Integrating for-profit and for-purpose considerations into B Corp business practices

Abstract

Society’s expectation of business is changing. The orthodox view of the role of business is to maximise profits and shareholder returns. However, recent surveys suggest that society is increasingly expecting CEOs to maximise profits and address societal issues. Hybrid organizations that employ market tactics to address social and environmental issues are responding to these changing expectations. B Corps are a recent form of hybrid organization that incorporate elements from market and social welfare logics. This paper investigates how an Australian B Corp is substantiating the market and social welfare logics in its strategy, structure and business practices. While the social welfare and market logics are strongly integrated in some aspects of the B Corp’s operations (vision, recruitment, communications and marketing), trying to balance these two logics has created tension and conflict in other areas (ownership structure, performance measurement, sales and distribution, product design and development). This has instigated purposeful change in the organization, specifically by appointing a new CEO, revising the strategy and realigning the incentives systems.