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129-438: Considered at the organisational level, CSR is generally understood as a strategic initiative that contributes to a brand's reputation. As such, social responsibility initiatives must coherently align with and be integrated into a business model to be successful. With some models, a firm's implementation of CSR goes beyond compliance with regulatory requirements and engages in "actions that appear to further some social good, beyond

258-417: A profit motive when participating in corporate philanthropy and community volunteering. On the other hand, the remaining corporate social initiatives can be examples of cause marketing, in which there is both a societal interest and a profit motive. CSR may be based within the human resources , business development or public relations departments of an organisation, or may be a separate unit reporting to

387-423: A CSR perspective, while critics argue that CSR distracts from businesses' economic role. A 2000 study compared existing econometric studies of the relationship between social and financial performance, concluding that the contradictory results of previous studies reporting positive, negative, and neutral financial impact were due to flawed empirical analysis and claimed when the study is properly specified, CSR has

516-417: A belief in helping those in need. The study also revealed that most American faith groups prioritize charity for their own places of worship in monetary donations, and then for other causes. Muslims and Jews contributed more to civil rights protection organizations than other religious groups, while Christians were more likely to make charitable contributions to youth and family services, with Evangelicals giving

645-413: A business enterprise that emerge from neighborhoods, environmental groups, local stakeholders, and other elements of the surrounding civil society". Social License to Operate can be determined as contractual grounds for the legitimacy of activities and projects a company is involved in. It refers to the level of support and approval of a company's activities by its stakeholders. Displaying commitment to CSR

774-535: A business model has been incorporated into certain accounting standards. For example, the International Accounting Standards Board (IASB) utilizes an "entity's business model for managing the financial assets" as a criterion for determining whether such assets should be measured at amortized cost or at fair value in its International Financial Reporting Standard, IFRS 9 . In their 2013 proposal for accounting for financial instruments,

903-514: A business model when none is in place and business model reconfiguration for the process of changing an existing business model, also highlighting that the two processes are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model. Al-Debei and Avison (2010) consider value finance as one of the main dimensions of business modelling which depicts information related to costing, pricing methods, and revenue structure. Stewart and Zhao (2000) defined

1032-735: A business model. A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity. Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily successful growth firms . Business models are used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore possibilities for future development. Well-known business models can operate as "recipes" for creative managers. Business models are also referred to in some instances within

1161-705: A change from traditional business models. One is the subscription model , in which platforms charge users a small monthly fee in exchange for services. She notes that the model was ill-suited for those "accustomed to free content and services", leading to a variant, the freemium model. A second method is via advertising. Arguing that traditional advertising is no longer appealing to people used to "user-generated content and social networking", she states that companies now turn to strategies of customization and personalization in targeted advertising . Eric K. Clemons (2009) asserts that consumers no longer trust most commercial messages; Van Dijck argues platforms are able to circumvent

1290-496: A charitable revolution. Rich patrons founded many leprosaria and hospitals for the sick and poor. New confraternities and religious orders emerged with the primary mission of engaging in intensive charitable work. Historians debate the causes. Some argue that this movement was spurred by economic and material forces, as well as a burgeoning urban culture. Other scholars argue that developments in spirituality and devotional culture were central. For still other scholars, medieval charity

1419-499: A company selects its customers defines and differentiates its offerings, defines the tasks it will perform itself and those it will outsource, configures its resource, goes to market, creates utility for customers, and captures profits". A business framework involves internal factors ( market analysis ; products/services promotion; development of trust; social influence and knowledge sharing) and external factors (competitors and technological aspects). The process of business model design

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1548-426: A company's business model. In a paper published in 2017, Johnson demonstrated how matrix methods may usefully be deployed to characterise the architecture of resources, costs, and revenues that a business uses to create and deliver value to customers which defines its business model. Systematisation of this technique (Johnson settles on a business genomic code of seven matrix elements of a business model) would support

1677-426: A company's economic actions to particular interest groups within society and to society at large. Social accounting emphasizes the notion of corporate accountability . Crowther defines social accounting as "an approach to reporting a firm's activities which stresses the need for the identification of socially relevant behavior, the determination of those to whom the company is accountable for its social performance and

1806-437: A competitive advantage. Although business model innovation promises financial returns, periods of radical business model innovation can reduce the person-organization fit and thus lead to a greater fluctuation in the workforce. As a specific instance of Business Model Dynamics, a research strand derived from the evolving changes in business models, BMA identifies an update of the current business model to changes derived from

1935-535: A concept is virtually nonexistent in Jewish tradition. Jews give tzedakah , which can take the form of money, time, and resources to the needy, out of "righteousness" and "justice" rather than benevolence, generosity, or charitableness. The Torah requires that 10 percent of a Jew's income be allotted to righteous deeds or causes, regardless if the receiving party is rich or poor. However, if one regards Judaism in its wider modern meaning, acts of charity can go far beyond

2064-452: A correlation between social/environmental performance and financial performance. The business case for CSR within a company employs one or more of these arguments: Business model A business model describes how a business organization creates, delivers, and captures value , in economic, social, cultural or other contexts. The model describes the specific way in which the business conducts itself, spends, and earns money in

2193-467: A differentiation strategy. They concluded that managers could determine the appropriate level of investment in CSR by conducting a cost-benefit analysis in the same way they analyze other investments. Reinhardt (1998) found that a firm engaging in a CSR-based strategy could only sustain an abnormal return if it could prevent competitors from imitating it. The relationship between corporate social responsibility and

