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Social Enterprise

Social Enterprise

    • April 2013
    • Article

    Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms

    By: Christopher Marquis and Matthew Lee

    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.

    • April 2013
    • Article

    Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms

    By: Christopher Marquis and Matthew Lee

    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...

    • Article

    Corporate Social Responsibility and Access to Finance

    By: 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.

    • Article

    Corporate Social Responsibility and Access to Finance

    By: 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....

    • Spring 2014
    • Article

    What Impact? A Framework for Measuring the Scale & Scope of Social Performance

    By: 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.

    • Spring 2014
    • Article

    What Impact? A Framework for Measuring the Scale & Scope of Social Performance

    By: 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...

    • July–August 2014
    • Article

    Sustainability in the Boardroom: Lessons from Nike's Playbook

    By: 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.

    • July–August 2014
    • Article

    Sustainability in the Boardroom: Lessons from Nike's Playbook

    By: 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...

    • 2014
    • Article

    Corporate Social Responsibility Reporting in China: Symbol or Substance?

    By: 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.

    • 2014
    • Article

    Corporate Social Responsibility Reporting in China: Symbol or Substance?

    By: 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...

    • 2014
    • Working Paper

    The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research

    By: 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.

    • 2014
    • Working Paper

    The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research

    By: 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...

Initiatives & Projects

The Social Enterprise Initiative, Business & Environment Initiative, and Health Care Initiative apply innovative business practices and managerial disciplines to drive sustained, high-impact social change.
Social Enterprise
Business & Environment
Health Care

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.

Initiatives & Projects

The Social Enterprise Initiative, Business & Environment Initiative, and Health Care Initiative apply innovative business practices and managerial disciplines to drive sustained, high-impact social change.

Social Enterprise
Business & Environment
Health Care

Recent Publications

Giving-by-proxy Triggers Subsequent Charitable Behavior

By: Samantha Kassirer, Jillian J. Jordan and Maryam Kouchaki
  • March 2023 |
  • Article |
  • Journal of Experimental Social Psychology
How can we foster habits of charitable giving? Here, we investigate the potential power of giving-by-proxy experiences, drawing inspiration from a growing trend in marketing and corporate social responsibility contexts in which organizations make charitable donations on behalf of employees or consumers. We create laboratory models of giving-by-proxy in workplace (Studies 1a-3) and consumer (Study 4) contexts. We then investigate how giving-by-proxy experiences (with varying amounts of autonomy) influence subsequent charitable behavior. Across five preregistered studies (N = 3255), we provide evidence that (i) giving-by-proxy experiences (that mirror those that typically occur in both workplace and consumer contexts) trigger increases in subsequent charitable behavior, (ii) this process is mediated by participants taking “charitable credit” for their behavior, and (iii) manipulating the amount of autonomy involved in the giving-by-proxy experience does not moderate these effects. Results highlight potential societal impacts of giving-by-proxy policies and campaigns.
Keywords: Corporate Social Responsibility and Impact; Philanthropy and Charitable Giving; Behavior
Citation
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Kassirer, Samantha, Jillian J. Jordan, and Maryam Kouchaki. "Giving-by-proxy Triggers Subsequent Charitable Behavior." Art. 104438. Journal of Experimental Social Psychology 105 (March 2023).

The END Fund: To Eliminate Neglected Tropical Diseases

By: V. Kasturi Rangan and Courtney Han
  • January 2023 |
  • Case |
  • Faculty Research
Founded in 2012, the END fund focused on eliminating five Neglected Tropical Diseases that accounted for 80% of the tropical diseases affecting nearly 1.5 billion people worldwide. Its roughly $25 million/year annual budget was fully committed when it got news that the British Government would be cutting back its funding for the sector, putting at risk nearly 50,000 people for a tropical disease (visceral leishmaniasis-VL), which the End Fund was currently not addressing. The case question is whether the End Fund should redirect its resources to VL. The case highlights the difficult decisions that noprofits have to make balancing resource stretch and mission focus.
Keywords: Nonprofit Organizations; Health Disorders; Health Care and Treatment; Resource Allocation; Global Range; Decisions; Investment Funds
Citation
Educators
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Rangan, V. Kasturi, and Courtney Han. "The END Fund: To Eliminate Neglected Tropical Diseases." Harvard Business School Case 523-063, January 2023.

