From: knowledge@wharton.upenn.edu
Sent: Wednesday, May 21, 2003 3:39 PM
Subject: K@W Newsletter May 21-June 3, 2003: Special Section: The Many Faces of Social Entrepreneurship

Knowledge@Wharton Newsletter

http://knowledge.wharton.upenn.edu

May 21-June 3, 2003

 

Special Section

The Many Faces of Social Entrepreneurship

When Knowledge@Wharton first announced its intention to publish a special section on social entrepreneurship, we received more than 200 e-mails from readers with ideas and examples for us to include. This response caused us to rethink our approach and expand the scope of the section. As the articles below show, social entrepreneurship is more than a movement; it is a philosophy, an objective, a variety of business models and organizations, and, perhaps most basically, a blueprint for the future. We plan to offer additional coverage of social entrepreneurship ‑ and its goal of using business knowledge to drive social change ‑ in subsequent editions.  

 

Social Entrepreneurs: Playing the Role of Change Agents in Society

Social entrepreneurship means many things to many people, but at the very least, it seems to imply generating business opportunities that give individuals the means to be both creative and productive, thereby raising the quality of life for society as a whole. Knowledge@Wharton present comments from several readers who sent us their views of this imprecise but promising phenomenon.

 

Venture Philanthropy Embraces Key Strategies of Venture Capitalists

The problem: Find a way to get more bang for the buck out of charitable donations. The strategy: Adopt techniques that worked well for venture capital firms in the 1990s – greater interaction between giver and recipient, and an emphasis on measurable results. The upshot: The birth of the movement variously called “venture philanthropy,” “social entrepreneurism,” “strategic philanthropy,” and “e-philanthropy.” But is it really a new model for charitable endeavors that even mainstream non-profits should adopt, or is it just a fad?

 

Globalization With a Human Face ‑‑ and a Social Conscience
Social entrepreneurs in
Bangladesh are turning household garbage into fertilizer. In South Africa, they are passing out low-tech, wind-up radios that link rural villages to the world’s airwaves. In Mexico, a former concert violinist is helping preserve key parts of the rain forest. Increasingly, cutting-edge ideas in global economic development are coming from a small band of social entrepreneurs promoting what at first glance often seem to be obscure, odd-ball ideas. These people can crop up in any country, notes one observer. “The need is everywhere.”

 

Images of Illness: OneWorld Health Strives to Heal the World’s Poorest Communities

Setting up the world’s first non-profit pharmaceutical company hasn’t been easy, says Victoria Hale, founder and CEO of the Institute of OneWorld Health (IOWH), based in San Francisco. The group’s business plan initially generated concern among big pharmaceuticals who were worried about possible competition. Moreover, financial support two years ago was in short supply, given the state of the economy in general, and Silicon Valley in particular. But things have a way of turning around when the goal is to develop drugs to combat deadly parasitic illnesses that afflict millions of people every year in some of the world’s most poverty-stricken regions.

 

A New Model for Corporate Charitable Giving
Companies and foundations, ranging from
Patagonia and Cisco Systems to Verizon and McCormick Tribune, are doing more than giving out cash for causes and programs. In what amounts to a shift in the world of charitable donations, philanthropists of all kinds – individuals, independent foundations and, lately, corporations – see themselves as active partners, rather than passive benefactors, of the groups they support. One company calls it “high-engagement grant making.”

 

Many NonProfits Now Combine Social Mission with For-Profit Mentality

Social entrepreneurs and their good deeds have become a hot topic in recent years. But these socially conscious go-getters hardly invented the idea of using talent and money to improve the lives of one’s fellow men and women. Traditional nonprofit organizations have been doing it for a long time. It’s just that the way many of them do it has begun to change.

 

The Triple Bottom Line: Student Activists Demand More from B-Schools

The idea that it is the business of business schools to teach future execs how to solve social and environmental problems has been slowly infiltrating B-schools around the world. But socially-conscious students are interested in changing more than their curricula; they also want to change the way businesses behave. Knowledge@Wharton looks at a variety of new B-school initiatives that are attracting students interested in “using the power of business to create a better world.” 

