INSIGHTS: ENTREPRENEURSHIP – THE FUTURE OF SOCIAL CORPORATE RESPONSIBILITY
By Guest Columnist Dr. Jim Tozzi:
Member Board of Advisors for the Center for Regulatory Effectiveness. He served as a senior regulatory policy official in five consecutive administrations and is a public member of the Administration Conference of the United States.
An article in The New Yorker last year, When Corporations Fail at Doing Good, discussed some of the pitfalls companies face in developing effective Corporate Social Responsibility (CSR) programs. For example, the author states that although CSR programs are credited with improving worker retention, company reputation and providing other benefits, “real‑world data doesn’t necessarily corroborate this.” Lack of quantifiable benefits is one the reasons why the article suggests that “the current corporate‑ social‑responsibility craze might not last long.”
In discussing a productive alternative to viewing CSR as just another charitable endeavor, globally renowned social entrepreneur Brij Kothari writing in the Financial Chronicle explained that companies developing CSR implementation plans, “would do well to tap into (are) proven social entrepreneurs, not merely as sounding boards or consultants, but as integral members to meaningfully shape CSR agendas and investments in the medium to long run.”
Mr. Kothari is right. Social entrepreneurship should be at the core of CSR programs not only because “[s]ocial entrepreneurs are the engines of social change….” as the Ashoka Foundation noted, but also because entrepreneurship is what successful companies best understand and accomplish.
The cutting-edge blog Ecopreneurist published an article, “Social Entrepreneurs in US Could Add to Bottom Line of Nation,” which discussed the Center for Regulatory Effectiveness’ (CRE) determination that “social entrepreneurs, who use proven private sector techniques to solve environmental and social issues, ought to be funded and supported at the same levels that they are in many other countries, thereby bringing about lasting, measurable, positive change to problems facing the US.” In essence CRE believes that companies should dedicate some of the expertise they have developed in becoming a successful enterprise to addressing societal problems.
Put simply, CRE recognizes, based on extensive research supported by the National Science Foundation (NSF) that the “development of social entrepreneurs could add to the bottom line of the nation, its citizens and its corporations.”
Ecopreneurist quotes a CRE official highlighting the importance of social entrepreneurship by stating “I want to encourage our best minds to become social entrepreneurs and be satisfied with rewards outside of financial rewards mainly through personal recognition in the media and their peers.”
It is CRE’s research-driven conclusion that social, policy and environmental entrepreneurs “have succeeded because they have developed techniques that move the ball forward with no personal reward.” CRE’s analysis of entrepreneurial initiatives and successes which was summarized in Accomplishment Beyond Dollars, published in the Environmental Law Institute’s Environmental Forum, which explained that:
Social entrepreneurs, persons who use entrepreneurial techniques to meet human needs, provide a powerful demonstration of the global benefits from entrepreneurship.
The article also found that “the hallmark and the legacy of entrepreneurs rest on their having fundamentally changed the processes by which future decisions are made.” It is by changing organizational process to create and implement new responses to longstanding problems that separates social entrepreneurship apart from charitable-based CSR activities, a policy conclusion in keeping with Brij Kothari’s view that the “future of social entrepreneurship…lies in strengthening the process by which we find and whet people with the most powerful ideas, and then empower them to execute on a larger canvas.”
Based on our research and work of numerous academicians and practitioners, CRE concludes that effective CSR programs will strengthen the economy through the development of social entrepreneurs.
CRE welcomes your views on this article. Please post comments at www.thecre.com
ON THE ECONOMY: THE SUPER BOWL SHUFFLE
We are the Bears Shufflin’ Crew, shufflin’ on down, doin’ it for you. We’re so bad we know we’re good. Blowin’ your mind like we knew we would. You know we’re just struttin’ for fun, struttin’ our stuff for everyone. We’re not here to start no trouble. We’re just here to do the Super Bowl Shuffle.
In 1985, the Super Bowl bound Chicago Bears recorded this rap song, which eventually reached number 41 on Billboard’s Hot 100. While da Bears did not make this weekend’s Super Bowl, to be held in chilly New Jersey (assuming its not cancelled due to snow), the favored Denver Broncos will be taking on the Seattle Seahawks in what is being called thePot or Stoner Bowl.
I thought about writing about marijuana legalization but a more interesting and timely topic is the bizarre methods used to predict the winner of the Super Bowl. This is particularly timely because of the sad passing of Princess, the Popcorn Park Zoo’s camel, who correctly picked the Baltimore Ravens to win last year’s contest. Princess predicted by choosing between two graham crackers marked with the names of the opposing teams. She had a pretty good record, and in 2008 correctly picked 17 of the 22 games she was asked about.
It’s sad to hear of the passing of the 26 year old ungulate, but there are still a number of forecasters at work. These include puppies, a porcupine and of course Sarasota’s own Buffett the manatee. If you are into animal predictions, the porcupine is predicting a Seahawks win while the manatee is for the Broncos.
Another key forecast of the winner of Super Bowl XLVIII comes from a video game. The Madden NFL 25 video game (which has correctly picked eight of the past 10 winners) is forecasting a Broncos’ win as well.
While it’s kind of cool that a camel or a sea cow can predict football games, it does not mean that they have psychic powers, or that they have run all of the statistics on players, weather, and field conditions to at least make an educated guess (as one might assume the folks at EA, the producers of the Madden NFL game have done).
These predictions bring up the idea of correlation vs. causation. Correlation simply is a statistical relationship between items, while causation means that one action actually leads to another. In short, a correlation between two variables (even one that has a strong “statistical significance”) does not necessarily imply that one causes the other.
So a good Super Bowl prediction record by a camel or a manatee means that there is a correlation between which graham cracker an animal picks but does not imply that specific knowledge actually leads to that pick.
One of the problems with what is often touted as research in the media, and even in certain academic fields, is that the statistics and mathematics (the measure of correlation) often overpower the theory (or the idea of causation). We often hear that something is statistically significant, or that there is a high R-square statistic, or that a value is within a certain degree of confidence. These are mathematical measures of correlation, and all of the complicated statistical techniques that we employ in many fields are designed to measure these. Because the techniques are complicated and hard to learn, many academics and researchers start to assign more importance and validity to them than they should.
In understanding how things actually impact each other – or how one action causes another action – it is important to first outline the problem as a thesis. The researcher should use the statistical methods of correlation to test whether or not a theory should be thrown out.
So for example, if we think higher taxes lead to less sales of an item, because we believe in the ideas of supply and demand, we test whether there is no correlation between higher taxes and sales. The statistical test then allows us to determine if we can reject this hypothesis. In other words, if statistically there is a correlation between higher taxes and lower sales, we can reject the idea that there is no correlation.
While this does not prove causation, it provides us with evidence that our theory of supply and demand is not incorrect.
So let’s all enjoy the Super Bowl this weekend. With the number one offense in the NFL facing the number one defense, it will be a good test of the theory that the best defense is a good offense.
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