Behavioral Perspectives on B Corps

Abstract

The values driving entrepreneurs are evolving from shareholder wealth maximization towards a more holistic approach wherein business impacts on all stakeholders are considered. This change has been driven in part by a societal cultural shift focused on promoting a sustainable future. To meet this cultural change demanding a balance of profit and ethics, novel entities (e.g., B Corps) have emerged in the private sector. In this chapter, we engage with behavioral perspectives to explore B Corps’ achievements, opportunities, and challenges. We first outline the transition from shareholder to stakeholder considerations, as we believe it constitutes the philosophical ethos of social enterprises. We then focus in turn on four of the five areas used by B Lab’s Impact Assessment-governance, workers, customers and consumers, and community-as they are most appropriate for an exploratory analysis of their interaction with human behavior. Specifically, in governance, we approach the topic of corporate ethics and transparency, as well as how the values of social entrepreneurs shape a firm’s culture. We then outline the relationship between purposeful work and employee performance and examine how B Corps have applied effective practices on social inclusion and employee well-being, in the workers’ section. Concerning customers and consumers, we explore a range of perspectives, including consumer motivations to purchase from B Corps, caveats of ethical consumerism, and how B Corps can capitalize on decision-making research to inspire consumer change. Additionally, we present our research on public awareness and perceptions of B Corp trustworthiness and greenwashing. Finally, the last section-community-highlights B Corps’ civic engagement and communication with their communities through social media, corporate volunteering, and charity work, among others.