 billion of assets under management. Among other issues related to the firm’s growth, the case provides insights into the challenges of operating in such a wide and varied geography as the African continent. The case also offers details on their multiple investment strategies, ranging from small-cap SME focused funds, to sector-specific funds, cross-border funds, and private credit. The case explores the synergies and challenges associated with such a wide-reaching investment platform. This is described against the backdrop of the collapse of Abraaj, a leading emerging market private equity firm, in a scandal that shook the investment community in the region. The case also touches upon the role of development finance institutions (DFIs) as investors in emerging markets and the challenges of defining and measuring impact investing. The opportunity of launching a pan-African VC fund in the context of the recent collapse of Abraaj brings to the forefront several strategic questions for AfricInvest’s co-founders: Should they keep expanding into new strategies, or would it be better to roll back their existing ones to focus only on their flagship private equity funds? Were the synergies and opportunities that came from being a platform enough to offset the risks, or was their focus being spread too thin by operating numerous diverse strategies?
Keywords: Finance; Private Equity; Venture Capital; Strategy; Governance; Financial Services Industry; Tunisia; Africa; Middle East;

Citation:
Ivashina, Victoria, and Youssef Abdel Aal. "AfricInvest: A Pan-African Investment Platform." Harvard Business School Case 221-037, October 2020. (Revised October 2020.) View Details
Cite View Details Educators Related
Case | HBS Case Collection | November 2020
The Tulsa Massacre and the Call for Reparations
Mihir Desai, Suzanne Antoniou and Leanne Fan
Survivors of the 1921 Tulsa Massacre and their descendants have continued to push the government of Tulsa to pay reparations for the massacre. In 2020, after no direct reparations and largely symbolic governmental efforts, Representative Regina Goodwin of Tulsa, the descendant of massacre survivors, wondered if that call would finally be answered. The upcoming centennial of the massacre, the resurgent Black Lives Matter movement, and discussions within the U.S. about reparations broadly have made the issue more salient. In the process of thinking about the specific issue of reparations for the Tulsa Massacre, the student is guided to consider the idea of reparations generally, as well as their feasibility and merit to respond to slavery’s effects in the U.S. The student also considers the role of business in responding to racial justice issues.
Keywords: Cost vs Benefits; Decision Choices and Conditions; Decisions; Judgments; Race; Fairness; Moral Sensibility; Values and Beliefs; Corporate Accountability; Corporate Governance; Policy; Governing Rules, Regulations, and Reforms; Government Legislation; Government and Politics; Government Administration; Lawsuits and Litigation; Legal Liability; Leading Change; Mission and Purpose; Corporate Social Responsibility and Impact; Conflict and Resolution; Conflict Management; Loss; Motivation and Incentives; Perspective; Prejudice and Bias; Civil Society or Community; Social Issues; Welfare or Wellbeing; Tulsa; Oklahoma; United States;

Citation:
Desai, Mihir, Suzanne Antoniou, and Leanne Fan. "The Tulsa Massacre and the Call for Reparations." Harvard Business School Case 221-039, October 2020. View Details
Cite View Details Educators Related
Case | HBS Case Collection | October 2020 (Revised November 2020)
Wilderness Safaris: Impact Investing and Ecotourism Conservation in Africa
James E. Austin, Megan Epler Wood and Herman B. "Dutch" Leonard

Citation:
Austin, James E., Megan Epler Wood, and Herman B. "Dutch" Leonard. "Wilderness Safaris: Impact Investing and Ecotourism Conservation in Africa." Harvard Business School Case 321-020, October 2020. (Revised November 2020.) View Details
Cite View Details Educators Purchase Related
Working Paper | HBS Working Paper Series | 2020
Accounting for Product Impact in the Consumer-Packaged Foods Industry
Amanda Rischbieth, George Serafeim and Katie Trinh
We apply the product impact measurement framework of the Impact-Weighted Accounts Initiative (IWAI) in two competitor companies within the consumer-packaged goods industry. We design a methodology that allows us to calculate monetary impact estimates on customer health, access and affordability of products and recyclability, among other factors. Our results indicate substantial differences in the impact that competitors have through their products. These differences demonstrate how impact measures reflect business strategy choices and inform decision-making on industry-specific areas, including food reformulation and product placement.
Keywords: Product Innovation; Impact; impact investing; impact measurement; ESG; ESG (environmental, social, governance) performance; ESG (environmental, social, governance) performance; ESG ratings; social corporate responsibility; corporate social responsibility; social impact; nutrition database; nutritional information; CPG; consumer packaged goods; IWAI; Product Design; Product Positioning; Society; Environmental Sustainability; Corporate Social Responsibility and Impact; Nutrition; Product; Safety; Consumer Products Industry;

