Corporate Social Entrepreneurship

Corporate Social Entrepreneurship

In this blog entry, I would like to discuss a paper written by James Austin and Ezequiel about Corporate Social Entrepreneurship (Harvard Business School). This form of Entrepreneurship pays more attention to the corporate role of a company.

Corporate Social Entrepreneurship is based on three other domains:

–       Entrepreneurship: the idea of Creative Destruction invented by Schumpeter

–       Corporate Entrepreneurship: “redefining organizations in order to create competitive superiority”

–       Social Entrepreneurship: the purpose is more social and the setting can be profit as well as non-profit

CSE is a way of transforming companies into “more powerful generators of social betterment”. It uses next elements in order to reach its goals:

–       Enabling environment

The company tries to match its operating performance with the creation of social value. It’s important to stimulate creativity and focus on intra-entrepreneurship.

–       The Corporate Social Entrepreneur

CSE goes beyond the traditional way of managing: the idea of change and the implementation have to be effectuated in synergy. The two C’s Communication and Coordination are a big support.

–       Corporate purpose: values-based organizations

We all know good intentions are not enough, words have to be translated into action. A CSE company tries to set an example; their goal “is not just to comply with the law”. It’s no longer just about the money, values make the difference towards the stakeholders.

–       Value creation and the double return

The most popular word nowadays is ‘innovation’. Many people are convinced that this is a mistake, but innovation is the only way to ensure the sustainability of the company and of our economy in general. Although, innovation has also a social and environmental implication that is often forgotten. Let us link these three items to a triple bottom line or “blended value”.

–       Co-generating value

Considering Thomas Friedman that “The World is Flat”, we have to realize companies do not longer stand alone. Interaction and cooperation is absolutely necessary and will result in a positive sum game.

We have to admit that the movement for CSR has “won the battle of ideas” (Crook 2005). The concept is positively oriented and is for all stakeholders an advantage. However this doesn’t mean further action is superfluous. In our globalized world, challenges occur constantly. Creativity and a determined thought for change will help us to face the opportunities.

David Roelandt

Original Paper: 09-101

Carlos Slim “Richest Man in the World” on Larry King

David Roelandt

McDonald’s: hate it or love it

McDonald’s, people are heavy fans or hate it. A feeling in between doesn’t exist. In this blog entry we shall focus on the entrepreneurial side of the company.

Ray Kroc was 52(!) years old when he purchased the McDonald’s company. In Belgium many people have already retired  at that age. He strongly believed in his ideas and was convinced that ‘luck is a division of sweat’. Aged 87, he had over 7.500 restaurants.

Kroc had the so-called entrepreneurial spirit “make a lot of mistakes, make them faster than somebody else, but don’t make the same mistake twice”.

McDonald’s, you can love it or hate it but one thing is for sure: everywhere in the world you get the same quality. That’s an incredible performance. Kroc improved the operational excellence by implementing Henry Ford’s assembly line idea in his restaurants. As everybody knows, it is possible to place an order and receive the food within a couple of minutes.

Franchising, which is explained in the blog entry by Tom Robberechts, was another revolutionary idea. Thanks to this, Kroc gave people responsibilities while he could make money regardless how the shops were doing. Besides, you can plug in the franchising-method everywhere.

In combination with a widespread national advertising campaign, McDonald’s skyrocketed sharply. At this moment, it is the world’s largest chain of hamburgers fast-food restaurants with 58 million customers every day. We can’t neglect that this is a (pure) economic success story. Moreover it is still growing and growing.

Although we all remind Bill Clinton’s mantra ‘It’s the economy, stupid!’, McDonald’s is more than that. The company suffers from many controversies, especially regarding the ethical aspect.

On the one hand, McDonald’s became a symbol for a (negative) globalization, which causes diversity to disappear. On the other hand, there is the criticism about the non-healthy food. In a previous blog entry (seven questions about entrepreneurship) we pointed out that the ethical aspect is important too. This means that the company has to face quite a lot of challenges on this plan.

Soruces:

http://www.economist.com/node/3285898

http://books.google.be/books?id=ZavI5VI33CkC&dq=ray+kroc&source=bl&ots=pvt_eRGSN2&sig=pGEuvpF7qL1Ht6Vlyq294tsdiCI&hl=nl&ei=McbqTObgBY6hOtX1gb8M&sa=X&oi=book_result&ct=result&resnum=10&ved=0CEMQ6AEwCQ

David Roelandt

Great Leaders Inspire Trust

 

As a leader you have to ensure that people trust you if you want to make them believe and follow you.  As you can assume, we’re talking about leadership. There are different types of leadership with different aspects, which every leader should take in consideration. Whatever the type of leadership is,  the word trust always comes back. So confidence between people is very important to make the relationship between them stronger.

Firtst of all, if you want to be a true leader you have to gain people’s trust, and then they will see you as their leader. Futhermore, it’s also important that the leader trusts his employees so the employees will be motivated to take more responsibility and make more efforts. This reciprocal confidence will help to reach succes.

