Using your Business Knowledge To Make a Difference



INTRODUCTION
Social entrepreneurship has become more visible in the media the past few years and it is even possible to study social entrepreneurship degrees at universities. According to Wiedswang (2010) the solution to deal with challenges of modern welfare is social entrepreneurship. Whether it is to create welfare in societies that have none, or if it is to cover new demands in welfare in more developed societies, social entrepreneurship will prove to be worth investing resources in (Wiedswang, 2010). This article will discuss how ones business knowledge can be used to do make a difference and why one should do it. Our main aim with this article is to inspire companies to take social responsibility. We would like all companies to take a step back and think of how they affect the society and what they can do to create social change and increase social value, whether it is in the immediate community or in other parts of the world.

We are both graduates at the master program Business Creation and Entrepreneurship shortened to the BCE program, at Tromsø University Business School. The BCE program offers talented and motivated students competence, capital and colleagues to take the best ideas to market. The aim is to establish knowledge-intensive businesses through practical teaching, a broad collaboration with research facilities and industry, and close monitoring of the processes (BCE Webpage, 2010). Together with five of our classmates we established BCE Impulse, a social entrepreneurship organization, in March 2010 in order to give something back to society and further to pass on the knowledge gained from the BCE program.

This article is a result of a BCE Impulse application to participate in the social innovation event “Kennisland Social Innovation Safari” in Amsterdam. The authors travelled 3000 kilometres from Tromsø to Amsterdam in July 2010 to participate in the event. The promise of dealing with real social innovation and social entrepreneurship projects over a one-week course, and the chance to meet other like-minded people from all over Europe (Kennisland, 2010) were factors that triggered the wish to participate. The trip to the Netherlands was funded by a scholarship, VRI-Troms. The scholarship is awarded in order to motivate students to write assignments in collaboration with companies within marine sector, tourism and oil / petroleum / environment (Karrieresenteret, 2010). The collaborating company is Scandinavian Dermal Innovation AS, a biotechnology company that works on development of ingredients for the cosmetics industry with a focus on sustainable development and social responsibility. One aim for participating in the Kennisland Social Innovation Safari was to look into possibilities for innovation in light of social entrepreneurship. Professor Lene Foss from the University of Tromsø has been our advisor in writing this article.

SETTING THE SCENE
The opening introduced two terms, social entrepreneurship and social innovation. Both terms contain the word social, so let us look into what it denotes. It seems like there is a general opinion that creating something that is social, is about increasing social value by contributing to the welfare or well being in a given community, the public or society as a whole (Mair & Martí, 2006; Peredo & McLean, 2006; Phills Jr., Deiglmeier, & Miller, 2008). What differentiates the two terms is also what seems to create two different directions of thoughts.

The definition of the conceptual framework of the term entrepreneurship is something that researchers have been arguing about for a long time. It is however no doubt about the fact that the entrepreneur and his or her skills have been idealized for a long time as a new sort of ‘cultural hero’ (Burns, 2008). In general, theorists associate entrepreneurship with opportunity and entrepreneurs are someone that have the ability to see and seize upon new opportunities (Martin & Osberg, 2007). Burns (2008) have a definition that pinpoints this:

“Entrepreneurs create new demand or find new ways of exploiting existing markets. They identify a commercial opportunity and then exploit it.”

The field of social entrepreneurship is attracting growing amounts of talent, money and attention (Martin & Osberg, 2007). Among with the growing popularity it is also a growing confusion about what a social entrepreneur does. There are several directions of thought within academia on what the term means (Bornstein, 2007; Elkington & Hartigan, 2008; Leadbeater, 1997; Nicholls, 2006). Some refers to social entrepreneurship as not – for – profit initiatives in search of optional funding strategies, or management methods to create social value. Others view it as a socially responsible exercise of commercial business engaged in cross – sector partnerships, and some see it as a means to ease social problems and catalyze social transformation (Mair & Martí, 2006). As the aim of this article is not to discuss the different definitions of social entrepreneurship, we are simply just recognizing the fact that there are disagreements regarding this. Alter (2006, p. 205) has a definition that is appropriate in the context of this article:

“The hallmark of social entrepreneurship is its ability to combine social interests with business practices to effect social change”.

