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Social and ethical entrepreneurship
The document explores the concepts of social entrepreneurship, highlighting its distinct goal of solving social problems through innovative means. It discusses the mindset differences between social entrepreneurs, ecopreneurs, and traditional entrepreneurs, emphasizing their commitment to sustainability and ethical considerations. Additionally, it examines the challenges faced by disadvantaged and indigenous entrepreneurs, noting how these pressures can sometimes foster entrepreneurial activity.
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Social and ethical entrepreneurship
- 1. Who are social entrepreneurs? •‘…driven by a social mission, with a desire to find innovative ways to solve social problems that are not or cannot be addressed by either the market or the public sector’. 風向轉變時, 有人築牆, 有人造風車 ‘When the wind changes direction, there are those who build walls and those who build windmills’.
- 3. Chapter 4 Social and ethicalentrepreneurship
- 4. Objectives 1. Examine theconcepts of the social entrepreneur and the social business 2. Explore the mind-set of social entrepreneurs 3. Introduce the concept of ecopreneurship 4. Define the term ethics and the implications for entrepreneurs 5. Examine environmental crime and its temptations for entrepreneurs 6. Examine cross-cultural concepts of ethics and corruption 7. Examine the ethics of criminal entrepreneurs and their similarities to other entrepreneurs 8. Focus on the challenges that face disadvantaged entrepreneurs
- 5. Social entrepreneurs How wouldgoals and success criteria vary between social entrepreneurs and more conventional entrepreneurs? ?
- 6. • “Social entrepreneursare not content just to give a fish or teach how to fish. They will not rest until they have revolutionised the fishing industry.” Bill Drayton, Ashoka Foundation Who are social entrepreneurs? What is Satish Jha holding?
- 7. Defining the social business Figure4.1 Defining social businesses and enterprises
- 8. Mind-set of social entrepreneurs •Recalling Chapter 2’s discussion on mind-sets . . . do social entrepreneurs have a different mind-set from business entrepreneurs? • They have the same skills and temperament but there are differences. – Not as overtly positive and confident. More likely to fear failure and more likely to say that lack of finance will stop them. Spiritual dimensions. • “Scholars and artists come to rest when they've expressed an idea. Managers, when they solve a problem for their company, complete their goal. . . . None of that satisfies a social entrepreneur. The entrepreneur simply knows in a very deep way that, ‘I have got to change the whole society’.” Bill Drayton
- 9. • Combine theenvironmental, economic and social components of sustainability • Different organising logic from more conventional entrepreneurs. • Market creation is more difficult for them • Face confusion in the marketplace • Operate their businesses in ways that run counter to popular perceptions of entrepreneurial behaviour Mind-set of sustainability entrepreneurs
- 10. Different ways of spottingmarket gap Business entrepreneurs • Find ‘structural holes’ between similar (homophilous) groups • Spot market gaps between connected categories of people – such as between suppliers and customers. • Position themselves in the middle (‘entre’) to plug the structural hole for their own increased personal gain. Social entrepreneurs • Find ‘structural holes’ between competing (heterophilous) groups. • Do not see others in terms of categories (for example, suppliers and customers), but rather as real individuals. • They value the unity of the whole of society and attempt to link others to the benefit of society.
- 11. • What couldthe word sustainable mean? • What is its old and its new definition??
