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3 tips for social entrepreneurs

3 tips for social entrepreneurs

Dawn Harris is leading the way in social enterprise research.

Money isn’t everything, especially in social entrepreneurship. So why not emphasize the human side of things?

That is the question put forth by Dawn Harris, PhD, associate professor of management at Quinlan, in her latest article, "The Role of Human Capital in Scaling Social Entrepreneurship: How Can Social Entrepreneurship and Human Assets Contribute to the Growth of Business?"

Cases in point

The article, recently published in the Journal of Management for Global Sustainability (from the International Association of Jesuit Business Schools), focuses on two case studies: Solar Sister of Uganda and E-Health Point of India. Solar Sister sells alternative-fuel lamps in a country largely reliant on kerosene—a combustible liquid often within easy reach of children. E-Health Point provides clean water and healthcare services in rural India.

In interviewing directors of these businesses, Harris and her research partner, Yasemin Kor, built a model for how human assets can contribute to a company’s operations and mission. In it, they outline three critical components:

  1. Human capital acquisition: skill development; getting the right people for the job
  2. Human capital development: training, motivating, and rewarding employees
  3. Human capital retention: preventing unwanted turnover

Harris says these organizations face particular challenges that make human assets valuable.

“Social ventures often have resource scarcity,” she says. “For example, the legal setup is often weak where these businesses are operating. So human assets have to function differently; they have to learn quickly and have a strong entrepreneurial drive.”

Greasing the wheel

There are other considerations to take into account when looking at this model, Harris adds. First, it is important to consider specialized skills, not just generic skills and education. Second, it is essential that informal training and incentives are promoted. Last, in the recruitment stage, the skill sets of the candidates should be assessed alongside their values, and how well each aspect fits with the social venture.

“We wanted to start building a model so that social entrepreneurs don’t have to reinvent the wheel,” Harris says.  “We want to continue to expand on this in our future research.”


Want more? Read Harris's article in the Journal of Management for Global Sustainability.

Defining 'social enterprise'

Social Enterprise

Professors Uğur Uygur and Alexei Marcoux at work.

TOMS Shoes has a simple mission: For every pair it sells, another is donated to a child in need. This model might not seem like the best for the bottom line, but it's what most people consider a “social enterprise.”

Why?

Quinlan Professors Uğur Uygur and Alexei Marcoux set out to answer that question in their latest paper, The Added Complexity of Social Entrepreneurship: A Knowledge-Based Approach, recently published by the Journal of Social Entrepreneurship.

Theirs is a philosophical examination, looking at what separates socially driven businesses from the rest of the pack.

“It’s something more than having a social benefit flowing from business,” Marcoux says, “because just about all businesses have some kind of social benefit flowing from them.”

After poring over scores of business models, Uygur and Marcoux settled on the distinction that social enterprises must consider knowledge sharing an essential part of their missions, lest they be deemed chiefly self-serving.

In order to earn the moniker of a “social enterprise,” then, a company must ask itself what matters more: keeping information proprietary to benefit the bottom line or sharing it with anyone committed to advancing its cause.

“Once social entrepreneurs finds a novel way to solve a social problem, it’s difficult for them not to share that knowledge with others who want to solve a similar problem,” Uygur says.

In the case of TOMS Shoes, the one-for-one model has largely been replicated, placing it squarely in the “social enterprise” camp. That's one foothold, according to Uygur and Marcoux, that it shouldn't have to share with just anyone.

The businessman's survival guide

Abol Profile

With all the change in today's world, businesses must adapt quickly—or be doomed to fail.

That was the resounding salvo of a keynote address delivered by Abol Jalilvand to the Financial Executive Institute’s Chicago Chapter in March.

Jalilvand, Ralph Marotta Professor of Free Enterprise and Professor of Finance at Loyola’s Quinlan School of Business, has developed some strategies to guide businesses toward success. His talk, “Flexibility, Innovation Strategy, and Performance under Turbulent Environments: Evidence from a Multi-Industry Sample”—based on research he has conducted with Quinlan Associate Professor of Management Sung Min Kim—underscores that few companies are highly profitable, only a small fraction of firms (just 0.1 percent in a sample of six million) live to age 40, and many industries are in need of major restructuring if they want to prosper.

“This requires three key elements of leadership,” Jalilvand says. “1) Strong and pro-innovation management, 2) a balanced financial strategy, and 3) the ability to effectively manage both in a turbulent environment.”

In an effort to provide organizations with a “how-to” for responding to changing environments, Jalilvand and Kim have developed a model for corporate adaptability. Successful firms, they say, are those that simultaneously pursue investments in core efficiencies and future growth opportunities by maintaining a match between their slack resources type and the nature of investment opportunities they are facing.

