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Corporate Social Responsibility and Social Entrepreneurs A “Profit making and Social Responsibility” oxymoron is strongly debatable. Profit

making is the fundamental dimension for an enterprise to sustain, perform and grow, which

means wealth maximization and mobilization; whereas social responsibility is the

fundamental accountability of the state that focuses on social enlistment in its totality.

There fore, the community is perplexed by a number of opinions turning around the

role of Corporate Social Responsibility (CSR) and how to apply CSR to entrepreneur’s

business decisions in term of increasing profit as much as possible. The appearance of social

entrepreneurs after that seemed to illuminate a new trend of making business along with

solving social problems. The important of social entrepreneurs is considered as a crucial

contribution for the universal development. The question under this condition is what social

entrepreneurs should do to face to a number of potential challenges to carry out this important

mission?

CSR

What is it?

The Sanskrit saying, ‘Atithi Devo Bhav’, means – ‘the one who comes to you for

being served, should be taken to be as God’, is considered as the highest order of

responsibility, be it to individuals or to the society. Thus, the phrase Social Responsibility has

its roots in Indian context. This phrase has long been in use with growth of industries and

corporate. It not only reflects the ‘passage of time’ in its impact and transformation, but its

meaning and understanding has been affected by the growth of society, nations and changes in

their appreciation of cultural heritage and background.

CSR is also concerned with treating the stakeholders of the firm ethically or in a

responsible manner. Ethically or responsible’ means, treating stakeholders in a manner

deemed acceptable in civilized societies. Stakeholders exist both within a firm and outside.

The wider aim of social responsibility is to create higher and higher standards of living, while

preserving the profitability of the corporation, for peoples both within and outside the

corporation. Some companies use the terms “corporate citizenship”, some “the ethical

corporation”, while others use “good corporate governance” or “corporate responsibility”

What does the CSR gain?

1. It would help to avoid the excessive exploitation of labor, bribery and corruption.

2. Companies would know what is expected of them, thereby promoting a level playing field.

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3. Many aspects of CSR behavior are good for business (such as reputation, human resources,

branding and making it easier to locate in new communities) and legislation could help to

improve profitability, growth and sustainability.

4. Some areas, such as downsizing, could help to redress the balance between companies and

their employees.

5. Rogue companies would find it more difficult to compete through lower standards. The

wider community would benefit as companies reach out to the key issue of underdevelopment

around the world.

In the longer term, richer consumers and improved worldwide income distribution is

obviously good for business. But should business be directly involved in these issues, or

simply pay taxes and rely on governments and public organizations to use these taxes wisely?

In other words, is it simply enough for business to maximize profits in anticipation that this is

in the best interests of human development?

Social Entrepreneur

Who are they?

It has been suggested, however, that social entrepreneurs are very distinctive

individuals. Attempts to define distinctive features of social entrepreneurs tend to portray a

social hero with “entrepreneurial quality.” Dees says: “Social entrepreneurs are one special

breed of leaders, and they should be recognized". "We need social entrepreneurs to help us

find new avenues toward social improvement as we enter the next century” (Dees, 1998b).

Interestingly, some social entrepreneurs do not even know they are “social entrepreneurs”

until they receive an award or are recognized by organizations.

What is the importance of SE for development?

Social Entrepreneurs endeavor to 'create social' value through innovative,

entrepreneurial business models. The potential market for these entrepreneurs is huge because

of the wide range of social needs that remain unsatisfied by existing markets and institutions.

SE is more and more increasingly important for economic (and social) development because it

creates social and economic values:

1. Employment Development

The first major economic value that social entrepreneurship creates is the most

obvious one because it is shared with entrepreneurs and businesses alike: job and employment

creation. Estimates ranges from one to seven percent of people employed in the social

entrepreneurship sector. Secondly, social enterprises provide employment opportunities and

job training to segments of society at an employment disadvantage (long-term unemployed,

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship

disabled, homeless, at-risk youth and gender-discriminated women). In the case of Grameen

the economic situation of six million disadvantaged women micro-entrepreneurs were

improved.

2. Innovation / New Goods and Services

Social enterprises develop and apply innovation important to social and economic

development and develop new goods and services. Issues addressed include some of the

biggest societal problems such as HIV, mental ill-health, illiteracy, crime and drug abuse

which, importantly, is confronted in innovative ways. An example showing that these new

approaches in some cases are transferable to the public sector is the Brazilian social

entrepreneur Veronica Khosa, who developed a home-based care model for AIDS patients

which later changed government health policy.

3. Social Capital

Next to economic capital one of the most important values created by social

entrepreneurship is social capital (usually understood as “the resources which are linked to

possession of a durable network of ... relationships of mutual acquaintance and recognition").

Examples are the success of the German and Japanese economies, which have their roots in

long-term relationships and the ethics of cooperation, in both essential innovation and

industrial development. The World Bank also sees social capital as critical for poverty

alleviation and sustainable human and economic development. Investments in social capital

can start a virtuous cycle

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4. Equity Promotion

Social entrepreneurship fosters a more equitable society by addressing social issues

and trying to achieve ongoing sustainable impact through their social mission rather than

purely profit-maximization. In Yunus’s example, the Grameen Bank supports disadvantaged

women. Another case is the American social entrepreneur J.B. Schramm who has helped

thousands of low-income high-school students to get into tertiary education.