Marfrig's Quest for Greener Beef

By: Jose B. Alvarez, Pedro Levindo and Ruth Costas
  • December 2022 (Revised January 2023) |
  • Case |
  • Faculty Research
Marfrig, one of the world’s leading meatpackers, strived to comply with its commitment to have a deforestation-free value chain in Brazil by 2030. The company also pledged to reduce its emissions of greenhouse gases in accordance with the guidelines set by the Science-Based Targets Imitative (SBTi). Controlling shareholder and chairman Marcos Molina, and Director of Sustainability and Communications for South America Paulo Painez, must figure how to achieve these goals while dealing with increased pressures from NGOs, customers, and foreign governments. The pair believed that a solution to the company’s—and the sector’s—challenges would only be achieved by working together with other stakeholders of the Brazilian beef industry: cattle ranchers, NGOs, the government, and civil society at large. Aligning the interests of the different players, while keeping Brazil’s lead as the world’s top beef exporter, was especially challenging given the country’s fraught political environment and its tarnished image abroad.
Keywords: Agribusiness; Animal-Based Agribusiness; Plant-Based Agribusiness; Acquisition; Family Business; Communication Strategy; Environmental Management; Climate Change; Environmental Regulation; Environmental Sustainability; Bonds; Food; Global Strategy; Goods and Commodities; Government and Politics; Political Elections; Leading Change; Marketing; Product Marketing; Product Positioning; Supply Chain; Supply Chain Management; Corporate Social Responsibility and Impact; Business and Government Relations; Business and Stakeholder Relations; Partners and Partnerships; Strategy; Adaptation; Business Strategy; Commercialization; Competitive Strategy; Corporate Strategy; Diversification; Expansion; Agriculture and Agribusiness Industry; Food and Beverage Industry; Brazil; Latin America; Argentina; Uruguay; North America; United States; Europe; Asia; China
Citation
Educators
Related
Alvarez, Jose B., Pedro Levindo, and Ruth Costas. "Marfrig's Quest for Greener Beef." Harvard Business School Case 523-073, December 2022. (Revised January 2023.)

How Do Investors Value ESG?

By: Malcolm Baker, Mark Egan and Suproteem K. Sarkar
  • 2022 |
  • Working Paper |
  • Faculty Research
Environmental, social, and governance (ESG) objectives have risen to near the top of the agenda for corporate executives and boards, driven in large part by their perceptions of shareholder interest. We quantify the value that shareholders place on ESG using a revealed preference approach, where shareholders pay higher fees for ESG-oriented index funds in exchange for their financial and non-financial benefits. We find that investors are willing, on average, to pay 20 basis points more per annum for an investment in a fund with an ESG mandate as compared to an otherwise identical mutual fund without an ESG mandate, suggesting that investors as a group expect commensurately higher pre-fee, gross returns, either financial or non-financial, from an ESG mandate. Our point estimate has risen from 9 basis points in 2019 when our sample begins to as much as 28 basis points in 2022. When we incorporate the possibility that investors are willing to accept lower financial returns in exchange for the psychic and societal benefits of ESG, when we consider that the holdings of ESG and non-ESG index funds overlap, when we measure the ESG ratings of these holdings, and when we focus on 401(k) participants who report being concerned about climate change or who work in industries with lower levels of emissions, we find that the implicit value that investors place on ESG stocks is higher still. A simple model of supply suggests that the large majority of these benefits accrue to investors and firms, with intermediaries capturing 5.9 basis points in fees, half of which reflect higher markups.
Keywords: Investment; Investment Portfolio; Corporate Social Responsibility and Impact; Business and Shareholder Relations; Environmental Sustainability; Governance; Financial Services Industry; United States
Citation
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Baker, Malcolm, Mark Egan, and Suproteem K. Sarkar. "How Do Investors Value ESG?" NBER Working Paper Series, No. 30708, December 2022. (Harvard Business School Working Paper, No. 23-028, November 2022.)

