Is Social Enterprise the New Corporate Social Responsibility?

The social enterprise movement and the corporate social responsibility (CSR) movement, including its progressive corporate law offshoot, appear to have much in common. They both seek a “better” world in a broadly left-liberal sense. Both want more businesses to take the interests of nonshareholder stakeholders seriously and to play a larger role in addressing pressing social and environmental problems. Yet there are some critical and underexplored differences in each movement’s approach to social change. We argue that social enterprise offers an authentic alternative to CSR, even though its short-term social impact would likely be smaller. This alternative, moreover, is remarkably congenial to mainstream corporate law in ideology and methodology. In one respect, the social enterprise movement sidesteps the CSR debate by operating in a different setting—its vision is realized and embodied in new organizational forms rather than existing corporations. In another respect, the movement shows how mainstream corporate law can accommodate CSR’s and progressive corporate law’s concerns without fundamental change. This Article is presented in three parts. Part II provides a Berle-themed synthesis of the CSR debate, including its progressive corporate law iteration. Part III describes the social enterprise movement, its legal agenda, and discusses several new legal forms designed specifically for dual-goal businesses. Part IV highlights the overlaps and conflicts between each approach, and in light of the longstanding debate, explains the new and vital aspects of the social enterprise movement. Specifically, social enterprise advances the debate in unexpected ways—the movement appropriates some CSR notions and shares some CSR sensibilities, but combines them in a manner that should please corporate contractarians, alarm proponents of progressive corporate law, and discomfort some proponents of CSR

Is Social Enterprise the New Corporate Social Responsibility?

Since at least the famous Berle-Dodds debate, corporate social responsibility (CSR) and later its more muscular and structural iteration, progressive corporate law, have been discussed without much progress. The authors consider whether the social enterprise movement, which envisions a new sector of businesses created both to generate profits and pursue social goals, advances this debate. They conclude that it does. Proponents of social enterprise believe that such businesses can combine the dynamism of for-profit firms with the mission-driven zeal more typical of nonprofit organizations. Social enterprise and CSR have much in common: both want businesses to take the interests of non-shareholder stakeholders more seriously and play a larger role in addressing social and environmental problems. Yet there are important and underexplored differences. Unlike CSR, the idea of social enterprise is remarkably congenial to mainstream corporate law in ideology and methodology. In one respect, the social enterprise movement sidesteps the CSR debate by operating in a different setting - its vision is realized and embodied in new organizational forms rather than existing corporations. In another respect, the movement shows how mainstream corporate law can accommodate CSR and progressive corporate law concerns without fundamental change. Social enterprise thus advances the CSR debate in unexpected ways - the movement appropriates some CSR notions and shares some CSR sensibilities, but combines them in a manner that should please corporate contractarians, alarm proponents of progressive corporate law, and discomfort some proponents of CSR

The Role of Social Enterprise

A social enterprise operates a business in a manner intended to increase social welfare more than conventional businesses in the same sector. This notion of “social enterprise” was pioneered by nonprofit organizations seeking to advance their charitable missions through revenue-generating commercial activity, instead of relying on charitable donations. With increasing frequency the term is applied to for-profit business ventures whose founders seek to both address social problems while also generating acceptable returns for owner-investors. The article examines the notion of for-profit social enterprise, and explains how such entities may better achieve social goals than nonprofits engaged in revenue-generating commercial activity, most notably by expanding a business’s access to capital and talent. The article also addresses what some have described as the “legacy problem” – the concern that for-profit social enterprises will not sustain their social missions after the founding social entrepreneur’s exit or loss of enthusiasm. Such concerns, the authors argue, reflect a “nonprofit lite” perspective, which sees the main challenge of social enterprise law as increasing the resources available to what are essentially nonprofit organizations, i.e., entities that are explicitly committed to generating social value in perpetuity. The authors favor an approach that is grounded in the broader ambitions of social entrepreneurship, which is to increase social welfare by transforming markets and preferences in a way that goes well beyond a particular enterprise’s activities. The for-profit social enterprise itself may be transitional and need not survive in order to achieve large-scale social change

