Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach
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Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation Fiona Wilson • James E. Post
Accepted: 30 November 2010 / Published online: 11 December 2011 Springer Science+Business Media, LLC. 2011
Abstract This article explores the hybrid phenomenon of social business, that is, both a form of organization and a practice that deliberately harnesses market dynamics to address deeply rooted social issues through the design and implementation of a core product or service. This new form of hybrid venture melds the social purpose traditionally associated with non-profit organizations with the economic purpose and market-based methods traditionally associated with for-profit firms. This exploratory research inductively explores the process by which social businesses are designed. The result suggests that clear intentionality around social purpose drives the design of these ventures and their associated missions and business models such that they can creatively synthesize competing paradigms (economic and social purpose) within one venture. The tight coupling of mission, method, and operationalization allows for the multistakeholder promise of the business model to be fulfilled.
F. Wilson (&) Whittemore School of Business & Economics, University of New Hampshire, McConnell Hall, 15 Academic Way, Durham, NH 03824, USA e-mail: [email protected] J. E. Post School of Management, Boston University, 595 Commonwealth Avenue, Boston, MA 02215, USA e-mail: [email protected]
Keywords Social entrepreneurship Social enterprise Social purpose business venture Social business Business models JEL Classifications
M10 M13 M14
1 Introduction Few can ignore the growth of critical social issues plaguing our society. Many experts and practitioners have begun to believe that the traditional approaches of government and the non-profit sector will not— alone—be enough to solve these problems. One of the emerging options is a new form of entrepreneurial organization which joins the social purpose traditionally associated with the non-profit sector, and the economic rationality and market-based approaches traditionally associated with for-profit firms. Examples of these hybrid ventures are emerging around the world (Lepoutre et al. 2011), embodying a fundamentally different approach to addressing social issues. The scale and creativity of this activity is receiving widespread media attention. In his 2007 book, Creating a World Without Poverty, Muhammad Yunus proposed a new model of organization—the social business. Yunus describes a marketbased business whose focus is on the pursuit of primarily social or environmental goals, rather than personal economic gain. He presents a powerful call to action:
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To make the structure of capitalism complete, we need to introduce another kind of business … If we describe our existing companies as profit maximizing businesses, this new kind of business might be called social business. Entrepreneurs will set
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