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Book part
Publication date: 14 November 2017

Ke Cao, Joel Gehman and Matthew G. Grimes

To fulfill their economic and social missions, it is imperative yet challenging for hybrid ventures to demonstrate legitimacy (fitting in) while simultaneously projecting…

Abstract

To fulfill their economic and social missions, it is imperative yet challenging for hybrid ventures to demonstrate legitimacy (fitting in) while simultaneously projecting distinctiveness (standing out). One important means for doing so is by adopting and promoting the recent B Corporation certification. Drawing on a comprehensive analysis of the emergence of this certification, we argue that when it comes to promoting their businesses, hybrid ventures should not adopt a one size fits all approach. Rather, their promotion strategies need to be adapted to their specific contexts. We theorize and develop a typology of certification promotion strategies for hybrid ventures based on the relative prevalence of other hybrid ventures in the same regions and industries. We conclude by articulating why the B Corporation movement is a rich and underexplored context for scholarship on hybrid ventures, and highlight several promising future research directions.

Case study
Publication date: 25 September 2019

Gabriele Lingenfelter and Ronnie Cohen

As the regulatory system begins to recognize the role of social responsibility reporting, reliable disclosure measures will be required. Issues of transparency…

Abstract

Theoretical basis

As the regulatory system begins to recognize the role of social responsibility reporting, reliable disclosure measures will be required. Issues of transparency, reliability and assurance are likely to arise as securities regulators consider whether and how to require disclosure of non-financial information. Various reporting models are presented in the case to illustrate different ways that these issues can be addressed by privately held and publicly traded corporations.

Research methodology

The case uses the company, Etsy, Inc., which has established itself as a publicly traded, socially responsible corporation. Etsy must decide whether it will re-incorporate as a benefit corporation in order to maintain its B Lab certification. This decision introduces students to the various measures of corporate social responsibility, the interests of the stakeholders of a corporation and the regulatory environment in which socially responsible, publicly traded corporations operate. The case uses only publicly available information.

Case overview/synopsis

This teaching case addresses the decision faced by Etsy, Inc. when it became a publicly traded corporation. In order to maintain its certification as a socially responsible corporation by B Lab, it would have to re-incorporate as a Delaware Benefit Corporation. In making this decision, the company had to consider various measures used for corporate social responsibility reporting and transparency and how these might affect Etsy’s stakeholders.

Complexity academic level

Undergraduate or masters level case that could be used in a business law, commercial law, legal environment or auditing course.

Details

The CASE Journal, vol. 15 no. 6
Type: Case Study
ISSN: 1544-9106

Keywords

Book part
Publication date: 14 May 2018

Caddie Putnam Rankin

This chapter outlines the nascent history of the Benefit Movement, discusses the theoretical implications that predict the long-term success of movement goals, and…

Abstract

This chapter outlines the nascent history of the Benefit Movement, discusses the theoretical implications that predict the long-term success of movement goals, and provides recommendations for firms who seek to safeguard practices of corporate social responsibility (CSR). The chapter provides an overview of Benefit forms and describes the indicators of Movement success. For the Benefit Movement to achieve success, it must establish legal options in all 50 states for Benefit incorporation, pave the way for both publicly and privately held organizations to incorporate, and mobilize diverse organizational actors with high levels of commitment to sustain contention for Movement goals. The chapter provides a framework to understand how the Movement can achieve its goal of safeguarding the effective practice of CSR within firms and across the planet.

Article
Publication date: 1 March 2022

Manuchehr Shahrokhi, Ali M. Parhizgari, Mohammad Hashemijoo, Collins E. Okafor, Yuka Nishikawa and Alireza Dastan

The authors revisit the inquiry into the primacy of shareholders vis-à-vis stakeholders that has been debated since 19th Century. The authors consider B-business firms as…

Abstract

Purpose

The authors revisit the inquiry into the primacy of shareholders vis-à-vis stakeholders that has been debated since 19th Century. The authors consider B-business firms as the closest groups of firms that have considerable similarities to stakeholders' firms. The authors model the impact of being certified as stakeholders (B-business) firms in a worldwide environment.

Design/methodology/approach

Employing daily returns data of B-corporations in a global setting during 2010–2021, the authors quantify and compare the firms' performance in the pre- and post-certified periods, measure the effect of their environmental social governance (ESG) scores on their performance and gauge the entire results on a standardized approach that yields easy interpretation.

Findings

Subject to some caveats arising from limited coverage and the lack of data on proper control variables, the findings, based on the statistical significance of the estimated coefficients, do not indicate any changes in B-corporations' performance in their post-certification dates. Notwithstanding that, market factor appears to be the driving force consistently.

