Call for Cases- Corporate Sustainability and Social Entrepreneurship

Hi Everyone,

The Humanisitic Management Network is sponsoring the oikos Case Writing competition for Corporate Sustainability and Social Entrepreneurship.
See more here:
http://www.oikos-international.org/en/projects/cwc.html

All the best,

Michael

interesting workshop on alternative organizational design

THE ARCHITECTURE OF A FOURTH SECTOR —THE THEORY AND PRACTICE OF DESIGNING NEW ORGANIZATIONAL FORMS Tuesday, July 15, 2008 12:30 pm – 2:00 pm KLD Research & Analytics250 Summer Street, 4th Floor, Boston, MA Lunch and refreshments will be provided. * * *Space is limited -- please RSVP as soon as possible to Michael Pirson, mpirson@fas.harvard.edu, 857.869.9604

Lunch sponsored by Slow Money, a new NGO designing intermediation that supports local food systems.* * *
Over the past few decades, many pioneering organizations across the three primary sectors – business, non-profits and government – have been blending social purposes with business approaches. There are many expressions of this trend, including corporate social responsibility, microfinance, venture philanthropy, sustainable businesses, social enterprise, privatization, community development and others. As this activity matures, it is becoming formalized as a “Fourth Sector” of the economy. As the Fourth Sector expands, organizations are encountering limitations imposed by existing legal and tax structures. Despite the many creative solutions that have been developed within the current regulatory environment, there is a growing consensus that new legal structures, tax policy, and other regulatory interventions might be necessary to facilitate the growth of these organizations.
AGENDA:
Moderated by Marion Fremont-Smith, Senior Research Fellow, Hauser Center for Nonprofit Organizations, Kennedy School of Government, Harvard University How We Got Here: A Brief History of Corporate Design – Peter D. Kinder, President & Co-founder, KLD Research & Analytics, Inc. The Theory and Practice of Designing New Organizational FormsApplying the laws of natural science to new organizational forms that aremore efficient, competitive, accountable and ecologically sustainable.– Dr. Shann Turnbull, Principal, International Institute for Self-governanceRoundtable Discussion:
What opportunities are represented by a Fourth Sector? What are the obstacles to its emergence?
What are the arguments against a Fourth Sector? Is it needed? Is it efficient? Is it competitive? Is it sustainable?
Why is there a gap in university education on the theory and practice of designing organizations?
By what process do we create a model corporate charter that defines the Fourth Sector archetype?
How might a Fourth Sector be implemented through tax policy, monetary and/or legislative initiatives?
How do you build a political constituency to support organizational transformation?
PRESENTER BIOS:
Marion Fremont-SmithMarion Fremont-Smith is senior research fellow at Harvard University’s Hauser Center for Nonprofit Organizations and the author of the definitive study Governing Nonprofit Organizations: Federal and State Law and Regulation (Harvard University Press, 2004). She has penned two other books and numerous articles. Ms. Smith’s distinguished legal career includes admission to the bar of the United States Supreme Court and service as Assistant Attorney General and Director of the Division of Public Charities in Massachusetts. A retired partner of Choate, Hall and Stewart, she is also a former director of Independent Sector. Ms. Fremont-Smith earned her B.A. from Wellesley College and her J.D. from Boston University School of Law.Shann Turnbull, Principal, International Institute for Self-governanceShann Turnbull researches and teaches corporate governance in Australia on a part time basis for the Macquarie University Graduate School of Management where he obtained his PhD in 2001. His PhD thesis showed how the science of control and communication in the animal and the machine could be extended to organisations to create a science of governance as presented in his articles. His thesis built upon his education as an electrical engineer in Tasmania, BSc from the University of Melbourne and an MBA from Harvard.>From 1966 to 1974 he was a founding partner in a private group that gained control of over a dozen publicly traded corporations in Australia. This gave him experience as a controlling shareholder, company director, chairman of one company, and CEO of two others. As a serial entrepreneur founding new enterprises, some of which became publicly traded, he gained further experience as a Chairman and CEO. He also became joint CEO/owner of a mutual fund management company. In 1975 he founded the first educational course in the world to provide an educational qualification for company directors and published his first book on Democratising the Wealth of Nations. The novel ideas in his book led to consulting assignments for multi-national corporations, United Nations, World Bank, and governments, including in 1991 the Peoples Republic of China and Czechoslovakia.Since 2001 he has been rating the governance of the largest 100 organisations in Australia by turnover and introduced an MBA elective at Macquarie University on evaluating and designing the governance architecture of organisations in the government, non-profit and private sectors. His latest book was commissioned by the New Economics Foundation in London and published in 2002 as A New Way to Govern; Organisations and society after Enron.Peter D. Kinder, President & Co-founder, KLD Research & Analytics, Inc. Peter D. Kinder is President and Co-founder of KLD Research & Analytics, Inc. an independent investment research firm providing management tools to professionals integrating environmental, social and governance factors into their investment decisions. His articles on socially responsible investing and fiduciary duties have appeared in publications in the US, Canada, the UK and India. His most recent think piece “Socially Responsible Investing: An Evolving Concept in a Changing World” is available on KLD’s website, together with a number of his essays.Mr. Kinder, Steven Lydenberg and Amy Domini are the authors of The Social Investment Almanac (Henry Holt, 1992) and Investing for Good (HarperBusiness, 1993). He collaborated with Amy Domini on Ethical Investing (Addison-Wesley, 1984). He also co-authored Law and Business (McGraw- Hill, 1982/94). With Steven Lydenberg, he wrote “Mission-Based Investing” (1999) which is about to appear in a revised edition.Mr. Kinder was a co-founder and principal (1997-2000) of Domini Social Investments, LLC. KLD is a co-founder of the Sustainable Investment Research International Group (SiRi) and he has served on its board. Mr. Kinder has served two terms on the board of the U.S. Social Investment Forum, the SRI trade organization, one as Vice Chair.