The Evolution of ESG Reports and the Role of Voluntary Standards

By: Ethan Rouen, Kunal Sachdeva and Aaron Yoon
  • 2022 |
  • Working Paper |
  • Faculty Research
We examine the evolution of ESG reports of S&P 500 firms from 2010 to 2021. The percentage of firms releasing these voluntary disclosures increased from 35% to 86% during this period, although the length of these documents experienced more modest growth. Using a semisupervised machine-learning approach and guided by voluntary standards that identified material ESG issues, we explore whether the content in these reports has become more relevant to investors. On average, firms devote most of their reports to topics that are material to their sector. The relative amount of material information increased by 11% after the release of voluntary standards. This increase was driven by firms that were not involved in the standard-setting process. Firms that helped develop the standards increased material disclosures at similar rates while the standards were being developed. These results provide new insights into how ESG reports evolved.
Keywords: Voluntary Disclosure; Textual Analysis; Modeling And Analysis; Corporate Social Responsibility and Impact; AI and Machine Learning; Accounting
Citation
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Rouen, Ethan, Kunal Sachdeva, and Aaron Yoon. "The Evolution of ESG Reports and the Role of Voluntary Standards." Harvard Business School Working Paper, No. 23-024, October 2022.

Ceibal: Sustaining and Scaling Educational Innovation in Uruguay

By: John J-H Kim, Michael Chu and Mariana Cal
  • October 2022 |
  • Case |
  • Faculty Research
Ceibal was founded in 2007 in Uruguay, as an initiative to reduce the digital gap in the country. After playing an important role providing a smooth transition to remote learning during COVID, Ceibal in 2022 must now determine the best way to fulfill its mission to "be the center of educational innovation with digital technologies in Uruguay…. in order to improve learning and promote processes of innovation, inclusion, and personal growth."
Keywords: Digital Gap; COVID-19 Pandemic; Education; Teaching; Digital Platforms; Technology Adoption; Technological Innovation; Social Issues; Transformation; Corporate Social Responsibility and Impact; Mission and Purpose; Education Industry; Latin America; South America; Uruguay
Citation
Educators
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Kim, John J-H, Michael Chu, and Mariana Cal. "Ceibal: Sustaining and Scaling Educational Innovation in Uruguay." Harvard Business School Case 323-034, October 2022.

Why Sharing Economic Growth with the Community Is Good Business

By: José A. Tiburcio, Lino Miguel Dias and Robert S. Kaplan
  • October 25, 2022 |
  • Article |
  • Harvard Business Review (website)
Subsistence dairy ranchers in Central America struggle to stay afloat during the dry season when grass is scarce. Global life sciences company Bayer has launched a program to enable them to produce their own corn silage feed. The results of this program are helping to pull the ranchers out of poverty because they are now able to sustain a consistent milk output through the year and can increase the number of cattle they keep. This in turn makes them more reliable (and cheaper) suppliers for large-scale milk processing companies. This innovation creates value for Bayer and its partners in the program as well as for the ranchers and their customers.
Keywords: Sharing Economy; Innovation; Economic Growth; Poverty; Production; Supply Chain; Social Enterprise; Agriculture and Agribusiness Industry; Central America
Citation
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Tiburcio, José A., Lino Miguel Dias, and Robert S. Kaplan. "Why Sharing Economic Growth with the Community Is Good Business." Harvard Business Review (website) (October 25, 2022).

