Redefining entrepreneur, and a new model for business: The social benefit enterprises

 This week, after I did some research and read the materials, I did redefining entrepreneur and unlocking more new models for business deep in my heart. For so many years, I have been wrong and trapping myself in a narrow concept of entrepreneur. Helping others does not mean you must sacrifice something. There are so many ways we can do both. We can use different solutions to solve the same math question. Although the answer is the same, the processes are different. That makes me think of an organization that also serves for social and public goals, Wikipedia. 

Wikipedia is a global multilingual encyclopedia collaborative writing project. The well-known feature of Wikipedia is that anyone can edit the content of Wikipedia at any time anywhere with an internet connection. It is also a web-native encyclopedia that is managed, edited, and its content is published and accessed entirely through Internet technology. Wikipedia was established in 2001 and is maintained and operated by the non-profit organization Wikimedia Foundation. The supporters believe that the good cooperation of mankind will improve the content of the encyclopedia. The group of Wikipedia management communities is composed of volunteers for management, control, and maintenance. They standardize, manage and review content quality, remove or block malicious users. 

Another example is a clothing recycle program. Uniqlo Co., Ltd.(株式会社ユニクロ) is a Japanese casual wear designer, manufacturer, and retailer. UNIQLO in Taiwan, promoted the "Clothes Recycling and Donation Charity Action" in 2014. With the love and sharing from the public, the recycled UNIQLO second-hand clothing will be donated to disadvantaged families, elders living alone, rural school children, and homeless people in Taiwan. This program aims to turn the discarded clothes into love. UNIQLO Taiwan encourages its customers to send UNIQLO clothing that is in good condition and no longer needed, donate to all stores in Taiwan for recycling. Together to send warmth to all corners of Taiwan.

Finally, a question I would like to ask. What would the world look like if there are no social enterprises like Wikipedia or others? What if all organizations and companies only care about maximizing profits? I think it would be absolutely a terrible thing. Now, I know why we need so many social enterprises. 

Reference

Wikimedia Foundation. (n.d.). Retrieved September 26, 2021, from https://wikimediafoundation.org/. 

Wikimedia Foundation. (2021, September 22). Uniqlo. Wikipedia. Retrieved September 26, 2021, from https://en.wikipedia.org/wiki/Uniqlo. 

Social business enterprises

 Preface

Most businesses provide products or services that are helpful to people. The free market economy is guided by a free price system, the mechanism of demand and supply. And, we often limit ourselves to a narrow definition of an entrepreneur, "a person who attempts to make a profit by starting a company and taking the risks." We only take the word "profit" because we love money and make it become the only reason why we are doing or start our businesses. And then, we do all our best to maximize it. However, social business enterprises are not the same. From the beginning, maximizing profits is the only thing it cares about. The Prisoner's Dilemma is also a great example here to illustrate the key point. If you only care about yourself, your options will be limited. But, if you can see a thing through a comprehensive view, as a chess player, you will not be limited within the view of each piece. Zoom in, you only see the roads and their names on the map, zoom out, you will see the whole map. 

What Is a Social Enterprise?

A social enterprise is a business that has specific social objectives that serve its primary purpose. Social enterprises seek to maximize profits while maximizing benefits to society, the environment, and are principally used to fund social programs. Social enterprises seek to balance activities that provide financial benefits with social goals, such as providing housing or food to poor families. Earning profits is not the primary motivation behind a social enterprise. Therefore, the revenues they generate are principally for the sustainability of the venture. 

What Are The Differences?

i. The Goals and Objectives

Social enterprises seek to balance activities that provide financial benefits with social goals rather than only maximizing profit by supplying products and services to satisfy demands. 

ii. Where The Profits Go

Social enterprises can also be profitable, but most of them go to reinvest profits into their social mission, rather than fund payouts to shareholders. As mentioned before, the revenues they generate are principally for the sustainability of the venture. By doing this, they can keep their steps on the way to achieve their goals.

iii. Their Employees

Most social enterprises seek to provide a reasonable living wage such as above the minimum wage. In addition, employees of social enterprises are priority given to those who are from at-risk sections of the community.

iv. The Purpose

Social entrepreneurs seek innovative ways to fulfill a business purpose and solve societal needs through their commercial activities. For example, a company that recently filed for IPO, Warby Parker is an American eyeglass retailer that donates a pair of glasses to someone in need for every pair sold. 

