Business philosophies and perceptions
Should businesses be run for the purpose of continually increasing profits, growing, and bringing positive changes to society though the economic benefits that commerce creates? Is it more important for more money to circulate through the economy and more jobs to be available which allow more people to have spending power? Or, is the quality of those jobs a more important factor? Should there be more focus on social issues? Is it the non-economic benefits that should be the focus of businesses? There are strong opinions on both sides and both arguments have strong logic behind them. On the one side you can look at more jobs and lower cost of goods as what will create a universal good for society. On the other hand the argument is that the move toward cutting costs is at the expense of higher wages for the individual worker, giving lower benefits and lower growth opportunity and the focus on profit will adversely impact society. While a sea of workers get low wages, the CEO is driving his luxury imported car on his way to the country club. On the other hand, giving businesses the freedoms they have allows for more innovation through competition and lower costs of goods. Social responsibility has made some significant strides in recent years. Whether forced by unions and activists or no, there has emerged a type of entrepreneurship that is a hybrid of the two philosophies.
Intro to social entrepreneurship
It seems there has been a trend of more people looking for business to be a means to achieving specific social goals. This tests the traditional view of businesses being established as a principally a cash generating machine. A business organization and structure often allows the entrepreneur to have the tools available to produce socially beneficial products. You may, for example, decide to make a change in the world by going to Africa and creating an engineering company that helps build water wells with technology that is uncommon in that geographical location. Your company foregoes some of the excess profit it could have had for doing business exclusively under another corporate business philosophy. But as a social entrepreneur you don't care as much about the profit. Your principle existence is to change the world for the better by improving the health and welfare of others. There are a variety of types of social entrepreneur business models from non-profit to for-profit with a reverse philosophy of meeting the social needs and a secondary emphasis on generating a profit.
Satisfying to the entrepreneur
Social entrepreneurs believe in the change they are creating to the point that they jump out of that magnetic field that pulls individuals to compromise social issues for more cash. Sure, it is awesome to be remembered for making the best tasting bread this world has ever known, but how much grander would it feel to know you gave up a life of luxury in order to make bread available to starving children. Social entrepreneurs have a high death bed investment payout in comparison to those who exclusively follow the traditional infinite profit and infinite growth philosophy. You see, on your death bed you will be left with the memories of the sum of all your experiences. Many are coming to believe that it is better to be remembered for an impact you made in the lives of others than to remember the individual pleasures you experienced on your own. Don't get me wrong, many business philosophies can make a difference in the lives of those around them, but when a business is focused on a specific social need, it makes a more lasting difference in the lives of others. Entrepreneurs who focus on social issues, and not solely on profit, have to work hard for their investment. Not only do they look for a social demand, they also have to find demand in the market that will allow them make their idea a reality. They find ways to have the demand in the market pull the social demand that they are striving to fulfill.
Satisfying for the customer
Social entrepreneurs can intrigue customers with the causes that they are striving to reach. When a customer purchases the goods or services of the social entrepreneur, he or she is purchasing social change. The product becomes an investment vehicle for social change. In the case of Tom's Shoes, you are not purchasing just a pair of shoes for yourself; you are purchasing shoes for an impoverished child. For other companies, you are purchasing carbon footprint reduction, education, or a number of other social movements. If you were to put two products of complete equality side by side and told the customer that if she chooses product A it will feed a starving child a meal and if she chooses product B it will not, I would bet that most will choose product A. Because the customer's purchase is an investment vehicle into positive social change, the customer also makes a death bed investment.
We have come a long way
We have come a long way as a nation. Over the years we have cleaned up and continually improved the economic and social status of most of our citizens. We have made changes in child labor laws; we have broken up trusts; and have made improved equality in the work force. Many companies are starting to put more emphasis on giving back to the community and society as a whole. There are all kinds of education, environmental and anti-hunger initiatives which have been started by large corporations. While these programs may be secondary to the company's focus on generating a profit, they are important nonetheless. The arguments between the two business philosophies (social equality and overall economic benefit) should not be so one sided. It is easy for people to see a page of dots and connect the dots out of order, according to the argument that sounds the best to support their own point of view. We can see that both philosophies have started to mesh a little bit. The free market has moved itself through consumers. Consumers decide who stays in business by the choices they make in product purchases. Those who have noticed social issues have brought them to the attention of corporations. Social entrepreneurs have seen the value of both the focus on economic benefit and the social issues at hand and have moved to more of a middle ground. They are able to use the free market to their advantage and harness demand to pull social changes in the world. As business owners strive to pull their companies to meet the needs of both philosophies, they can enjoy their own emotional death bed investment payout in the end.