Sustainable Business

In recent years lawyers have become increasingly active in the field of for-profit social enterprise and sustainable business. This is nowhere more evident than in the design of new organizational forms such as the low-profit limited liability company (L3C), the flexible purpose corporation, and the benefit corporation. In this emerging field, sustainability is perhaps the most prized quality as well as its most versatile construct. This Essay contributes to the debate over new legal forms by analyzing the multiple meanings of sustainability in this context. The analysis demonstrates the importance of distinguishing between the social enterprise as a dual mission or double bottom line endeavor (i.e., one that pursues both profits and a non-pecuniary mission) and the sustainable business as a triple bottom line endeavor (i.e., one that pursues the tripartite goals of profits, social equity, and environmental sustainability -- also known as people, planet, profit), and the critical yet unappreciated differences between the two types of undertakings. Social enterprise and sustainable business each attempt to solve a different problem, and these problems differ vastly in scale. In the case of social enterprise, new forms such as the L3C and flexible purpose corporation address a relatively discrete and concrete problem: how can mission-driven for-profit businesses expand access to capital without endangering their missions, enabling them to combine the most advantageous features of the for-profit and nonprofit forms. The ability of new forms to achieve these aims has been extensively discussed, but relatively little has been said about the non-pecuniary missions of such businesses other than that they be legally charitable, social, or confer a public benefit. In contrast, the sustainable business movement is more ambitious and specific in its aims: it seeks to enlist private enterprises in a global struggle to avert humanitarian disaster and ecological catastrophe. Although it has been little remarked upon, the benefit corporation form provides a good model for how triple bottom line businesses may be organized. At the same time, the benefit corporation could, if accepted as the model or archetypal social enterprise, serve as a Trojan horse for environmental sustainability by imposing an environmental mandate on every social enterprise, thereby eliminating the distinction between social enterprise and sustainable business. No longer could a social entrepreneur simply follow her bliss if that bliss is deemed environmentally unsustainable. The problems created by imposing an additional non-pecuniary bottom line on dual mission social enterprises have been neither acknowledged nor resolved

Freezing out Ben & Jerry: Corporate Law and the Sale of a Social Enterprise Icon

Companies with social missions are frequently bought by larger, more conventional profit-seeking firms and just as frequently accused of “selling out.” Ben & Jerry’s Homemade Inc. is perhaps the leading example: its takeover by international conglomerate Unilever is an oft-repeated cautionary tale of the negative proclivities of the publicly-traded corporate form and profit-maximizing corporate law. Contrary to conventional wisdom, however, corporate law did not compel the sale, or sell-out, of Ben & Jerry’s. This familiar account omits a critical part of the narrative -- the company and its founders had established impressive anti-takeover defenses that, when pressed, the board declined to test. The Ben & Jerry’s story demonstrates that a well designed corporate structure can be suitable for social entrepreneurs seeking to pursue both profits and a social mission. Moreover, handwringing by progressives over the sale of social enterprise icons may be misguided, as such transactions may enable these firms to create more social value than they could independently

Classical literature gives life to business paradox and systems integration

Professors bemoan the great difficulty students have understanding the complexity of their disciplines or functional specializations. Many non-traditional students have work and family commitments that limit the time needed to reflect professionally and to master these concepts. This disconnect has persisted despite decades of work developing more integrated, interdisciplinary curricula. One potential, partial solution is to simply start sooner and partner with liberal arts courses to introduce business students to complexity and paradox before they arrive at the business school. Grounding these concepts in the Classics embeds them in great stories of passion, betrayal, commitment, and emotion normally absent in business courses. Business textbooks and cases are usually sanitized, simplified, and quantified, stripping them of the chaos normally experienced in reality. These classical tales are captivating and compelling, making the business concepts used to analyze them more memorable and hopefully retained until encountered again in the business curriculum. The classics deal with real and raw emotions, with powerful prose more likely to capture and engage students on a very personal level. This article explores how economics can be used to analyze Jane Austen’s Pride and Prejudice, how multi-stakeholder theory can be used to analyze Sophocles’ Antigone, and how business contract law can be used to analyze William Shakespeare’s The Merchant of Venice. Liberal Arts programs will gain additional relevance, commanding further student respect; business schools will stand a better chance of meeting AACSB gold-standard, interdisciplinary learning outcomes when students are exposed to these concepts before arriving at the business school