Reference

Barone, A. (2021, May 19). The aims of social enterprises. Investopedia. Retrieved September 24, 2021, from https://www.investopedia.com/terms/s/social-enterprise.asp. 

a social contract, historical influences on the continued redefinition of the social contract

 The major topics in this week are the concept of a social contract, historical influences on the continued redefinition of the social contract, and the elements of the future social contract. A social contract is an actual or hypothetical compact or agreement between the ruled and their rulers. It defining the rights and duties of each. For example, it is an agreement among individual people in a society or between the people and their government that outlines the rights and duties of each party. However, it wasn't always this way. 

Nowadays, the concept of a social contract has moved from the exceptional to the expected. Unlike the old days, only very few things and profits are regulated and included as a social contract. Before World War II, the Union Nations did not even exist. Not to mention today's human right related organizations around the world. But, it's never too late to do the right thing. Moves like a turtle do not mean you are absolutely going to lose. 

There is a question I was trying to figure out. Jeff Bezos once said, "Cleverness is a gift, Kindness is choice". Normally, people are free to choose they want to be good or bad and responsible for the consequences. But for companies, they are a group of people, and their consequences can be huge or even destroy the planet. For example, if you are a military contractor, you may have tons of weapons on hand. Many people contribute their cleverness to a company and share the consequences. However, their leaders, owners, or shareholders make the decisions of the whole group. So, what if cleverness is the gift of a group, but kindness is not their choice? What if their leaders choose to be bad citizens? A knife on hand does not mean you are a bad guy, you can be either a Masterchef or a murderer. But I think a social contract should avoid everyone making the latter choice.

While human rights and freedom are gaining value nowadays, does a social contract is limiting our choices and freedom? Let's go back to the basic concept of a social contract. It defining the rights and duties. Freedom is everyone's right, but violence is not. Because it violence the previous rule, "freedom is everyone's right". It is a complicated concept and the definition of freedom is also varies in different countries. Therefore, having a common goal is a great way to solve this kind of divergence. For example, the 17 UN Sustainable Development Goals or the 2030 zero-emission goal are both great ways to share and understand the concept of a social contract. 

Embedding Long-Term Wealth Creation in the Heart of Tesla

 Preface

The author of the article “Embedding Long-Term Wealth Creation in the Heart of the Enterprise” describes the notion of recognizing that long-term wealth creation lies in the heart of the enterprise. The public interest is served by creating long-term wealth, defined as a value that continues to yield societal benefit. In addition to wealth created by technological innovation and productivity applied to goods and services, long-term wealth implies a productive activity that at least preserves and potentially expands the stock of natural, human and social capital. A company’s well-being is inextricably linked to the well-being of the society in which it operates.

Creating Long-Term Wealth with Tesla

Tesla, Inc. is an American electric vehicle and clean energy company based in California, United States. Tesla designs and manufactures electric cars, battery energy storage from home to solar panels, solar roof tiles, and related products. Tesla strive to be the best on every metric relevant to our mission to accelerate the world’s transition to sustainable energy and each product they make must be continuously improved at each step of its lifecycle. From manufacturing to consumer use to recycling. Tesla aspires to do the right thing, and constantly looking for ways to do better. 

The Impact Report

According to Tesla's 2020 impact report, in 2020, Tesla customers helped accelerate the world's transition to sustainable energy by avoiding 5.0 million metric tons of CO2 emissions. Meanwhile, Tesla's team is designing and manufacturing a complete energy and transportation ecosystem that is fully vertically integrated. By creating affordable products that work together to amplify the impact, leading to the greatest environmental benefit possible. Tesla seeks to achieve the goal through software development and continued drive to develop advanced manufacturing capabilities. 

The Entire Lifetime

A vehicle’s environmental impact must include both its manufacturing and usage emissions. Since Tesla vehicles are powered entirely by electricity, their lifetime emissions are significantly lower. More than that, Tesla battery packs are designed to outlast the vehicle itself. Preparing for the future, the battery factories have already begun implementing an in-house, closed-loop recycling system that will ensure 100% of Tesla batteries received are recycled and up to 92% of their raw metals reused. 

The Public Health

Electric vehicles don’t just benefit the future of our planet, they also help address preventable deaths today. Air pollution in the form of carbon monoxide, NOx, and fine particulates from burning fossil fuels causes over eight million premature deaths every year. 