Last but not least, most of the entrepreneurs define their leadership style as leading by example, but it’s better to talk about the three Ps”: program, process and people. Program stands for planning, which you want to realise with a process. Furthermore, a leader also needs people who believe in his leadership. So true leaders are trying to fnd the appropriate people. Other entrepreneurs are happy with mediocre performance. As you can see leadership isn’t necessarily just leading by example.

Finally, I can conlude that confidence is very important in each type of leadership . I am also convinced that confidence is important everywhere. We all want to trust our friends, family, leaders,… When you can’t find confidence, uncertainty will take it’s place. So the target is to prevent this uncertainty and to make people believe in you.

Sources:

http://www.entrepreneur.com/management/leadership/leadershipcolumnistraysilverstein/article204816.html

http://alishazel.blogspot.com/2009/12/le-maintien-de-bonnes-relations-debt_04.html

Emin Özüak

The need of entrepreneurship

An economy needs entrepreneurship. Without the risk taking people you wouldn’t have enterprises, there wouldn’t be work and there would be no consumers. That’s the point where you get in the vicious circle, the economy keeps on spiraling downwards.

It’s therefore very important in my opinion that the government must do everything to stimulate people to start an own business and to take the risk.

The overregulated Belgium with its extremely high labor costs, due to a system called the index set up by the government, unique in the world, isn’t the trendsetting example.

 

Income tax plus employee and employer contributions (As a percentage of labour cost)

Labor costs are the biggest costs for most of the Belgian companies. This isn’t because the Belgians earn a lot more than other European employees but it is a consequence of the  social security system in Belgium. The difference between what an entrepreneur pays for 1 employee and what the employee gets is huge here.

Before you start your own business in Belgium there’s also a lot of administrative work to do, which is another threshold-indice.

But it isn’t all bad in Belgium. There are a lot of organizations set up by the government to encourage entrepreneurship, the government tries to inform starters.

Let us all hope that the government doesn’t push us deeper into the vicious circle with more rules and more restrictions for enterprises.

http://lysander.sourceoecd.org/pdf/fact2006pdf/09-03-02.pdf

http://www.ewi-vlaanderen.be/ewi/wat-doen-we/de-samenleving/ondernemerschap/actieplan-ondernemerschap/doelstellingen

The Downside of Price Reductions

Price reduction is one of the best methods to improve sales, but using only price reductions can be dangerous. So choosing other methods can also be useful. For example, offering the lowest price can be risky, because competitors can undercut you. Furthermore, you can also have non-price-sensitive products. So it might be a good idea to find better options to improve your sales.

I think the most important point is value. In my opinion value is more important than price. If people can see the added value they will pay less attention to the price. That is why the seller has to make clear what the added value of his business is. You can attract people by offering something special behind the product or service. That means, companies should try to be different from all their competitors. To be more specific, they have to built a competitive advantage. For example trying to have the most-reliable service.

The seller has a lot of other options to improve his sales. Although, slashing prices is not a bad thing to do, a better option can be offering limited-time offers. On the one hand, people will hurry up to buy the products. On the other hand, you can easily change your prices to normal prices afterwards. Another point is that the seller can improve the presentation of his prices.

In my opinion people always search for other options. We are never satisfied and I think that’s very normal. People always believe that there are better options. So if the seller wants to make people happy and improve his sales, he should offer more options to the customers.

Finally, I can conclude that only using price reductions wouldn’t be enough to improve sales. It can cause negative consequences. So there is more to do.

Sources:

http://www.entrepreneur.com/article/217263

http://www.dronkers.com/tag/price-reduction/

Emin Özüak

 

How to promote entrepreneurship at a young age?

In order to support entrepreneurship, stimulating people at a young age might be an excellent idea.  To that end in Belgium an institution called Voka has developed a concept called ‘student companies’.

A student company is  a company established by students together with a mentor (usually the teacher). An entire year, the students run a real self-made company. Among the activities that they go through are: draw up a business plan, do market research, set up meetings with their shareholders and do the accountancy for their company. It’s a win-win situation for both the students and the school. In this setting, the students can put their economic knowledge into practice and develop their entrepreneurial skills. Furthermore I believe that it will reduce the presumed, but mainly imaginary threshold towards entrepreneurship in the future.

In my opinion this is the right way to push students towards entrepreneurship. Two years ago, I created a student company (Mini Invest) myself along with 6 other classmates. I experienced it as a perfect situation where I could learn how it feels to be an entrepreneur. It also convinced me that it might require much work. But I got an enormous feeling of satisfaction when things were running well. Finally I guess that because of that experience, I will probably become  an entrepreneur myself one day.

To make it all a bit more competitive, Voka also organizes a competition between the student companies to decide which company will be named the ‘best’ student company of that year. Belgium has two forms of student companies. On the French side of Belgium it is called ‘petites enterprises’ while on the Flemish side the students operate under the name of ‘mini ondernemingen’. Happily this initiative of promoting young entrepreneurship is used by many other European countries and the winners of the Belgian companies can participate in a European competition.

Finally, we (Mini Invest) were the winners in the Flemish competition. Unfortunately we didn’t finished on the podium in the European event.

http://www.voka.be/talent/aanbod/Pages/aanbodmini-ondernemingen.aspx

Tom Robberechts

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