Effect of Levamisole on the Incidence of Spontaneous Mammary Tumors in C3H Mice

Spontaneous mammary carcinoma in C3H mice is preceded by premalignant hyperplastic alveolar nodules. When a primary tumor is evident, examination of the other mammae will reveal a number of microscopic precancerous lesions in various stages of transformation to overt malignant tumors. In an effort to inhibit the development of additional malignant tumors after surgical removal of the first apparent tumor, we treated female C3H/HeJ mice with subcutaneous injections of levamisole (0.6 mg per kg of body weight) on a twice weekly regimen. All further tumors were surgically excised when they became palpable. The surgical excision of bulk tumor burden, immunorestoration by levamisole, and the presence in the tumor cells of immunogenic surface antigens related to the virus all might be expected to enhance immunodulation of tumor cell growth or immunorejection of tumor cells. Immune activity measured by assaying macrophage migration inhibition factor, extractable from splenocytes, was significantly greater in the levamisole-treated mice than in the controls throughout the experiment. Although fewer tumors developed in the treated animals during the first eight weeks, this apparent effect of immunopertubation was only transitory. By the end of 14 weeks, there was no longer a statistically significant difference in cumulative tumor index between the two groups

Olfactory lures in predator control do not increase predation risk to birds in areas of conservation concern

Context. Lethal control of predators is often undertaken to protect species of conservation concern. Traps are frequently baited to increase capture efficacy, but baited traps can potentially increase predation risk by attracting predators to protected areas. This is especially important if targeted predators can escape capture due to low trap success. Snake traps using live mouse lures may be beneficial if traps effectively remove snakes in the presence of birds and do not attract additional snakes to the area. Aims. The present study evaluated whether mouse-lure traps in areas occupied by birds (simulated by deploying birdlure traps) could influence predation risk from an invasive snake on Guam. Methods. Snake traps were used, with Japanese quail (Coturnix japonica) as a proxy for predation risk, to assess if an adjacent trap with a mouse (Mus musculus) would attract brown treesnakes (Boiga irregularis) to a focal area and increase contact between an invasive snake and avian prey. Catch per unit effort (CPUE) at stations containing either a bird-lure trap, mouse-lure trap or pair of traps (i.e. one bird-lure and one mouse-lure trap) was evaluated. Key results. Bird-lure traps paired with mouse-lure traps did not differ in CPUE from isolated bird-lure traps. At paired stations, CPUE of snakes in mouse-lure traps was 2.3_higher than bird-lure traps, suggesting mouse lures were capable of drawing snakes away from avian prey. Bird-lure traps at paired stations experienced a decay in captures over time, whereas CPUE for isolated bird-lure traps increased after 9 weeks and exceeded mouse-lure traps after 7 weeks. Conclusions. Mouse lures did not increase the risk of snakes being captured in bird-lure traps. Instead, mouse-lure traps may have locally suppressed snakes, whereas stations without mouse-lure traps still had snakes in the focal area, putting avian prey at greater risk. However, snakes caught with bird lures tended to be larger and in better body condition, suggesting preference for avian prey over mammalian prey in larger snakes. Implications. Strategic placement of olfactory traps within areas of conservatio

Quiet Supersonic Flights 2018 (QSF18) Test: Galveston, Texas Risk Reduction for Future Community Testing with a Low-Boom Flight Demonstration Vehicle

The Quiet Supersonic Flights 2018 (QSF18) Program was designed to develop tools and methods for demonstration of overland supersonic flight with an acceptable sonic boom, and collect a large dataset of responses from a representative sample of the population. Phase 1 provided the basis for a low amplitude sonic boom testing in six different climate regions that will enable international regulatory agencies to draft a noise-based standard for certifying civilian supersonic overland flight. Phase 2 successfully executed a large scale test in Galveston, Texas, developed well documented data sets, calculated dose response relationships, yielded lessons, and identified future risk reduction activities