Put Sustainability at The Heart of Tesla

Sustainability drives people, the values, and the mission at Tesla. It also matters greatly to Tesla's stakeholder such as customers, employees and shareholders. To achieve a zero-emissions future, Tesla have implemented several programs and initiatives at its global manufacturing facilities and in the communities in which it operate.

Challenges in China

In China, much of the grid is powered by coal. So, Tesla is expecting the grid mix in China to improve dramatically over time as China remains a dominant deployer and manufacturer of renewable energy. However, in 2020, charging a Tesla Model 3 in any of its major markets is more environmentally friendly than burning gasoline. 

Challenges in Supply Chain

In alignment with the mission, Tesla believes in reducing emissions upstream of its factories, including the carbon footprint of its supply chains. Tesla localized the suppliers to reduce the distance of its parts need to travel before they are assembled into the vehicles, and reduces the emissions associated with transportation. In addition, supplier localization also supports the local community and its workforce and reduces the risk of a supply disruption due to geopolitical dynamics. 

Reference

2020 impact report. Tesla. (n.d.). Retrieved September 20, 2021, from https://www.tesla.com/impact-report/2020. 

In the article "Is it Time to Rewrite the Social Contract?", discussed the historical criticism of government involvement in business enterprise.

 Preface

In the article "Is it Time to Rewrite the Social Contract?", discussed the historical criticism of government involvement in business enterprise. As companies seek to offload all or most of these rising costs onto employees, they play a pivotal role in shaping the lives of people and the actions of government. To discuss what level of social responsibility we believe corporations should have, we must know how to measure it first or based on what criteria to measure private companies meet the expectations or not. If corporations are like the trees that live on the land we share, then they at least have to protect or keep their environment safe since it is where they get their nutrients, the stakeholders. That makes me think of the interesting prisoner's dilemma. The Prisoner's Dilemma is a standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interests to do. 

The Prisoner's Dilemma

Assume that two individuals(Jerry and Tom) of a criminal organization are arrested and imprisoned. Each prisoner is in solitary confinement with no means of communicating with the other. The prosecutors lack sufficient evidence to convict the pair on the principal charge, but they have enough to convict both on a lesser charge. Therefore, if Jerry and Tom each betray the other, each of them serves two years in prison. If Jerry betrays Tom but Tom remains silent, Jerry will be set free and Tom will serve three years in prison. If Jerry remains silent but Tom betrays Jerry, Jerry will serve three years in prison, and Tom will be set free. If Jerry and Tom both remain silent, both of them will serve only one year in prison. As you can see, the best outcome for Jerry and Tom is they cooperate with each other, their stakeholders.

The Prisoner's Dilemma Is A Mirror

As we know that, usually, their selfishness will make them weaker and lead to the worst outcome for all of them. Nowadays, the broad spectrum of the public has moved from the exceptional to the expected. I believe the least level of social responsibility that corporations should have is they should not make any excessively selfish decisions to benefit themselves by hurting others, destroy our future, or anything like that. But, what decisions are selfish? It can be controversial. Moreover, as globalization has accelerated, an explosion of new organizations has evolved in response to urgent problems that globalization itself has caused, accelerated, or exposed.

Trust Must Be Earned

Trust is hard to build but easy to lose. And, no one is born to be fully trusted. So, trust must be earned. The key point here is to earn and retain. To earn the public's trust and retain it as the heart of an enterprise. I trust you can provide me great and responsible products, and you earn more from sales and reputation. It is a win-win strategy. 

Long-Term Wealth

The public interest is served by the creation of long-term wealth and it should be the value that continues to yield societal benefit, and trust is essential to do this. If the goal is long-term wealth, then it implies the productive activity that at least preserves and expands the stock of natural, human and social capital. 

Reference

Wikimedia Foundation. (2021, September 15). Prisoner's dilemma. Wikipedia. Retrieved September 16, 2021, from https://en.wikipedia.org/wiki/Prisoner%27s_dilemma. 

What is the responsibility of Western countries toward the economic development of developing countries?" I think it is relevant to CSR.

 This week, I read some articles about "What is the responsibility of Western countries toward the economic development of developing countries?" I think it is relevant to CSR. 

Most of the time, when we talk about globalization, it is all about economic growth, international trade, and information interchange. Many big multinational companies benefit from globalization. However, does it really benefits those developing countries where these companies are operating? In the beginning, most of them just tried to lower the cost of production by producing their products in those low-income and low-wage countries. 

