Transcript Ethical Capital: The Neglected Aspect in the Conceptualisation of

Ethical Capital: The Neglected
Aspect in the Conceptualisation of
Social Enterprise
Mike Bull, Manchester Metropolitan University
Rory Ridley-Duff, Sheffield Hallam University
Doug Foster, University of Surrey
Pam Seanor, University of Huddersfield
Social Enterprise Research Conference – 26th – 27th June 2008
Objectives of the paper
o
This paper is very much a tentative piece of theorising that brings
together our (different) views around the conceptualisation of social
enterprise to initiate and stimulate further research
o
What we are trying to do here is explore the conceptualisation of
social enterprise from a new perspective, a new frame of reference
o
How do we frame the way we look at social enterprise? - what
lenses do we currently look through and what might an alternative
lens look like?
o
We introduce the conceptualisation of ethical capital as the
neglected aspect in the conceptualisation of social enterprise, in
looking through this lens we think we have a story worth telling!
Context
o
What is different about Social Enterprise from the Private Sector?
o
What is blurring at the boundaries in the mix between non-profit and profit?
o
What is distinctive? Where does CSR and social enterprise differ?
Context
o
o
What is different about Social Enterprise from the Private Sector?
o
What is blurring at the boundaries in the mix between non-profit and profit?
o
What is distinctive? Where does CSR and social enterprise differ?
What current conceptualisations are there of Social Enterprise?
o
Primarily Social?
o
Entrepreneurial income generation – ‘Trading’?
o
Building Social Capital?
Context
o
o
o
What is different about Social Enterprise from the Private Sector?
o
What is blurring at the boundaries in the mix between non-profit and profit?
o
What is distinctive? Where does CSR and social enterprise differ?
What current conceptualisations are there of Social Enterprise?
o
Primarily Social?
o
Entrepreneurial income generation – ‘Trading’?
o
Building Social Capital?
Are the current conceptualisations comprehensive?
o
Have we all the ingredients?
o
Is ethical capital one ingredient that is missing?
Context - Ethical Capital ?
o
Tim Smit (Eden Project) – Voice 07
One of the most interesting things I have come across recently is that a
lot of people in the city reckon that corporate life as we know it is
going to be dead in thirty years. And I would say that Eden would be
a good example of why. When I look at my top executives, the top
eight people who work for me are all people who have decamped
from very successful jobs in very successful organisations, because
they no longer want to work for corporations where there is no
ethical capital, and this is happening all over the place.
Nowadays 40% of school leavers apparently do not want to work for
a corporation.
[emphasis added]
Context
o
Physical capital (natural resources)
o
Economic capital (financial resources)
o
Human capital (people’s degree of instruction)
o
Intellectual capital (an organization’s capacity for innovation)
and
o
Social capital (levels of activity of civil society)
and
o
Ethical capital (levels of activity of values)?
Conceptualising Ethical Capital
o
‘There is one and only one social responsibility of business – to use its
resources and engage in activities designed to increase its profits so long
as it stays within the rules of the game, which is to say, engages in open
and free competition without deception and fraud.’
(Friedman, 1970)
This prescription for the way to behave has left society with a low ethical base
Conceptualising Ethical Capital
o “It is contended that modern business theory, as represented by the Neo
Classical economic paradigm, has established a moral code of business
based on efficiency of outcome and the assumed link of efficiency to selfinterested behaviour. The result is markets as the arbitrators of ethical
outcomes, and profit maximization as the ultimate moral code”
(Keller 2007)
2 points to consider here;
(1) A world dominated by self-interested behaviour
(2) A world dominated by a market ‘system’
o
“the market frees individual acquisitiveness from moral, social and/or
religious constraints. While this acquisitiveness can be a source of great
energy and creativity, it is also a turbulent, disruptive, and potentially
disintegrative force. Moreover, the market is believed to contain an
expansionary dynamic, so that unless it is contained it progressively
invades and colonizes other spheres of our social lives;
o It releases self-interest from moral restraints
o It erodes all social ties other than purely economic ones and/or
converts social relationships into instrumental ones ("commodifies"
them)
o It promotes a preoccupation with narrow individual advantage at the
expense of responsibility to the community or social obligations
o It substitutes competition for voluntary cooperation
o It favours materialistic or hedonistic values.”
(Maitland 1997)
Conceptualising Ethical Capital
o
There is hope!
Conceptualising Ethical Capital
o
There is hope! – Social Enterprise?
Conceptualising Ethical Capital
o
There is hope! – Social Enterprise?
o
How do we bring this discussion and theory from the
literature into the social enterprise debate?
o
Where are the boundaries and where can we draw
differences from the behaviour of business to the
behaviour of social enterprise?
o
What perspectives can we offer?
Alter (2004) Sustainability Spectrum
mmmmmmmmm
mmmmmmmmm
Alter (2004) Sustainability Spectrum
M
M
M
M
M
M
M
mmmmmmmmm
mmmmmmmmm
M
M
M
M
M
Alter (2004) Sustainability Spectrum
M
M
M
M
M
M
M
M
M
M
M
M
mmmmmmmmm
mmmmmmmmm
Alter (2004) Sustainability Spectrum
mmmmmmmmm
mmmmmmmmm
Alter (2004) Sustainability Spectrum
mmmmmmmmm
mmmmmmmmm
Social Enterprise
Private Enterprise
Economic Capital
Charitable Enterprise
Equilibrio/Balance
"Blended Value"
Social Capital
Intellectual
Capital
Economic Rationality
Social Rationality
(Performing Tasks Efficiently)
(Developing Equitable Relationships)
Virtue Ethics
Individualistic
Normative Ethics
Hegemonic
Critical Ethics
Collectivist
Religious Ethics
Holistic
Moral Agency & the Moral Enterpriser
o Becker (1963) – Moral Entrepreneur: two types –
o Rule-Enforcer
o Rule-Creator
o Hart (1963) – Modes of Morality: two types –
o Conventional Morality
o Critical Morality
o Combination of Becker/Hart to suggest the Moral Enterpriser: again,
two types –
o Conventional and Enforcing Moral Enterpriser
o Critical and Creative Moral Enterpriser
Conclusions
o
The objective of the paper was to present the neglected aspect in
the conceptualisation of social enterprise.
o
A new frame of reference in ethical capital may add to the list of
characteristics that help define this organisational form
o
The business world is changing – the rules of the game are shifting
– CSR and social enterprise reflect the changing times in which we
live – the primary purpose of each organisational form may not
simply be ‘for profit’ or ‘for social’ – ethical capital may add insight.
Discussion?
o
We have presented a new perspective in the
conceptualisation of social enterprise
o
Is this the changing appetite to stimulate peoples’ taste buds for
a more ethical code of conduct?
o
Are there benefits to social enterprises that this
conceptualisation may allude to?
o
This paper has bridged from practice into theory – can it go back
again?
o
Can ethical capital be capitalised on in social enterprises?
o
And . . . How can we analyse or measure ethical capital?