I propose a theory aimed at advancing scholarly research in social entrepreneurship. By highlighting the key trade-off between value creation and value capture and explaining when situations of simultaneous market and government failure may arise, I suggest that social entrepreneurship is the pursuit of sustainable solutions to neglected problems with positive externalities. I further discuss the situations in which problems with externalities are likely to be neglected and derive the central goal and logic of action of social entrepreneurs, in contrast (...) to commercial entrepreneurs. Overall, this article provides a conceptual framework that allows understanding the growing phenomena of social entrepreneurship and its role in the functioning of modern society. (shrink)

Tokenistic short-term economic success is not good indicia of long-term success. Sustainable business success requires sustained existence in a corporation's political, economic, social, technological, legal and environmental contexts. Far beyond the traditional economic focus, consumers, governments and public interest groups alike increasingly expect the business sector to take on more social and environmental responsibilities. Corporate social responsibility (CSR) is the model in which economic, social and environmental responsibilities are fulfilled simultaneously. However, there is insufficient empirical evidence that demonstrates genuine widespread (...) adoption of CSR in practice, and its underlying reasons. Though research in CSR has been rapidly growing, its commercial reality and implications need to be further improved if it is to inspire corporations to voluntarily adopt CSR. In the literature, Carroll's four-dimensional (economic, legal, ethical and discretionary) CSR framework offers a theoretical basis for developing an empirically based model to explain why and how profit-motivated managers take up CSR voluntarily. Our study has developed a structural equation model to identify the key factors and their interactions that influence economically motivated managers to take on voluntary CSR, and validate Carroll's four-dimensional construct. The results support Carroll's four-dimensional CSR framework, with the exception of the link pertaining to the relationship between economic and discretionary/voluntary responsibility. This characterises the economic reality that financial market-driven economic responsibility does not automatically translate into social responsibility. Nevertheless, the empirical results demonstrate that corporations can be led to engage in more voluntary CSR activities to achieve social good when appropriate legal and ethical controls are in place. (shrink)

Most studies on climate change response have examined reductions in greenhouse gas (GHG) emissions. Yet these studies do not take into account ecosystem services constraints and biophysical disruptions wrought by climate change that may require broader types of response. By studying a firm in the wine industry and using a research approach not constrained by structured methodologies or biased toward GHG emissions, the findings suggest that both “inside out” and “outside in” actions are taken in response to climate change. While (...) attempts are made by the firm to curtail and reverse climate change through management of carbon emissions, evidence suggests a clear pattern of actions designed to adjust to the adverse consequences of climate change as well. The results both confirm and extend previous findings and suggest that the level and breadth of response to climate change is shaped by situated attention, structural controls, and industry type. (shrink)

Previous research in the social responsibility/social performance area has failed to systematically address the institutional determinants of social responsibility and its various manifestations in terms of social performance. This paper examines the relationship between the configuration of institutional structures at various levels and the necessary and sufficient conditions for the concept of social responsibility to manifest in the practice of stakeholder management. In particular we hypothesize that smaller, closely held firms in profitable niches are in the optimum position to practice (...) stakeholder management, assuming the management of these firms is predisposed to do so. (shrink)

Objectives of socially responsible investment (SRI) are discussed with reference to the two main mechanisms of the SRI ‘movement’: shareholder advocacy and managed investments. We argue that in their current forms, both mechanisms lack the power to create significant corporate change. Shareholder advocacy has been largely unsuccessful to date. Even if resolutions were successful, shareholder advocacy may still be ineffective if underlying economic opportunities remain. Marketing material and investment prospectuses issued by socially responsible mutual funds (SRI funds) commonly contain the (...) claim that, by affecting corporations' access to capital funding, SRI funds can change corporate practices. This paper makes a contribution by presenting the market share of SRI funds in the regions where they are most developed, being Europe, the U.S. and Australia, to show that this claim is unlikely to eventuate. SRI funds also commonly claim that they will outperform conventional active mutual funds. That the economic performances of both are similar might be explained by their similar portfolio compositions. The paper makes an innovation in the SRI literature by adopting a legitimacy framework to explain the continued presence of SRI funds. To achieve desired social and environmental outcomes, SRI funds are urged to address issues at a more systemic level. A suggested mechanism is the collective lobbying of corporations and, especially, governments. (shrink)

This paper evaluates the current use of the Principal Agent Model (PAM) in accounting and finance, focusing on the agent'ss use of private information. The agent'ss behavioral norms in the the PAM deviate from commonly held ethical values in society, from models of man in conventional economic theory, and also from behavioral foundations of related business school fields like corporate strategy, business ethics, and human resource management. Still, it would be unwise to reject the PAM solely because of its distasteful (...) ethical assumptions. The model does appear to have predictive power, but its descriptive or normative qualities remain unexplored. The popularity of the PAM, with its extreme model of man, raises fundamental questions about the impact of this model on business school stakeholders and society at large. (shrink)

This paper briefly examines the topic of business ethics and attempts to suggest a code of ethics for multinational firms. While most companies have basic policies on employee integrity, confidentiality and sexual harassment, relatively few have established policies regarding bribery, exploitive child labor, human rights violations and other issues they may encounter in the global market place (Drake, 1998). Until recently, very few companies had truly global operations. Consequently little attention was paid to the issue of ethical guidelines in a (...) global context. Recent changes in international markets have led to an explosion of corporations with global operations, and the need for a global code of ethics has grown commensurately. In this paper we explore the issue of global business ethics and attempt to provide a framework for future discussion. We also examine some of the unique difficulties surrounding the development of any set of global business standards. Key among these difficulties is the issue of competing ethical values in home and host countries. (shrink)