Monday, May 18, 2009

how private business shames social enterprise

Recently I blogged about the debate that's raging in social enterprise land about what the purpose of social enterprise is, and how the various forms that can be adopted serve to confuse the issue unless you see them for what they are - various options to allow you to manifest your vision within a specific set of values that define what social enterprise 'is'.

A recent blog on the Guardian by Jonathan Bland, chief exec of the Social Enterprise Coalition about how social enterprise can show private business how to 'get in right' got me wondering how far this issue of models can be taken - let me give you an example:

if I was to describe to you an established global food business with a multi-million pound turnover; that seeks to source all its products from various sustainable, local, organic and fair-trade suppliers; that specifically seeks to set up new branches in areas of non-affluence (ie where the rich people aren't); that charges customers a price that is affordable to just about everyone; that has created its own charitable trust as well as actively supporting various other charitable causes; that offers all of its employees structured accredited training programmes; that seeks to educate its customers about its various practices and its impacts; and has also just committed to recruiting at least 1/3 of its next years intake of staff from people who have been long-term unemployed, and all without any taking ant form of grant or public subsidy, would that sound like an ideal social enterprise to you?

Sadly its not - its McDonalds, that big international company that all us ethical eco-warrior types fought against in the 80s and 90s, but is now shaming some social enterprises and charitable groups by its ethical practices being of a far greater standard than can be typically found in our sector, and still turning a handsome profit in the process.

And this causes problems for the ethical consumer: McDonalds is not a social enterprise in that it still exists primarily to make as much cash as possible for its investors, but in doing so its realised that it can also create a whole heap of good stuff for people and planet along the way.

Its not a social enterprise as we currently define them and yet its practices shame some of the wider third sector...

I'm lovin it, but I'm not sure that I should...


  1. Hi Adrian,

    I think this is a great comment and goes to the heart of the current debate on social enterprise and the definitions debate.

    To my mind there are a couple of important points raised here. I do not know enough about Macdonalds practises to endorse the picture you paint of them and they may well still be producing food that is not acceptable as has been evidenced in the past but lets presume the picture you paint here is correct.

    It would make Macdonalds one of the best Social Enterprises in the world but why did they go down this path? Probably because of all of the negative publcitiy over the years and the fact that they're wise enough to see where the competition is coming from and have acted accordingly.

    Whatever their past this is a good thing surely but it has been driven in some way by all the little guys starting social enterprises and all the campaigners over the years who have identified their bad practise.

    This change of direction has been determined not by Macdonalds but by people who care about what we eat and how it is made. Also by "market forces" and "consumer democracy"

    The market forces being Fair Trade and social and environmental businesses and consumer democracy being the consumer who more and more has come to realise the power of the money they spend.

    Saying all of this we do not really know if all of these claims are true and this is where we come to the crux of the matter for me.

    Isn't it probably true that the best way to ensure a company is behaving as they should or as they claim, is to make much of what they do transparent and openly available to the general public?

    As someone who runs a social enterprise myself I've for a while toyed with the idea of abandoning "social marketing" altogether. I doubt I'll do that but I suspect that my product will succeed if it can compete, is fairly priced, is visible in the market place and I treat my customers with the respect they deserve!

    I believe there is undoubtedly a case for funding social enterprise. Perhaps the criteria for funding could simply be a statement of principle of some sort and a commitment to transparency?

    Martin Murphy

  2. Interesting article Adrian and (pardon the pun) plenty of food for thought.

    One question that did occur to me though is that what you have described could simply be the behaviour of a profit-maximising company. Locating restaurants in poor areas could simply be that poor people eat more MacDonalds than rich people (working hypothesis) and the local sourcing could simply be responding to what customers want.

    I would be more impressed if I saw them taking actions which reduced their profit levels specifically to do something about poverty, the environment, social disadvantaged communities, etc. Doing a small amount of high-profile Corporate Social Responsibility doesn't count either as that is just cheap marketing :)

  3. I am involved in several social enterprises and none of them actively market themselves as social enterprises. We just concentrate on delivering a good product at the right price to our customers.

    There's a lot of talk in the paid professional circles about "social marketing" and so on.. in my experience it makes little difference when it comes down to getting in the business.

    The definitions debate has been going on as long as I've been involved in the movement (about 15 years now) and I would have to say that, in my experience, the definitions debate seems to largely be driven by funders.. organisations who want to classify everything so they can decide how to target their money.

  4. I line up with Jonathan above. This debate is goofy. Who cares. I care more about getting McDs and others like them to do more good, than supporting a non-biz, charading as a social enterprise.

    We need to put the business first, so we have a perpetual fund for social benefit not conrolled by a funder.

  5. We've just published a white paper on corporate social responsibility that makes some similar points about the ways in which large companies that are innovating to solve social problems while making profits are making the concept of CSR redundant (and teaching social enterprises lessons in scale while they're at it).

    Copies downloadable for free at

  6. Rhiannon-Jane Raftery12 July, 2016 13:41

    I think profit for purpose is a good model thee are a number of mainstream businesses like MacDonald's that have a social purpose whether we should delve too deeply into their reasons or take it at face value I don't know. Like you I remember the eco warrior days:-). My major concern with social enterprise is many are not focused enough on income generation - to deliver social purpose you have to generate money so it's important to remember it is a business albeit a social one so profit for purpose is my approach.