 

Forging a Link Between Shareholder Value and Social Good

To endure and build long-term value for shareholders, companies must also do well by society, according to speakers at a recent symposium titled, “Building and Valuing a Firm’s Sustainability Strategies,” sponsored by the Wharton Social Impact Management Initiative. Poverty, globalization and the environment all have an impact on business, yet are often perceived as issues that fall beyond the responsibility of corporate management. That shouldn’t be the case, argued symposium participants, who discussed the challenges of operating within the context of a worldwide community.

 

Environmental Camps, Rice Farms and Hearing Aids: Ashoka Fellows Around the World

David Green was consumed with the idea that hearing aids need not cost as much as they do. He thought he had a technology that could cut the cost of a simple hearing aid from $1,500 to less than $100. Ashoka, an organization that funds socially-conscious entrepreneurs like Green, agreed. The result is the Affordable Hearing Aid Project, which started manufacturing hearing aids in India in February – one of many projects that Ashoka has supported since its establishment 23 years ago.

 

Can Corporate Philanthropy Promote Regional Growth?

As part of the recent Wharton Leadership Lectures, Philadelphia Republican mayoral candidate Sam Katz and J. William Mills, PNC Bank regional president of Philadelphia and Southern New Jersey, spoke on the value of merging business and politics. Their thesis: that corporate community involvement is fundamental not only to the economic vitality of the Philadelphia urban region, but to the future of business itself.

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What's Hot

How Serious is the Deflation Threat?

Reactions to the Federal Reserve’s recent expression of concern over the possibility of deflation in the world’s biggest economy have ranged from alarm to dismissal. But even the optimism of those who believe the U.S. is not headed for a period of generally falling prices may be dampened by much of the economic data that has followed the Fed’s historic statement.

http://knowledge.wharton.upenn.edu/whatshot.cfm

 

Marketing

For Tiger Woods’ Sports Agent, It’s All About Brand Management

Sports agent Mark Steinberg compares representing a star in an individual sport such as golf to managing a consumer brand. “Coca-Cola, Kodak, Nike – those are three of the largest international brands. Tiger Woods is on a par with them,” Steinberg told an audience at Wharton several weeks ago. “You can’t walk down a street in Kuala Lumpur or New Zealand and say, ‘Tiger Woods,’ and not get a response.” Not to mention the response recently generated by another one of his golf clients, Annika Sorenstam.

http://knowledge.wharton.upenn.edu/articles.cfm?catid=4&articleid=779

 

Leadership and Change

Do Shareholders Have the Clout to Rein in Excessive Executive Pay?

Warren Buffett’s latest attack on excessive executive compensation is another chapter in the long-running saga about how much to pay top business leaders, and how to limit the compensation of those who are deemed to be making too much.

The issue is especially acute given the dismal performance of many leading stocks over the past year. The question is: What pressures, if any, can be brought to bear on these pay packages and who should bring them?

http://knowledge.wharton.upenn.edu/articles.cfm?catid=2&articleid=780

 

Real Estate

As Big Money Chases Real Estate, Markets Await Better Fundamentals

Office markets are starting to recover on the West Coast of the U.S., and the recovery will soon spread to the East. That upbeat observation came from Sam Zell, chairman of Equity Group Investments, the biggest office landlord in the U.S. Zell and other experts were generally optimistic about real estate's prospects at a recent meeting of the Zell-Lurie Real Estate Center at Wharton.

http://knowledge.wharton.upenn.edu/articles.cfm?catid=8&articleid=783

 

Insurance and Pensions

Will Baby-Boomers’ Retirement Years Go Bust from a Lack of Savings?