2322-543: A distinct form of love . Over time, the meaning of charity has evolved from "Christian love" to "providing for those in need; generosity and giving" (cf. offertory ), a transition that began with the Old French word charité . Thus, while the older Douay-Rheims and King James versions of the Bible translate instances of agape (such as those appearing in 1 Corinthians 13 ) as "charity", modern English versions of

2451-428: A firm's corporate financial performance is a phenomenon that is being explored in a variety of research studies that are being conducted across the world. Based on these research studies, including those undertaken by Sang Jun Cho, Chune Young Chung, and Jason Young, a positive relationship exists between a firm's corporate social responsibility policies and corporate financial performance. To investigate this relationship,

2580-771: A foundation for consumers to verify that their products are socially sustainable . Due to an increased awareness of the need for CSR, many industries have their verification resources. They include organizations such as the Forest Stewardship Council (paper and forest products), International Cocoa Initiative, and Kimberly Process (diamonds). The United Nations Global Compact provides frameworks not only for verification, but also for reporting human rights violations in corporate supply chains. The rise of ethics training inside corporations, some of which are required by government regulation, has helped CSR to spread. Such training aims to help employees make ethical decisions when

2709-442: A given value. As a result of digital transformation , it is the predominant business model of the 21st century. In an op-ed on MarketWatch, Choudary, Van Alstyne and Parker further explain how business models are moving from pipes to platforms, leading to disruption of entire industries. There are three elements to a successful platform business model. The toolbox creates connection by making it easy for others to plug into

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2838-611: A healthy, educated workforce, sustainable resources, and an adept government to compete effectively. For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and philanthropy. The Harvard Business Review article "Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility" provided examples of companies that have developed deep linkages between their business strategies and CSR. CSV acknowledges trade-offs between short-term profitability and social or environmental goals, but emphasizes

2967-546: A letter to an English newspaper editor complaining about beggars who try to invoke pity by displaying their tattered clothing and ailments. Engels also points out that charity is seen as a way for the wealthy to avoid further inconvenience and discomfort, highlighting the self-interest of the bourgeoisie . Reinhold Niebuhr , an American theologian, suggests that charity often substitutes for true justice. In his work Moral Man and Immoral Society , he criticizes charities that fund Black education, arguing that they fail to address

3096-561: A national plan: 1) monitoring to assess threats to food insecurity, 2) improving coordination at different levels, 3) enhancing accountability, and 4) involving the public in policy construction. Amelia Barwise supported Chilton's argument by discussing the implications of philanthropy. She indicated that philanthropy can lead to tax avoidance and decrease opportunities for comprehensive welfare policies. Additionally, philanthropy might dilute an institution's mission and grant undue power to donors. Barwise highlighted that Americans' distrust of

3225-399: A neutral impact on financial outcomes. Critics have questioned the "lofty" and sometimes "unrealistic expectations" of CSR, or observed that CSR is merely window-dressing , or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations . In line with this critical perspective, political and sociological institutionalists became interested in CSR in

3354-413: A new business model, the process is called business model innovation. There is a range of reviews on the topic, The concept facilitates the analysis and planning of transformations from one business model to another. Frequent and successful business model innovation can increase an organisation's resilience to changes in its environment and if an organisation has the capability to do this, it can become

3483-411: A new one. Charity (practice) Charity is the voluntary provision of assistance to those in need. It serves as a humanitarian act, and is unmotivated by self-interest . Various philosophies about charity exist, with frequent associations with religion. The word charity originated in late Old English to mean a " Christian love for one's fellows", and until at least the beginning of

3612-588: A positive response. Somerville also found that consumers are loyal and willing to spend more on retailers that support charity. Consumers also believe that retailers selling local products will gain loyalty. Smith (2013) shares the belief that marketing local products will gain consumer trust. However, environmental efforts are receiving negative views, given the belief that this would affect customer service. Oppewal et al. (2006) found that not all CSR activities are attractive to consumers. They recommended that retailers focus on one activity. Becker-Olsen (2006) found that if

3741-492: A pyramid of responsibilities, namely, economic, legal, ethical, and philanthropic responsibilities. While Carroll was not defining CSR, but simply arguing for the classification of activities, Sheehy developed a definition differently following the philosophy of science—the branch of philosophy used for explaining phenomena. Carroll extended corporate social responsibility from the traditional economic and legal responsibility to ethical and philanthropic responsibility in response to

3870-495: A range of reporting guidelines and standards that serve as frameworks for social accounting, auditing, and reporting: Legal requirements for social accounting, auditing, and reporting exist in nations like France. However, international or national agreement on meaningful social and environmental performance measurements has not been achieved. Many companies produce externally audited annual reports that cover Sustainable Development and CSR issues ("Triple Bottom Line Reports"), but

3999-524: A risk of agency costs, a law academic may consider that discretion to be an appropriate expression of what the law demands from directors. In the 1930s, two law professors, A. A. Berle and Merrick Dodd, famously debated how directors should be made to uphold the public interest: Berle believed there had to be legally enforceable rules in favor of labor, customers and the public equal to or ahead of shareholders, while Dodd argued that powers of directors were simply held on trust. Corporate social responsibility

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4128-568: A socially responsible company makes safe, high-quality products; for Germans it provides secure employment; in South Africa it makes a positive contribution to social needs such as health care and education. Even within Europe, the discussion about CSR is very heterogeneous. A more common approach to CSR is corporate philanthropy . This includes monetary donations and aid given to nonprofit organizations and communities. Donations are made in areas such as

