Corporate social responsibility, social enterprise and philanthropy

The IB provides a distinct educational qualification, which rests on a strong philosophy related to the Learner Profile attributes. IB Learners strive to be

  • inquirers
  • knowledgeable
  • thinkers
  • communicators
  • principled
  • open-minded
  • caring
  • risk-takers
  • balanced
  • reflective

As IB teachers we need to consider how best to represent these attributes within our subject.

The aims of the business and management course at HL and SL are to:

  • promote the importance of exploring business issues from different cultural perspectives
  • encourage a holistic view of the world of business
  • enable the student to develop the capacity to think critically about individual and organizational behaviour
  • enhance the student’s ability to make informed business decisions
  • enable the student to appreciate the nature and significance of change in a local, regional and global context
  • promote awareness of social, cultural and ethical factors in the actions of organizations and individuals in those organizations
  • appreciate the social and ethical responsibilities associated with businesses operating in international markets.

These aims place a greater emphasis on social responsibility, cultural understanding and ethical values than many other awarding bodies and most business courses. As a consequence, the focus of the syllabus and assessment is often on non-profit making organisations, or those exhibiting social values. One area that has attracted attention in recent years is the area of social enterprise and philanthropy. In the past, I have made several blogs about altruism in the business field. The Bill & Melinda Gates Foundation is the world’s largest philanthropic organization and I wrote about their aims and operations in 2010 in my post altruism on a grand scale.

Philanthropy is the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes. This consists of private initiatives, for public good, focusing on the quality of life in communities. Corporate philanthropy is one of several approaches to corporate social responsibility (CSR), in which companies seek to do well by doing good. The whole concept of philanthropy may seem strange to your students – why give your money away for no obvious return? For very rich individuals, donating even millions of dollars may make little difference to the donor’s wealth, but why would firms, who have a legal obligation to their shareholders to act in their best interests, give away the firm’s money and resources? Your students may be sceptical about the motives of those individuals and organisations that donate; seeing the action as merely a marketing ploy. Indeed, for commercial firms there may well be reasons to be at least suspicious of the motives for giving.

Similar to research and development, philanthropy allows companies to make investments in sectors where the return is speculative. In a recent survey of Fortune 500 companies (Giving in Numbers 2013), it was found that 59% increased their philanthropy between 2007 and 2012. The typical company allocated 29% of its giving budget to schools and higher-education institutions. It isn’t a coincidence that corporate giving levels are up. Smart companies understand that philanthropy is part of a commercial strategy, developing customer loyalty in the communities where they deliver social value. The consequence in the long-run is often improved market performance and higher profitability.

Philanthropy can also help companies develop employees. For example, IBM’s Smarter Cities Challenge sends teams of employees into cities all over the world to address community issues. The teams offer consulting services to provide solutions to health care and public safety. Many IBM employees reported that the Smarter Cities Challenge was one of the most rewarding experiences of their careers. In short, it is a priceless programme for professional development and employee engagement.

Philanthropy can help companies reduce business risk, open up new markets, engage employees, build the brand, reduce costs, advance technology and deliver competitive returns. Of course, philanthropy is not the only strategy for companies to play meaningful corporate-citizenship roles. Business leaders can use a range of tools in their CSR portfolio to help create economic value that can help address relevant societal issues.

Many profit making firms have social objectives, but commitment to these objectives is usually motivated by the perception that their corporate social responsibility will ultimately make the business more profitable and support market growth. A social enterprise, however, is an organisation that uses commercial strategies to maximise improvements in human, social and environmental well-being, rather than maximising profits for shareholders.

Lesson ideas

Topic One Activity – Business organisation and environment: Social Enterprise or Social entrepreneurship

Working in groups, your students:

  • discuss the possible nature of a business enterprise. After five minutes, ask for their definitions. Have any of the groups identified non-profit organisations? If not raise the importance of non-governmental organisations and organisations with social rather than profit maximising objectives and relate this to the Learner Profile and the aims of the BM programme.
  • examine the nature of a social enterprise and after watching the following videos and after visiting the Schwab Foundation website:
    • define a social enterprise
    • identify the key characteristics of a social enterprise

What is a Social Enterprise?

Social Entrepreneurs (World Economic Forum)

Provide your students with some examples of social enterprises such as MetoWe.

‘Me to We’ is an innovative social enterprise that provides people with better choices for a better world. We offer socially conscious and environmentally friendly products as well as life-changing experiences. ‘Me to We’ measures the bottom line, not by dollars earned, but by the number of lives changed and the positive social and environmental impact made. Half of ‘Me to We’s net profit is donated to Free The Children. The other half is reinvested to grow the enterprise and its social mission.

Working in groups, your students then:

  • find two similar examples of social enterprises that interest them or catch their imagination.
  • present their social enterprises to the whole class.
  • develop a social enterprise, produce a short summary about its aims (including who it would target and benefit) and then present their ideas.

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