Ch16 - The socialization of Capitalism Flashcards
socialization of capitalism
process through which the business system conforms to the expectations of society resulting in desired, socially responsible outcomes
social purpose def
corporation is responsible to society and is aware and concerned about the ethical, social and environmental issues
-> corps will become involved in addressing these issues
-> used in place of social responsibility or sustainability
Movement toward making capitalism more aware of the impact of its actions on society
fourth sector
sector of the economy in addition to the traditional private, social and public sectors
=> illustrates in interrelations between these sectors for social purposes
=> “for-benefit” organizations that combine market-based approaches of the private sector with the social and environmental aims of the public and non-profit sectors
=> sometimes referred to as hybrid orgs
private sector, social sector and public sector
private = that part of the economy not controlled and operated by government
social = includes charities and non-profit organizations and is also referred to as the non-profit or voluntary sector
public = operated by government departments, agencies, and organizations usually not to operate businesses or make profits
Public-private partnership (PPP)
cooperative venture between the public and private sectors, built on the expertise of each partner
-> best meets clearly defined public needs through the appropriate allocation of resources, risks, and rewards
sustainable strategy
plan that views economic, ethical, social, and environmental responsibilities more intensively and integrates CSR into all facets of business operations
-> also referred to as CSR strategy
four-stage continuum
amoral sustainability strategy ->
compliance-based sustainability strategy ->
emerging sustainability strategy ->
comprehensive sustainability strategy
10 things new sustainability managers need to know
- whether there is payback on investments in sustainability
- how to make sustainability a part of corporate culture
- how to make the supply chain competitive and sustainable
- Whether customers will pay more for sustainable products
- how to best engage stakeholders
- how to identify best measurements of corp’s environmental impact
- whether CSR attracts and retains employees
- how a corp can mitigate and adapt to climate change
- the meaning of business sustainability
- How to identify resources about sustainability and related issues
Strategic management
process through which a corp:
- establishes missions and objectives
- analyzes the environment and resource capabilities
- creates the organizational systems and processes needed to implement the strategy
- devises mechanisms for evaluating performance
social enterprise
a model of business operation where some or all profits are deliberately used to further social aims
- different types determined by:
- need for operational flexibility
- financing and funding sources
- preferential taxation treatment
- public perception
- use business structure to accomplish a social purpose
types of social enterprise
- non profit org : charitable status (can issue donation receipts) or without (exempt from taxation)
- co-operative : member controlled, operated for their social benefit, if profits occur - returned to members
- hybrid corp : with caps on dividends and asset production, no tax advantages
- for-profit corp A: owned by non-profit and can operate as subsidiary earning profits
- for-profit B: owned by investors, can involve private returns to owners as well as committing a portion of profit to social purposes
common characteristics of social enterprises
- enterprise orientation
- social aims
- commitment to local capacity building
- accountable to members and community stakeholders
- autonomous orgs
- profits distributed to stakeholders or used for community
social entrepreneurship + entrepreneur
involved activities undertaken to enhance social wealth in some innovative way
- social entrepreneur : innovative, visionary leader for of a non-profit or for-profit business with real-world problem-solving creativity and a high awareness for ethical, social, and environmental considerations
social intrapreneurship + extrapreneurship
intra : process of addressing social challenges from inside established orgs
extra: process of inter-organizational action that facilitates alternative combinations of ideas, peoples, places, and resources to address social challenges
B-Corp
variation of a for-benefit corp, a certification process is required in order to be eligible to receive this designation
-> required to meet rigorous and independent standards of social and environmental accountability and transparency
2 dimensions to consider sustainability in social enterprises / non-profits
- how well they accomplish their social aims / objectives
- how they are able to maintain themselves financially
criteria for assessing an org’s social impact
- contribution to the intended mission
- evidence that an unmet need was addressed
- contributions to the community
- cooperation with other organizations
social license
privilege of operating in society with minimal formalized restrictions based on maintaining public trust by doing what is acceptable to stakeholders in the business and society relationship
-> based on ethics, values, expectations, and self-regulations
-> preferable to social or gov control, which is based on legal regulation, legislation, litigation, and compliance
criticism of social license (by business persons)
- rules, procedures, and processes are vague, making it difficult to obtain
- requirements are too open-ended, undefined and biased with unaccountable tests
social innovation
novel solution to a social problem that is more effective, efficient, sustainable, or just than current solutions
- value created accrues primarily to society rather than private individuals
- society’s most important problems cannot be solved without involving private, social, and public sectors of economy
social impact investing and social finance
1- financing of initiatives to address social and environmental challenges and that generates a financial return and measurable benefits to society
2- investments intended to create measurable social pr environmental impact as well as to generate financial returns
how is impact investment different from traditional investment
- investors expect tot receive a financial return with a defined societal impact
- investees’ business models constructed to seek both financial and social values
- both investors and investees expect to be able to measure social impact
sharing economy
sustainable social and economic system involving the sharing of human and physical resources
- reduce, reuse, recycle
- swapping, exchanging, shared ownership, borrowing, trading of used goods
- market- and exchanged-based and offers opportunities to consumers and providers of services that were not being provided in the past
philanthrocapitalism
philosophy of capitalist style objectives and criteria with and entrepreneurial spirit to get more from non-profit or social orgs
-> applies to the “one percent”
-> goals are to address social issues (human well-being, poverty, equality)