4257-660: A sourcing business model known as Vested Outsourcing, a hybrid sourcing business model in which buyers and suppliers in an outsourcing or business relationship focus on shared values and goals to create an arrangement that is highly collaborative and mutually beneficial to each. From about 2012, some research and experimentation has theorized about a so-called "liquid business model". Sangeet Paul Choudary distinguishes between two broad families of business models in an article in Wired magazine . Choudary contrasts pipes (linear business models) with platforms (networked business models). In

4386-548: A specific response. Examples of needs-based approaches include charitable giving, philanthropy , and other private investments. In contrast, a rights-based approach involves active participation from both ends, with recipients having a say in policies. Politically, a rights-based approach might involve income redistribution, minimum wage regulations, and cash subsidies. Mariana Chilton, in the American Journal of Public Health , suggested that current government policies reflect

4515-619: A study of collaborative research and external sourcing of technology, Hummel et al. (2010) similarly found that in deciding on business partners, it is important to make sure that both parties' business models are complementary. For example, they found that it was important to identify the value drivers of potential partners by analyzing their business models, and that it is beneficial to find partner firms that understand key aspects of one's own firm's business model. The University of Tennessee conducted research into highly collaborative business relationships. Researchers codified their research into

4644-418: A taxonomical approach to empirical studies of business models in the same way that Linnaeus’ taxonomy revolutionised biology. Daas et al. (2012) developed a decision support system (DSS) for business model design. In their study a decision support system (DSS) is developed to help SaaS in this process, based on a design approach consisting of a design process that is guided by various design methods. In

4773-510: A variety of outside markets, an improved reputation, and stakeholder relationships. In all cases (emerging markets vs. developed economies), implementing CSR policies into the daily activities and framework of a company has been shown to allow for a competitive advantage versus other companies, including the creation of a positive image for the company, improved stakeholder relationships, increased employee morale, and attraction of new consumers who are committed to social responsibility. Despite all of

4902-666: A way that generates profit . The process of business model construction and modification is also called business model innovation and forms a part of business strategy . In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business , including purpose , business process , target customers , offerings, strategies, infrastructure , organizational structures , profit structures, sourcing, trading practices, and operational processes and policies including culture . The literature has provided very diverse interpretations and definitions of

5031-460: Is a philosophy and social movement that uses evidence and reasoning to determine the most effective ways to benefit others. Effective altruism encourages individuals to consider all causes and actions and to act in the way that brings about the greatest positive impact, based upon their values. It is the broad, evidence-based, and cause-neutral approach that distinguishes effective altruism from traditional altruism or charity. Effective altruism

5160-408: Is a consequence of the business model and has a symbiotic relationship with it, because the business model determines the brand promise, and the brand equity becomes a feature of the model. Managing this is a task of integrated marketing . The standard terminology and examples of business models do not apply to most nonprofit organizations , since their sources of income are generally not the same as

5289-514: Is achieved within and given by communities, which is defined as "a social unit of any size that shares common values, or that is situated in a given geographical area". Lacey suggested that social license can take a long time for a corporation or industry to achieve, but social license can be lost very quickly for a variety of factors, including changes in stakeholder expectations, technology, or other disturbances. Gunningham et al. stated that meeting and exceeding regulations to build reputational capital

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5418-426: Is economically vital, saying: "in certain circumstances, [natural resource-based industries] cannot afford to do otherwise". In communities with a diverse economy, achieving social license is often much more complex than in local communities, which depend economically on the natural resource industry. In research undertaken by Ketola et al. , the writers believed that the forest products industry in rural Michigan in

5547-407: Is not directly undertaken by the companies, they become accountable to the stakeholders. These surrounding issues have prompted supply chain management to consider the corporate social responsibility context. Wieland and Handfield (2013) suggested that companies must include social responsibility in their reviews of component quality. They highlighted the use of technology to improve visibility across

5676-556: Is one way to achieve a social license, by enhancing a company's reputation. As stated in Enduring value: the Australian minerals industry framework for sustainable development the concept of the 'social license to operate', then defined simply as obtaining and maintaining broad community support and acceptance. Unless a company earns and maintains that license, social license holders may intend to block project developments; employees may leave

5805-613: Is part of business strategy . Business model design and innovation refer to the way a firm (or a network of firms) defines its business logic at the strategic level. In contrast, firms implement their business model at the operational level, through their business operations . This refers to their process-level activities, capabilities, functions and infrastructure (for example, their business processes and business process modeling), their organizational structures (e.g. organograms, workflows , human resources) and systems (e.g. information technology architecture , production lines). The brand

5934-409: Is part of the larger movement towards evidence-based practices . While a substantial proportion of effective altruists have focused on the nonprofit sector , the philosophy of effective altruism applies more broadly to prioritizing the scientific projects, companies, and policy initiatives which can be estimated to save lives, help people, or otherwise have the biggest benefit. People associated with

6063-412: Is sometimes considered charity—as in the saying "Charity begins at home"—charity usually involves giving to those who are not related. Terms like filial piety describe supporting one's family and friends. Treating relatives as strangers in need of charity has led to the phrase "as cold as charity"—providing for one's relatives as if they were strangers, without affection. Behavioural psychology describes

6192-483: Is the process by which several organizations, including suppliers, customers, and logistics providers, work together to provide a value package of products and services to the end-user, who is the customer. Corporate social irresponsibility in the supply chain has greatly affected the reputation of companies, leading to many costs to solve the problems. For instance, incidents like the 2013 Savar building collapse , which killed over 1000 people, pushed companies to consider