Interesting Paper on Legal Alternatives for humanistic businesses

Hi everyone,

Here is an interesting paper exploring humanistic business alternatives.


Anup Malani & Eric A. Posner, The Case for For-Profit Charities 17-18 (Univ. of Chi. John M. Olin Program in Law and Econ., Working Paper No. 304, 2006), available at
http://papers.ssrn.com/sol3/Jeljour_results.cfm?nxtres=41&form_name=journalBrowse&journal_id=164009&Network=no&SortOrder=numHits&stype=desc&lim=false

All the best,
Michael

Humanet Sponsoring Event on 4th sector organizations design

Book Alert - Integrative Economic Ethics

Dear humanes,

this book is one of the cornerstones of humanistic management and attracted two of the members of the humanistic management network to do their PhD in St. Gallen. After 10 years of its first German edition (now in the 5th) it has finally been translated into English. As of its distinctive value it has been published by Cambridge University Press this year and is a must read for all interested in a philosophically-rooted approach to humanistic management.

www.cup.cam.ac.uk/catalogue/catalogue.asp?isbn=9780521877961

All the best
Heiko

Discussion on Well being and Wealth

Hi everyone,

Well being is much more of a focus in current discussions on economic and management restructuring.
Th New York Times has some interesting, if provocative pieces on it:
http://freakonomics.blogs.nytimes.com/2008/04/16/the-economics-of-happiness-part-1-reassessing-the-easterlin-paradox/?scp=1-b&sq=happiness&st=nyt

Best,
Michael

Interesting Conference on alternative, humane business models

Hi Everyone,

An interesting conference on alternative, human centered organizational models at IESE in Barcelona

http://www.iese.edu/en/events/BusinessEthics/15Symposium/Home/Home.asp

Claus and I will present there.

Best,
Michael

Dear humanes,

if you are interested why a more humanistic form of governance might be the way forward have a look at

The New Capitalists
by Stephen Davis, Jon Lukomnik and David Pitt-Watson
http://www.amazon.co.uk/gp/product/1422101010/ref=sib_rdr_dp

This book deepens the discussion started in our edited volume Humanism in Business, where Alan White speaks about the "Democratising the Corporation" from a governance perspective.

All the best from Cranfield
Heiko

Fiduciary Duty

We often believe fiduciary duty prevents corporate actors from acting responsibly. While the legal framework must be more developed still, there is enough room for environmental and social resonsibility.
See:
http://www.socialfunds.com/news/article.cgi/1851.html

Social Entrepreneurs as trailblazers for the new economy?

