Nguyen Duong
Nguyen Duong
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Corporate Social Responsibility and Social Entrepreneurs A “Profit making and Social Responsibility” oxymoron is strongly debatable. Profit making is the fundamental dimension for an enterprise to sustain, perform and grow, which means wealth maximization and mobilization; whereas social responsibility is the fundamental accountability of the state that focuses on social enlistment in its totality. There fore, the community is perplexed by a number of opinions turning around the role of Corporate Social Responsibility (CSR) and how to apply CSR to entrepreneur’s business decisions in term of increasing profit as much as possible. The appearance of social entrepreneurs after that seemed to illuminate a new trend of making business along with solving social problems. The important of social entrepreneurs is considered as a crucial contribution for the universal development. The question under this condition is what social entrepreneurs should do to face to a number of potential challenges to carry out this important mission? CSR What is it? The Sanskrit saying, ‘Atithi Devo Bhav’, means – ‘the one who comes to you for being served, should be taken to be as God’, is considered as the highest order of responsibility, be it to individuals or to the society. Thus, the phrase Social Responsibility has its roots in Indian context. This phrase has long been in use with growth of industries and corporate. It not only reflects the ‘passage of time’ in its impact and transformation, but its meaning and understanding has been affected by the growth of society, nations and changes in their appreciation of cultural heritage and background. CSR is also concerned with treating the stakeholders of the firm ethically or in a responsible manner. Ethically or responsible’ means, treating stakeholders in a manner deemed acceptable in civilized societies. Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for peoples both within and outside the corporation. Some companies use the terms “corporate citizenship”, some “the ethical corporation”, while others use “good corporate governance” or “corporate responsibility” What does the CSR gain? 1. It would help to avoid the excessive exploitation of labor, bribery and corruption. 2. Companies would know what is expected of them, thereby promoting a level playing field.
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3. Many aspects of CSR behavior are good for business (such as reputation, human resources, branding and making it easier to locate in new communities) and legislation could help to improve profitability, growth and sustainability. 4. Some areas, such as downsizing, could help to redress the balance between companies and their employees. 5. Rogue companies would find it more difficult to compete through lower standards. The wider community would benefit as companies reach out to the key issue of underdevelopment around the world. In the longer term, richer consumers and improved worldwide income distribution is obviously good for business. But should business be directly involved in these issues, or simply pay taxes and rely on governments and public organizations to use these taxes wisely? In other words, is it simply enough for business to maximize profits in anticipation that this is in the best interests of human development? Social Entrepreneur Who are they? It has been suggested, however, that social entrepreneurs are very distinctive individuals. Attempts to define distinctive features of social entrepreneurs tend to portray a social hero with “entrepreneurial quality.” Dees says: “Social entrepreneurs are one special breed of leaders, and they should be recognized". "We need social entrepreneurs to help us find new avenues toward social improvement as we enter the next century” (Dees, 1998b). Interestingly, some social entrepreneurs do not even know they are “social entrepreneurs” until they receive an award or are recognized by organizations. What is the importance of SE for development? Social Entrepreneurs endeavor to 'create social' value through innovative, entrepreneurial business models. The potential market for these entrepreneurs is huge because of the wide range of social needs that remain unsatisfied by existing markets and institutions. SE is more and more increasingly important for economic (and social) development because it creates social and economic values: 1. Employment Development The first major economic value that social entrepreneurship creates is the most obvious one because it is shared with entrepreneurs and businesses alike: job and employment creation. Estimates ranges from one to seven percent of people employed in the social entrepreneurship sector. Secondly, social enterprises provide employment opportunities and job training to segments of society at an employment disadvantage (long-term unemployed,
Global Initiatives Symposium in Taiwan 2009
disabled, homeless, at-risk youth and gender-discriminated women). In the case of Grameen the economic situation of six million disadvantaged women micro-entrepreneurs were improved. 2. Innovation / New Goods and Services Social enterprises develop and apply innovation important to social and economic development and develop new goods and services. Issues addressed include some of the biggest societal problems such as HIV, mental ill-health, illiteracy, crime and drug abuse which, importantly, is confronted in innovative ways. An example showing that these new approaches in some cases are transferable to the public sector is the Brazilian social entrepreneur Veronica Khosa, who developed a home-based care model for AIDS patients which later changed government health policy. 3. Social Capital Next to economic capital one of the most important values created by social entrepreneurship is social capital (usually understood as “the resources which are linked to possession of a durable network of ... relationships of mutual acquaintance and recognition"). Examples are the success of the German and Japanese economies, which have their roots in long-term relationships and the ethics of cooperation, in both essential innovation and industrial development. The World Bank also sees social capital as critical for poverty alleviation and sustainable human and economic development. Investments in social capital can start a virtuous cycle
Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship
Nguyen Duong