6321-459: The CEO or the board of directors . An engagement plan can assist in reaching the desired audience. A corporate social responsibility individual or team plans the goals and objectives of the organization. As with any corporate activity, a defined budget demonstrates commitment and scales the program's relative importance. Social accounting is the communication of social and environmental effects of

6450-486: The Financial Accounting Standards Board also proposed a similar use of business model for classifying financial instruments. The concept of business model has also been introduced into the accounting of deferred taxes under International Financial Reporting Standards with 2010 amendments to IAS 12 addressing deferred taxes related to investment property. Both IASB and FASB have proposed using

6579-573: The Jaycees . With the rise of more social peer-to-peer processes , many charities are moving away from the charitable model, adopting a more direct donor-to-recipient approach. Examples include Global Giving (direct funding of community development projects in developing countries), DonorsChoose (for U.S.-based projects), Kiva (funding loans administered by microfinance organizations in developing countries), and Zidisha (funding individual microfinance borrowers directly). Institutions developed to assist

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6708-544: The Make a Wish Foundation (John Cena holds the record for the most wishes granted by an individual, with over 450 wishes) and the World Wildlife Fund . Nowadays, some charities allow online donations through websites like JustGiving . Originally, charity involved the benefactor directly giving goods to the receiver. This practice continues with some individuals, such as " CNN Hero " Sal Dimiceli , and service organizations like

6837-462: The United States may have received a social license through the channels that mining corporations initially established and the long history of logging and copper mining in the area continued to shape the attitudes and identities of industry participants to present day. They found that local stakeholders and local industry operators have shared history and experience as having limited power to control

6966-481: The free market think tank Institute of Economic Affairs published a report called "Sock Puppets: How the government lobbies itself and why", which criticizes governments funding charities that then lobby for changes desired by the government. Growing awareness of poverty and food insecurity has sparked debates among scholars about the needs-based versus the rights-based approach. The needs-based approach provides recipients with what they require, without expecting

7095-474: The supply chain . Corporate social responsibility includes six types of corporate social initiatives: All six of the corporate initiatives are forms of corporate citizenship. However, only some of these CSR activities rise to the level of cause marketing , defined as "a type of corporate social responsibility (CSR) in which a company's promotional campaign has the dual purpose of increasing profitability while bettering society." Companies generally do not have

7224-483: The "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook). A variant of this model

7353-614: The 1990s from Southwest Airlines , Netflix , eBay , Amazon.com , and Starbucks . Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created new models that depend entirely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs. In addition, the rise of outsourcing and globalization has meant that business models must also account for strategic sourcing, complex supply chains and moves to collaborative, relational contracting structures. Design logic views

7482-662: The 20th century, this meaning remained synonymous with charity. Apart from this original meaning, charity is etymologically linked to Christianity, with the word originally entering the English language through the Old French word charité , which derived from the Latin caritas , a word commonly used in the Vulgate New Testament to translate the Greek word agape ( ἀγάπη ),

7611-451: The Bible typically translate agape as "love". Charitable giving is the act of donating money, goods, or time to the less fortunate, either directly or through a charitable trust or another worthy cause. Charitable giving as a religious act or duty is referred to as almsgiving or alms . The name stems from the most obvious expression of the virtue of charity: providing recipients with

7740-571: The Hungarian Association for Environmentally Aware Management (KÖVET) refers to "Deep CSR" and the role of a "Truly Responsible Enterprise". Gergely's definition of "Deep CSR" is the behaviour displayed by a "Truly Responsible Enterprise" (TRE), which: The five principles of the TRE are: In competitive markets, the cost-benefit analysis of CSR initiatives can be examined using a resource-based view (RBV). According to Barney (1990), "formulation of

7869-454: The Institute for Social Policy and Understanding examined philanthropic and charitable giving among members of American religious communities. The study found that American Muslim donation patterns align mostly with other American faith groups, like Christian (Protestant and Catholic), and Jewish communities, but American Muslims are more likely to donate due to a sense of religious obligation and

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7998-801: The RBV, sustainable competitive advantage requires that resources be valuable (V), rare (R), inimitable (I) and non-substitutable (S)". A firm introducing a CSR-based strategy might only sustain high returns on their investment if their CSR-based strategy could not be copied (I). However, should competitors imitate such a strategy that might increase overall social benefits? Firms that choose CSR for strategic financial gain are also acting responsibly. RBV presumes that firms are bundles of heterogeneous resources and capabilities that are imperfectly mobile across firms. This imperfect mobility can produce competitive advantages for firms that acquire immobile resources. McWilliams and Siegel (2001) examined CSR activities and attributes as

8127-408: The activity of designing a company's business model. It is part of the business development and business strategy process and involves design methods . Massa and Tucci (2014) highlighted the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high technology entrepreneurship, and changing an existing business model, such as when

8256-413: The alignment of the organization's strategy with the organization's structure, operations, and the environmental factors in achieving competitive advantage in varying combination of cost, quality, time, flexibility, innovation and affective. Business model design includes the modeling and description of a company's: A business model design template can facilitate the process of designing and describing

8385-855: The answers are unclear. The most direct benefit is reducing the likelihood of "dirty hands", fines, and damaged reputations for breaching laws or moral norms. Organizations see increased employee loyalty and pride in the organization. Common CSR actions include: The term "social license" was introduced in 1997 and has since been applied in multiple resource extraction industries to describe changes in company-community interactions. This use of social license has included an understanding of how acceptance levels impact resource development operations within these industries. Gunningham et al. state corporations comply with their social license by operating within societal expectations and avoiding activities (or influential elements within them) considered unacceptable, and define social license it as "the demands on and expectations for

