BCorp · Between Social Values and Profitable Performance: The Case of B-Corporations
Horizon 2020 — Marie Skłodowska-Curie Actions
- Duration
- 2016-06-01 → 2018-05-31
- EU contribution
- €158,122
- Participants
- 1
- Scheme
- MSCA-IF-EF-ST
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Results in brief
Between Social Values and Profitable Performance: The Case of B-Corporations
It is an increasing trend the idea that business enterprises should have a social impact and thus, they should respond to a blended logic, not purely economic. Think of the following: the company Toms’ follows the ‘One to One’ business: for each item purchased Toms will help a person in need. For each pair of shoes, the company gives for free another pair to children in needs. Or they offer a sight visit to a person in need for each glasses they sell. And with others of its products, Toms sponsors a safe birth delivery or the supply of filtered water. With a different approach Ben & Jerry’s - ice cream leader brand - has created its social identity as the one of a company committed to environmental causes, sustaining around the world initiatives and movements to fight climate change. How do companies can pursue profitability by developing a value & identity-based strategies? Particularly, this issue implies a non-trivial balance: on the one hand, entrepreneurs invest in classical profitable business-oriented actions, while, on the other hand, they also might engage in non-profit social values not related to their business. The term hybrid company has been coined recently to indicate the new phenomenon of those businesses whose mission and identity are a mix between the achievements of a competitive advantage and the realization of a non-profit social purpose. To address this general research question and understand how social business hybrids can implement and profit from value and identity-based strategies balancing dual objectives, this project has studied the population of B-Corporations. B-Corporations are a new corporate form that is spreading in the United States since 2007 that perfectly synthetize the combination of social actions and competitive benefits is fully realized in this kind of businesses and currently are a total of about 2,300 around the world. The concept of B-corporation is based on a fundamental idea of redefining the way to do business: compete not to be the best in the world, but for the best of the world.
Data: CORDIS, © European Union
Project objective
How entrepreneurs could profit from social responsible investments? This issue implies a balance between entrepreneurs’ investments in profitable business models and their engagement in non-profit social actions. To address this question, the project studies the B-Corporations as a new legal business form of corporations (private and public) pursuing benefits for society and shareholders. A non-profit certifying organization, B-Lab, analyses the impact of these companies on society, with particular attention to their ability to provide to ‘communities’ beneficial products or services. Although first established in US, now they are present in 34 countries across 121 industries. Employing this legal form of social companies, the proposal exploits the notion of community-focused strategies (CFS) to refer to the actions that entrepreneurs should pursue to establish links with communities to fulfill reciprocal social values. If people join communities to satisfy their identity needs, entrepreneurs might seek to align their ventures’ strategy to them to improve entrepreneurial performance. Building on social identity theory, entrepreneurial and strategy research, this project adopt mainly a demand-oriented approach. First, it tries to explain differences in new ventures’ performance investigating how B-Corps interact with their communities and through them access customers’ information and gaining loyalty. Second, it explores and profiles the B-Corps as new examples of social entrepreneurial ventures. Finally, it studies entrepreneurs’ strategies to develop long-term interactions with the communities. The statistical evidence is drawn from secondary data, surveys to entrepreneurs, and lab experiments. Implications on ventures’ success rate, growth and drawbacks of the interplay between social entrepreneurship and CFS are discussed.
Original text from CORDIS.
Participants
- IE UNIVERSIDAD · SegoviaCoordinatorSpain
Links
Data: CORDIS, © European Union