4. Equity Promotion Social entrepreneurship fosters a more equitable society by addressing social issues and trying to achieve ongoing sustainable impact through their social mission rather than purely profit-maximization. In Yunus’s example, the Grameen Bank supports disadvantaged women. Another case is the American social entrepreneur J.B. Schramm who has helped thousands of low-income high-school students to get into tertiary education. To sum up, social enterprises should be seen as a positive force, as change agents providing leading-edge innovation to unmet social needs. Social entrepreneurship is not a panacea because it works within the overall social and economic framework, but as it starts at the grassroots level it is often overlooked and deserves much more attention from academic theorists as well as policy makers. This is especially important in developing countries and welfare states facing increasing financial stress. CSR and Social Entrepreneur – Where is the meeting point? Corporate social responsibility represents the response of the business community for the issues of sustainability. It mainly shows the way the business community can address the sustainability concerns of various stakeholder groups through ethical behavior and a commitment to add economic, social and environmental value. Through corporate social responsibility companies address various important issues. For example, within the company corporate social responsibility deals with human resources, health and safety, adaptation to change, management of environmental impacts and natural resources. Issues relating to the company’s relationship with the outside world include local communities, business partners, suppliers and consumers, human rights, and global environmental concerns. On the other hand social entrepreneurship is the work of a social entrepreneur. Asocial entrepreneur is an individual, group, network, organization, or alliance of organizations that recognizes a social problem and uses entrepreneurial principles to organize, create, and manage an enterprise to make social change. The social entrepreneurs’ focus is the pursuit of opportunities to catalyze social change and they also measure their success primarily in terms of social value creation, rather than profit. Among many other things, the language and concept of social entrepreneurship can include innovative not-for-profit ventures, social purpose business enterprises, such as for-profit community development banks, and hybrid organizations mixing not-for-profit and for-profit elements.
Global Initiatives Symposium in Taiwan 2009
In spite of the distinction between the actors and the range and complexity of issues they tend to address, corporate social responsibility and social entrepreneurship are strongly linked and they serve the purpose of sustainability. However, unlike business organizations, social entrepreneurs have a lot of constraints which hinder them from the pursuit of creating social value. In contrast to business initiated corporate social responsibility projects, initiatives by social entrepreneurs suffer from lack of key resources including financial, managerial and strategic roadmaps. SE – What is the way to go? Recognizing the constraints that hinder social entrepreneurs from achieving their goals is the first valuable step in devising the strategy for the required nurturing. Here the following areas of concern are identified: 1. Financial Innovative financial mechanism is important for sustainable development. Social entrepreneurs can originate and developed the idea for socially beneficial ventures. However, most social entrepreneurs depend on the financial assistance of individuals and on private and government foundations to achieve their goals. The availability of financial assistance is a crucial factor for the success of social enterprises in all stages of their life cycle. Therefore assisting organizations should come up with innovative financial mechanisms. In this regard, companies can focus on developing venture capital, microfinance and other financial assistances for social entrepreneurship. 2. Technical Like financial assistance technical assistance is also an important area for nurturing social entrepreneurs. In this regard assisting companies can focus on areas that help social entrepreneurs in their innovative engagements, in improving their organizational capacity and in strengthening their managerial capabilities. 3. Networking The complex and multifaceted nature of sustainable development and the creation of social value requires the input and cooperation of many players from diverse disciplines and sectors. Due to several constraints, social entrepreneurs could not coordinate these important networks. Therefore assisting organizations can focus on creating network platforms where social entrepreneurs can exchange their experiences and learn form one another. 4. Entrepreneurial Education and Training
Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship
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By focusing on entrepreneurial education and training, assisting companies can contribute a lot in the development of the field of social entrepreneurship towards knowledge - based professions. For example, social entrepreneurs can benefit from training programmes on: business and project planning, strategy formulation project and venture management, social sector marketing and other related topics. It is not a simple task to identify and handle the problems social entrepreneurs getting involved because they have their own limitations. This essay with the limited knowledge of writer just underlines some points that may help to give an overview of CSR, social entrepreneurs, the inter link between them and how to face to their challenges. Regardless of the mechanism, promoting social entrepreneurship can definitely create new waves of opportunities, strategies, approaches, and impacts in the direction of sustainable development.
References: 1. Er. Manoj Joshi, Asst. Professor, SAMA. Corporate Social Responsibility: Global Perspective, Competitiveness, Social Entrepreneurship & Innovation 2. United Nations Conference on Environment and Development (UNCED) (1992). Agenda 21: Programme of Action for Sustainable Development. New York: United Nations. 3. Mair, J., & Marti, I. (2005). Social Entrepreneurship Research: A Source of Explanation, Prediction, and Delight. Barcelona: IESE Business School. 4. Aron Ghebremariam. Nurturing Social Entrepreneurship through Corporate Social Responsibility 5. The importance of Social Entrepreneurs for Development http://www.business4good.org/ 6. School for Social Entrepreneurs http://socialentrepreneurs.typepad.com/
Global Initiatives Symposium in Taiwan 2009