In recent years, the format of Americans’ pension plans has changed as more companies move to a defined contribution model that places more responsibility on the shoulders of the employees. But even as it becomes more important for workers to prepare for retirement, surveys and other data indicate that many plan participants confess to having little or no understanding of these vital tools. Worse, because of the complex nature of 401(k)s and other plans, employee contributions tend to be far lower than they should. These and other issues were explored during a recent Wharton Pension Research Council conference titled “Decision-Making under Uncertainty: Implications for Pensions.”

http://knowledge.wharton.upenn.edu/articles.cfm?catid=5&articleid=782

 

Strategic Management

Ignoring Your Corporate Identity Can Sabotage Strategic Change

Corporate identity is a crucial component of all firms, yet it is often overlooked until a crisis forces companies to confront change, argue Wharton management professor  John Kimberly and colleague Hamid Bouchikhi. Managers at Nissan and Danone Group took identity into account when instituting change, the researchers suggest, while managers at Vivendi and Hewlett-Packard didn’t. Ford is wrestling with the issue now. Kimberly and Bouchikhi have developed an “Identity Audit” to help managers factor identity into company strategy.

http://knowledge.wharton.upenn.edu/articles.cfm?catid=7&articleid=778

 

Public Policy and Management

"We Need a New Generation to Reshape the World"

While World Bank president James D. Wolfensohn faces attacks from both the right and the left, he is driven by hopes of ameliorating poverty in the developing world. In a recent speech at the University of Pennsylvania, he explained why projects aimed at improving health and education have a greater impact on reducing poverty than the World Bank''s former approach of lending money for dams and bridges.

http://knowledge.wharton.upenn.edu/articles.cfm?catid=9&articleid=777

 

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Links from Knowledge@Wharton Sponsors

Strategy + Business: Consumers Take Charge: Defined-Contribution Health Plans

After twenty rocky years, employers, physicians, patients, and politicians are growing more and more frustrated with managed care, and are supporting a new consumer-driven system. The goal is to temper rising costs and improve service quality by giving consumers better information and greater control over how they spend their health-care dollars. Defined-contribution plans won’t replace managed care plans, but they will be the next dominant form.

http://www.strategy-business.com/press/sbkw2/

 

GE Corporate Financial Services:  Five Principles to Consider in Choosing the Right Lender for Your Company

As the economic downturn stubbornly persists, corporate borrowers are facing troubling short- and long-term changes in the commercial lending landscape. On the cyclical level, for example, credit concerns loom large, M&A activity is off, there is a reduced and shifting demand for debt, and high default rates are giving many lending institutions an increased aversion to risk. Meanwhile, long-term fundamental shifts are also impacting borrowers as bank consolidation reduces borrower choice and many financial institutions reconsider the concept of relationship lending. In an effort to address companies' concerns, GE has identified five interrelated principles that borrowers can utilize to significantly improve their chances of making a good match.

http://www.gelending.com/cgi-bin/gelending/gelending/others/direct.jsp?newsLetter=Wharton:%20Five%20Principles%20in%20Choosing%20Lender&source=EXTERNAL

 

Aon: Corporate Reputation: Not Worth Risking
Damage to a company's reputation can mean a sharp and often irreversible loss of market share. To examine the full spectrum of reputational risk management, companies need to consider risk assessment, measurement, mitigation, planning, and transfer. Below, experts from Aon and the Wharton School of the University of Pennsylvania weigh the pros and cons of a piecemeal vs. holistic approach to reputational risk.
http://www.aon.com/wharton

Microsoft: Back to Basics: Accounting for IT in Business Performance
Not so long ago, many considered speed to be the primary tactic for blocking competition and increasing market share. Companies rushed to field a dot-com strategy or some innovative application of IT that was going to secure their role in the new economy. As a result, many firms under-analyzed or over-invested in IT in pursuit of market dominance. Today, it's back to the basics. Companies are serious about using technology as a competitive advantage. They are learning that IT purchases tied to a company's business strategy have the most clear-cut business value, as expressed in traditional financial terms like Net Present Value (NPV) and payback. Moreover, when IT solutions and business strategy are woven together, companies are finding that business benefits are often broader and deeper than expected.
http://knowledge.wharton.upenn.edu/microsoft/070302.html

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