Impact or Purpose: Let the Fight Begin
Is Apple the greatest Social Enterprise in China? Are its managers the greatest social entrepreneurs of all time?
This question cuts at the heart of the definition of social entrepreneurship. Is it about purpose of the company, or about total impact.
After working at a microfianance company in China all summer doing their social impact analysis, I found myself asking myself the same question over and over. Is Apple the greatest social enterprise in China? Here my company was, slaving away day in and day out to bring credit to fewer than 15,000 blue-collar workers. That’s not a small number, for sure, but when you look at the number of actual transactions that people made over the course of their enrollment in our company’s program, I began to wonder if there were more than 5000 active credit-users at any given time.
Let’s compare that quickly to Apple in China. Apple co. outsources their manufacturing to a company called Foxconn, which became infamous for their employee suicides- jumpers from factory rooftops. They received quite a bit of a backlash, but here are some very interesting facts for you to consider before you condemn Foxconn and their working conditions.
- The suicide rate of Foxconn workers isn’t higher than the Chinese national average for suicide.
- Foxconn workers are actually paid pretty good wages for blue-collar workers.
- When I went down and drove past the factories, there were literally hundreds of people lining up outside the application office, waiting for their turn to fill out a form so they had a chance to apply to work there.
Foxconn employs over 300,000 workers. That’s almost a third of a million people that they’re paying good wages (for Chinese blue-collar workers) to that they can plough into their homes, families, future savings, education, etc.
And I have a very hard time believing that even though my company was cool, that we’re having a comparable impact.
So is Apple the greatest social enterprise in China? I would love to hear your thoughts.
I’ve decided that impact is irrelevant in determining if an organization is SE or not. For example, a country singer is a country singer, whether or not their music sells well or is respected by those who subscribe to such music. Whether an organization is effective at what it intends to do does not define what it is.
Since I think Apple doesn’t care who builds it’s products, it’s not in the SE space. See my entry for more of my thoughts on this and some other questions you brought up when we talked last week: https://dogoodbetterbyu.wordpress.com/2012/08/31/what-is-social-entrepreneurship/
I’ve decided that impact is irrelevant in determining if an organization is SE or not. For example, a country singer is a country singer, whether or not their music sells well or is respected by those who subscribe to such music. Whether an organization is effective at what it intends to do does not define what it is.
Since I think Apple doesn’t care who builds it’s products, it’s not in the SE space. See my entry for more of my thoughts on this…
I agree with bluetaylor. Apple is in China for cheaper labor to maximize their profits. It just happens to be a mostly symbiotic relationship because there are plenty of poor people looking for a decent and stable job.
If people and organizations do not have the intentions of seeking to solve societies intractable problems, these problems will remain, and in some cases worsen. The extremely poor, vulnerable, and excluded portions of society would probably never be reached by organizations who operate under traditional profit driven schemes.There are many societal problems that would never be considered or addressed by these types of organizations. I think real social entrepreneurs are always looking for the under served and the problems that have not been addressed. Although it may be great they are providing so many jobs, I don’t think Apple is seeking for better ways to lift people out of poverty or how to really bring the best quality of life for their employees, or how they could find the populations that most need the jobs that they provide.
Great responses, but I’m still not convinced that they settle the issue of a definition for me. If we take purpose as the definition of a social enterprise, then no doubt Apple is not riding there at the top.
But this issue of impact is still gnawing at me. Continuing on Hank’s example of country singers- if someone says they’re a country singer, but never produces any country songs, are they a country singer?
Likewise, if a purported rapper is producing country music left and right along with his rap albums, is he a country singer?
When you ask if it is about the total impact, that seems to relate to the social half of S.E. Whereas, when you ask about the purpose of the company, that seems to fit with the entrepreneurial or financial aspect of S.E.
To me, S.E. is the balanced combination of both. But how realistic it is to have a perfectly balanced company, I can’t tell you. It is obviously different for each. I would like to believe businesses focus on the social impact as that is what sets them apart from traditional entrepreneurship. On the other hand, I would hope they are conducting smart business so as to not sacrifice a profit.
If the social impact is reducing unemployment and poverty, then yes, Apple is an SC[orp] (not so sure about E. If the social impact is giving away products and devastating local manufacturing (think BOGO), then it might be what we normally associate with SE, but does Social = Useful/ Moral/ Positive Impact?
@bgong1 Don’t go breaking my metaphors!
The fact is that Apple’s going to ditch those employees the first chance they get; it’s just good business and profits come first. The stakeholders in a company like Apple care only about the bottom line. Any impact is a byproduct of profit-seeking.