Social Entrepreneurship could well be one of the alternative business models for a life conducive economy. Check out David Brooks Op-ed in the New York times.
http://www.nytimes.com/2008/03/21/opinion/21brooks.html?ex=1363752000&en=ac6d570c32787156&ei=5124&partner=permalink&exprod=permalink

Base of the Pyramid blog

Check out this blog regarding Base of the pyramid business:
http://bopreneur.blogspot.com/

Paul Lawrence on HUMANISM IN BUSINESS

HUMANISM IN BUSINESS: A RD Theory Relevant Book Review

The book named above is still in press with Cambridge University Press. I received an advance draft copy from one of its five editors, Michael Pirson, who approached me after having read a draft of Being Human. It lives up to its sub-title, “Perspectives on the Development of Responsible Business in Society” by having 23 chapters with 28 authors. It is truly an unusual book whose goal is no less than the launching of a movement dedicated to focusing business on the improvement of the human condition, no longer on the maximization of shareholder wealth. The book’s contributors are members of an informal network called Humanet, and they are mostly a mix of business school academics, philosophers, along with NGO and conventional business managers. Of course, no one book will be able to establish a serious social movement but, in my opinion, this book gives their effort a serious start.

As the author of Being Human, I am frankly astonished at the amount of overlap of this new book with mine, given such different origins. In contrast to Being Human, which is built on the contributions of all the sciences of human behavior starting with Darwin, the Humanism in Business book is built primarily upon the contributions of leading philosophers throughout human history. In spite of this difference their definition of human nature has significant overlap with that of RD theory. Beyond that, their implications for action directed toward the business community are remarkably parallel to those in Being Human.

I am in a quandary as to how to convey in a few words the evidence of this remarkable overlap. I can say that my first message back to Michael Pirson after finishing the book was, “There cannot be a shadow of a doubt that we are studying the same beast.” Beyond such a declaration I will offer below just a few highlights of this as yet unpublished book so that its relevance to the Being Human story becomes clear.

This volume starts off with an analysis of humanistic thought by citing the work of sages and philosophers across time and place. I will quote from Cherry’s chapter on ‘The Humanist Tradition’’:
“Strands of humanist thought can be seen throughout human history. Just as most human societies have held a wide range of beliefs in gods and supernatural forces, it seems too that most societies have included skeptics who have doubted these gods and sought to explain the world solely in natural terms. Many of these skeptics emphasized that happiness here on earth was more important than speculative notions about life after death. Similarly, human communities have always developed moral codes, and some have justified these codes by appeals to reason, humanity, or community, rather than to gods and the supernatural… In addition to humanist thought that stood outside of, or in opposition to, religion, we also see more or less humanist thinkers within many religions traditions… Humanism has often been portrayed as a Western invention, but in fact humanist ideas have arisen independently in cultures all over the world. The humanist heritage of ancient Greece shaped Western civilization and therefore in central to the development and spread of humanism in the modern world. However, India and China have older humanist histories. These rich humanist traditions reveal that common principles can arise in the most diverse environments, and suggest that the humanist goal of living an ethical and fulfilling life, guided by reason, is an aspiration with universal appeal.”

In a summation that appears tautological but is not, “Humans are humane, guided by reason they care about others as well as about self.” Such a definition is consistent with that of RD theory in its proposition that humans have a drive to bond and to comprehend as well as drives to acquire and defend, with the resultant conflicts worked through by the balancing and reasoning capacity of the prefrontal cortex.

The book proceeds to address how humanism is expressed through the historical development of basic human institutions, political, economic, art, religion and science. They cite the American Revolution and the U.S. Constitution as a turning point in humanizing political institutions. Its watchword, ‘government of the people, by the people and for the people’ is the very essence of humanism. This parallels the treatment of this issue in Being Human.

