Corporate social entrepreneurship

A corporate social entrepreneur (CSE) is someone who attempts to advance a social agenda in addition to a formal job role as part of a corporation. It is possible for CSEs to work in organizational contexts that are favourable to corporate social responsibility (CSR). CSEs focus on developing both social capital and economic capital, and their formal job role may not always align with corporate social responsibility. A person in a non-executive or managerial position can still be considered a CSE.^[1]^[2]

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Mass layoffs and record profits at the same time, manager salaries, scarcity of natural resources and imminent climate catastrophe, morally questionable advertising, child labor, corporate fraud, financial crisis and the "Occupy Wall Street" movement ... These are just a few examples you may have heard about under the topics of sustainability business ethics or corporate social responsibility These themes raise questions about justice for current as well as for future generations. We want to ask corporate social responsibility --CSR for short-- what is this? This man made headlines a few years ago. In 2004, Angelo Ugolotti learned from investigators that he was chairman of the board several companies set up by his employer, the Italian milk concern Parmalat. angelo however had not even heard of those companies. At Parmalat, he was responsible for the switchboard. You can imagine how the story goes. Corporate fraud at its best: bogus companies, cooking the books, bribery, accounts in the Cayman Islands -- the whole works. The task of corporate social responsibility is to prevent these and other morally reprehensible practices which can weaken society, damage companies and hurt employees. More and more companies have realized the relevance of moral practices in their business; even though they have not always sufficiently implemented CSR, yet. Concrete preventative measures are often labeled "risk management", a term more commonly used for avoiding financial risks and damage to a company's reputation. And no one likes bad press, right? Thus, companies define clear rules, so-called "compliance" or "value-management" systems. For example, you can accept a bottle of wine from the supplier, but you have to pass up a golfing trip to Hawaii. However, risk and compliance management are only one aspect of corporate responsibility correctly understood. Firstly, CSR is not just about preventing "bad practices," like corruption and fraud and so on. Secondly, this approach does not question a company's business activities, as such. In fact, compliance management could be an efficient control mechanism even in organizations like the mafia. The more challenging question is: How can companies contribute to a "good society" through "good business" practices? "Oh, that's easy!" they say. We'll create a charity foundation or donate a lot of money and, thus, "do good". Wrong! That won't hurt and may even help, but it is not systemic change. The important thing is: CSR is about how companies make profits, not about how they spend them. not about how they spend them. Corporate social responsibility must not simply be the "repair center" of capitalism. It has to demand systemic changes in a market economy. In part, this requires a new role for the key players in this game: companies must become moral, as well as economic, actors. What is required and important is a stronger integrative perspective based on a system of deontological values and which is closely related to the company's "core business". closely related to the company's "core business". This means social and ecological criteria must be taken into consideration, for example, in the treatment of employees, organization of the production process, offered and produced products and services and how they are marketed, and responsible business practices of suppliers, the so-called "supply chain". By the way, virtuous managers or the "honorable merchant" alone will not suffice. We need employees of integrity at all levels of the company, but we also need organizational structures and clear rules. But relying on a code of conduct is also short sighted, because in extreme cases it means "act according to some given rules", which is the opposite of ethical reflection, namely, actually thinking about good and evil, right and wrong. In other words: CSR is always about both individuals and institutional structure. In business ethics, one speaks of individual ethics and institutional ethics. But isn't that unrealistic? Shouldn't the state do more to promote a good and fair society? Granted. It is unrealistic and that's exactly why such questions are important! Business ethicists don't just ask what the world is like, but also what it should be like -- how it ought to be. At the very least, we want to suggest where the journey should lead. At the same time, we want to make practical suggestions about how to embark on that journey. One speaks of questions of justification, on one hand, and of implementation, on the other -- preferably in that order. The state, particularly through politics and law, can contribute to the implementation of corporate responsibility, but only within a limited range. If we look at society from a bird's-eye view, we can spot different social systems: the economic system, the political system, the justice system, for example. One can speak of the "functionally differentiated" society we live in. About sixty or seventy years ago, some German economists came up with an idea that led to the development of the social market economy as we now know it, particularly in Europe. They thought that a market economy should be embedded in a political framework that determines the rules of the game. This underlying idea is still important, but it has become distinctly more difficult to rely on the state alone. Societal differentiation has progressed because most systems have internationalized. "Globalization" is the magic word that applies to most systems, but not all of them. Politics and, particularly, law tend to be bound to one country's borders, while the economy, above all, is highly internationalized and globalized. This makes effective regulation difficult. Thus, it is now not only about the classic rules of the game, but also about the moves of the players, the corporations in a changed and changing world. And beyond politics and law, civil society -- in particular NGOs -- has gained a strong influence on the economy, as both vicious watchdogs and as partners of businesses. In 21st century society, we find new, rather odd -- hybrid -- constructs under the notion of "soft laws". These are collective individual commitments to comply with certain social and ecological standards, such as collective industry agreements or the UN Global Compact. So companies are supposed to operate responsibly. Is anything really happening??? There's no clear answer to that question. The cynics say that CSR is like teenage sex: everybody says they are doing it, but few actually are. And those who really do it, do it rather badly. ;-( The truth is more nuanced, of course: in the area of corporate responsibility there is also "the good, the bad and the really ugly." 0:07:52.340,0:07:59.699 More and more companies deal with CSR and take the first steps towards responsible business practices. We can definitely observe a distinct effort, even though it is still a delicate little plant. And of course there are still those who misconstrue CSR as a PR instrument and simply want to "green wash" or "blue wash" their company. And, unfortunately, there are still companies that don't give a s*** about questions of corporate responsibility, and which even trample on justice. Got all that? Let's sum it up: First, CSR stands for Corporate Social Responsibility. Second, CSR is based on the question of "good business" for a "good society" -- today and tomorrow. Third, Corporate Social Responsibility is not charity: it is about how companies earn their profits, not how they spend them. Fourth, it takes employees of integrity and appropriate organizational structures to realize CSR. It is a matter of individual and institutional ethics. Fifth, politics continue to play an important role, but in a globalized world the effects of regulation can be limited. And, thus, sixth, companies play an increasingly important role. Seventh, "soft laws" are new governance mechanisms based on companies' self-commitment. Finally, eighthly, CSR has arrived in business practice. It is necessary to support these developments professionally, but also to provide critical perspectives with respect to them. Research on issues of corporate responsibility is still beginning and future developments will be exciting to see. It is unclear whether a good and fair society can be created with the help of companies. But it can't be created without them. [wait! she is coming back.... ] Oh, we almost forgot: besides corporate responsibility, there's also consumer responsibility. You can practice that the next time you go shopping, and there may be more from us on that topic.