Jalilvand and Kim’s research is unusual in that it brings together principles from both finance and strategy. And it has spurred Jalilvand to develop a new Quinlan course, Financial Strategy and Strategic Change, which will be offered next spring. 

“What we’re trying to do is develop some guidelines so we can look at an industry and highlight how it can improve strategic and financial decision making to react more smoothly and appropriately to change,” Jalilvand says. “We predict as more adaptable companies achieve higher profitability over time, others will be pressured to better manage the balance between their resources and investment strategies to become more adaptable and responsive to the changing environments.”

'Best paper' award a sweet victory for Suzy Fox

Winning a “best paper” award from a professional journal is an achievement for any researcher. But for Suzy Fox, professor of human resources and employee relations in Loyola’s Quinlan School of Business (as well as colleague Paul E. Spector and three others who recently earned that distinction), the victory is particularly sweet. Their paper, which challenged conventional thinking in the field of voluntary work behavior, was submitted to several journals over five years before it was finally published.

So having the Journal of Occupational and Organizational Psychology single it out as its best paper of 2012 has been especially gratifying.

“The award is a validation that the top people in the field recognized this as an important contribution,” Fox says. 

The paper, titled “The Deviant Citizen: Measuring Potential Positive Relations Between Counterproductive Work Behavior and Organizational Citizenship Behavior,” calls long-held assumptions and empirical findings into question. For 15 years, researchers—including Fox and Spector themselves —have found that counterproductive work behavior (which harms or intends to harm organizations) and organizational citizenship behavior (which helps or intends to help organizations) are inversely related, so that a person who demonstrates more counterproductive work behavior shows less organizational citizenship behavior.

Fox’s team’s paper refutes that model, in part because they found that the scales typically used to measure such behaviors are flawed—and that work behavior itself is more complex. After devising a new organizational citizenship behavior scale that measures purely positive citizenship behaviors (and no counterproductive work behavior, as previous ones did), and testing it in several studies, they turned previous research on its head.

“What we found, to our surprise, was that when we used really distinct scales, counterproductive work behavior and organizational citizenship behavior were often positively related,” she says.

As an example, she cites a stressful work environment that might prompt an employee to put in extra hours but then also feel anger toward coworkers who don’t do the same.

Now, with an award under her belt and her new scale in use by others, Fox is philosophical about the sometimes frustrating journey to getting research published. 

“It’s the typical process for critical or innovative work,” she says. “And the result is an improved paper.”

Vefa Tarhan making waves in financial world

Vefa Tarhan

At Loyola University Chicago's Quinlan School of Business, Professor Vefa Tarhan is known primarily as a corporate finance specialist. But in his native Turkey, he has achieved something of a rock star status. During visits to the country, where his expertise places him frequently in the media, Tarhan is often approached on the street, at airports, or in restaurants.

And word is spreading.

In early March, Tarhan was the featured speaker at the British House of Commons, where he delivered a 90-minute address, “The Turkish Economy at the Crossroads: Its Recent Past and Future Vulnerabilities,” to an audience that included the Labour Party, the shadow minister of the economy, think-tank leaders, economists, and the media. Organized by the Labour Friends of Turkey and the Centre for Policy Analysis and Research on Turkey, the event gave Tarhan an opportunity to speak not only about the Turkish economy—the world's fastest growing, just after China’s—but also about what other countries still face after the mortgage crisis of 2007.

“People want to know, why is it taking the world’s economies this long to recover?” says Tarhan, who attributes ongoing challenges to corporate fear over global instability. “It’s what’s preventing firms all over the world from making investments. If you don’t build factories, you don’t hire people—and the economy doesn’t improve.”

Tarhan addressed this issue further at the London School of Economics, during a talk on “Global Uncertainties and the Future of the Euro.”

But his views aren't always met with delight. In fact, he has gained notoriety for his sometimes controversial arguments in favor of dismantling the eurozone (with each of the 17 eurozone countries returning to their former currencies) because of what he sees as systemic flaws and the constant threat of countries in need of rescue—Cyprus being the latest.

“The system is bound to collapse because it wasn’t designed correctly, and the negatives of the euro system far outweigh the benefits,” he says. “They’re better off saying, ‘We made a mistake’—and the sooner the better.”

Still, Tarhan, who was honored this year with the Scientist with a Strategic Vision award from the Turkish Asian Center for Strategic Studies, prefers solutions to criticisms.

It’s that sort of creative thinking that has made him an in-demand speaker, news source, and adviser to Turkish leaders, which pays off at home as well.

“I bring back the preparation I make for a speech and use it as well in my teaching and research,” he says, “thereby advancing the cause of Quinlan.”

Are you a typical dude?

Zayer profile

Probably not. But most advertisers think differently.

It’s time for those advertisers to face reality, researchers say. In fact, some men will actually avoid ads that depict them in an unrealistic or unflattering light.