At this point the book moves on to its central theme, the relevance of humanism to corporations, the business structures that grew in the 19th century to be the dominant economic institutions worldwide. The book analyzes the almost chance way corporations became defined, both by legal logic and by academic economics, in ways that locked corporate power to property ownership. This definition marginalized the contributions of all other stakeholders to corporate wealth creation. It created the presumption that the single goal of the corporation was the maximization of stockholder wealth. This presumption played out in the rapid growth of corporations to national and international scope well into the 20th century. In Europe and in America this created great inequalities in the distribution of wealth along with many other abuses. Marx was moved by a humanist impulse to decry this situation, but at enormous cost to the world, his explanations and his recommendations proved to be far off target. The book’s overall historic analysis of corporations is again parallel with that offered in Being Human, except the latter book explains the process as being more a result of the Spencerian misunderstanding of Darwin and the existence of free-riders who, without a conscience, led the way in using the corporate form in marginalizing contributors other than investors.

The book moves on to examine the gradual development of humanist thought about the corporation in the 21st century. This was expressed in many ways; in the governmental reform and regulation efforts of both of the Roosevelts, in critiques of neo-classical economics, in philosophical writing about human rights and human freedom from coerced choice, in reform movements within corporations themselves and in some of the research and teaching in business schools.

The final chapters of the book report on several recent developments that the authors see as concrete manifestations of a here-and-now humanist movement, alive and well in business practice. They report on the activities of three corporations that have in their own industries become successful exemplars of making the improvement of the human condition the central mission of their corporate life. One chapter focuses on the development within business schools of Positive Organizational Scholarship (POS). This a rapidly growing research network that focuses on the systematic study of how business can improve its performance in human terms. Another chapter focuses on the long-term partnerships that the World Wildlife Federation has forged with several large transnational firms to jointly pursue the goal of complete sustainability in regard to natural resources and climate stabilization. One chapter deals with the great promise of micro-financing as an approach to the grass roots development of emerging economies. Another chapter deals with an amazing development in Latin American barrios that is moving forward by local youths training other local youths in computer science using ‘applied empathy’ methods. This is but one example of ‘social entrepreneurship’. The book discusses a shift in the top governance mechanisms of corporations from total control by shareholders toward the ‘stakeholder’ model of control by means of a balanced representation of all the major stakeholders including investors, employees, customers, suppliers and the general public.

The last chapter of the book, more than any other, links the theme of humanism to the evolutionary biology approach of Being Human. It was written by Muhammad Yunus, the pioneer of micro-finance and entitled, “Social Business Entrepreneurs Are the Solution.” Some quotes from Yunus’ chapter will best make my point about the linkage.
Many of the problems in the world remain unresolved because we continue to interpret capitalism too narrowly. In this narrow interpretation, we then create a one-dimensional human being to play the role of entrepreneur. We insulate him from other dimensions of life, such as the religious, the emotional, the political, and the social. He is dedicated to one mission in his business life: maximizing profit. Masses of one-dimensional human beings support him by backing him with their investment money to achieve the same mission. The free market game, we are told, works out beautifully with one-dimensional investors and entrepreneurs. Have we been so mesmerized by the success of the free market that we don’t dare to question it? Have we worked so hard at transforming ourselves absolutely into one-dimensional human beings – as conceptualized in economic theory – to facilitate the smooth functioning of the free market mechanism?
Economic theory postulates that you contribute to society and the world in the best possible manner when you concentrate on squeezing out the maximum for yourself. Once you get your maximum, everybody else will get his or hers too. As we follow this policy, we sometimes begin to doubt whether we are doing the right thing by imitating the entrepreneur created by theory. After all, things don’t look too good around us. We nevertheless quickly brush off such doubts by maintaining that bad things happen as a result of “market failures” – well-functioning markets do not produce unpleasant results, do they?
I do not think things are going wrong due to “market failure.” The causes lie much deeper. Let us be brave and admit that they are the result of “conceptualization failure.” More specifically, it is the failure of economic theory to capture the essence of human beings. Everyday human beings are not one-dimensional entities; they are excitingly multi-dimensional… They are [also] people referred to as ‘social entrepreneurs’ in formal parlance. Social entrepreneurship is in fact an integral part of human history. Most people take pleasure in helping others and all religions encourage this quality in human beings…