Relevance

CSE is a multi-disciplinary scientific sub-field relating to the fields of corporate social responsibility and sustainability. It has relevance in the context of business and management, specifically in areas such as business ethics, sustainability, organizational behavior, entrepreneurship, human resource management and business strategy. The concept has intersections with sociology, anthropology, social psychology and philosophy.^[3]

The social entrepreneurship literature has largely concentrated on the voluntary, not-for-profit, or "third" sector. In the for-profit context, the social entrepreneur is traditionally perceived as a philanthropic agent or business owner.^[2]^[4] In the UK, the corporation is defined by the company’s directors and shareholders in its articles of association, requiring employees to deliver returns to shareholders, through their job roles.^[5] The exception to this might be the UK’s Co-operative Group, which describes its business as guided by a social mission and is not responsible to shareholders for delivering profit.

CSE is unlikely to have the time or other resources to commit full-scale due to organizational constraints. Hence, corporate social entrepreneurship is characterized by its informality.^[6] The entrepreneurial discretion that is required to perform it is controversial.^[7] Activity done by CSEs varied across the domains of CSR.^[8]

Background

CSE was initially described in 2002 in a theoretical working paper published in the Hull University Business School Research Memoranda Series.^[9] The paper argued that personal values could also motivate CSR (and sustainability), along with more apparent economic and macro-political drivers. This reflected traditional business ethics and the philosophical debate on moral agency.^[10]^[11] The paper was then followed by a UK conference paper, published the following year in the Journal of Business Ethics,^[12] which discussed the significance of managerial discretion in CSR.

The term "corporate social entrepreneur" was first used in a paper presented during the 17th Annual European Business Ethics Network Conference held in June 2004.^[13] The term "corporate social entrepreneur" was defined and distinguished from other types of entrepreneurs, such as executive entrepreneurs, intrapreneurs (Pinchot, 1985), policy entrepreneurs, and public or social entrepreneur.^[14]^[13] The term initially referred to managers. However, employee inclusion was later extended to all levels of the firm.^[1]

Dr. Christine A. Hemingway developed the idea of CSE after her stint as a marketing executive in the corporate sector.^[3] The notion was also inspired by Wood, who had previously referred to "Ethical training, cultural background, preferences…and life experiences…that motivate human behavior".^[15]^[16]