“There’s a misconception that men are always tough and that they are not impacted by these advertisements,” says Linda Tuncay Zayer, a Quinlan professor of marketing who co-authored the research with her colleague, Cele Otnes, of the University of Illinois. 

But what Zayer and Otnes found was that some men are offended by the hyper-masculine stereotypes portrayed in certain ads, while others say the ads can leave them feeling inadequate or vulnerable. So much so, Zayer says, that some men may ignore the ads altogether.

Zayer has been studying consumer behavior for more than a decade. But while scores of studies have been done on how women react to advertisements, few researchers have focused on men.

“I wanted to know how men respond to these idealized depictions of masculinity in advertising,” Zayer says.

So she and Otnes interviewed Gen-X males (men born between 1965 and 1981) to find out what they thought about print ads pulled from magazines such as Sports Illustrated, ESPN Magazine, Maxim, and Playboy. Many of the men said the ads were so unrealistic—Six-pack abs! Bikini models! Hot tubs!—that they simply ignored the message. And that can spell big trouble for companies.

“Advertisers need to be conscious of the images they’re putting out in the marketplace,” Zayer says, “because sometimes it can have a negative effect on men.” 

What can companies do to reach men?

“They really need to find positive messages of masculinity that resonate with the consumers,” Zayer says. “Something like fatherhood can be a really powerful message that connects with men.” 

Zayer recalls the Volkswagen commercial from 2011 in which a young boy, dressed as Darth Vader, tries to use “the Force” to start his dad’s car. After trying for a few seconds with no success, the boy suddenly gets the car to fire up—much to his amazement. The camera then cuts away to show the father inside the house, holding the car’s remote starter and winking at his wife.

That, Zayer says, is a great example of an advertiser moving beyond stereotypes.

“Men are multifaceted and fulfill lots of different roles,” she says. “So let’s see them in lots of different roles.”
 

 

Linda Tuncay Zayer

Hometown: Grew up in Northwest Indiana, now lives in Wicker Park

Professor at Quinlan since: 2005

Courses taught: Consumer behavior to graduate (MARK 467) and undergraduate students (MARK 310); research practicum seminar to business honors students (BHNR 353)

Notes from the Nile

Human resources: 7 tips for hanging on to your top talent

Dow Scott Research

Economic recovery usually represents a positive: Manufacturers step up production, companies see their profits rise, and more people start landing jobs. But for human resource professionals, that can be a double-edged sword.

“The one thing that’s keeping chief HR officers awake at night is trying to retain key employees as the economy improves,” says Dow Scott, PhD, human resources professor at Loyola’s Quinlan School of Business. “This is particularly true of industries that don’t recover as quickly. The ones that come out of the recession the quickest can grab up all the talent.”

This challenge prompted Scott, along with Tom McMullen and Mark Royal of the Hay Group management-consulting firm, to examine how some organizations retain their top talent—an effort that greatly impacts the bottom line. 

“It generally costs organizations 200 percent of an employee’s base salary to find a suitable replacement,” Scott says. “But for high-talent individuals, the costs are almost impossible to calculate because disruption in those jobs can have a tremendous impact on the organization.”

To determine best practices, what causes top talent to quit, and incentives for keeping the best and brightest on board, Scott and his team surveyed 600 reward professionals, WorldatWork Association members, and Hay Group registered website users. 

Based on theses responses, the team came up with the following list of recommendations for companies looking to hang on to high-performing players:

  • Develop clarity around what defines “key employees” and identify the specific employees you consider top talent.
  • Have a plan for developing and managing key employees.
  • Ensure that the organization’s reward system is relevant, differentiated, and fair.
  • Have development and succession planning processes in place for each key employee.
  • Keep key employees apprised of their development and advancement opportunities.
  • Monitor voluntary turnover among key employees to understand why they leave.
  • Put counteroffer policies in place and identify those individuals or positions where counteroffers will be made.

The team presented these findings at a Nov. 1 conference at Loyola’s Water Tower Campus. The work will be published soon in WorldatWork Journal.

Dow Scott


Dow Scott

Hometown: Grew up in and around the Nez Perce National Forest in Idaho

Professor at Quinlan since: 1996

Courses taught: Compensation, Incentive Pay and Employee Benefits, Human Resource Development, and Human Resource Management

Why attack ads work

why-attack-ads-work

If you’re sick of all those negative political ads that run on television before Election Day, well, you’re out of luck. Those ads—which many people say they hate—run for a reason: They work.

So says Joan Phillips, a Quinlan professor of marketing who has researched how voters react to negative political ads. But if so many people say they can’t stand the ads, why are they so effective?

It’s the same reason why people are more likely to watch the weather when a hurricane is coming than when it’s sunny and 70 degrees outside, Phillips says.

“We pay more attention to negative information,” she says. “It’s more salient, it scares us, and we’re more likely to remember it.”