Once a social entrepreneur operates at 100 percent or beyond the cost recovery point, he has actually graduated into another world, the business world with its limitless expansion possibilities. This is a moment worth celebrating... This is the critical moment of significant institutional transformation. The social entrepreneur has migrated from the world of philanthropy to the world of business. To distinguish him from the first two types of entrepreneur listed earlier, we will call him a ‘social business entrepreneur.’ Social business entrepreneurs make the market-place more interesting and competitive… Social business entrepreneurs can become very powerful players in national and international economies… We do not pay attention to them because we are blinded by prevailing theories. If social business entrepreneurs exist in the real world – as it seems they do—it makes no sense that they are not accommodated within current conceptual frameworks. Once we have recognized social business entrepreneurs, the supportive institutions, policies, regulations, norms and rules can be developed to help them enter the mainstream.

In conclusion the book stresses the theme of humanism in business in terms of seeking the goal of sustainability, not only in terms of the earth’s resources, but also in terms of relationships to all the contributors to the creation of wealth. They propose that the corporation needs to be conceived as a community of people who are committed not only to one another’s sustainable well being, but beyond that to the further enrichment of one another’s lives. Call it sustainability plus.

Call for Abstracts

Call for cases: Humanistic Management in Practice The Humanistic Management Network (www.humanetwork.org) tries to impact the way businesses operate by integrating humanistic thought into strategy in the quest for a more ‘life-conducive’ economy. Aiming to create actionable knowledge The Humanistic Management Network is compiling a book with case studies that represent positive examples of how businesses can succeed in generating social value whilst running a profitable organization. A prerequisite for managing a business in tune with humanistic principles is the emancipation from a singular focus on maximizing profits. The common ground such businesses share is that they are managed as an integrated and responsive part of society by: a) Seeing their organizational raison d’être also in the promotion of social benefit for which the use of business methods and market mechanisms is a tool – a means to support an end rather than an end in itself. b) Submitting themselves to the necessity of earning at least a sufficient income to be a self-sustaining organization but without submitting themselves to a normative heightening of profit maximization. c) Maintaining the liberty to opt out of the application of market rationality in situations where this would create a conflict with, or decrease the social benefit the organization aims to create. We are initially looking for case abstracts of no more than 500 words which we need to receive by July 1st 2008. These abstracts should cover the following questions: a) Why is this case a good example for a responsible business, a business that is managed respecting the three criteria mentioned above b) What is the company’s name, headquarter location, and size (Start-up, SME, large corporation...)? c) What goods or services does the business offer? To download the full call for cases including some Background information please go to http://www.humanetwork.org/Research_Download_Area/Research_Download_Area.htm Please submit your abstract to Ernst von Kimakowitz: evkimakowitz[at]humanetwork.org For further information on The Humanistic Management Network please visit www.humanetwork.org.

Being Human book

http://www.prlawrence.com/

Check it out!

Paul Lawrence offers a draft version for free download.

Path breaking book by Paul Lawrence

Book review:

Being Human: A Darwinian Theory of Human Behavior
by Paul R. Lawrence

Being human: A Darwinian theory of human behavior by Paul R. Lawrence is nothing short of a revelation to researchers concerned with the current state of affairs. Not that it gives concrete hints at what to do specifically to prevent environmental destruction or social inequities, but rather that it provides something far more important: a rigorous concept of human nature, which informs us in many insightful ways how to build societal institutions to ensure human flourishing in a sustainable manner.

The book is structured in four parts in which the first two parts are dedicated to the formulation of the Renewed Darwinian (RD) Theory and the latter two parts examine the application of the theory with regard to political, economical and societal problems.

In the first part, the author is presenting his own model of human motivation as an introduction. Based on his work in ‘Driven’ (with Nitin Nohria) the four innate motivational drives, the drives 1) to aquire 2) to bond 3) to comprehend, and 4) to defend are presented. He then relates his work to research across the scientific disciplines and proposes an enlarged model of human behavior as a consequence. In this model, checks and balances of the basic motivational drives ( akin to a moral compass) become essential to human survival. In the second part Darwin’s theories of human development are revisited and debunked of popular misconceptions. Lawrence uses these theories (theories of natural, sexual and group selection) to interpret human development over historic periods. As the drives to acquire and defend have been present in early human species (and animals), the drives to bond (Homo erectus) and to comprehend (homo sapiens) have only rather recently developed in human history. These developments can be retraced in the human brain (prefrontal cortex) and are largely credited with giving humans a better fit for survival. Lawrence’s argument is that only with the balanced satisfaction of all four drives can a human being develop and society evolve and flourish. So far, so good. Not all is well with human development as a certain percentage of people (around 1%) has remained undeveloped, namely does not possess a drive to bond or a drive to comprehend (Correct?), but are rather driven by an unchecked drive to acquire. These people are what psychologist call psychopaths (economists free riders), and much of the harm done throughout human history can be attributed to these people.