Business ethics

Embezzlement of social entrepreneurial funds is not unheard of, nor are generally unethical business practices being covered up by robust social entrepreneurial programs.^[17]^[18] Many businesses conduct social entrepreneurship for the sake of public relations.^[19] Social corporate entrepreneurship activity has yet to be quantified on any objective scale.^[20] There is some evidence that supports the idea that businesses that are ethical, as reported by their employees, are performing better than those that are not.^[21] This evidence is joined by other evidence which suggests that employees tend to leave companies that they do not view as behaving ethically.^[22] CSE has been described as a manifestation of enlightened self-interest.^[14]^[23]^[24] Alternatively, a deontological viewpoint frames acts of socially responsible behavior as driven by the individual's sense of duty to society, which may be viewed in terms of altruism.^[12]^[25]

Research

Summers and Dyck (2011) described the abstract stages of CSE as: first socialization, or the conception of a socially beneficial idea. Second externalization, developing the idea into a concrete plan. Third integration, making the idea a reality. Finally, fourth is internalization, or establishing socially beneficial practices in the company.^[26]

Some studies have shown a positive relationship between CSR and financial performance,^[27] others regard the picture as more nuanced.^[28] Consequently, the notion of the corporate social entrepreneur is controversial due to arguments about the role of business and whether or not CSR helps financial performance, and because the concept of employee discretion has been considered a key factor in moral character (in the ancient philosophical sense).^[29] Some unethical behavior is sometimes acknowledged as an outcome of discretion and agency; corporate irresponsibility is regarded as insufficient.^[7] This is of particular relevance in the global financial crisis of 2008, caused by financial irregularities and lapses in corporate governance. These have produced some calls to move beyond capitalism.^[30] Individuals closely related between the financial objectives of a company and public well-being sometimes referred to as Social Intraprenuers.^[31]^[32] Hemingway (2013) referred to the synonymous nature of the two terms: intrapreneur (Pinchot, 1985) and corporate entrepreneur.^[33]

The value system that is employed within an organization plays a large role in the emergence of corporate social entrepreneurs.^[34] Moreover, the sustainability of social intrapreneurship ventures has been called into question by critics. Socially beneficial ventures often struggles in the short term, leading to hesitance from investors.^[35]

