"Ask More of Business. Ask more of yourself"
That's the Notre Dame Mendoza College of Business tagline. That's the reason I came to get my MBA. I wanted to learn how to make a positive societal impact through business.
During my time here, I've learned about being an effective manager. I've learned about accounting and finance. I've learned about marketing and statistics. I've learned about stakeholders, ethics, and Catholic Social teaching.
I'd never really learned about social enterprise and social innovation, though, which is why I decided to take this class in the final mod of my final year.
Social Innovation: "A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals" (1)
Through this class, I learned about different business social innovation opportunities that included micro finance, engaging the poor as consumers and
producers, and impact investing.
I also had a chance to reflect on the challenges and tensions business social innovations face. A few of these include:
- Measurement: The nice thing about pure for profits is that capitalistic mechanisms help managers gauge the health of the business. It’s easy to measure profits. It's easier to measure risk and return. With businesses with a social aspect, you can measure profits, but it’s hard to measure social impact, which is a challenge faced by non-profits as well.
- “Fair” Pricing and Profits: If a business is trying to serve the “Bottom of the Pyramid”, there’s a tension between offering a product or service at a profitable, sustainable, and accessible price. What is a fair price? What is a fair profit? With social enterprises, there is an expectation that the distribution of burden and gains will be equal and equitable to all stakeholders. Additionally, “excess profits” for the company may be considered as "wasteful" and as "taking away" from the poor or underprivileged they are trying to serve.
- Funding: Social enterprises can be caught between the ability to receive donor funds and grants (like non-profits) and making above average returns to attract conventional investors.
Finally, I had the opportunity to be introduced to the ideas of Jacqueline Novogratz and The Acumen Fund. There are the two takeaways that she mentions in her TED talk on "Patient Capitalism" (2) that really struck a chord with me:
- Dignity is more important to the human spirit than wealth. When people gain income, they gain choice, and that is fundamental to dignity. But as human beings, we also want to see each other, and we want to be heard by each other, and we should never forget that.
- Traditional charity and aid are never going to solve problems of poverty. Markets alone also are not going to solve the problems of poverty.
Taking this class at the end of my time here as an MBA provided me with the opportunity to come full circle. After taking all of my "business basics" courses, I really learned about new ways business can make a positive impact on society, which is what I ultimately came to business school to do.
Bibliography:
(1) Phills Jr., James A., Kriss Deiglmeier, and Dale T Miller. "Rediscovering Social Innovation." Stanford Social Innovation review, Fall 2008: 34-43.
(2) http://www.ted.com/talks/jacqueline_novogratz_on_patient_capitalism/transcript
I agree that this class would make a great "capstone" class for business education. But I think a great thing about taking this class in the first year it will allow many of us to bring a different perspective into other classes and think of business issues differently. Either way, I think we've benefited from the conversations we've had.
ReplyDeleteAgreed - part of me wishes I could have taken this class earlier! But as a "non finance-y person" I think I needed to take more finance classes before to truly appreciate the financing problems associated with social entrepreneurship.
DeleteI like your quote about dignity being more important than wealth. I think, going forward, we should always keep in mind that every human has the right to dignity. Dignity is essential to survival and one of the consequences we should consider as we leave Notre Dame for our jobs/internships is how our actions affect other people and their dignity as well.
ReplyDeleteAgreed Nicole! :)
DeleteThank you for such an insightful post Anna. I also was struck by your quote: " Dignity is more important to the human spirit than wealth. When people gain income, they gain choice, and that is fundamental to dignity."
ReplyDeleteAs we studied MFI in class, I noticed how many of the MFIs focused more on allowing the borrowers to gain more money, putting pressure on them, not realizing that in many cultures, if not all, people value dignity more than financial wealth. This brings me back to a conversation I had with a Navajo friend, asking him why he thought Native American reservations were poorer. His response was:"Because poverty is defined by others. We do not consider ourselves poor. Our wealth comes from our ties to our land and our connections with each and earth."
Thanks for the comment, Adel. I really like the quote from your Navajo friend - illustrates Novogratz's quote exactly!
DeleteAnna and Adel, I think your comments about measurement are spot on. So many of our metrics and measurements for "value" are superficial and arbitrary. In the realm of for-profits (and in general) it is easier to use financial metrics as the basis for success/failure, wealth/poverty, respect/disdain, because they are related to mathematics which is a pure science. Pure mathematical equations are irrefutable. The reality of 1+1=2 will always be true no matter how we represent or conceptualize it. The risk and the problem comes when we attempt to apply the pure math to our subjective reality and confuse the irrefutability inherent to mathematics with the fallibility and subjective of our own judgements. Adel, just as your friend stated, we have full control over what we define as wealth. His statement that "poverty is defined by others," is also extremely powerful. While I interpret the intended meaning in this context is related to perceptions, he actually addresses another major point that poverty really is defined by others. Our collective decisions determine who is poor and who is not. Because wealth is self-defined and defined by society, we have the power to immediately eliminate poverty if we were to so choose. But we don't. We assume there will always be "the poor" and "the suffering." But that does not have to be the case. As long as someone else is "the poor," I know I am doing alright so what reason do I have to eliminate the stratification and bring myself down?
DeleteBrett, this is a very packed comment. I think I follow what you say about math and its application to fallibility and subjectivity inherent in human judgment. I also think I follow what you say about the control people have over the definition of wealth and poverty.
ReplyDeleteI disagree about how we have the power to immediately eliminate poverty if we were to choose. Depending on your point of reference, there will always be "the poor" and "the suffering", no matter where you're coming from. I don't see the fact that someone else is "poor" as a reason to see that I'm doing alright and thus have no incentive to eliminate the stratification and bring myself down.
Instead, I think the inequalities we perceive should motivate people to strive for promoting the inherent dignity in each and every one of us and try to create a more just society.
Anna - You certainly struck a chord with your readers! I would re-phrase Jacqueline's quote as "when people gain ACCESS, they gain choice, and that is fundamental to dignity." Thanks for the reflection - Melissa
ReplyDelete