What company's product gives the greater value: a Ben & Jerry's ice cream that costs more than other ice creams but gives a 'pyschic benefit' because Ben & Jerry's ice cream is sold with the implicit message that it is a force for social value, and supports a foundation for social good. Or the Aravind Eye Hospital that for slightly less than the price of a scoop of ice cream restores sight to very poor people in southern India?
In an article published in Stanford Social Innovation Review, Spring 2009, Philip Auerswald, asks the question "Does social entrepreneurship matter?" drawing on both Ben & Jerry's and the Aravind Eye Hospital to make the case that
entrepreneurs of various types create both private and social value. Private value can be assessed in terms of conventionally defined consumer surplus and producer surplus, where producer surplus is comprised of financial, reputational, and ethical "residuals.
Ultimately he suggests that both are needed given the 'magnitude of 21st century challenges'. It seems easy to say but more difficult to apply in organizations. How do leaders design organizations that balance the challenge of meeting financial goals and also deliver social value? That question seems to be more and more coming the fore in discussions on new forms of organization and requires a significant level of reflection and dialogue to get to the 'right' answer for each organization. Useful preparation for the discussion is the book by Mihaly Csikszentmihalyi, called "Good Business".
Naomi Stanford 