Citation:
Rischbieth, Amanda, George Serafeim, and Katie Trinh. "Accounting for Product Impact in the Consumer-Packaged Foods Industry." Harvard Business School Working Paper, No. 21-051, October 2020. (Revised November 2020.) View Details
Cite View Details SSRN Read Now Related
Article | Harvard Business Review Digital Articles | October 6, 2020
COVID-19 Is Rewriting the Rules of Corporate Governance
Lynn S. Paine
Boards are facing a complex new reality as a result of COVID-19. The new environment is characterized by pressures and demands from various stakeholder groups, heightened expectations for societal engagement and corporate citizenship, and radical uncertainty about the future. These factors are complicating board decision-making and challenging the shareholder-centric model of governance that has guided boards and business leaders for the past several decades. A board’s ability to deliberate in a thorough and thoughtful, but efficient, manner and come to a considered conclusion around key issues will be a critical aspect of its effectiveness in the post-COVID era.
Keywords: Health Pandemics; Corporate Governance; Governing and Advisory Boards;

Citation:
Paine, Lynn S. "COVID-19 Is Rewriting the Rules of Corporate Governance." Harvard Business Review Digital Articles (October 6, 2020). View Details
Cite View Details Find at Harvard Register to Read Related
Case | HBS Case Collection | October 2020
COVID-19 Testing at Everlywell
Jeffrey J. Bussgang and Olivia Hull
In March 2020, as COVID-19 spreads rapidly across the U.S., Everlywell founder Julia Cheek considers how to respond as a small start-up specializing in at-home lab testing. After making dramatic budget cuts, she decides to pivot the organization to address the country’s testing shortage. But after a hectic few weeks building capacity at her partner labs to 30,000 COVID daily tests, the U.S. Food and Drug Administration (FDA) releases a statement warning the public that it has not granted approval for at-home tests. Cheek must decide whether to return to her core business or persist in focusing her nascent organization on COVID-19 tests, an opportunity whose commercial merit is unclear.
Keywords: Entrepreneurship; Business Strategy; Venture Capital; Health Care and Treatment; Health Disorders; Leading Change; Technology Adoption; Technology Platform; Competitive Strategy; Science; Adaptation; Corporate Social Responsibility and Impact; Crisis Management; Social Entrepreneurship; Ethics; Government Legislation; Health; Health Testing and Trials; Health Pandemics; Consumer Products Industry; Health Industry; Technology Industry; Texas; United States;

Citation:
Bussgang, Jeffrey J., and Olivia Hull. "COVID-19 Testing at Everlywell." Harvard Business School Case 821-001, October 2020. View Details
Cite View Details Educators Purchase Related
Case | HBS Case Collection | October 2020
PraDigi Open Learning: Transforming Rural India
John J-H Kim and Malini Sen
Pratham is a non-governmental organization, focusing on high-quality, low-cost and replicable interventions to address gaps in the Indian education system. Co-founder Madhav Chavan is interested in using technology for education but differed in the way it is used in schools in India. He believes that technology allowed flexibility and non-linearity in exploring knowledge while the school classroom is based on a rigid and linear path of learning textbook lessons for the sake of examinations. Keeping this in mind, Chavan designs a digital initiative, PraDigi Open Learning, to improve basic numeracy and literacy skills among children in rural India. Electronic tablets pre-loaded with content are distributed in a few villages to help increase children’s engagement with learning. Self-directed peer group learning is encouraged. The tablets trigger the children’s curiosity. Post-COVID 19, when children are not able to attend class because of the lockdown, Chavan wonders how PraDigi Open Learning can be scaled and aligned with school education to ensure uninterrupted learning.
Keywords: Decision Choices and Conditions; Social Entrepreneurship; Education; Technology; Learning; Growth and Development Strategy; Non-Governmental Organizations; Social Issues; Education Industry; India; Asia;

Citation:
Kim, John J-H, and Malini Sen. "PraDigi Open Learning: Transforming Rural India." Harvard Business School Case 321-022, October 2020. View Details
Cite View Details Educators Purchase Related

See all faculty publications on Social Enterprise »

Faculty & Research

Featured Works

See Also

Initiatives & Projects

Faculty

HBS Working Knowledge

Harvard Business Publishing