8514-435: The arts, education, housing, health, social welfare, and the environment, among others, but excluding political contributions and commercial event sponsorship. Another approach to CSR is to incorporate the CSR strategy directly into operations, such as procurement of Fair Trade tea and coffee. Creating shared value , or CSV, is based on the idea that corporate success and social welfare are interdependent. A business needs

8643-411: The beneficiaries. The term 'funding model' is generally used instead. The model is defined by the organization's vision, mission, and values, as well as sets of boundaries for the organization—what products or services it will deliver, what customers or markets it will target, and what supply and delivery channels it will use. Mission and vision together make part of the overall business purpose . While

8772-531: The benefits, it is important to note that several drawbacks exist, including possible accusations of hypocrisy, the difficulty of measuring the social impact of CSR policies, and oftentimes placing companies at a disadvantage against competitors when prioritizing CSR ahead of advancing a company's R&D. A large body of literature urges businesses to adopt non-financial measures of success (e.g., Deming 's Fourteen Points, balanced scorecards ). While CSR benefits are hard to quantify, Orlitzky, Schmidt and Rynes found

8901-613: The business model as "a statement of how a firm will make money and sustain its profit stream over time." Osterwalder et al. (2005) consider the Business Model as the blueprint of how a company does business. Slywotzky (1996) regards the business model as "the totality of how a company selects its customers, defines and differentiates it offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profits." Mayo and Brown (1999) considered

9030-477: The business model as "the design of key interdependent systems that create and sustain a competitive business." Casadesus-Masanell and Ricart (2011) explain a business model as a set of "choices (policy, assets and governance)" and "consequences (flexible and rigid)" and underline the importance of considering "how it interacts with models of other players in the industry" instead of thinking of it in isolation. Zott and Amit (2009) consider business model design from

9159-478: The business model as an outcome of creating new organizational structures or changing existing structures to pursue a new opportunity. Gerry George and Adam Bock (2011) conducted a comprehensive literature review and surveyed managers to understand how they perceived the components of a business model. In that analysis these authors show that there is a design logic behind how entrepreneurs and managers perceive and explain their business model. In further extensions to

9288-451: The business model has to take into account the capabilities of Web 2.0 , such as collective intelligence , network effects, user-generated content , and the possibility of self-improving systems. He suggested that the service industry such as the airline, traffic, transportation, hotel, restaurant, information and communications technology and online gaming industries will be able to benefit in adopting business models that take into account

9417-427: The business model includes high-level strategies and tactical direction for how the organization will implement the model, it also includes the annual goals that set the specific steps the organization intends to undertake in the next year and the measures for their expected accomplishment. Each of these is likely to be part of internal documentation that is available to the internal auditor. When an organisation creates

9546-526: The case of pipes, firms create goods and services, push them out and sell them to customers. Value is produced upstream and consumed downstream. There is a linear flow, much like water flowing through a pipe. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value. Alex Moazed, founder and CEO of Applico , defines a platform as a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers, of

9675-487: The characteristics of Web 2.0. He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect. He gave the example of the success story of Amazon in making huge revenues each year by developing an open platform that supports a community of companies that re-use Amazon's on-demand commerce services. Jose van Dijck (2013) identifies three main ways that media platforms choose to monetize, which mark

9804-700: The companies is to obtain and maintain the Social License to Operate. Based on the Requisite Organization , to achieve this goal, a company needs to: A positive relationship has been shown to exist between CSR and a firm's corporate financial performance. However, results from these analyses may need to be examined under different lenses for emerging and developed economies, especially since firms based in emerging economies oftentimes have weak firm-level governance. For companies operating in emerging markets, engaging in CSR practices enables widespread reach into

9933-406: The company as the social contract the company has with the social license holders (employees, trade unions, communities, government) for them to manifest positive intention to support the business short- and long-term objectives by "providing managerial leadership that nurtures the social good and also gives the foundation for sustainable growth in organizational results." The primary objective for

10062-456: The company for a company that is a better corporate citizen: and companies may be under ongoing legal challenge. Issues related to the government's measurement of corporations' social license include its role in licensure processes, the penalties for non-compliance, or the community's ability to halt a project if a corporation is not responsive to their concerns, are still subject to global concern. Regardless of government involvement, social license

10191-540: The company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others. From an ethical perspective, some businesses will adopt CSR policies and practices because of the ethical beliefs of senior management: for example, the CEO of outdoor-apparel company Patagonia, Inc. argues that harming the environment is ethically objectionable. Proponents argue that corporations increase long-term profits by operating with

10320-600: The concept of business model in the context of reporting a lessor's lease income and lease expense within their joint project on accounting for leases. In its 2016 lease accounting model, IFRS 16 , the IASB chose not to include a criterion of "stand alone utility" in its lease definition because "entities might reach different conclusions for contracts that contain the same rights of use, depending on differences between customers' resources or suppliers' business models." The concept has also been proposed as an approach for determining

10449-492: The context of accounting for purposes of public reporting. According to the Oxford English Dictionary, the term "business model", a compound of business and model , was first used in 1832 in the sense of "a plan for the operation of a business". Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the " razor and blades business model " or

10578-545: The context of theories of globalization , neoliberalism , and late capitalism . Since the 1960s, corporate social responsibility has attracted attention from a range of businesses, academics and stakeholders and been referred to by a number of other terms, including "corporate sustainability", "sustainable business", "corporate conscience", "corporate citizenship", "purpose", "social impact", "conscious capitalism ", and "responsible business". A wide variety of definitions have been developed, but with little consensus. Part of

