Academic journal article Public Administration Research

Social Business Responsibility: The 'Magarpatta'

Academic journal article Public Administration Research

Social Business Responsibility: The 'Magarpatta'

Article excerpt


This case deals with the win-win situation of the social enterprise model of business. The case focuses on the aspect that the economic aspect of maximizing wealth for the shareholders can be integrated with the social objective of 'Doing good'. The case also deals with the leadership qualities and vision to improve the living standards of not only the farmer-turned entrepreneur community but generating more employment for other stakeholders while taking heed of environmental issues like greening the environment, conserving energy and waste recycling. In short, this social business entrepreneurship case showcases how a threat could be turned into an opportunity for sustainability.

Keywords: emerging economy, social business enterprise, leadership, sustainability

1. Introduction

The difficulty arises in defining and capturing the meaning and essence of social responsibility. Koutilya, the 4th century B.C. political economist in India advocated business with a moral lining which reveals the origins of social responsibility. In India, even a quarter century ago, a corporation's social objectives were narrow and its activities, sporadic and voluntary. But in the present era, the scope and the outcomes have taken a different dimension to include several stakeholders both active and passive.

It has been seen and heard that organizations like nations take pride in their contribution towards social responsibility. Their activities could take one or more forms. Some call it philanthropy, some corporate citizenship and many others business strategy. Whatever may be the form, the impact is often felt by a wider spectrum of society, more often the under privileged. Though the term 'social responsibility' is frequently referred in connection with a corporate body, it is equally applicable to any other entity. Today, social responsibility, corporate or otherwise has emerged as a topic for discussion both in board rooms and classrooms.

OECD has prescribed the four tenets of corporate governance which form its pillars; Transparency, Accountability, Responsibility and Fairness. Responsibility includes social responsibility to all the stakeholders. While World Commission on Environment and Development in its report refers to sustainable development as 'development that meets the needs of the present generation without compromising the ability of the future generations to meet their own needs', World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as "The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." Kofi Annan the former UN Secretary-General in his speech in Davos referred to it as "the human face of corporations".

Taking the concept of social responsibility further, it is seen that the responsibility of being a good citizen, corporate or otherwise lies both with the Government and other private bodies too. A new form of business enterprise is the social business enterprise which follows the model of doing good both economically and socially. Austin, Stevenson and Wei-Skillern (2006) define social entrepreneurship as "innovative value creating activity that can occur within or across the non-profit, business or Government sectors." Thompson and Doherty (2006) add that social organizations are those seeking business solutions to social problems. The central driver for social entrepreneurship is the social problem being addressed and comprises of three essential components viz. response to market failures, transformative innovation and financial sustainability (Noruzi, Westover, Rahimi, 2010).

Defourny and Nyssens (2010) have differentiated between two schools of thought by separating them as 'Earned-Income' School of thought for commercial non-profit approach and 'Mission-driven' business approach which embraces all forms of business initiatives. …

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