To see why negative ads work, Phillips and two colleagues developed a field study in 2004 using real TV advertisements from the George W. Bush and John Kerry presidential election. The researchers asked college students to rate their level of support for the candidates on a seven-point scale, from “definitely Bush” to “definitely Kerry” (with five points in between).

They then showed the students one of four political ads and asked them to re-rate their levels of support. Roughly 14 percent of the students said the attack on their candidate made them support him even more, the researchers found. But an equal percentage of students said the advertisement weakened their support and caused them to move closer to the opponent—the one who ran the negative ad.

Although no one jumped from “definitely Bush” to “definitely Kerry,” some students who were leaning toward one candidate did switch to the other side. And in a tightly contested race, like this year’s presidential election, getting even a few people to change their vote can make all the difference in the world.

“That’s a huge, huge gain for a candidate,” Phillips says.

Negative ads tend to work best when people are passionate about the campaign, such as a presidential election where the stakes are high, Phillips says. The ads, however, become less effective as you move down the political ladder and into smaller races.

“The voter may just discount it,” she says. “They’ll think: ‘I don’t know who to believe, I don’t care, it doesn’t really matter to me.’ ”

So what’s the bottom line?

 “We’re not saying positive ads aren’t good,” Phillips says. “It’s just that negative ads are effective.”

  mug of Quinlan professor Joan Phillips

Joan Phillips

 Hometown: Grew up in New York, now lives in the Gold Coast

 Professor at Quinlan since: 2008

 Courses taught: Marketing strategies to undergraduate students (MARK 390) and research methods in marketing to graduate students (MARK 461); also teaches two courses for Quinlan’s Executive MBA program

A supply chain success story

Supply chain scholar
Natalie Miknaitis won a $2,000 scholarship from the Council of Supply Chain Management Professionals.

With an undergraduate degree in English, Natalie Miknaitis found herself in unchartered waters in February 2011 when she began her MBA at Loyola’s Quinlan School of Business.

But the introductory classes in operations management struck a chord, and now, just a little more than a year later, Miknaitis, 24, has won the Future Supply Chain Stars graduate-level scholarship from the Council of Supply Chain Management Professionals.

To compete for the $2,000 award, Miknaitis submitted an essay that focused on the benefits of a “green” supply chain management—moving products from one place to the next in the most economical, environmentally friendly, and efficient way possible.

“The supply chain contains the greatest potential for sustainable change within a business since it manages many of the business processes that use natural resources and also because the nature of supply chains stretches beyond the company itself, allowing positive changes to be implemented with partnering suppliers,” her paper stated.

The essays were judged on several criteria, including coherence of arguments presented, evidence of critical thinking and analysis, and relevance and poignancy of topic, says Charles Slutz, chair of the Chicago CSCMP’s Education Committee, which bestowed the award.

Sustainability is a subject that is near and dear to Miknaitis’s heart. She researches sustainability issues outside of class and did an independent study of sustainability and operations management as part of her coursework last winter. She is also a huge proponent of green living.

“Every decision I make, I try to consider the impact that it has on the planet and other people,” Miknaitis says. “The reason I push this so frequently in my projects at the business school is that I think corporations and businesses are also duty-bound to preserve the planet.”

With the rise in fuel and gas prices and environmental regulations, the issue is gaining the attention of industry leaders.

“I think sustainability is crucial to a business’s survival,” Miknaitis says. “Addressing these issues and finding alternative solutions is really going to be an asset when it comes to competition.”

This is the third time in four years that a Loyola student has taken home the CSCMP award, says Maciek Nowak, PhD, director of Loyola’s Master of Science in Supply Chain Management program, which will be the only such accredited program in Illinois when it debuts this fall.

“Chicago is one of the premier international supply chain hubs, but there have been no formal supply chain management programs,” he says. “Loyola saw a vacuum in the supply chain world.”

Since announcing the program, the feedback from industry leaders in search of supply chain talent has been extremely positive, Nowak says.

After she receives her MBA with a concentration in operations management/sustainability in May and gets married in July, Miknaitis plans to look for a position in the supply chain field. With her scholarship—which includes a free, one-year membership in the CSCMP and distribution of her resume to all who attended the council’s spring seminar—she’s off to a great start.

Loyola's Quinlan School of Business is an established leader in the pursuit of research and scholarship in a wide range of business-related fields and specialties. Our faculty of acclaimed experts successfully combines professional experience and applied research with innovative and engaging classroom instruction. And our professors have been published in some of the nation's most esteemed professional journals.

The broad array of faculty research interests includes such topics as: ethical issues in corporate governance; global monetary instability; the impact of TIFs on property values; bank regulation and systematic risk; interpersonal behavior in high-stress group work; marketing as a cultural belief system; supply chain management; and workforce agility.