To sum up, social enterprises should be seen as a positive force, as change agents

providing leading-edge innovation to unmet social needs. Social entrepreneurship is not a

panacea because it works within the overall social and economic framework, but as it starts at

the grassroots level it is often overlooked and deserves much more attention from academic

theorists as well as policy makers. This is especially important in developing countries and

welfare states facing increasing financial stress.

CSR and Social Entrepreneur – Where is the meeting point?

Corporate social responsibility represents the response of the business community for

the issues of sustainability. It mainly shows the way the business community can address the

sustainability concerns of various stakeholder groups through ethical behavior and a

commitment to add economic, social and environmental value. Through corporate social

responsibility companies address various important issues. For example, within the company

corporate social responsibility deals with human resources, health and safety, adaptation to

change, management of environmental impacts and natural resources. Issues relating to the

company’s relationship with the outside world include local communities, business partners,

suppliers and consumers, human rights, and global environmental concerns.

On the other hand social entrepreneurship is the work of a social entrepreneur. Asocial

entrepreneur is an individual, group, network, organization, or alliance of organizations that

recognizes a social problem and uses entrepreneurial principles to organize, create, and

manage an enterprise to make social change.

The social entrepreneurs’ focus is the pursuit of opportunities to catalyze social

change and they also measure their success primarily in terms of social value creation, rather

than profit. Among many other things, the language and concept of social entrepreneurship

can include innovative not-for-profit ventures, social purpose business enterprises, such as

for-profit community development banks, and hybrid organizations mixing not-for-profit and

for-profit elements.

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship

In spite of the distinction between the actors and the range and complexity of issues

they tend to address, corporate social responsibility and social entrepreneurship are strongly

linked and they serve the purpose of sustainability.

However, unlike business organizations, social entrepreneurs have a lot of constraints

which hinder them from the pursuit of creating social value. In contrast to business initiated

corporate social responsibility projects, initiatives by social entrepreneurs suffer from lack of

key resources including financial, managerial and strategic roadmaps.

SE – What is the way to go?

Recognizing the constraints that hinder social entrepreneurs from achieving their goals

is the first valuable step in devising the strategy for the required nurturing. Here the following

areas of concern are identified:

1. Financial

Innovative financial mechanism is important for sustainable development. Social

entrepreneurs can originate and developed the idea for socially beneficial ventures. However,

most social entrepreneurs depend on the financial assistance of individuals and on private and

government foundations to achieve their goals.

The availability of financial assistance is a crucial factor for the success of social

enterprises in all stages of their life cycle. Therefore assisting organizations should come up

with innovative financial mechanisms. In this regard, companies can focus on developing

venture capital, microfinance and other financial assistances for social entrepreneurship.

2. Technical

Like financial assistance technical assistance is also an important area for nurturing

social entrepreneurs. In this regard assisting companies can focus on areas that help social

entrepreneurs in their innovative engagements, in improving their organizational capacity and

in strengthening their managerial capabilities.

3. Networking

The complex and multifaceted nature of sustainable development and the creation of

social value requires the input and cooperation of many players from diverse disciplines and

sectors. Due to several constraints, social entrepreneurs could not coordinate these important

networks. Therefore assisting organizations can focus on creating network platforms where

social entrepreneurs can exchange their experiences and learn form one another.

4. Entrepreneurial Education and Training

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By focusing on entrepreneurial education and training, assisting companies can

contribute a lot in the development of the field of social entrepreneurship towards knowledge

- based professions. For example, social entrepreneurs can benefit from training programmes

on: business and project planning, strategy formulation project and venture management,

social sector marketing and other related topics.

It is not a simple task to identify and handle the problems social entrepreneurs getting

involved because they have their own limitations. This essay with the limited knowledge of

writer just underlines some points that may help to give an overview of CSR, social

entrepreneurs, the inter link between them and how to face to their challenges. Regardless of

the mechanism, promoting social entrepreneurship can definitely create new waves of

opportunities, strategies, approaches, and impacts in the direction of sustainable development.

References:

1. Er. Manoj Joshi, Asst. Professor, SAMA. Corporate Social Responsibility: Global

Perspective, Competitiveness, Social Entrepreneurship & Innovation

2. United Nations Conference on Environment and Development (UNCED) (1992).

Agenda 21: Programme of Action for Sustainable Development. New York: United Nations.

3. Mair, J., & Marti, I. (2005). Social Entrepreneurship Research: A Source of Explanation,

Prediction, and Delight. Barcelona: IESE Business School.

4. Aron Ghebremariam. Nurturing Social Entrepreneurship through Corporate Social

Responsibility

5. The importance of Social Entrepreneurs for Development

http://www.business4good.org/

6. School for Social Entrepreneurs

http://socialentrepreneurs.typepad.com/