04 October 2011 ~ 6 Comments

Is the “social” needed before the “enterprise”?

I’m starting my first week of classes at the University of Oxford in their MBA program, and I realize that I am not in the minority for having chosen this program because of its connection to the Skoll Center and its focus on “social entrepreneurship.” Many of the people I have met state that some aspect of “better” business is what brought them here…. well, that and the fact that you get to study in an institution with 800+ years of history and where some of the world’s most brilliant minds have gathered. It’s a fascinating place!

During our first week of orientation we had an optional day and a half session on social innovation that opened with Pamela Hartigan, director of the Skoll Center, speaking about how she thinks the word “social” needs to be removed from “entrepreneurship”. I couldn’t agree more, especially given the reception these concepts have received from some of my MBA classmates.

The polarization of “entrepreneurship” and “social entrepreneurship” implies mutual exclusivity. If you are a “social” entrepreneur, do you somehow get to claim moral superiority over your every day entrepreneur? Many of the most mission driven organizations I have seen have never heard of nor benefited from the term “social enterprise”, so why do we make this distinction? Is this naming trend causing us to forget that ALL business has the responsibility to not only increase profits for shareholders, but also respect and support the world around it?

I view “social” enterprises as businesses working towards social changes as their mission above maximizing income. We don’t call Colgate a social enterprise, but if a group said they were starting a business with the explicit mission of getting toothpaste out to people all over the developing world to reduce tooth decay, we might consider them so. If a group with a stated social mission took on the same business as Colgate, would just the motivating factor be enough to note the difference? Or, would there be no difference at all? And towards that end, should programs like mine be working to remove the polarizing “social” from the entrepreneurship to attract more MBA’s who don’t associate at all with the social side of this curriculum. Perhaps through their drive for successful businesses they will be ones who have the largest ability to make changes in the world?

Relying on free market approaches to global development does leave me with some additional concerns many stemming from a lack of a systematic way to define what “social” impact is. If we believe that people will vote with their money for the things they believe in, then we might take the mindset that as long as you had a socially driven society, the market would drive social improvements. The dilemma here is that the social/environmental implications of certain purchases are not readily available to influence consumer decision making. More worrying is that much of this complete impact understanding is also not readily understood or sought out by business leaders themselves. If we don’t know our social impact and can’t measure it, how can we improve it?

It turns out the same dilemmas causing failures in the NGO world are at work in business. An inability or lack of effort to measure impact and tie positive impacts to future decision making, both for donors and consumers, is creating inefficient markets where funding is going to areas which, with full informational clarity would be less desirable options.

How do we mesh all of the good intentions on one side with all of the business drive on another and make all parties realize that we can and are working towards the same goals? I’m so excited to see where this year takes me and all those of us on this course and how this unique MBA program will impact the work we all take on throughout our lives. Let’s hope that in the future the “social” doesn’t need to be listed as a distinction as a better understanding of the complete spectrum of impacts of our work will be available to all business leaders and consumers and we will all prioritize a better world in designing our businesses.

  • Hengsophiaxu

    Great info. Have you considered blogging for emerge conference?

  • http://twitter.com/_hala Hala Hanna


  • http://twitter.com/_hala Hala Hanna

    Nice one, Daniela. The other “debate” that comes up a lot when discussing business at the base of the pyramid is whether or not the business is “adding social value”. But one could argue that if you’re adding commercial value to your customers (who would otherwise, because of their low income, not have a choice) then you are automatically adding social value. In other words as you say – this is not a moral issue. If you’re providing a service that’s in demand, you’re good.

  • Sam Roberts

    You might enjoy these two links.
    Seth Godin: http://sethgodin.typepad.com/seths_blog/2011/07/no-such-thing-as-business-ethics.htmlSteve Henry (and Michael Porter and HBR): http://herd.typepad.com/herd_the_hidden_truth_abo/2011/07/hbr-gets-to-business-as-a-means-to-make-the-world-better-and-not-just-in-a-kind-capitalism-csr-way.html

  • http://twitter.com/adamkronk Adam Kronk

    Daniela, a very similar topic came up at a meeting of business school deans and business leaders in the States a few weeks ago.  It was the “Partners in Business Ethics” conference and one focus was “corporate social responsibility.”  One of the speakers basically asked why the word “social” is even in there and argued that in today’s world, concepts like CSR and sustainability should soon be what the “quality” movement was decades ago in business — something that started out as a novelty, then just a competitive advantage, and finally became simply how business is done, incorporated into all aspects of a corporation.

    This also brings to mind the “b-corp” movement afoot right now (bcorporation.net), which itself has two sides to it.  On the one hand, a growing critical mass of businesses getting on board is awesome.  But on the other, isn’t this what ALL businesses should be doing?  Aspen Institute’s Judith Samuelson has a good piece on this (http://huff.to/pZmNdS).

  • Angelique

    Hi Daniela,

    You are a great writer! For me the definition of social enterprises is not
    complete. Besides having the social goals being more important than profit
    maximalization in social companies profits don’t go to owners/shareholders but
    back into the company and its community.

    CRS program in commercial companies is a good step
    forward to show a more social face, but be realistic that at the moment it is
    just a disguise of a marketing campaign.