Social Business Model

The topic I’d like to mention today is not related to HRM, but I find it very interesting and in a line of objectives of our blog :)

In Poland there’s an annual competition organised for students in collaboration with big corporation, NGOs and governmental organisations. Representatives of these institutions prepare case studies from various areas such as finance, IT, HR, marketing and others. Students who propose the most interesting solutions to the problems presented in case studies can be offered an internship in one of these institutions and ,depending on the performance during this internship, they may be also offered a permanent employment. Recently there has been a new subject area introduced to this competition called ‘Corporate Social Responsibility’. I believe that the notion of CSR has gained a big popularity in recent years and now majority of people how take at least minimal interest in issues related to business must have come across it.

I personally heard about CSR for the first time around 4 years ago when working in AIESEC I was a part of the team responsible for organising conference about it. The main objective was to spread this business idea among students and increase awareness about CSR among entrepreneurs. At that time I was really excited about CSR and thought of it as of a ‘human face’ of corporations. However recently, having a bit deeper insight into this concept I came to realize that like 90-100% of companies’ activities CSR is also profit-reassuring initiative. In countries such as USA or UK a company that does not brag about their sustainable processes, environment concerns, employee engagement ec.. take a financial risk in two aspects: Primarily because rich consumers when having a choice between a product which is known to be produced in sweat shops in Bangladesh or a product developed in a collaboration with local communities are more likely to choose the second one. Second of all for an employer branding reasons; recruiters are aware that the generation of todays’ 20 something year old employees do care more about working for fair employer.

Now, how is the contents I mentioned in the beginning relevant? This year’s CSR case study was to invent a CSR strategy for company X. Main objectives of the task was to indicate was would be the business advantage (profit advantage) from implementing it. And that made me wonder….s there a third way? Is there a way for the company to actively help to address societal, environmental and other problems that such idea deprived of profit-making objectives is an utopia? Then I came across of Social Business. The short film attached to this post gives a basic introduction to this concept.

The discussion I would like to being is related to the questions: should corporations engage in social business or rather give money to organisation that specialise in this and (are supposed to) have a better KNOW-HOW? And if social business is a good idea than what has to be considered while implementing such strategy? Recently I read an report from the conference organised by Harvard Business School about these issues. Once study regarding micro founds in India was an excellent example of how a good initiative can bring about side effects when various context surrounding it are not considered. But about this I will elaborate next time :)

Link to the film: http://www.youtube.com/watch?v=0C3XQ3BTd4o