After some negative effects on their brand, such as child labor and poor working conditions in Nike's foreign factories, they must change their strategies to redeem their brand image. They started to improve the working conditions and published detailed information about its supplier policies, audits, and remediation processes. But, do these processes enough to help and those developing countries? I think it is more likely to unequally distribute the benefits back to where they came from. Most companies are trying to benefit from those direct investments, not doing charity to take care of the local laborers. However, after some remediation processes such as CSR programs, the local laborers did get jobs, get paid more, and learned some new skills. 

One of the key factors is the crucial resources, techniques, technologies, and knowledge is controlled by these big companies and Western countries. Education is the key to better competitive advantages. If those developing countries can build their own excellent education systems, they may not be just developing countries anymore. However, most developing countries are dragging by their corrupt bureaucracy. High efficient governments can lead their residents to follow up the steps of a better future, whereas corrupt bureaucracy just makes things worse.

I think, in the past, there are no clear responsibilities for companies or Western countries to do anything for developing countries since it is an ethical issue and making money is all business owners care about the most. However, if enterprises do their businesses more kindly, honestly, with integrity, and effectively implement CSR programs, it is also a way to gain their profits by increasing sales and consumer loyalty. 

Reference

New Idea. (2019, December 11). Nike Sweatshops: The Truth About the Nike Factory Scandal. New Idea. https://www.newidea.com.au/nike-sweatshops-the-truth-about-the-nike-factory-scandal.

What is CSR and how does it positively impact the community or you?

What Is CSR?

Corporate Social Responsibility, or CSR, is a self-regulating standardized guideline for business operations that assists a company to be socially accountable to its stakeholders and the public. By practicing CSR, companies can be conscious of the impact they are having on many aspects such as economics, society, and the environment. That means a company is operating in ways that enhance positive impacts instead of negative ones. Corporate responsibility programs are also a great way to raise morale in the workplace because the activities can help companies to shape a stronger bond with employees. In addition, it boosts morale and builds stronger positive connections and relationships between employees and employers.

Example of CSR

Starbucks has long been known for its intensity of corporate social responsibility and commitment to sustainability and community welfare. According to Starbucks' 2020 Global Social Impact Report, it reaching 100% of ethically sourced coffee, creating a global network of farmers. Moreover, Starbucks' goals for 2021 are hiring 10,000 refugees, reducing the environmental impact of its cups, and planned to help the world navigate the coronavirus pandemic. 

Personal Experience of CSR

My father runs a pork meat processing company in Taiwan. He purchases pork from suppliers nearby and then processing pork in the factory. He did not think any of his products are socially irresponsible. He thinks he is just providing food for the people. However, it is not as simple as he thinks. When I told him we can do more than just feeding people, he did not believe me and thought I was crazy. 

Learned from Beyond Meat

Five years later, when I heard about the company, Beyond Meat, I was attracted by its mission. "By shifting from animal to plant-based meat, we can positively affect the planet, the environment, the climate, and even ourselves. After all, the positive choices we make every day – no matter how small – can have a great impact on our world." So, I tried to persuade my father to shift his products like that. And, it was not surprised. He denied my proposal. He was stuck in a traditional concept that businesses are all about profits. However, I think when the rivers are all dried up, and all the trees cut down, people will then realize that they will not be able to eat money. My concept was simple. I don't want to wait for the end, I want to do something for a better future, a sustainable one.

Inconvenient Truth

Beyond Meat believes that unlike ¼ lb U.S. beef counterparts, original Beyond Burgers can be made by generating 90% fewer Greenhouse Gas Emissions, according to the University Of Michigan, 2018, the Environmental Impact of the original Beyond Burger vs ¼ lb. U.S. beef. Life Cycle Analysis. So, I started to invest in this company and buying its shares. And, I also started to purchase its products.

Profit-Orient Business

After a couple of years, my father was influenced by the actions I took. He started a new plan to make and processing some plant-based meats. Then, he was shaken by the increasing demand for these new products. When the profits went up, he decided to put more effort into this program and ask me to provide more suggestions of how to do it. In this story, not only his company was increasing profits, but also it influenced the environment and society. In Taiwan, more and more people tend to buy plant-based products instead of animal ones. According to World Animal Protection, by Forbes, Dec. 2019 Report, plant-based burgers are saving approximately 250,000 animals per year. Although we may think that how animals live their life is not our business, we as humans still have empathy to feel the pain of other animals. An empathic society is a better place to live. Less violence and less abuse. In the workplace, I found that the employees tend to be more kind than they were before. 