Originality/value

Prior studies on B-corporations are overwhelmingly qualitative. The current study is the first study that evaluate performance of B-corporations' returns at firm level with daily data.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 June 1999

Rocco R. Vanasco

The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and…

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Abstract

The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and auditing profession, but also in international law. The Acts raised awareness of the need for efficient and adequate internal control systems to prevent illegal acts such as the bribery of foreign officials, political parties and governments to secure or maintain contracts overseas. Its uniqueness is also due to the fact that the USA is the first country to pioneer such a legislation that impacted foreign trade, international law and codes of ethics. The research traces the history of the FCPA before and after its enactment, the role played by the various branches of the United States Government – Congress, Department of Justice, Securities Exchange commission (SEC), Central Intelligence Agency (CIA) and the Internal Revenue Service (IRS); the contributions made by professional associations such as the American Institute of Certified Public Accountants (AICFA), the Institute of Internal Auditors (IIA), the American Bar Association (ABA); and, finally, the role played by various international organizations such as the United Nations (UN), the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO) and the International Federation of Accountants (IFAC). A cultural, ethical and legalistic background will give a better understanding of the FCPA as wll as the rationale for its controversy.

Details

Managerial Auditing Journal, vol. 14 no. 4/5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 9 October 2020

Lisa Baudot, Jesse Dillard and Nadra Pencle

Building on the research program of Dillard and Brown (2015) and Dillard and Vinnari (2019), specifically related to an “ethic of accountability,” this paper recognizes…

Abstract

Purpose

Building on the research program of Dillard and Brown (2015) and Dillard and Vinnari (2019), specifically related to an “ethic of accountability,” this paper recognizes accountability systems as key to how organizations conceptualize their responsibility to society. The objective is to explore how managers of hybrid organizations conceptualize responsibility and the role of accountability systems in their conceptualization.

Design/methodology/approach

This paper studies hybrid organizations that are for-profit entities with explicitly recognized non-economic imperatives. Semi-structured interviews are conducted with managers of organizations that pursue certification as a B-Corporation, often in conjunction with a legal designation as a benefit corporation.

Findings

Managers of the hybrid organizations evidenced a broader responsibility logic that extends beyond responsibility to shareholders. This pluralistic orientation and broader set of objectives are expressed in a set of certification standards that represent an accountability system that both enables and constrains the way responsibility is understood. The accountability system reflects a “felt” accountability to the “other” manifested, for example, as generational accountability, with the other (re)created relative to the certification standards.

Research limitations/implications

Certifications and standards represent accounting-based accountability systems that produce a type of accountability in which the certification becomes the overall objective nudging out efforts to take accountability-based accounting seriously (Dillard and Vinnari, 2019). At the same time, the hybrids under study, while not perfect exemplars, incline toward an ethic of accountability (Dillard and Brown, 2014) that moves them closer to accountability-based accounting.

Originality/value

The findings reveal perspectives of managers embedded in hybrid organizations, illustrating their experiences of responsibility and accountability systems in practice (Grossi et al., 2019). The insights can be extended to other hybrid contexts where accountability systems may be used to demonstrate multiple performance objectives. We also recognize the irony in the need for an organization to be required to attain a special license to operate in a more responsible manner.

Details

Accounting, Auditing & Accountability Journal, vol. 35 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Book part
Publication date: 16 October 2015

Charles J. Coate and Mark C. Mitschow

Benefit corporations are a form of incorporation that require management to pursue some specified social goal or benefit, even if this goal requires sacrificing profit…

Abstract

Benefit corporations are a form of incorporation that require management to pursue some specified social goal or benefit, even if this goal requires sacrificing profit maximization. Hence, benefit corporations are considered a new business model that explicitly incorporates a socially responsible component in the corporate mission. This alternative business model may offer investors and customers a more ethical corporate form due to the social responsibility motive.

Several states currently allow companies to incorporate as benefit corporations, and more states are considering such legislation. To be successful, benefit corporations will require either investment from the capital markets and/or favorable treatment from government entities. Thus, the potential success of benefit corporations is likely to rely on the general interest of private investors and citizens as well as the ability to communicate operational success.

As with the evolution of the for-profit corporate model and of free market economic systems, accounting may be critical to the success of benefit corporations. Accounting systems will need to be able to measure and report both profits and social benefits to the market. Socially conscious investors must have reliable information if they are to choose the benefit corporation model over other alternatives (e.g., maximizing their return from for-profit investments and making individual donations). Citizens must also have reliable information to bring pressure on governments to support this model if it proves viable.

It is still too early to determine benefit corporations’ long-term impact on society or even whether this business model will succeed in the marketplace. Our purpose is to offer a basic framework for evaluating benefit corporations relative to current substitutes and to consider characteristics that would contribute to benefit corporation success. Within this context, we consider accounting systems’ role in assessing the social utility of this new business model.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78441-666-9

Keywords

Article
Publication date: 23 August 2017

Ieva Zebryte and Hector Jorquera

The purpose of this paper is to address the question of how social entrepreneurs achieve the desired impact-based model of business.

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Abstract

Purpose

The purpose of this paper is to address the question of how social entrepreneurs achieve the desired impact-based model of business.

