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Integrating the social into the business model

Michael Jarvis's picture

The Harvard Business Review might not be top of most people's lists of stocking stuffers, but for those with loved ones interested in corporate responsibility or social entrepreneurism, two articles make the December issue a must.

First, Michael Porter and Mark Kramer take up the premise that business and society are in the same boat and that firms need to move from reactive or do-gooder motivations to a strategic approach that makes corporate social responsibility part and parcel of day-to-day business. The anticipated result? Improved long term competitiveness and greater social good. The argument – building on Porter's previous call for strategic philanthropy - is hardly revolutionary, but well made, and highlights the importance of measuring social impact instead of stakeholder satisfaction. Given Porter's guru status, Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responibility should provoke some interesting reactions in the letters page.

It appears that strategic shifts are just as necessary in the NGO sector as the board room if we really want to change the world. So suggests the partner piece on Disruptive Innovation for Social Change. How can the US spend more per capita on healthcare than any other nation but lag behind on basic health indicators? The authors argue that such outcomes reflect too much social investment in established organizations that rarely disrupt their business models, even if they aren't working. Instead, financing should support "catalytic innovations" that find new ways of serving many more at lower cost. Cited examples of such disruptive initiatives include microfinance and groups such as KickStart that develop low-cost equipment for poor entrepreneurs. Such cases suggest that the distinctions between the business innovator and the "social" entrepreneur are steadily eroding.

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