socialresponsibility

Business Models of Social Responsibility

1. Social Enterprise

We are witnessing today a remarkable growth in the so-called “third sector” (i.e., in socio-economic initiatives which belong neither to the traditional private for-profit sector nor to the public sector). These initiatives generally derive their impetus from voluntary organizations and operate under a wide variety of legal structures. In many ways, they represent the new or renewed expression of civil society against a background of economic crisis, the weakening of social bonds, and difficulties of the welfare state (Borzaga and Defourny, 2004).

Taken from https://socialenterprise.us/about/social-enterprise/

2. Humanistic Management

Humanistic management is a distinct perspective on management in which people matter. It prioritizes that intrinsic value of human beings called human dignity. The mainstream approach to management tacitly assumes that if something cannot measured it cannot be managed. As a consequence of such thinking, those things that have a price take priority over those that do not, say human integrity, environmental beauty, or quality of life. This process is also often described as commodification and current reality shows that all the commodities traded on some exchange are part of the public conversation, much more so than what makes life worthwhile.

Humanistic management aims to create a more balanced relationship between those things that can be exchanged on markets and those that are not but make life worthwhile, i.e. human dignity and well-being. Markets are an important tool and can help protect dignity and contribute to well-being, but our organizing practices need to encompass an understanding for inherent value and values that matter.

This new humanistic paradigm wants human dignity to be defended in the face of its vulnerability. The dignity of the human being lies in its capacity to define autonomously the purpose of its existence. Because human autonomy realizes itself through social cooperation, economic relations and business activities can either foster or obstruct human life and well-being. Against the widespread objectification of human subjects into human resources, against the common instrumentalization of human beings into human capital, and a mere means for profit, humanistic management advocates and upholds humanity as the ultimate end and principle of all economic activity.

The social enterprise movement is growing and gathering supporters across the globe as an innovative approach to business activity offering disadvantaged populations a path to human development and economic prosperity. There is increasing recognition among businesses, governments, and non-governmental organizations (NGOs) that their participation in these initiatives can lead to substantial benefits for disadvantaged and underserved populations, while simultaneously providing opportunities for income generation (Nielsen and Samia, 2008).

The term social enterprise is used to refer either to an activity carried out or to particular organizations and institutions. Social enterprise is thought to be something new and something distinct from classical business and traditional non-profit activity, combining at different extents elements of the social purpose, the market orientation, and financial-performance standards of business (Galera and Borzaga, 2009). All told, it is possible to agree on the following definition of social enterprises: social enterprises are organizations whose mission is to bridge social opportunity into sustainable reality innovatively, effectively, and efficiently (Borzaga and Defourny, 2004).

What is the link between social enterprises and social responsibility? Social entrepreneurs actually embed corporate social responsibility into the startup business model. Social entrepreneurs start their companies with an operational view and culture of how they will build a team, add employees, design products, choose customers, target beneficiaries and improve our environment by driving net-positive social impact results. They don't simply embrace, they impose an ownership vision that adds a mandate beyond owner wealth creation to net-positive gains for targeted groups. Doing no evil and making no harm is not enough – others must gain in significant ways.

3. Benefit Corporation

Benefit Corporation is a new legal tool to create a solid foundation for long term mission alignment and value creation. It protects mission through capital raises and leadership changes, creates more flexibility when evaluating potential sale and liquidity options, and prepares businesses to lead a mission-driven life post-IPO.

Becoming a benefit corporation has advantages for every stakeholder in your business, from consumers and talent to shareholders and directors:

Reduced Director Liability.
Expanded Stockholder Rights
A Reputation For Leadership
An Advantage in Attracting Talent
Increased Access to Private Investment Capital
Increased Attractiveness to Retail Investors and Mission Protection as a Publicly Traded Company
Demonstration Effect

Benefit corporation legislation is effective in Arkansas, California, Colorado, Delaware, Florida, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia and DC. Click HERE to find a Benefit Corp.

4. Humanistic Management case

QuikTrip (Tulsa, Okla.-based convenience chain) manages to outperform its competitors while maintaining a loyal workforce of 10,000-plus employees. QuikTrip workers enjoy above-average wages, job security (the chain has never had layoffs), and benefits including health insurance, performance bonuses and paid vacation.

The QuikTrip case offers a blueprint on how retailers can combine the best of both worlds. The key is making the right operating decisions and focusing on employees. "You can invest in your people and offer low prices. And guess what? You'll have a service advantage, too," says Zeynep Ton, HBS casewriter.

For QuikTrip, that advantage is evident to customers in easy-to-navigate stores with organized shelves, clean bathrooms and parking lots, along with quick, friendly service. As a result, its 2010 in-store profit was almost double that of the top quartile of competitors.

Since its founding in 1958 by Chester Cadieux and Burt B. Holmes, QuikTrip has opened more than 500 stores in 11 metropolitan areas; 33 more are planned to open this year.

QuikTrip systematically makes operating decisions that are good for employees, customers and profits. One principle is simplicity. Instead of customizing stores according to market, QuikTrip uses the same store layout everywhere, along with limited product variety.

The reduced complexity that results from these decisions leads to higher employee productivity and fewer errors. This standardization of stores and products also provides flexibility: QuikTrip can easily transfer employees and managers from one store to another.

The company also makes decisions that increase costs in the short term, but offer long-run benefits. For example, it invests in "relief employees," people who do not report to a specific store but are able to fill in for workers who get sick, take a vacation or have an emergency. These people ensure that the stores are never understaffed. QuikTrip also cross-trains employees for multiple functions, making it possible to shift employees as need dictates.

"Instead of constantly changing the quantity of employees in response to workflow," Ton observed, "QuikTrip changes what employees do." A daily activities worksheet lists tasks for each shift; managers can assign jobs to each employee, but more often than not the staffers are trusted to complete the work at their own pace. "The store is staffed knowing how long it takes to perform the various tasks. ... Employees frequently initiate a team-based, mutually accountable approach. It's not uncommon for them to step up for each other if there's a sick child at home or another family issue."

Conversely, workers who aren't doing their part hear about it sooner rather than later, whether it's from a manager or coworkers. "Slow movers are not meant to work at QuikTrip," said Ton. If an employee's performance isn't up to par, a manager investigates to find out how he or she can help (QuikTrip offers a variety of employee support programs). But if there are no real barriers and a worker's performance continues to suffer, the employee is cut loose.

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