Design/methodology/approach

Qualitative research design included semi-structured in-depth interviews with entrepreneurs of three Chilean Tourism B Corporations (B Corps), participant observation of the Latin American B Movement, and print, digital and social media clippings.

Findings

This research unearths the practices by which entrepreneurs implement their aspirations of balancing profit and social impact obligations within their business models.

Research limitations/implications

Though an intentional sample is not representative in quantitative terms, the employed research design allowed the authors to deepen the understanding of the processes which are taking place in Chile, Latin America, and on the Global scale. The authors concluded that social benefit commitment guides innovation in business models of Chilean entrepreneurs seeking to have a broader positive impact on vulnerable communities and the society at large.

Practical implications

This research shows that traditional businesses have the possibility of hybridizing management, combining the necessary organization that defines its mission with social or environmental purposes. The latter is likely to open up new markets for traditional businesses.

Social implications

Social entrepreneurship is the principal means for new generations of entrepreneurs to make changes in businesses and in vulnerable local communities through global aspirations. But the need for more open political discussion within the B Movement is clear, especially regarding the nexus between the “negative externalities” of the traditional economy and social or environmental problems which the B Corps intend to solve. Such debate would allow companies and the movement to more easily identify new courses of action.

Originality/value

This study gives account of regional nuances of social entrepreneurship and social innovation phenomena. In particular, there has been a surge of impact-oriented rather than profit-oriented innovation initiatives in neoliberal-oriented Latin American states, such as Chile. These initiatives offer us a wealth of empirical information about the development of alternative business models.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 23 no. 6
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 14 September 2015

Kathleen Wilburn and Ralph Wilburn

The purpose of this paper is to investigate the value of the Certified B Corporation (B Corp) structure for a long-term commitment to corporate social responsibility (CSR…

Abstract

Purpose

The purpose of this paper is to investigate the value of the Certified B Corporation (B Corp) structure for a long-term commitment to corporate social responsibility (CSR) achievements. Organizations of all sizes are now focusing on commitment to achieving social purposes beyond philanthropy and on reporting their CSR performance as a means of accountability.

Design/methodology/approach

The authors studied 45 Founding Certified B Corps to check how many had maintained their certification by filing B Impact Reports with B Lab, how many Impact Reports they had filed and if the reports showed progress toward CSR goals.

Findings

The results showed that all Founding B Corps submitted multi-year B Impact Reports, made progress toward CSR goals, maintained their commitment to a social contribution and made profit from 2010 to 2015. The B Impact Reports identified their goals and progress in the five Impact areas that were then assessed by B Lab.

Practical implications

The Certified B Corp structure can be confidently used by small companies that desire to do good and want an outside assessor to help establish CSR goals and provide a method for accountability. The reports are published on the B Lab Web site, providing an additional means of publishing CSR accomplishments.

Originality/value

This research provides information for those businesses, particularly small ones, that wish to establish their commitment to CSR in a public way and are certified by a third-party assessor.

Details

Journal of Global Responsibility, vol. 6 no. 2
Type: Research Article
ISSN: 2041-2568

Keywords

Article
Publication date: 20 May 2022

Magesh Nagarajan and Patturaja Selvaraj

The purpose of this study is to evaluate the efficiency of the relative performances of Mother’s canteen across the regions of Tamil Nadu and find out the determinants of…

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Abstract

Purpose

The purpose of this study is to evaluate the efficiency of the relative performances of Mother’s canteen across the regions of Tamil Nadu and find out the determinants of inefficiencies in the scheme.

Design/methodology/approach

An untargeted food security scheme called Amma (Mother's) canteen was started in Tamil Nadu, India, with an aim to provide the urban poor with hygienic and healthy food at an affordable price. Along with secondary data, interviews were conducted to understand the operational details of Mother's canteen. Data envelopment analysis (DEA) was used to find the relative efficiency of the scheme operated by nine corporations.

Findings

Based on the daily expenditure, number of meals served and revenue, seven of nine corporations were found to be inefficient. Further, sensitivity analyses found that among six procurement variables, procurement (quantity and price) of black gram and cooking oil were determinants of inefficiency.

Research limitations/implications

As an untargeted scheme, the cost of delivering service-based evaluation was used for performance evaluation. Policymakers could use centralized procurement instead of open market procurement at the corporation level and standardized ingredients' usage (quantity) to further reduce the cost of the food security scheme.

Practical implications

The proposed DEA model may be used by policymakers to empirically evaluate the food security scheme's delivery effectiveness across various corporations in a region. Inefficient branches are identified here with empirical support for further performance improvement changes.

Originality/value

There are limited number of studies evaluating untargeted schemes. This paper presents the challenges of evaluating an untargeted scheme which allows self-selection of beneficiaries. The outcome of this study will help in identifying inefficient corporations, and further, improve the performance and cost of delivering untargeted food security scheme.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

1 – 10 of over 70000