Summary

Although it looks like just a profit-seeking decision, it did affect how we doing business and it also spreading all over the industry. If we consider CSR as a need, a need for a better world and a better future, then companies can also make profits by satisfying those needs. I think the CSR provides us a clear and formulated standard to follow rather than discuss and judge each step. If you set a goal for yourself, you are more likely to succeed by putting in more resources and focus on it.

Reference

Fernando, J. (2021, September 7). Corporate social RESPONSIBILITY (CSR). Investopedia. Retrieved September 10, 2021, from https://www.investopedia.com/terms/c/corp-social-responsibility.asp. 

Reflection and Journal in Business and Society Course

 Most of the time, when we talk about sustainability, we often only focus on the environment, the planet, and things like climate change. However, in this week's materials, I learned that sustainability is more than just the environment. Sustainability can be explained with the three pillar model based on environmental, economic, and social considerations. In addition, the 17 UN Sustainability Development Goals are also not only targeting climate change. They also targeting many other social and economic goals such as poverty, inequality, peace, or even justice. I think this concept helps me to think of it in a whole new and comprehensive way.

I feel the course has changed my thinking a lot at the beginning. The concept of stake and stakeholders give me a clear view of what should I consider and how to make wiser decisions. However, I am still confused about the E3, Macroenvironment(the 4 factors, social, political, technological, economics), and the SDGs. They all trying to make the world a better place, but the strategies, the logic, and the goals are a little different. For example, in the four Macroenvironment factors, social, political, technological, economic, you cannot clearly see any relevance to zero hunger, the goal 2 of UN Sustainability Development Goals. But, the need for food is connecting to almost all economic activities since we all need food to eat.

By the way, among the 17 UN Sustainability Development Goals, I am curious about the Goal 1, No Poverty. The target is to eradicate extreme poverty for all people everywhere, by 2030. The defined extreme poverty as people living on less than $1.25 a day. However, I think the money and the number are not the main points. The question is, how much or how many they can purchase, the value is the key. If a hamburger is $0.05, they can afford 25 hamburgers a day. If a hamburger is $3, they are facing a big trouble. These days, more and more governments tend to increase their currency supply, causing inflation to grow their economic growth figures. That means if those extremely poverty people do not catch up with the speed of the money supply, their life will be more difficult to reverse. 

And, the Goal 2, End hunger, achieve food security and improved nutrition, and promote sustainable agriculture, is not just as easy as providing them foods to eat. Their target is, By 2030, to end hunger and ensure access by all people, in particular, the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round. That means nutrition, sustainable agriculture, and food security are also included.

Reference

United Nations. (n.d.). THE 17 GOALS | sustainable development. United Nations. https://sdgs.un.org/goals. 

The concepts of stake and stakeholder from your perspective as an individual

A stake is an interest or share in an undertaking(Bucholtz and Carroll, p.63). It can be an interest that when a person will be affected by a decision, a legal right, or ownership of a property or an asset. For instance, suppose a government decides to raise the minimum wage. The laborers and the business will all be affected. So, they pay very close attention to this policy. In this case, the stake is the minimum wage policy that will affect those people's legal rights and ownership of their salaries.

A stakeholder is a person who has this interest or share. This interest may include a legal right, a moral right, or a concern for what they consider ethical or fair. Recall the example of the minimum wage policy, the laborers and the business will all be affected. The laborers will receive more on their paychecks and the business owners will have to pay more for their daily operations.

I planed to buy a new car last year. I was browsing many official websites of car brands and then I found a policy that benefits electric car owners such as zero tax and lower cost of charging. It is a stake like consumer rights when you buy goods and services or a policy that influences your decision. Obviously, it did impact my decision on the buying behavior. Due to this policy, I prefer an electric car rather than a fossil one. In this case, the stakeholders are car manufacturers, the main stakeholders in the electricity industry, newly started business owners, salespeople, people who care about climate change, the charging spots builders, fossil fuel providers, people who work for traditional oil companies, and more.

References

Bucholtz, A. K. and Carroll, A. B. 2012. Business and Society, Ethics and Stakeholder Management. 8th edition. South-Western. Cengage Learning. Latest edition