TBS Global Business Forum 2017: Embracing Disruption: Finding opportunities in crisis
Corporate Activism: Engaging with Social Issues
– Sheila Cannon, Assistant Professor of Social Entrepreneurship, Trinity Business School
8 February 2017
What is businesses’ role in addressing Ireland’s social issues? It has become trite to say that these are times of great change, but it is impossible to operate as a business without considering – at one level or another – significant social change in the operating environment, and how your organisation will relate to those changes. Many businesses are jumping to the front lines and advocating for social issues.
Currently, businesses are stepping forward in Trump’s America to counter some of his recent executive orders, such as the “Muslim Ban.” Numerous CEOs have denounced these orders on social media, including Nike, Twitter, Netflix, Microsoft and others. Lyft, a ride-sharing company, has pledged to donate $1 million to the American Civil Liberties Union (ACLU) over the next 4 years. Starbucks has pledged to hire 10k refugees. Google has created a ‘crisis campaign’ matching donations of users and directing the funds towards several human rights organisations. Businesses are taking sides on issues. Advocacy is no longer left to the NGO advocates. You could see it as clever marketing. You could also see it as an exception, driven by unprecedented social context. But it is more than that. The trend of mixing social and commercial goals has been a long time coming.
Businesses that ignore social issues are following Milton Friedman’s famous, outdated advice that business’ sole purpose is to generate profit for its shareholders (1970). This approach used to be the norm. The three sector approach, public, private and nonprofit*, assigns the responsibility for social issues to the first and third sectors, governments and nonprofits. From this perspective, engaging with social issues is too risky for businesses, might alienate some stakeholders or market segments, and is, frankly, none of our business. While some leaders and organisations still hold this position, others take a very different approach.
In the Marriage Equality Referendum held here in Ireland two years ago, businesses took a stand on the issue of LGBT rights, advocating for a Yes vote. The Irish business association, IBEC, claimed that YES was “Good for business, good for employees and good for Ireland” (humanrights.ie). In retrospect, at least, this was a fairly safe issue, as all the major political parties endorsed the Yes vote, and opinion polls showed a favourable outcome. Many Irish businesses already had equality policies, so Marriage Equality followed as a logical extension of those principles. However, it was quite radical that businesses advocated for any position on a social change that was pending a referendum. Particularly one that ran counter to an influential and dominant institution, the Catholic Church in Ireland.
A fairly new phenomenon in Ireland and globally is the blurring of boundaries between sectors. Rather than three separate sectors, organisational form is theorised as a spectrum from public to nonprofit to private. Social entrepreneurs set up businesses that combine social purpose with commercial interests, and are often publically funded as well. This approach to organising has been gaining traction since Ashoka set up in the 1980’s in the US and Social Entrepreneurs Ireland set up in 2004 in Ireland; both organisations identify and support social entrepreneurs with funding and other resources. Porter and Kramer brought attention to the trend first in 2006 and then in their famous article “Creating Shared Value” in Harvard Business Review (2011). This shift away from three separate sectors is reflected in the transformation of Trinity Business School’s Centre for Nonprofit Management, into a new research centre: The Centre for Social Engagement.
Social enterprises are businesses guided by social missions. The trick is finding a creative and powerful combination of social purpose and commercial interest. One fantastic example is Speedpak Group, a company that hires and retrains long-term unemployed individuals through their businesses of making rosettes, and providing customised packing and storing solutions. They have found an innovative way to operate a business in which social purpose and commercial interests mutually reinforce each other. It is a growing trend. Whatever role businesses take in addressing Ireland’s social issues, whether advocacy, service delivery or addressing unemployment in disadvantaged areas, it is an evolving space, not to be ignored.
The Trinity Global Business Forum will include a panel at 12:15 on Responsible Business. Speakers include Hugo MacNeill, Managing Director Ireland of Goldman Sachs; Darren Ryan, CEO of Social Entrepreneurs Ireland; Alex Cooney, CEO of Cybersafe Ireland; Jack Kavanagh, Founder of the Jack Kavanagh Trust and an active member of Enactus, a global student-led entrepreneurship organisation.
For further expansion upon this topic please read my extended article at the following link – http://europe.newsweek.com/donald-trump-business-ban-ngos-557066
- *I use the term “nonprofit” broadly, as there are such fuzzy boundaries between the terms nonprofit, charity, nongovernmental, civil society, and even increasingly, social enterprise.
- IBEC Quote on supporting YES: http://humanrights.ie/civil-liberties/business-said-yes-to-marriage-equality-but-will-the-circle-be-widened/
- List of Irish companies supporting Marriage Equality: http://www.glen.ie/news-post.aspx?contentid=28635
- Freidman, Milton (1970). The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine, 13 September 1970.
- Newton, Casey (2017). Silicon Valley’s responses to Trump’s immigration executive orders, from strongest to weakest, The Verge, 28 January 2017. http://www.theverge.com/2017/1/28/14426550/silicon-valley-trump-immigration-response
- Porter, M. & Kramer, M (2011). Creating Shared Value. Harvard Business Review. Jan-Feb 2011, p.62-77.