Financial Missions Research Articles

O Modelo C na modelagem de negócios sociais

Abstract Purpose: This article aims to analyze entrepreneurs’ perceptions about the contributions of Model C in modeling their social businesses. Originality/value: The study contributes theoretically and empirically when addressing social businesses linked to opportunities and their development challenges by using the Model C tool in its modeling, exploring institutional integration, and allowing a holistic, systemic structure of value creation activities. Design/methodology/approach: The study adopts a qualitative method of a descriptive type based on multiple cases in three Brazilian social businesses. For data collection, an interview script developed from the analysis categories of the Model C framework was applied, as well as the interviewees’ perception of how the tool helps the development of their business model, direct observation, and documentary analysis. The analysis of the results was performed with the aid of the software ATLAS.ti. Findings: Based on the assumption that a social business model mixes several institutional logics, combining social and financial missions in a balanced way, the results show that Model C can structure the business’s organizational capacity and social value. However, it cannot fully quantify the financial value generated by social businesses, leading the social entrepreneur to use complementary financial tools. There is evidence for the creation of new tools that assist in obtaining innovative solutions to address societal challenges.

Unpacking social impact scaling strategies: challenges and responses in African social enterprises as differentiated hybrid organizations

PurposeSocial enterprises (SEs) face tensions when combining financial and social missions, and this is particularly evident in the scaling process. Although extant research mainly focuses on SEs that integrate their social and financial missions, this study aims to unpack social impact scaling strategies in differentiated hybrid organizations (DHOs) through the case of African SEs.Design/methodology/approachThe study entails an inductive multiple case study approach based on four case SEs: work integration social enterprises (WISEs) and fair trade producer social enterprises (FTPSEs) in Uganda and Kenya. A total of 24 semi-structured interviews were collected together with multiple secondary data sources and then coded and analyzed through the rigorous Gioia et al. (2013) methodology to build a theoretical model.FindingsThe results indicate that SEs, as differentiated hybrids, implement four types of social impact scaling strategies toward beneficiaries and benefits (penetration, bundling, spreading and diversification) and unveil different dual mission tensions generated by each scaling strategy. The study also shows mutually reinforcing mechanisms named cross-bracing actions, which are paradoxical actions connected to one another for navigating tensions and ensuring dual mission during scaling.Research limitations/implicationsThis study provides evidence of four strategies for scaling social impact, with associated challenges and response mechanisms based on the cross-bracing effect between social and financial missions. Thus, the research provides a clear framework (social impact scaling matrix) for investigating differentiation in hybridity at scaling and provides new directions on how SEs scale their impact, with implications for social entrepreneurship and dual mission management literature.Practical implicationsThe model offers a practical tool for decision-makers in SEs, such as managers and social entrepreneurs, providing insights into what scaling pathways to implement (one or multiples) and, more importantly, the implications and possible solutions. Response mechanisms are also useful for tackling specific tensions, thereby contributing to addressing the challenges of vulnerable, marginalized and low-income individuals. The study also offers implications for policymakers, governments and other ecosystem actors such as nongovernmental organizations (NGOs) and social investors.Originality/valueDespite the growing body of literature on scaling social impact, only a few studies have focused on differentiated hybrids, and no evidence has been provided on how they scale only the social impact (without considering commercial scaling). This study brings a new perspective to paradox theory and hybridity, showing paradoxes come into view at scaling, and documenting how from a differentiation approach to hybridity, DHOs also implemented cross-bracing actions, which are reinforcement mechanisms, thus suggesting connections and synergies among the actions in social and financial mission, where such knowledge is required to better comprehend how SEs can achieve a virtuous cycle of profits and reinvestments in social impact.