Some argue that the term social innovation is more useful than social entrepreneurship because innovation is what creates social value (Phills Jr. et al., 2008). However, Phills Jr. et al. (2008) do not underestimate the importance of social entrepreneurs as they see new patterns and opportunities for innovation and are willing to exploit them even when established organizations are unwilling to try them. Phills Jr. et al. (2008, p. 36) have suggested a definition for social innovation that makes it easy to understand what the term comprises:

“A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals.”

WHY USE YOUR BUSINESS KNOWLEDGE TO MAKE A DIFFERENCE?
Now that the scene has been set, we can look into why one should use ones business knowledge to make a difference. What reasons are there for taking social responsibility, other than the obvious one of making a difference?

Sprinkle and Maines (2010) have identified six reasons for why companies engage in socially responsible activities. The study focused on benefits of CSR, but we believe it can be translated to companies involved in social entrepreneurship or social innovation activities as well, as these are also ways of taking social responsibility. Some companies may have altruistic reasons, believing that taking corporate social responsibility is a part of being a good global citizen. Other companies may engage in CSR activities as “window dressing” to satisfy a variety of stakeholder groups. It is a common belief that one of the most significant benefits of having an active CSR program is that it will help recruit, retain and motivate employees. Customer-related motivations are another reason for having CSR programs because it may persuade consumers to buy a company’s products or services. Companies’ focus on environmental concerns can also potentially reduce production costs. Last, CSR can be viewed as an integral part of a company’s risk management efforts. It can for instance be an effective lever for easing legal or regulatory constraints. This is not, as Sprinkle and Maines (2010) also realized, a complete list of reasons to why companies engage in CSR activities. Other examples could be that suppliers may be more likely to buy from social responsible companies, and it may also be easier to attract investors.

Innovation Norway (2011) has made a model to show how companies can take social responsibility. The model consists of four levels in which companies can take social responsibility: passive, active, strategic and innovative. If the company has knowledge about social responsibility and how the company affects the society and the environment, it is a passive involvement. A company is on an active level when the management actively creates positive social and environmental values through business operations. Building a good reputation and create good relations between employees, suppliers and other stakeholders are motivations for being on this level. On the strategic level, responsibility for society and environment are a part of a strategic positioning. The motivation is a sustainable operation and development of the company. Based on the business idea and business model, a strategy is developed to reinforce a mutual influence and dependency with society and environment. At the top level, a company’s business ideas and business models are commercialized and contribute to solve challenges or create value for society and environment.

An example of a company that has developed a business model that benefits both the company and the society is Tullow Oil (Henry, 2007). Tullow is an Irish oil producer, which has upped their image by helping locals in developing countries when starting production there. The CSR strategy is fully embedded into Tullow’s business strategy. As the CEO of Tullow, Aidan Heavey explained himself, it does not make sense, starting work in communities as rich expats in developing countries without helping the local community. When they start a new project they therefore build infrastructure that benefit both their own workers and the whole community. Tullow share their success with local communities. Heavey has no doubt that CSR has contributed significantly to the success of Tullow and has a clear distinction between charity and an integrated CSR strategy. For Heavey an integrated CSR strategy is a two way process, it both benefits the local communities and the company. For Tullow Oil being a company first and foremost, not a charity, any expenditures on CSR has to show real benefit to the company’s bottom line (Henry, 2007).

USING YOUR BUSINESS KNOW-LEDGE TO MAKE A DIFFERENCE
Now we can start exploring how ones business knowledge can be used to make a difference.

Let us start by an example. BCE Impulse gave us a unique possibility to use our business knowledge to make a difference. We did what needs to be done in any project whether it is a start-up company, a matured company or an independent project: we had an idea, we planned, we raised money, and finally we implemented the idea.

BCE Impulse was established because we were drawn to the idea of giving something back to society by using our acquired business knowledge. The aim of BCE Impulse is to create income opportunities through innovation and the vision is to:

inspire people to improve living conditions and welfare through small-scale business activities. BCE Impulse will be associated with sustainability, engagement, commitment, equality and happiness.