- 12. • Traditional definition –surviving or maintaining a business’ viability against its competitors. • New definition – real commitment to the environment and climate change mitigation/adaptation as well as a revamping of the entire business model to its core. – providing products and services without jeopardizing the environment Sustainable
- 13. • Traditional definition –surviving or maintaining a business’ viability against its competitors. • New definition – real commitment to the environment and climate change mitigation/adaptation as well as a revamping of the entire business model to its core. – providing products and services without jeopardizing the environment Sustainable City of Melbourne, Australia, across the four domains of sustainability
- 14. Ecopreneurs • ecopreneurship =‘ecological’ and ‘entrepreneurship’. • Ecopreneur combines the unrelenting drive of the entrepreneur with the stewardship of a conservator rather than the devastation of an exploiter. Bob Brown, former leader of the Australia Green Party
- 15. Seeking competitive advantage ona warming planet • Many entrepreneurs are ad hoc ecopreneurs – seeking to find commercial opportunities in a carbon-constrained world. – find products and services that hedge against physical climate risk, – mitigate regulatory costs – improve/ repair corporate reputations through green business. – seek to manage climate risk in the supply chain, – invest in low-carbon activities and – innovate new technology that sells while improving the planet.
- 16. Profitability drivers for climate-change-orientedentrepreneurs Revenue drivers • How to pass climate-related costs through to customers? • How to generate streams of revenue from new low-carbon products? • What new forms of income (for example, carbon credits) will become available? • What threats do we face from low-carbon substitute products? • What will be the impact of weather patterns on revenue? Cost drivers • How can we pass on our regulatory costs? • Is there a chance that emissions will be taxed? • How much will our raw materials costs escalate? And those of our competitors? • How much will our energy costs rise? • How will our risk profile affect our insurance premiums? 41
- 17. Do you agree? •That ‘the business of business is business’. – Is this still used to excuse profit and shareholder value being put ahead of employee welfare and protecting the environment? • Corporate social responsibility (CSR) was all the rage. • This laissez faire attitude may have built a base of prosperity for some, but at considerable social cost for many and lasting environmental costs for the planet. • Entrepreneurship can cause losses and hardships for some members of society … even as it creates new wellbeing among other stakeholders ?
- 18. We are nowin a different era • CSR helped sensitise business to a growing range of economic, social and environmental challenges • Progress has been slow. • We are now in a different era where we need Corporate Responsibility for a Sustainable Environment (CRSE) • For entrepreneurs, research evidence increasingly shows that profit and sustainability can go hand in hand.
- 19. What do youthink? What does ethics have to do with entrepreneurship? • If you are invited to a business contact for dinner in China . . . ? • Is it ethical to change the name of your business . . . ? • Is it ethical to put pictures of young children . . . ? • Is it ethical to pad your expense account . . . ? • Is it ethical to put your business's rubbish . . . ? ?
- 20. Entrepreneurial ethics • TheGreeks were interested in right and wrong conduct (ethos). • Chilon (in about 560 BCE) stated: – ‘A merchant does better to take an honest loss than to make a dishonest profit’. – He reasoned that a loss may be painful for a while, but dishonesty hurts forever. • Some entrepreneurs are not ethical
- 21. Why are someentrepreneurs not ethical? • Is it because they have a strong ‘action bias’ that prevents them from considering ethical issues? • Is it because they are more focused on personal financial gain even at the expense of others? • Is it because they love rule-breaking and are non-conformists? • Is it because they lack resources and must rely on corruption and bribery?
- 22. ‘Greed is good’ •The attitude in Gordon Gekko’s phrase ‘greed is good’ (from the 1987 film Wall Street) has fuelled a series of economic crises. (Audio) • Many entrepreneurs ‘see what works as right’. • A moral consensus does not exist in our dynamic, changing environment.
- 23.
- 24. When must ethicalconduct break the law? • Case Study –Sea Shepherd's harassment of Japanese whaling ships in the Southern Ocean. ?
- 25. What is ethicalwith your own team? • How do you divide up the ownership shares? • The unavoidable ethical dilemmas that entrepreneurs face in dividing up shares • Startup Equity Calculator ?