The Role of Executives in Enhancing Trust in Capitalism

Trust in capitalism is declining, and many observers hold executives responsible. However, there is limited theory explaining why this decline is important and how executives’ characteristics and actions can enhance trust in capitalism. In our theory development, a core premise is that executives can restore trust in capitalism by prioritizing financial and social missions equally, although dealing with this paradox represents a challenge for executives. Specifically, we recognize that placing social missions on an equal footing with financial missions is difficult, but nevertheless pivotal, to ultimately affecting trust in capitalism. Drawing on the upper echelons perspective, paradox theory, and the trust literature, we describe why executives might pursue financial and social missions equally, and how executives’ actions that follow this pursuit could help shape trust in capitalism. Further, we describe the role of information asymmetry in shaping the effects of such actions. Our theoretical framework has implications for understanding executives’ responsibilities and relationships with shareholders and other constituents, the origins and importance of trust, and responsible leadership. Our overall contribution is to shed light on the role that executives play in the development of trust in capitalism.

Strategic Advantages through Social Responsiveness: The Case of Certified B-Corps

While there has been increasing scholarly interest in hybrid organizations that seek to address social and financial missions, much research has focused on the incompatibility of their missions. Some scholars have described their category-spanning nature that leads to several internal and external tensions and conflicts. Prior research shows that third-party certification can aid the process of category membership. However, it is still not clear whether certification can help firms establish their category to internal and external audiences in a context where the phenomenon of hybrid enterprises is new. My inductive analysis using case studies helps identify and understand the processes whereby B-Corp certification can bring about a change in perception and practices at different levels. In this study, I analyze certified B-Corporations to understand the change of processes and perceptions at the level of the: (i) founder/firm leader, (ii) organization and employees and (iii) external environment. I explain how these changes enable the reinforcement of dual logics in hybrid enterprises and lead to internal and external category establishment. My study contributes to the literature on organizational categories. It also adds to the literature hybrid firms by suggesting that certifications can play a role in reinforcing their logics of profitability and social welfare. For practitioners in social entrepreneurship, my study suggests how they may be able to sustain the dual logics of their firms, by seeking external endorsement such as the B-Corp certification and undergoing certain changes that it entails.

Perspectives from the Council of Microfinance Equity Funds

The Council of Microfinance Equity Funds is a group of private equity funds with joint social and financial missions that invest in microfinance institutions (MFIs). This article discusses the role of equity finance in the microfinance industry. It categorizes the types of funds and their varying objectives and describes the typical MFI being invested in. Drawing on the deliberations that have taken place at council meetings, this article identifies key issues confronting the microfinance field as it begins to incorporate these new players, such as how these players affect governance, whether the funds are financially viable and whether the funds can help develop a local investor market.

Monetary Reform, 1923–30: A Prelude to Colombia's Economic Development

Two financial missions to Colombia headed by Edwin W. Kemmerer are examined to determine their impact on Colombia's financial system and on the flow of American investment to Colombia. The 1923 and 1930 missions established a central bank and completely reorganized the Colombian financial and fiscal system. These reforms served to provide enough stability to encourage American investment, which helped to develop a financial and economic infrastructure in Colombia.

The Diplomacy of Finance: British Financial Missions to The United States 1914–1918

It is a commonplace among historians of the First World War that during this period Britain and America changed positions as dorninant and subordinate financial powers. The great gap in the histories, however, has been any description of how this came about, Historians of the period have generally relied on one book, E. V. Morgan's Studies in Brtish financial policy 1914–1925 (1952), with the occasional use of Henry F. Grady's British war finance, 1914–1919 (1923). Both are very useful, and within its field Morgan in particular will be difficult to supplant; but within the context of Anglo-American relations they only treat one side of the stroy. It is clear that during the war Britain was dependent increasingly on American finance, private and later public, both to supply her civilian and military populations and to fight the war; and further, that by late 1916 decisions taken in America could have a direct bearing on British ability to finance her own operations. Once America entered the war this influence became even more direct. Negotiations over finance largely took place in America, by means of temporary and permanent missions. This article will describe the most important of these missions, and trace the gradual change in the balance of British and American financial power.