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Social Entrepreneurship to Stakeholder Entrepreneurship

Course video 21 of 26

We close the course by learning how to become a stakeholder entrepreneur by discussing specific examples. This module concludes with an opportunity for what your next steps might be as a stakeholder entrepreneur.

In this course we will be discussing the emergence of a new story about business. This new story locates business within a societal framework. Almost every business creates or destroys value for customers, suppliers, employees, communities and society, in addition to shareholders and other financiers. A number of new models of business can be built on this idea such as corporate responsibility, philanthropy, shared value and sustainability. Profits and stakeholder value go together, and this course explains how. The final session explores the idea of how to become a stakeholder entrepreneur and create a business that makes money and makes the world a better place.

Skills You'll Learn

Business Model, Management, Stakeholder Theory, Environmental Economics, Entrepreneurship

Taught By

R. Edward Freeman
University Professor; Elis and Signe Olsson Professor of Business Administration

Transcript

[MUSIC]

We've talked about a lot of ideas about how to think differently about business.

Everything from the problem with the dominant narrative in society.

And now, I hope you know how you can begin

to think differently, see business differently, expect it to be different.

And, I want to focus this week on things you can do.

Maybe start your own business.

Things you might be able to do as a customer, an employee, as a citizen.

I want to orient this week around something

I'm going to call becoming a stakeholder entrepreneur.

Now, one of the models we've seen emerge in the past, really, ten years

is this idea of, social entrepreneurship. And social

entrepreneurship focuses on people who primarily care about doing

good, not so much about making money. One of the

originators was a man who won the Nobel prize, the Nobel Peace Prize Dr.

Muhammad Yunus in Bangladesh.

Yunus started a bank called the Grameen Bank that

[INAUDIBLE]

whose motto is poverty belongs in a museum.

It only lends money to the poorest of the poor who have, who have no collateral.

So they broken every rule in the banking industry.

And as a result, they've raised millions of people out of poverty.

Now,

these are not interest free loans.

In fact, the interest rates are actually quite high.

But the emergence of microfinance really came

out of Muhammad Yunus wandering through a

village near Chittagong and Bangladesh and saying, why does it have to be like this?

Can't we figure out a better way

than money lenders for these incredible craftspeople

to finance their businesses? Now, I want to argue

that social entrepreneurship and what it really does is very much in keeping

with what we've talked about so far, that it's about finding

some stakeholders and creating value for them.

And it doesn't matter whether it's for profit,

like the Grameen Bank, or not for profit, like the Ashoka entrepreneurs.

Again, if you go to the Ashoka, Ashoka website, you'll find out more about

what they're doing, in a book by David Bornstein called, Building a Better World.

So, I want to redefine this

[INAUDIBLE]

this idea of social entrepreneurship, reorient it around the

story of business we've been creating. A stakeholder entrepreneur is somebody

who starts or improves an organization by making it responsive to a stakeholder's

needs or a set of stakeholder's needs. You can be a stakeholder

entrepreneur in an existing business or you can be one in

a start up.

Stakeholder entrepreneurs understand that their

organizations are firmly set within society.

They're not in some free market land,

and they're not just doing government programs.

They're set in society where they have clear stakeholders and clear purposes.

They also understand that they have to have a

business model that satisfies stakeholders and generates self-sustaining funds.

And it doesn't matter whether these funds go to shareholders, whether they is

satisfaction to donors but you gotta be able to essentially pay the bills.

Stakeholder entrepreneurs want to make the world better, and

they have to make money to sustain that.

It encompasses both traditional

entrepreneurship and social entrepreneurship.

So I'd like

you to look at a brief video from someone who I think

is a paradigm stakeholder entrepreneur Blake Mycoskie from Tom's Shoes.

[BLANK_AUDIO]

What Blake Mycoskie's done is he's identified

some points of, of pain in a society. Children need shoes to be safer.

And he's identified something he has passion about.

Helping these

[INAUDIBLE],

theses children. He's managed to figure out how to work

with over 75 partner organizations. They've donated over two million

pairs of shoes, while at the same time, addressing the challenge

of doing business in often not

very well developed parts of the world. Tom's makes shoes in

places that are quite poor and they've been criticized for that as well.

But they're committed to making those communities better.

They've recently started a program for eyewear as

well, where you buy one and they donate one.

The one for one business model that Tom's has developed,

you can see combines elements of philanthropy, social responsibility and

thinking about stakeholders and purpose.

What I'd like you to do is think about two or three businesses.

Can you find two or three businesses like Tom's Shoes?

What are their strengths? What are

their challenges,

do you think?

[BLANK_AUDIO]

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