Abstract
Benefit Corporations and B Corps represent alternative models of enterprise that bridge the for-profit and not-for-profit model (hybrid organizations). Italy is the first country outside the US to pass Benefit Corporation legislation and introduce the Società Benefit (Law No 208, 2015), namely for profit companies formally allowed by law to pursue a CSR mission, intended to achieve general and/or specific public benefits. Starting from these premises, the aim of this study is to evaluate the motivations for and benefits of becoming a B Corporation through an empirical case study focussed on an Italian small and medium-sized enterprise (Paradisi Srl) transformed into Benefit in 2016. Findings point out the efficacy of this choice taking into account the enhancement of a socially responsible commitment to CSR practices and the creation of a public benefit, as well as the improvements in accountability, transparency and stakeholder engagement.
Highlights
Benefit Corporations and B Corps represent alternative models of enterprise that bridge the for-profit and not-forprofit model
Hybrid business models - neither fully governmental nor fully private nor no-profit - combine characteristics of all these sectors and employ market tactics to address social and environmental issues. Among these are new forms of corporations belonging to a sustainability-oriented movement emerged in the United States - the Benefit Corporation and B Corps, that are private companies allowed by law to pursue a corporate social responsibility (CSR) mission and a profit one (Alcorn & Alcorn, 2012; Castellini, Marzano, & Riso, 2017; Hiller, 2013; Nicholas & Sacco, 2017; Nigri, Michelini, Grieco, & Iasevoli, 2017)
(2019) 4:4 that it is solely the government’s responsibility to address society’s needs, the B Corp movement triggered by B Lab a third-party standard-setting and a not-for-profit certifying organization founded in Pennsylvania in 2007 - recognizes that the government and the not for profit sector alone have insufficient means to address the urgent challenges faced by society today
Summary
Benefit Corporations and B Corps represent alternative models of enterprise that bridge the for-profit and not-forprofit model (hybrid organizations). Hybrid business models - neither fully governmental nor fully private nor no-profit - combine characteristics of all these sectors and employ market tactics to address social and environmental issues Among these are new forms of corporations belonging to a sustainability-oriented movement emerged in the United States - the Benefit Corporation and B Corps, that are private companies allowed by law to pursue a CSR mission and a profit one (Alcorn & Alcorn, 2012; Castellini, Marzano, & Riso, 2017; Hiller, 2013; Nicholas & Sacco, 2017; Nigri, Michelini, Grieco, & Iasevoli, 2017). Being that “systemic challenges require systemic solutions” Benefit Corporation (hereinafter BC) and B Corp are an example of “for profit social entrepreneurship” that offers concrete, “market-based and scalable solution” because they are aimed “to enhance their profit and apply the social and sustainability model to improve their impacts on the whole environment, changing in this way the mission of the organizations and understanding the corporate identity by building consideration into the corporate DNA” (Hiller, 2013, p. 291)
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