10707-499: The context. BMA can be innovative or not, depending on the degree of novelty of the changes implemented. As a consequence of the new context, several business model elements are promoted to answer those challenges, pivoting the business model towards new models. Companies adapt their business model when someone or something such as COVID-19 has disrupted the market. BMA could fit any organization, but incumbents are more motivated to adapt their current BM than to change it radically or create

10836-427: The deceased. Institutions may honor benefactors by displaying their names or even naming buildings or the institution itself after them. When the recipient provides something of substantial value in return, the transaction is usually not labeled as charity. In the past, many charitable organizations followed a "charitable model" in which donors gave to conglomerates that then distributed to recipients. Examples include

10965-447: The definition problem has arisen because of the different interests represented. A business person may define CSR as a business strategy, an NGO activist may see it as ' greenwash ' while a government official may see it as voluntary regulation. "In addition, disagreement about the definition will arise from the disciplinary approach." For example, while an economist might consider the director's discretion necessary for CSR to be implemented

11094-475: The design logic, George and Bock (2012) use case studies and the IBM survey data on business models in large companies, to describe how CEOs and entrepreneurs create narratives or stories in a coherent manner to move the business from one opportunity to another. They also show that when the narrative is incoherent or the components of the story are misaligned, that these businesses tend to fail. They recommend ways in which

11223-426: The development of appropriate measures and reporting techniques." Modern CSR has a wide range of different standards, frameworks and metrics for reporting and disclosing the social, environmental and economic issues. However, there is no single, fixed standard and the complex, dynamic and contextual nature of CSR means different companies and stakeholders adopt different approaches depending on their needs. There are

11352-491: The early history of business models it was very typical to define business model types such as bricks-and-mortar or e-broker. However, these types usually describe only one aspect of the business (most often the revenue model). Therefore, more recent literature on business models concentrate on describing a business model as a whole, instead of only the most visible aspects. The following examples provide an overview for various business model types that have been in discussion since

11481-452: The employed resources." Businesses have changed when the public came to expect and require different behavior [...] I predict that in the future, just as in the past, changes in public attitudes will be essential for changes in businesses' environmental practices. Most consumers agree that while achieving business targets, companies should engage in CSR efforts at the same time. Most consumers believe companies doing charity work will receive

11610-427: The entrepreneur or CEO can create strong narratives for change. Berglund and Sandström (2013) argued that business models should be understood from an open systems perspective as opposed to being a firm-internal concern. Since innovating firms do not have executive control over their surrounding network, business model innovation tends to require soft power tactics with the goal of aligning heterogeneous interests. In

11739-559: The environment, and how others perceive competitor CSR strategy. Meehan, Meehan and Richard developed a model known as the 3C-SR model, published in a frequently cited article in 2006, which aimed to offer "a new strategic approach to corporate responsibility". Their model sought to fill the gap between corporate social responsibility definitions and strategy, which the authors perceived to be an issue, and to provide guidance to managers on connecting businesses with ethically-aware consumers. An approach described by Tóth Gergely and published by

11868-525: The feeling derived from the practice of charitable giving as having an impact on how much and how often people give The "warm glow" of giving has been described as an intrinsic benefit received from charitable giving as first described by James Andreoni. Feelings derived from giving can be positive or negative for individuals. Most forms of charity focus on providing basic necessities such as food, water, clothing, healthcare, and shelter. However, other actions can also be considered charitable: visiting

11997-512: The form of philanthropic public projects that empower and help many. Dāna leads to one of the perfections ( pāramitā ). This can be characterized by unattached and unconditional generosity, giving and letting go. Historical records, such as those by the Persian historian Abū Rayḥān al-Bīrūnī who visited India in early 11th century, suggest dāna has been an ancient and medieval era practice among Indian religions. Effective altruism

12126-487: The government often drives them towards private and de-politicized actions like charity. Her research explored the consequences of philanthropic actions and suggested more effective uses of philanthropic funds. She argued for increased federal funding for welfare policies and criticized philanthropy for diverting resources from public support. In medieval Europe during the 12th and 13th centuries, Latin Christendom underwent

12255-414: The identifiable behaviour of individual businesses risks not including what he calls " unincorporated market behaviour" within the scope of CSR - actions attributable to market processes, and also calls for other factors including "brand citizenship" and "illegitimate, informal or illegal activity" to be considered as part of a more complete picture. The term "brand citizenship" has been put forward because

12384-487: The impacts of their operations on society and the environment. On the other hand, the horsemeat scandal of 2013 in Europe affected many food retailers, including Tesco, the largest retailer in the United Kingdom, leading to the dismissal of the supplier. Corporate social irresponsibility from suppliers and retailers has greatly affected the stakeholders who lost trust in the affected business entities. Although sometimes it

12513-438: The imprisoned or homebound, ransoming captives, educating orphans, and supporting social movements. Donations to causes that indirectly benefit the less fortunate, like funding cancer research, also fall under the category of charity. Regarding religious aspects, recipients of charity may offer prayers for the benefactor. In medieval Europe, it was customary to provide meals to the poor at funerals in exchange for their prayers for

12642-518: The interests of the firm and that which is required by law". Furthermore, businesses may engage in CSR for strategic or ethical purposes. From a strategic perspective, CSR can contribute to firm profits, particularly if brands voluntarily self-report both the positive and negative outcomes of their endeavors. In part, these benefits accrue by increasing positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions. CSR strategies encourage