A social entrepreneur willingly bears the risk that comes with making an impact, which includes lower profit margins. They are literally willing to make decisions that a company like Apple can’t make, decisions that leave money on the table. If no second bottom line is considered, then the organization is not SE. Only purpose can drive an SE to pay the premium for impact.
Let me see if I can put that succinctly:
If impact is a byproduct of profit-seeking, it is not SE.
If a premium is paid for impact, it’s SE.
xD
I think that Todd nailed this on the head in class when he said that companies do increase standard of living, but they simultaneously create a lot of problems. The business sector plays a vital role in development, but the system is imperfect, and causes rise to social problems that will be unfixed by the business sector or governments alone. This is where non-profits traditionally came in. Social enterprises are filling the same void, but provide a sustainable, more effective solution. I think that Hank has made a good argument. I do not believe that Apple is a social enterprise. But I totally know what you mean Ben – this very topic has been on my mind for years (ever since Kearl made a very bold comment in Econ 110 that challenged everything I had learned about development). I have come to believe that the business sector is in fact the largest driver of economic development . Countries go through periods of industrialization that raise standards of living faster and at a larger magnitude than anything else possibly could. The business sector gets a bad wrap for going into countries for cheap labor with poor working conditions, but this is better than them not going in at all. The same thing happened in the US during the industrial revolution (child labor, long hours, low pay). Eventually, government regulation and other circumstances improved conditions, and the country benefited greatly from the increased efficiency. The same thing is happening abroad. The trick is to improve the working conditions as rapidly as possible. Wages and standards of living will rise as development takes place. And although companies will move when cheaper labor is available, this is just a sign that they the standard of living has increased in that country, and the low-wage jobs will usually be replaced with more technical ones. Perhaps a topic for another day…
I think the interesting thing to look into then, is that if running a corporation like a corporation does more to make beneficial social impact, why do we celebrate social entrepreneurs who, although they have “purer” intentions, will not be able to make as great an impact? Perhaps we should be trying to do more of “business as usual” with targeted populations to improve society.
I think part of the issue is that many of us don’t truly know what we’re looking for. We know that we don’t want people in poverty or hurting or what not, but what do we want the world to look like once that’s gone? I certainly don’t want the entire world to look like the US (the more we can contain Hollywood to southern California, the happier I’ll be,) but how can homegrown Americans really nurture anything else? Many of our “improvements” in our standard of living are a result of doing things our way, and if we want those same results for others, they’re going to need to do a lot of the same things. Is that what we want? If not, what do we want?
Kyle, I’m glad you mentioned Hollywood. I think Hollywood/entertainment is one of the biggest unique products America has to offer the world. Spending time in LA, I was impressed with how many jobs were created within the industry. Should we consider Hollywood an SE? Of course we wouldn’t…. in America. Arguably, America’s greatest social need is not food, water, jobs, basic necessities, etc. Overall on Maslow’s hierarchy of needs America is higher up the pyramid which gives us a different set up problems.
However, in China if poverty is the predominate social need they are facing than I would say, yes any entity that can help them mass produce jobs is a SE. However, if China is higher up on Maslow’s hierarchy then it is not their major need and as a result offering jobs is a norm and Apple is not a SE.
@BCochran I think you’re onto something with the idea of an SC[orp].
While Apple, at it’s foundation, was not designed in order to solve a certain social problem, it has done (arguably) well at providing stable jobs and socioeconomic benefits to their employees. But just because they are could be categorized as a social minded corporation does not qualify them as a social entrepreneur. To continue the analogy (@bgong1, @bluetaylor) I feel that Apple is comparable to a rock star that eventually produced some popular southern baptist choir music on the side. Thank goodness for gospel music.
SE? Maybe not. SI? Sure. SC[orp]? Probably.
I have one main question in response to all of these comments: what is the relationship between social innovation and social entrepreneurship? To be a social entrepreneur, must one be socially innovative? Undoubtedly, Apple is innovative. But what have they innovated in the social sector? They’ve created a heap of jobs, yes, but they have not innovated within the social sector.
For those of you who support the idea of Apple being classified as SE, can one be a social entrepreneur without being socially innovative? My opinion is no, an individual cannot be an SE without SI, nor can an organization be SE without being socially innovative. Apple is not SE.
I think the fundamental issue that has risen here is purpose vs. impact like Ben said? An interesting question because apple really has no socially driven purpose but they are having some definite impact on people’s lives. While on the other hand you have organizations that are completely driven by social purposes but they have shallow impact. So, a true social entrepreneur must have a clear purpose that is based on creating social returns but also measurable impact.