BCE Impulse’s first project was carried out in January 2011 and took place in the small village of Makobe, around 30 km north of Mombasa in Kenya. The target in the village was Makobe School for Disabled, chosen because of its central position in the community of 2500 people. One of the new additions to the school was a workshop building built by Dutch donors aimed at giving the disabled children increased self-worth and confidence through partaking in income generating activities. As the workshop had proved to be very successful BCE Impulse wanted to expand on this to give the building clean, free and renewable energy. The choice fell naturally on solar power. We managed to raise money for 18 45W solar panels, which generates a total of 3kWh per day for the workshop building and an adjacent dormitory for 20 of the school’s girls. The school now enjoys electricity, which they immediately started to use for income generating activities such as a mobile phone charging business. Potentially this activity alone could generate around 500 NOK per month, which would cover the school’s food programme, an amount to be saved each month, and money set aside for maintenance. Other activities that are planned are computer workshops, electric sewing machines to speed up production of school uniforms and a barbershop.

We believe that BCE Impulse falls under the category of social entrepreneurship, as we combined social interests with business practices to effect social change. However, whether an initiative falls under social entrepreneurship or social innovation, we believe is of less importance. No matter how one looks at it, the outcome is the same: it is social change. Without undermining the importance of research and the need for clear definitions, we believe that when talking about creating social change and increasing social value in a business setting what is important is how this can be achieved.

Therefore, let us explore more examples. Ferd, a Norwegian privately owned industrial and financial group, are taking their social responsibility by investing in social entrepreneurs. Ferd will in 2011 have 2.5 employees that work with social entrepreneurship and they have set aside up to NOK 20 million per year for the work. In total Ferd has invested in 11 social entrepreneurship initiatives (Ferd, 2011).

The next example brings us back to the reason for writing this article: the Kennisland Social Innovation Safari. Kennisland is a non-profit organization contributing to a smarter Dutch society by developing and realizing interventions (Kennisland, 2011). During the week The Kennisland Social Innovation Safari lasted, the participants worked together with pioneers and the Kennisland team to develop and prototype interventions (Kennisland, 2010). The Safari introduced us for a smart way of creating change. By combining people with different backgrounds and adding time pressure, it increased the creativity resulting in innovative solutions. We believe that this can be used for addressing many different issues, both small and big ones. For social issues it is especially interesting as one can bring together people with different experiences and views on how to create social change and increase social value. When working with a specific social challenge in such a setting, these people can come up with innovative solutions that could not have been achieved by any of them in their own.

Another way companies can create social change and increase social value is by having a focus on corporate social responsibility (CSR). The European Commission (2011) defines CSR as

“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”

CSR activities focus on the welfare of stakeholder groups like charitable community organizations, employees, suppliers, customers and future generations (Sprinkle & Maines, 2010). Internationally, there is an increasing focus on CSR and the obligation companies have to contribute to a sustainable development of society. More and more companies also realize that contributing to society is necessary to develop a competitive edge. Often the functionality of competing products and services are similar, so the choices of investors and customers will be decided by other factors (Argument gruppen, 2003).

FINAL THOUGHTS
We believe that the role of CSR, social entrepreneurship and social innovation will be increasingly important, and possibly one of the corner stones of modern society. The business society needs to become increasingly aware over their CSR, either by supporting social innovation or social entrepreneurship initiative or setting up such functions within own business practices. One can argue that this is also a very successful business strategy as companies who truly are engaged in society’s best interest have more social “capital” to consume once they get negative interest from the media, to take one example.

As we have tried to communicate in this article, there are many ways companies can use their business knowledge to do something good. And we hope we have inspired companies to take social responsibility. Whether it is to initiate or support projects like BCE Impulse or have an intervention like the Kennisland Social Innovation Safari. Or maybe it is to support social entrepreneurs like Ferd does, or like Tullow Oil by helping develop communities when taking their business into developing countries. Whichever way companies choose to take social responsibility and use their business knowledge to do something good is less important than not doing anything at all.



REFERENCES
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