12771-458: The invention of term business model : Other examples of business models are: Technology centric communities have defined "frameworks" for business modeling. These frameworks attempt to define a rigorous approach to defining business value streams. It is not clear, however, to what extent such frameworks are actually important for business planning. Business model frameworks represent the core aspect of any company; they involve "the totality of how

12900-405: The issue through personal recommendations from friends or influencers on social media platforms, which can serve as a more subtle form of advertisement. Finally, a third common business model is monetization of data and metadata generated from the use of platforms. Malone et al. found that some business models, as defined by them, indeed performed better than others in a dataset consisting of

13029-438: The larger economic forces acting upon them. Local actors are more likely to have values similar to those of stakeholders, have established some history in the area, and have had the time to develop meaningful relationships within the community. This shared experience shaped the process of acquiring a social license. Nonlocal actors are likely to experience a much lesser degree of social license than local actors. Furthermore, many of

13158-475: The largest U.S. firms, in the period 1998 through 2002, while they did not prove whether the existence of a business model mattered. In the healthcare space, and in particular in companies that leverage the power of Artificial Intelligence, the design of business models is particularly challenging as there are a multitude of value creation mechanisms and a multitude of possible stakeholders. An emerging categorization has identified seven archetypes. The concept of

13287-471: The means they need to survive. The impoverished, particularly widows, orphans, the ailing, and the injured, are generally considered appropriate recipients of charity. People who cannot support themselves and lack external means of support sometimes become " beggars ," directly seeking help from strangers in public. Some groups believe that charity is best directed towards other members of their specific group. Although giving to those closely connected to oneself

13416-683: The measurement and classification when accounting for insurance contracts . As a result of the increasing prominence the concept of business model has received in the context of financial reporting, the European Financial Reporting Advisory Group (EFRAG), which advises the European Union on endorsement of financial reporting standards, commenced a project on the "Role of the Business Model in Financial Reporting" in 2011. Business model design generally refers to

13545-526: The most, followed by Mainline Protestants and Roman Catholics. A 2021 study discovered that when potential donors had to choose between two similar donation targets, they were more likely to choose not to donate at all. A philosophical critique of charity can be found in Oscar Wilde 's essay The Soul of Man Under Socialism , in which he refers to it as "a ridiculously inadequate mode of partial restitution... usually accompanied by some impertinent attempt on

13674-455: The needs-based approach, perpetuating the misconception that charity alone can address basic needs insecurity. Chilton argued for increased government accountability, transparency, and public participation, along with recognizing the vulnerability and discrimination caused by existing policies. She advocated for federal legislation to establish social safety nets through entitlement programs, such as SNAP . Chilton concluded with four strategies for

13803-434: The opportunities for competitive advantage from building a social value proposition into corporate strategy. CSV gives the impression that only two stakeholders are essential – shareholders and consumers. Many companies employ benchmarking to assess their CSR policy, implementation, and effectiveness. Benchmarking involves reviewing competitor initiatives, measuring and evaluating the impact those policies have on society and

13932-574: The ownership of what one considered or identified as one's own, and investing the same in a recipient without expecting anything in return". Karna , Mahabali and Harishchandra are heroes also known for giving charity. The earliest known discussion of charity as a virtuous practice, in Indian texts, is in Rigveda . According to other ancient texts of Hinduism, dāna can take the form of feeding or giving to an individual in distress or need. It can also take

14061-409: The part of the sentimentalist to tyrannize over [the poor's] private lives." He also views it as a remedy that perpetuates the "disease" of poverty instead of curing it. Slavoj Žižek approves of Wilde's thoughts and adds his own interpretation of the effect of charity on the charitable: When confronted with a starving child and told, "For the price of a couple of cappuccinos, you can save her life!"

14190-504: The perspectives of design themes and design content. Design themes refer to the system's dominant value creation drivers and design content examines in greater detail the activities to be performed, the linking and sequencing of the activities and who will perform the activities. Developing a framework for business model development with an emphasis on design themes, Lim (2010) proposed the environment-strategy-structure-operations (ESSO) business model development which takes into consideration

14319-476: The platform. This infrastructure enables interactions between participants. The magnet creates pull that attracts participants to the platform. For transaction platforms, both producers and consumers must be present to achieve critical mass. The matchmaker fosters the flow of value by making connections between producers and consumers . Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. Chen (2009) stated that

14448-462: The poor, and these charities now constitute the majority of charitable giving in terms of monetary value. These institutions include orphanages , food banks , religious institutes dedicated to helping the poor, hospitals , organizations that visit the homebound and imprisoned, and many others. These institutions allow individuals who may not have the time or inclination to care for the poor directly to enable others to do so. They provide funding for

14577-439: The poorest fifth of Americans donated 4.3% of their income, while the wealthiest fifth donated 2.1%. In absolute terms, this translated to an average donation of $ 453 from an average income of $ 10,531, compared to $ 3,326 from an income of $ 158,388. Research also indicates that "individuals who are religious are more likely to give money to charitable organizations" and tend to give more than those who are not religious. A study by

14706-478: The public perception of an organisation may be associated with its branding rather than its corporate identity: McIntosh uses Virgin as an example. Similarly, Anne Bahr Thompson uses the same term and observes that companies adopting socially responsible behaviours are primarily investing in their reputations . In the 21st century, corporate social responsibility in the supply chain has attracted attention from businesses and stakeholders. A corporation's supply chain

