Management Team Decision

A Different Way to Go Global Exporting, cooperative contracts, licensing, franchising, joint ventures, wholly owned affiliates, global new ventures . . . As a management team wanting to take your business to the next level, you have a smorgas board of options available to you.

But, in addition to these traditional options, there is another angle you can take, one that is becoming increasingly popular among startup companies like yours: social entrepreneurship. Social entrepreneurs use business skills to solve social problems. You and the members of your team, just out of your MBA programs, are excited about the business and want to grow it and make money. But you are also passionate about making a difference when it comes to problems like homelessness in the United States or AIDS in Africa.

As your team discusses how and where to go global, you think about the problems you'd like to address and you look to role models to help you brainstorm and plan. You read about how Pfizer-a pharmaceutical giant, not a startup-started a program to offer free medicines to recently unemployed Americans.

Other companies are doing the same in Africa. Peet's Coffee & Tea has been working recently to develop the economic well-being of coffee farmers in Kenya, Rwanda, Tanzania, and Uganda by teaching them to grow better quality coffee that Peet's can market to its customers in coffee-loving developed economies. As much as your team wants to help others in need, you also recognize that doing good can't come at the expense of the bottom line.

In fact, Peet's Coffee's effort is currently run by a nonprofit and hasn't started making Peet's any money yet. You know that the success of such ventures is untested, but your team is also aware that any effort at going global involves some type of risk. Thinking it through, you ask yourselves what's in it for companies who undertake social entrepreneurship-and what might be in it for you?

Pfizer adopted this program to create customer loyalty, exchanging a brick (something it has) for a jade (something even more valuable and harder to come by). Customers who drink Peet's care about where their coffee comes from and about its quality, so Peet's establishes relationships with African farmers partly in response to customer demand and to build its brand. With all of this in mind, it's your team's task to figure out how you can balance your interest in doing business on a global scale with your interest in making a difference in the world.

Questions

1. What are the advantages of social entrepreneurship as a way to approach doing business in developing economies outside the United States? What are the disadvantages?

2. How might you combine social entrepreneurship with traditional options for going global?

3. Can establishing a multinational corporation or a joint venture serve the principles of social entrepreneurship? Would some options lend themselves better to social entrepreneurship than others? What might such a business venture look like?