- 26. When in Rome,do as the Romans do? • Corruption = Monopoly + Discretion – Accountability
- 27. Corruption around theworld World rank / Country 1 New Zealand 5 Singapore 9 Australia 14 United Kingdom 15 Hong Kong 18 Japan 19 United States 36 Taiwan 46 South Korea 53 Malaysia 80 China 94 India 94 Philippines 102 Thailand 114 Indonesia 116 Vietnam
- 28. Build a lineitem in your Business Plan for ‘compliance commissions’
- 29. Entrepreneurship and organised crime •Examples: Boot-legging cigarettes, hydroponic cannabis growers, pimping, people smuggling, illegal dumping, species smuggling and prostitution. • Face same challenges as entrepreneurs. – Must be excellent risk managers – ‘Know-who’ is as important as know- how. – Are future-oriented organisation builders. – Work the edge or the margin. – Seek ‘niche advantage’ – Satisfy consumer demand that legitimate markets ignore. Ross Ulbricht’s LinkedIn profile. This Internet entrepreneur, founder of Silk Road, was sentence to life in prison without possibility of parole.
- 30. Environmental criminal entrepreneurs • Deliberateor careless act that harms the environment, e.g. – illegal logging and timber smuggling – wildlife smuggling – black market in ozone-depleting substances, – dumping of hazardous wastes and chemicals Illegal waste dump Illegal ivory trade
- 31. Environmental criminal entrepreneurs • Environmental crime isworth billions of dollars in profit to criminal groups around the world. • Here are the major criminal groups.
- 32. • Have difficultyintegrating into the market and are typically located outside the mainstream. • Suffer ethnic disrespect, lack of language skills, poor access to finance and urban poverty, usually at the bottom of the social ladder. • Different from ethnic or indigenous entrepreneurs. Disadvantaged entrepreneurs
- 33. • Is itpossible that being disadvantaged may actually lead one to become more entrepreneurial? • Are entrepreneurs more likely to emerge from deprived or marginal groups? • Corresponds with what is called the social marginality theory • When a group is discriminated against, then a psychological disequilibrium might occur. • This might drive a person into enterprising behaviour to compensate for this imbalance Disadvantaged entrepreneurs
- 34. Indigenous entrepreneurs • Foundin every inhabited climate zone and continent. • Everywhere they suffer from chronic poverty, lower education levels and poor health. • Colonisation and post-colonial practices deprived Indigenous people of their land, their culture and their human rights. • Government assistance produced only mixed results • Indigenous entrepreneurship has been a positive step for some groups, but it is not the answer for all Indigenous people.
- 35. Indigenous Australian entrepreneurs • Threeper cent of population with endemic poverty, poor health, low literacy, poor employment prospects. • Archaeological evidence suggests that Aboriginal people engaged in wide-ranging intellectual, trade and entrepreneurial pursuits. • Trade routes traversed the Australian coast prior to European settlement. • Goods such as pearl, shell, flints and axe heads, oyster and turtle, knives, were traded and sold over vast distances, including Indonesia. • Now Indigenous people are often caught in a spiral of discrimination that is scarcely conducive to authentic entrepreneurial activity. • Building an enterprising spirit in these circumstances is far from easy. Australian arts entrepreneur Jessica Mauboy
- 36. Māori entrepreneurs • GEMstudy showed Māori had highest entrepreneurship rate in OECD. • Māori have a history of commerce and resource ownership. • Cultural resistance to wealth creation • Unhelpful cultural attitudes towards failure, risk, and growth. • Trapped by the reverence for the past of their elders • Need to be accepted as successful in the “white” business world.
- 37. Key concepts (close yourbooks) 1. What does ethics have to do with entrepreneurialism? 2. How are ecopreneurs, social entrepreneurs and Indigenous entrepreneurs different to conventional entrepreneurs? ?
- 38. Key concepts • Ethicsand entrepreneurship – Ethical behaviour by entrepreneurs is required for the future of our planet. – Ethical entrepreneurship protects individuals and communities from corrupt business practices. • Ecopreneurs, social entrepreneurs and Indigenous entrepreneurs: – are focused on un-selfish goals – are committed to larger outcomes than the profit motive – can succeed despite significant challenges.