Wendy D. Chen and Christopher Marquis
This article examines the relationship between stakeholders and shareholders and identifies the key lessons from the B Corp movement that serve as practical tools for businesses �…
Abstract
Purpose
This article examines the relationship between stakeholders and shareholders and identifies the key lessons from the B Corp movement that serve as practical tools for businesses – not just B Corps – to be more stakeholder focused.
Design/methodology/approach
This article uses an in-depth interview with the author of Better Business: How the B Corp Movement Is Remaking Capitalism.
Findings
This article focuses on the pros and cons of the B Corp movement. One key point of discussion is that because B Corps focus more on stakeholders in general, they are more likely to attract likeminded employees who also support the companies’ missions, which also leads to greater retention rates. There is also growing interest from the investment community in B Corps and stakeholder-driven companies generally. However, a big challenge for B Corps lies in customer awareness. While many consumers may be buying products from B Corps, they do not know about the certification that links them together. A further conclusion is that even if a company does not want to be a B Corp, they can still benefit from the different stakeholder management tools and processes the movement has developed.
Practical implications
The article argues that businesses can – and should – be responsible and accountable to any stakeholder beyond shareholders. While they do not necessarily need to become B Corps, they can use the accountability and governance tools - like the B Impact Assessment (BIA) and benefit corporation governance - as guides to better manage their businesses to be more sustainable and resilient and to contribute to a better society.
Social implications
The B Corp movement has emerged as a powerful voice calling for businesses to balance financial returns with environmental, social and governance (ESG) performance. The B Corp model shifts conventional business from a shareholder primacy to a stakeholder focus, through novel corporate governance and accountability mechanisms. This article investigates the key lessons that all businesses can learn from the B Corp movement to make the world a better place to live.
Originality/value
This article takes a pracademic approach using academic research on the B Corp movement to generate actionable lessons for businesses.
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Christopher Marquis, Michael Lounsbury and Royston Greenwood
How does organizations' embeddedness in social and cultural communities influence their behavior? And how has this changed with recent communication technology advances and…
Abstract
How does organizations' embeddedness in social and cultural communities influence their behavior? And how has this changed with recent communication technology advances and globalization trends? In this introductory chapter to Research in the Sociology of Organization's volume on Communities and Organizations we consider how diverse types of communities influence organizations, as well as the associated benefit of developing a richer accounting for community processes in organizational theory. Our goal is to move beyond the focus on social proximity and networks that has characterized existing work on communities. We highlight how the notion of community provides a distinct institutional order that enables actors to tailor community logics that give cultural meaning to and govern specific institutional fields and furthermore how communities can function as an organizational form.
Christopher Marquis, Zhi Huang and Juan Almandoz
This chapter examines the transition in the US banking industry from a community to a national logic, developing a general model to explain how and when shifts in institutional…
Abstract
This chapter examines the transition in the US banking industry from a community to a national logic, developing a general model to explain how and when shifts in institutional logics occur. Based on qualitative historical evidence and discrete-time event history analysis predicting the introduction of legislation favoring the national logic, this chapter proposes that dramatic exogenous events such as the Great Depression or more gradual processes such as modernization favored the industry's transition to the national logic, but that such exogenous events had a greater influence in areas where strategic actors could capitalize on them. The qualitative evidence presented here suggests that struggles involving organizational identity and “legitimacy politics” played an important role in the shift in logics. Our theorizing focuses on how, when the environment changes in an incremental fashion, actors are primed with new possibilities, which may shift their collective identities, but when environmental changes are discontinuous, they provide actors strategic opportunities to alter the balance of logics in the environment.
Matthew Lee and Christopher Marquis
A large and growing literature examines the explicit social responsibility practices of companies. Yet corporations’ greatest consequences for social welfare arguably occur…
Abstract
A large and growing literature examines the explicit social responsibility practices of companies. Yet corporations’ greatest consequences for social welfare arguably occur through indirect processes that shape the social fabric that sustains generosity and mutual support within communities. Based on this logic, we theorize and test a model that suggests two pathways by which large corporations affect community philanthropy: (1) through direct engagement in community philanthropy and (2) by indirectly influencing the efficacy of community social capital, defined as the relationships among community members that facilitate social support and maintenance of social welfare. Our analysis of United Way contributions in 136 US cities over the 46 years from 1952 to 1997 supports our model. We find that the presence of corporations weakens the contributions of both elite and working-class social capital on community philanthropy. Our findings thus contribute to a novel view of corporate social responsibility based on how corporations influence the social capital of the communities in which they are embedded.
