Last week, Eric Stryson from GIFT contributed to one day of the Chinese University of Hong Kong (CUHK) MBA programme inauguration events with thoughts on the social impacts of business and the increasingly popular notion of social enterprise. The day was meant to introduce and inspire incoming students to consider the role of business in society before launching into their coursework and functional lessons. During the morning of the one-day conference attendees heard presentations on sustainability and business responsibility. In the afternoon, they considered the role of business in driving positive change in society and the way social enterprises had been developing both regionally and in Hong Kong.
One key question from the audience which came up during Q&A and which seemed to be on the minds of many participants was, “What is the difference between a social enterprise and a for-profit business?”
Stryson’s answer which led into a discussion of the topic was quite simply, there is not much difference. Business exists to meet a social need and the more effectively and efficiently it can meet this need, the more profit it stands to generate. In recent times the aberration has been businesses which exist exclusively to extract profit and which do not add value to society by meeting a societal need. In many ways business has also become very good at disguising harmful social and environmental externalities for which they are not held accountable. The difference in what may be called a ‘social enterprise’ is that the business reprioritizes the act of solving a social challenge above returning profits to shareholders or employees. It essentially reinvests the profits back into advancing its mission in society. Typically such a company will also maintain high standards of integrity in other aspects of its operations and management.
The fact that more than 200 MBA students are discussing this issue ahead of commencing their business degree studies is encouraging. During his talk Stryson referenced a piece GIFT had published in late 2008 just after the onset of the financial crisis entitled, “Why business schools are failing society.” This article took a critical look at the perverse emphasis business schools increasingly placed on purely financial motivations of students and their coursework and the shrinking emphasis placed on the value that business was adding to society.
In the post-crisis global business environment it is clear that the responsibility of business schools to their students has changed as has the role of an educated MBA entering a career in management. The introductory session at CUHK is a positive step in the right direction and the team at GIFT is working hard to promote this discussion more widely.