SMART: AI and Machine Learning for Wildlife Conservation

By: Brian Trelstad and Bonnie Yining Cao
  • October 2022 (Revised December 2022) |
  • Case |
  • Faculty Research
Spatial Monitoring and Reporting Tool (SMART), a set of software and analytical tools designed for the purpose of wildlife conservation, had demonstrated significant improvements in patrol coverage, with some observed reductions in poaching and contributing to wildlife population growth. Jonathan Palmer, Executive Director of Conservation Technology for the Wildlife Conservation Society, wondered how far to promote the integration of a new predictive analytic tool being developed at Harvard University, called the Protection Assistant for Wildlife Security (PAWS), and whether the data that PAWS gathered from the parks and wildlife reserves would be reliable enough for artificial intelligence (AI) and machine learning (ML) to work effectively.
Keywords: Business and Government Relations; Emerging Markets; Technology Adoption; Strategy; Management; Ethics; Social Enterprise; AI and Machine Learning; Analytics and Data Science; Natural Environment; Technology Industry; Cambodia; United States; Africa
Citation
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Trelstad, Brian, and Bonnie Yining Cao. "SMART: AI and Machine Learning for Wildlife Conservation." Harvard Business School Case 323-036, October 2022. (Revised December 2022.)

Cost Plus Drugs

By: Alexander MacKay and James Barnett
  • October 2022 |
  • Case |
  • Faculty Research
In September 2022, Mark Cuban Cost Plus Drugs Company CEO Alex Oshmyansky considered the future of the company. Cost Plus Drugs was a retailer for more than 340 generic oral medications, selling their drugs at significantly lower prices than typical pharmacies. Oshmyansky could focus resources on adding brand-name drugs to its medication portfolio or focus on the company’s ongoing development of a facility to manufacture sterile injectable drugs.
Keywords: Business Ventures; Decision Making; Entrepreneurship; Ethics; Health; Markets; Social Enterprise; Society; Strategy; Health Care and Treatment; Business Divisions; Factories, Labs, and Plants; Health Industry; Pharmaceutical Industry; United States; Texas
Citation
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MacKay, Alexander, and James Barnett. "Cost Plus Drugs." Harvard Business School Case 723-362, October 2022.

EducationSuperHighway 2.0

By: William A. Sahlman, Allison M. Ciechanover and Emily Grandjean
  • October 2022 |
  • Case |
  • Faculty Research
In 2012, Evan Marwell launched EducationSuperHighway (ESH) to address a major problem: though most public K-12 schools in the US had access to the Internet, only roughly 30% had true broadband access that would enable every student to have high speed connectivity. Marwell and his team raised philanthropic capital and worked with schools, telecommunications companies, and local, state, and federal government officials to meet that challenge. By 2019, over 99% of the public schools in the US had true broadband access.
Marwell and his team had begun the process of winding down activities at ESH when the pandemic erupted. Students were working from home, not physically at school. They decided to try to help 18 million households with 47 million people to have affordable broadband access at home.
In 2020, Marwell and Jessica Reid Sliwerski also launched a program to tackle a pernicious problem in education; by third grade, only about one in three US children were reading at grade level. Ignite! Reading offered students access to an individual science of reading tutor for 15 minutes a day over Zoom while at school. Early evidence suggested that for every week working with an Ignite tutor, kids gained over 2 weeks of reading comprehension. Ignite was organized as a public benefit corporation.
Keywords: Nonprofit Organizations; Social Entrepreneurship; Social Issues; Leading Change; Early Childhood Education; Infrastructure; Internet and the Web; Telecommunications Industry; Education Industry; Technology Industry; United States; San Francisco
Citation
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Sahlman, William A., Allison M. Ciechanover, and Emily Grandjean. "EducationSuperHighway 2.0." Harvard Business School Case 823-060, October 2022.
More Publications

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V. Kasturi Rangan
George Serafeim
Rosabeth M. Kanter
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Lynn S. Paine
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Forest L. Reinhardt
Regina E. Herzlinger
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    • 26 Jul 2022

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→More Articles

Harvard Business Publishing

    • November 2011
    • Article

    How Great Companies Think Differently

    By: Rosabeth Moss Kanter
    • October 2022 (Revised December 2022)
    • Case

    SMART: AI and Machine Learning for Wildlife Conservation

    By: Brian Trelstad and Bonnie Yining Cao
    • 2020
    • Book

    Capitalism at Risk: How Business Can Lead

    By: Joseph L. Bower, Dutch Leonard and Lynn S. Paine
→More Harvard Business Publishing
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