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Mary Ann Glynn and Daniel S. Halgin
We explore the role of geographic communities in the construction of an organization's identity as narrated in the pages of Martha Stewart Living magazine, the flagship product of…
Abstract
We explore the role of geographic communities in the construction of an organization's identity as narrated in the pages of Martha Stewart Living magazine, the flagship product of the Martha Stewart Living Omnimedia organization. We content analyzed 253 columns published between 1990 and 2004. We found that communities figured prominently in the emergence and institutionalization of the organization's identity, with over 800 mentions of specific places, from Stewart's childhood home of Nutley, New Jersey, to storied Paris, France. We examined how Stewart's use of places compared with descriptions of these same places in the Lonely Planet Travel. Our evidence suggests that the invocation of community enabled the organization to legitimate its product offerings as well as claim and partition complex and sometimes contradictory identity elements that included both highbrow culture and Americana “rural apple-pie goodness.”
Juan Almandoz, Matthew Lee and Christopher Marquis
How does environmental uncertainty affect the process of starting new hybrid organizations? Our comparative analysis of the formation of two “green” banks – with hybrid goals…
Abstract
How does environmental uncertainty affect the process of starting new hybrid organizations? Our comparative analysis of the formation of two “green” banks – with hybrid goals linked to banking and environmental logics – reveals that shifts in their strategic orientations resulted from attempts to align uncertain and changing resource environments with the composition and goals of the organizations’ top leadership. While the initial idea and goals of the founders were similar, the organizations they established ended up with divergent strategic orientations and senior leadership groups.
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Donald Palmer and Matthew Zafonte
Recent theory and research suggests that local relational networks among business organizations play an important role in establishing and preserving a locale's identity. Such…
Abstract
Recent theory and research suggests that local relational networks among business organizations play an important role in establishing and preserving a locale's identity. Such networks facilitate the development, dissemination, and enforcement of norms and cognitive frames that guide local business behavior. They also provide a vehicle for the consolidation of local business interests and for the coordination of local business strategic action. We examine the factors that influenced the likelihood that the CEOs of large corporations sat on the board of directors of large locally headquartered commercial banks in the 1960s. We focused on the 1960s because doing so allows us to make use of an exceptional comprehensive data set on the attributes and relationships of large firms and their leaders. We examine connections to commercial banks because these banks played a crucial role in community development in the 1960s. We find that both the class attributes of corporate CEOs (as reflected in their ownership of the firm and their affiliation with elite educational, social, and policy-making institutions) and the organizational attributes of their firms (as reflected in their financial structure, geographic reach, and age) influenced a CEO's propensity to sit on the board of a locally headquartered bank. These results suggest that future research on participation in local relational networks should take into account both class and organizational theories. They also suggest that future research on the class and organizational underpinnings of relational networks should pay closer attention to spatial relations.
Susanne Boch Waldorff and Royston Greenwood
The geographically bounded community is explored as a political jurisdiction. Jurisdictions are important sites as local factors determine which political party is in power and…
Abstract
The geographically bounded community is explored as a political jurisdiction. Jurisdictions are important sites as local factors determine which political party is in power and because different professionals work within them. Jurisdictions are, thus, arenas for the expression of public policies, which have significant societal consequences. Specifically, we analyse 18 Danish municipalities and the local constructions of a new health-care organisation's focus either upon citizens in general or upon specific groups of patients. The study shows little evidence of specifically local translations. Instead, the study suggests the choice of focus – and underlying institutional logic – is influenced by the local actors' relationships with an external institutional context. Members of local political parties adopt the ideological position of the national party. Similarly, professionals employed locally push the ideology of their profession.