14835-530: The religious authority. Sadaqa is a voluntary charity or contribution. Sadaqa can be given using money, personal items, time, or other resources. There is no minimum or maximum requirement for sadaqa . Even smiling to other people is considered a sadaqa . In Hinduism, Buddhism, and Jainism, the practice of charity is called dāna or daana . It is the virtue of generosity or giving. Dāna has been defined in traditional texts, state Krishnan and Manoj, as "any action of relinquishing

14964-505: The religious prescriptions of tzedakah and also beyond the wider concept of ethical obligation . In Islam , there are two methods of charity: zakat and sadaqa . Zakat is one of the five pillars upon which the Muslim religion is based. 2.5% of one's savings is compulsory to be given as zakat per Islamic calendar year, provided that the saving is beyond the threshold limit, called nisab , usually determined by

15093-682: The reports vary widely in format, style, and evaluation methodology (even within the same industry). Critics dismiss these reports as lip service, citing examples such as Enron 's yearly "Corporate Responsibility Annual Report" and tobacco companies' social reports. In South Africa, as of June 2010, all companies listed on the Johannesburg Stock Exchange (JSE) were required to produce an integrated report in place of an annual financial report and sustainability report. An integrated report reviews environmental, social, and economic performance alongside financial performance. This requirement

15222-515: The researchers conducted a regression analysis and preceded the analysis with the provision of several measures that they utilized to serve as proxies for key financial performance indicators (i.e. return on assets serves as a proxy for profitability). Initially, CSR emphasized the official behaviour of individual firms. Later, it expanded to include supplier behaviour, the uses to which products were put, and how articles were disposed of after they lost value. Malcolm McIntosh notes also that focussing on

15351-891: The resources affected by forest management are held in the public trust, so it is essential for both industry actors and community stakeholders to feel engaged and involved in decisions regarding local natural resource management. Baines and Edwards shared similar findings in New Zealand's aquaculture sector regarding the importance of relationships and communication between industry and local stakeholders. They find that social license depends on relationships and building trust. Smaller, local companies tend towards relationships that are relational as opposed to transactional, possibly due to their ongoing community presences and communication abilities, which are better for fostering these relationships and trust building. In research of Requisite Organization , Elliott Jaques defines Social License to Operate for

15480-628: The rising concerns on ethical issues in businesses. A review of 14,523 articles found that stakeholder perspective is the most prevalent dimension of corporate social responsibility. This view is reflected in the Business Dictionary that defines CSR as "a company's sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on

15609-436: The root causes of inequality. Niebuhr states that charity can be a way for the powerful to maintain control while avoiding addressing systemic issues. Peter Singer , a philosopher, criticizes much charitable giving, particularly when it favors recipients who are nearby and visible. He argues that the interests of all individuals should be given equal consideration, regardless of their location or citizenship status. In 2012,

15738-592: The social initiative done by the company is not aligned with other company goals it will have a negative impact. Mohr et al. (2001) and Groza et al. (2011) also emphasise the importance of reaching the consumer. Some commentators have identified a difference between the Canadian (Montreal school of CSR), the Continental European , and the Anglo-Saxon approaches to CSR. It has been described that for Chinese consumers

15867-415: The tooling company Hilti shifted from selling its tools to a leasing model. They suggested that the differences are so profound (for example, lack of resource in the former case and inertia and conflicts with existing configurations and organisational structures in the latter) that it could be worthwhile to adopt different terms for the two. They suggest business model design to refer to the process of crafting

15996-510: The true message is: "For the price of a couple of cappuccinos, you can continue in your ignorant and pleasurable life, not only without feeling guilty but even feeling good for participating in the struggle against suffering!" In his 1845 treatise on the condition of the working class in England , Friedrich Engels highlights that charitable giving, whether by governments or individuals, is often an attempt to mask unpleasant suffering. Engels cites

16125-487: The work and support those who do it. Institutions can also work to distinguish genuine need from fraudulent claims of charity. Early Christians particularly emphasized the care of the less fortunate as the responsibility of the local bishop. Various studies have examined who gives more to charity. A study in the United States found that as income decreases, charitable giving increases as a percentage of income. For instance,

16254-458: Was defined by Sheehy as "international private business self-regulation". Sheehy examined a range of different disciplinary approaches to defining CSR. The definitions reviewed included the economic definition of "sacrificing profits", a management definition of "beyond compliance", institutionalist views of CSR as a "socio-political movement," and the law's focus on directors' duties. Further, Sheehy considered Archie B. Carroll's description of CSR as

16383-444: Was employed by Adobe , a software developer that gave away its document reader free of charge but charged several hundred dollars for its document writer. In the 1950s, new business models came from McDonald's Restaurants and Toyota . In the 1960s, the innovators were Wal-Mart and Hypermarkets . The 1970s saw new business models from FedEx and Toys R Us ; the 1980s from Blockbuster , Home Depot , Intel , and Dell Computer ;

16512-545: Was implemented in the absence of formal or legal standards. An Integrated Reporting Committee (IRC) was established to issue guidelines for good practice. One of the reputable institutions that capital markets turn to for credible sustainability reports is the Carbon Disclosure Project , or CDP. Consumers of goods and services should verify corporate social responsibility and the results of reports and efforts. The accounting, auditing, and reporting resources provide

16641-450: Was primarily a way to elevate one's social status and affirm existing hierarchies of power. In religious Judaism , tzedakah —a Hebrew term literally meaning righteousness but commonly used to signify charity —refers to the religious obligation to do what is right and just. Because it is commanded by the Torah and not voluntary, the practice is not technically an act of charity; such

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