Business is normally defined as the practice of making one’s living by engaging in the trade of goods, services, or both, to customers, typically in exchange for money. The problem is that too many businesses have forgotten that they are corporate citizens. By doing so, they have shirked their responsibility to society.
A businesses is not only a legal entity, it is also a member of society and therefore a citizen. The U.S. federal diversity jurisdiction statute provides that a corporation is a citizen of both (1) the state where it is incorporated, and (2) the State where it has its principal place of business. As corporate citizen it has legal, ethical and economic responsibilities to society, the goal being to improve the standards of living and quality of life for the communities that surround them and maintain profitability for stakeholders.
As Robert Reich, in his most recent book The Common Good (2018) points out, “CEOs and directors of major corporations are also entrusted with the common good. It is no excuse for them to argue they have no choice but to do whatever it takes to maximize share prices. No law requires them to do this… corporations are responsible to all their shareholders.”
What distinguishes a social enterprise from a run-of-the-mill enterprise is that it takes a distinctive approach to business by seeking to balance profit with purpose. A social enterprise does business with a clear, bottom-up, social dimension intended to produce benefit for all. Its bottom line is transformation for good.
Social entrepreneurship is about doing good business well. It’s about achieving objectives that are meaningful for the business and its stakeholders. It’s about being a good corporate citizen.
Being a good corporate citizen is what makes social entrepreneurship meaningful…and valuable. It is valuable to those around you. But it also boosts your business. It increases brand awareness; it builds your reputation; and it improves the business environment.
As opposed to Sudoku-type approaches to business and economic development, social entrepreneurship does not limit the capacity of a business for abstraction to data analytics and information gathering. It does not polarize business and everyone else. It is not just about problem solving and decision making in relation to one single problem; there is always more than one answer to any problem, and solutions are influenced by the response of others to one’s actions.
Social entrepreneurs don’t resolve problems or overcome challenges head-on or by deducing a unique solution on a nine-by-nine grid. They make decisions obliquely. They understand that the good business process is not just about SMART goals and strategies for achieving them. They take a multidimensional view of how business can achieve high-level objectives by balancing purpose with action, by being context-sensitive, by recognizing complexity and the need to continuously acquire new knowledge about the operational context, by deciding what to focus on and what to ignore, by accepting risk as a necessary and positive factor, and by reaching for success through a process of adaptation, iteration and constant rebalancing of seemingly incompatible components.
Like any business person, social entrepreneurs suffer from ignorance of the future. But unlike the dog-eat-dog profit seekers, social entrepreneurs anticipate the relevant questions for getting beyond better. They cultivate an unlimited capacity to imagine what the future might be… and then take action based on a very simple formula: Good finances + Good product/service + Good will + Good corporate citizenship= Good business.