Chapter 14

ethical responsibility

A firm's obligation to abide by the unwritten ethical standards, norms, and values of the communities in which it operates.

philanthropic responsibility

A firm's obligation to contribute to the enhancement of the communities in which it operates.

legal responsibility

A firm's obligation to obey the written and codified laws of the countries in which it operates.

sustainable stakeholder advantage

the ability of an organization to consistently gather resources from, or provide services to, key stakeholders such as donors, volunteers, students, or clients

value net

A model of value creation that describes how an organization interacts with others in its environment to create value. The value net consists of four elements: customers, suppliers, competitors, and complementors.

cash donation

A monetary gift as one organization transfers money to a recipient group.

social constructionist

A social entrepreneur who builds something that did not exist before.

social engineer

A social entrepreneur who designs and creates new social systems to create large-scale change.

complementor

An individual or organization that makes customers value the organization's output more because of its product or service.

social entrepreneur

An individual or organization that uses free market principles and creates for-profit businesses with the goal of creating value.

hybrid organization

An organization pursuing more than a single goal; each goal has equal importance.

base of the pyramid (BoP)

Describes those living in conditions of extreme poverty around the world, usually defined as less than $2 per day.

social value

Improvements in the noneconomic elements of individual's lives and community well-being.

in-kind donation

Philanthropy accomplished as one organization transfers product, employee time, or other services to a recipient group.

economic value

The creation of income, wealth, and other economic outcomes for individuals and organizations.

shared value

The simultaneous creation of economic value (for the business) and social value (for the larger community).

social entrepreneurship

The use of innovative organizations and business models to create social value.

1. economic value 2. social value 3. shared value

What are the 3 types of value?

institutional change

When entrepreneurs strive to change the way people and groups think about problems and they work to create or change social institutions-from government policies to social values and norms.

economic resonsibility

a firm's obligation to generate economic profits

social bricoleur

a social entrepreneur who creates something new through the combination of diverse and different elements

corporate social responsibility

activities of companies designed to further some social objective and that lie beyond the direct economic interests of the organization

competitor

and individual or organization that makes customers value the organization's output less because it offers its own product or service

customers

individuals or groups that purchase, or receive, the outputs of the organization

philanthropy

gifts that promote the good or well-being of others

suppliers

individuals, groups, or organizations that provide important inputs for the organization

capacity building

the transfer of skills and abilities from one organization to another