After specifying the renewed Darwinian (RD) theory of human behavior as a parsimonious and testable theory, the author proceeds to interpret political, economical, and societal developments with the RD lens. One of the main foci is the problem of free rider leadership. Lawrence presents several examples of psychopaths achieving positions of power causing extensive harm to society. As a solution to the problem of free rider leadership in the political arena he presents a checks and balance systems, which protects society from psychopaths. He views the U.S. constitution as such a system supporting human flourishing by keeping the four drives in balance. With regard to economic developments, Lawrence specifically examines the institution of the corporation. The corporation in his eyes reverses the achievement of institutional checks and balances by prioritizing the drive to acquire, as in the duty to maximize shareholder value, over all other drives. As such an imbalance is created; an imbalance that is exacerbated when free riders are in charge of such corporations. He further cites research that points to a large overrepresentation of psychopaths within current corporations, a hint toward an explanation of the dismal current state of affairs.

In part four, the most interesting part of this intellectual journey, the author lays out his recommendations to put humanity back on track. He outlines clearly, how we can build institutions that allow human beings to satisfy and balance their four motivational drives while being protected against the dangers of free riders. He starts by looking at the balanced self, a balanced family and a balanced community, then moves to the problems of balancing the corporation within the nation state. He then proposes several ways to institute international institutions based on the RD theory, echoing many recommendations of political scientists, to ensure human survival in the long run.

All in all, this book owes its genius not necessarily to the novelty of the presented facts, but rather the coherent presentation of these facts within a concise theory. The book is highly informative, eminently readable and of urgent need. While most social sciences are currently employing different assumptions about human nature there is almost no testable theory. As a result, human nature has remained rather mythical, allowing those sciences with the simplest explanations to gain power. This has contributed to an imbalanced view of human beings in the public policy process, which is largely influenced by economists and their assumptions of economic man.

Therefore “Being Human: A Darwinian Theory of human behavior” renders greatly needed service, as it allows proving and disproving assumptions that have long dominated social sciences for better and for worse. As such, the RD theory provides a crucial stepping stone in our endeavor to understand ourselves better, to build the best organizations possible and to understand how we can deal successfully with the current environmental and societal crises.
Therefore this is a work of greatest relevance and demands the attention of everyone concerned with the survival of our species.

Book proposal

Actionable Management concepts for a humane economy


Title: Humanism in Business - Actionable Humanistic Management Frameworks
Subtitle: Creating sustainable stakeholder benefits

A collection of actionable concepts/frameworks guiding managers interested in value driven business conduct

Outline
Many managers are torn by the need to maximize profit on one hand and their innate wish to make a positive contribution to society. All too often these two intentions collide, profit maximization prevails, and managers are increasingly dissatisfied. When trying to manage humanistically many managers lack structured support to base their actions on. Structured management frameworks akin to the Porter 5 forces, 6 Sigma etc.. are sparse and not mainstream yet. The purpose of the book is to provide an overview of actionable management frameworks that help managers to humanistically deal with management dilemmas in the 21st century. This book will provide insight for the day-to-day manager, executive and business leaders as well as consultants seeking to combine business and public value creation.

Introduction

Hi Humanetters,

We wish to make this blog an information and discussion resource for all those interested in creating a different kind of economy, one that centers on authentic human needs not on amassing excessive wealth. We wish to freely discuss alternatives that are both practical and life conducive.

We will also use this blog to promote our ideas of a humanistic economic system specifically and will let you know about publications, events and interesting discussion we come across. Please feel free to contribute your thoughts and ideas in a respectful and constructive manner.

Thanks and all the best,

Michael