The social contract, social enterprise, and business model innovation

Purpose

The purpose of this paper is to investigate and describe the emerging and various forms of innovative business models, both in non-profit and for-profit sectors, that are either designed towards, or place strong emphasis on, social objectives.



Design/methodology/approach

This is a conceptual rendering, supported theoretically by the evolution of social contract theory, and by example, considers emerging new innovative business models in light of their role in society, the context of business in society, and in the ways value is being created for both business and society.



Findings

As issues mount regarding social justice, environmental sustainability, and developing economies, business leaders are recognising that established business models are proving inadequate for emerging circumstances. Nonetheless, it is those circumstances that present an opportunity for a shift in business model, and potentially in social and environmental outcomes (Eyring, Johnson, & Nair, 2011; Kanter, 2011; Porter & Kramer, 2011; Senge, 2008). The examples and argument developed here present evidence that the traditional economic business model of the past, while still rooted in the 20^th century, is being augmented and innovated by variations of a newer, more socially driven business model that is responsive to newer realities, pressing social concerns, and to greater expectations of society.



Limitations

The argument presented here must be attenuated by the fact that we are still talking small numbers. Modern business, particularly in the multinational realm, is still dominated by large for-profit enterprise that seeks primarily to serve its own interests. Further, the work is conceptual and based on evidentiary and anecdotal evidence.



Contribution

Social business in its various forms, while still perhaps in its infancy, is on the upswing. It warrants additional exploration, understanding, theoretical development, and championing. This paper adds to the literature by supporting the concept theoretically and by expanding current notions of just what social business is and can do.