References

^ ^a ^b Hemingway 2013b.
^ ^a ^b Austin, James; Stevenson, Howard; Wei-Skillern, Jane (2012). "Social and commercial entrepreneurship: Same, different, or both?". Revista de Administração. 47 (3): 370–384. doi:10.5700/rausp1055.
^ ^a ^b Hemingway 2013a.
^ Thompson, John L. (2002). "The world of the social entrepreneur". International Journal of Public Sector Management. 15 (5): 412–431. doi:10.1108/09513550210435746.
^ "Model articles of association for limited companies". GOV.UK. 10 October 2017.
^ Hemingway, Christine A. (2013). Corporate Social Entrepreneurship: Integrity Within. Cambridge University Press. pp. 119–192. ISBN 978-1-107-44719-6.
^ ^a ^b Hemingway 2005.
^ Hemingway 2013a, Chapters 8, 9.
^ Hemingway, C.A., An Exploratory Analysis of Corporate Social Responsibility: Definitions, Motives and Values, Research Memorandum No. 34, University of Hull Business School. 2002. ISBN 1-902034-24-4
^ Lovell, Alan (2002). "Moral agency as victim of the vulnerability of autonomy". Business Ethics: A European Review. 11: 62–76. doi:10.1111/1467-8608.00259.
^ Maclagan 1998.
^ ^a ^b Hemingway, Christine A.; Maclagan, Patrick W. (2004). "Managers' Personal Values as Drivers of Corporate Social Responsibility". Journal of Business Ethics. 50 (1): 33–44. doi:10.1023/B:BUSI.0000020964.80208.c9. JSTOR 25123191. S2CID 154889970.
^ ^a ^b Hemingway, C.A., Personal Values as the Catalyst for the Corporate Social Entrepreneur. 17th Annual European Business Ethics Network (EBEN) Conference ('Ethics and Entrepreneurship', University of Twente, Enschede, The Netherlands, 24/26 June 2004
^ ^a ^b Austin, James; Stevenson, Howard; Wei-Skillern, Jane (2006). "Social and Commercial Entrepreneurship: Same, Different, or Both?". Entrepreneurship Theory and Practice. 30: 1–22. doi:10.1111/j.1540-6520.2006.00107.x. S2CID 154727792.
^ Wood, Donna J. (1991). "Corporate Social Performance Revisited". The Academy of Management Review. 16 (4): 691–718. doi:10.5465/amr.1991.4279616. hdl:10068/100015. JSTOR 258977.
^ Trevino, Linda Klebe (1986). "Ethical Decision Making in Organizations: A Person-Situation Interactionist Model". Academy of Management Review. 11 (3): 601–617. doi:10.5465/amr.1986.4306235.
^ Jones Christensen, Lisa; Mackey, Alison; Whetten, David (1 May 2014). "Taking Responsibility for Corporate Social Responsibility: The Role of Leaders in Creating, Implementing, Sustaining, or Avoiding Socially Responsible Firm Behaviors". Academy of Management Perspectives. 28 (2): 164–178. doi:10.5465/amp.2012.0047.
^ Dejardin, Marcus; Laurent, Hélène (April 2016). The Ambivalent Effect of Corruption on Entrepreneurship and Economic Development. International OFEL Conference on Governance, Management and Entrepreneurship. Zagreb. pp. 903–924. ProQuest 1803688400.
^ Chell, Elizabeth; Spence, Laura J.; Perrini, Francesco; Harris, Jared D. (1 February 2016). "Social Entrepreneurship and Business Ethics: Does Social Equal Ethical?". Journal of Business Ethics. 133 (4): 619–625. doi:10.1007/s10551-014-2439-6.
^ Kuratko, Donald F.; McMullen, Jeffery S.; Hornsby, Jeffrey S.; Jackson, Chad (1 May 2017). "Is your organization conducive to the continuous creation of social value? Toward a social corporate entrepreneurship scale". Business Horizons. 60 (3): 271–283. doi:10.1016/j.bushor.2016.12.003. S2CID 157716734.
^ Ogbari, Mercy Ejovwokeoghene; Oke, Adunola Oluremi; Ibukunoluwa, Adeyemo A.; Ajagbe, Musibau Akintunde; Ologbo, Andrew Cat (12 June 2016). "Entrepreneurship and Business Ethics: Implications on Corporate Performance". International Journal of Economics and Financial Issues. 6 (3S): 50–58. ProQuest 1809615223.
^ Low, Mei Peng (2017). Linking Entrepreneurial Orientation and Internal Corporate Social Responsibility to Employees' Intention to Leave in Small Medium Sized Enterprises: The case of Malaysia (Thesis).
^ Austin, J.; Leonard, H.; Reficco, E. and Wei-Skillern, J. in Social Entrepreneurship: New Models of Sustainable Social Change A. Nicholls, ed., Oxford University Press, Oxford. 2006b, pp. 169 – 181.
^ Austin, J.; Leonard, H; Reficco, E. and Wei-Skillern, J. in The Accountable Corporation: Corporate Social Responsibility Volume 3 M. Epstein and K. Hanson, eds., Praeger, Westport, CT. 2006c, pp.237 – 247.
^ Hemingway 2013a, p. 49-50.
^ Summers, Donald B.; Dyck, Bruno (2011). "A Process Model of Social Intrapreneurship within a For-Profit Company: First Community Bank". Social and Sustainable Entrepreneurship. Advances in Entrepreneurship, Firm Emergence and Growth. Vol. 13. pp. 139–174. doi:10.1108/S1074-7540(2011)0000013010. ISBN 978-1-78052-072-8.
^ Orlitzky, Marc; Schmidt, Frank L.; Rynes, Sara L. (2003). "Corporate Social and Financial Performance: A Meta-Analysis". Organization Studies. 24 (3): 403–441. doi:10.1177/0170840603024003910. S2CID 8460439.
^ Barnett, Michael L. (2007). "Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility". The Academy of Management Review. 32 (3): 794–816. doi:10.5465/amr.2007.25275520. JSTOR 20159336. S2CID 167584731.
^ Rabinow, P. (ed.), Michael Foucault Ethics: Subjectivity and Truth, Essential Works of Foucault 1954–1984 Volume 1, Penguin, London. 2000.
^ Mason, P. PostCapitalism: A Guide to Our Future, Penguin, London. 2015
^ "A guide to 'social intrapreneurs' and where to find them". TheGuardian.com. 31 January 2011.
^ Venn, Ronald; Berg, Nicola (2013). "Building competitive advantage through social intrapreneurship". South Asian Journal of Global Business Research. 2: 104–127. doi:10.1108/20454451311303310.
^ Hemingway 2013a, p. 86.
^ Austin; Reficco, James; Ezequiel. "Corporate Social Entrepreneurship" (PDF).{{cite web}}: CS1 maint: multiple names: authors list (link)
^ Venn, Ronald; Berg, Nicola (2013). "Building competitive advantage through social intrapreneurship". South Asian Journal of Global Business Research. 2 (1): 104–127. doi:10.1108/20454451311303310.

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