Business Models and Social Entrepreneurship

Abstract

The financial crisis of 2007/08 has caused many to question the basic premises of the current business system and the financial service industry in particular. In a recent article, Michael Porter and Mark Kramer suggest that corporations should aim to regain legitimacy by pursuing shared value rather than mere financial value. Specifically, they suggest that managers look at the field of social entrepreneurship to learn how such shared value can be created. In this article I present the concept of social entrepreneurship and introduce two areas in which social entrepreneurs have created novel business models: micro-finance and social impact investing. I analyze what lessons can be learned for shared value creation for the financial industry as a whole and those interested in socially responsible finance. I conclude with the presentation of caveats.

Keywords: Social Entrepreneurship, Shared Value Creation, Business Models, Responsible Finance