Hospitality for Society: Hospitality Driving Positive Social Impact

“The only shareholder whose interests count is the shareholder who is short-sighted, opportunistic, undiversified, and without a conscience.”

Lynn Stout – The Shareholder Value Myth - 2012

It has been more than a decade since the thought-provoking book of Professor Lynn Stout revised the founding “fable” of the corporation’s legal duty to maximize shareholder wealth. Since then, instances of comments have expanded to actions towards revising our view on the role of corporations.

In the business world, where short-term profit dominates decision-making, social entrepreneurship revives a foundational enterprise principle: serving as a force for societal good. Integrating financial sustainability with a mission to address pressing social and environmental challenges reaffirms that businesses can create value far beyond the accounting bottom line. Therefore, exploring social entrepreneurship is essential for entrepreneurs, hospitality business owners, aspiring entrepreneurs, socially conscious consumers, and business students to thrive in today’s evolving market landscape.

What is Social Entrepreneurship?

At the intersection of charities that depend on donations and traditional businesses focused solely on profit, social enterprises operate with a dual purpose: generating revenue and driving meaningful social change.

This model has gained global traction, with over 10 million social enterprises contributing approximately $2 trillion in revenue annually. Movements like Ashoka, with its 4,000 fellows across 95 countries, and Catalysts 2030, a coalition of over 1,300 organizations committed to the UN Sustainable Development Goals (SDGs), exemplify the scale and potential of social entrepreneurship to transform industries.

In hospitality, the potential is immense. The industry’s reach, cultural significance, and reliance on human connections provide unique opportunities to address critical challenges such as sustainability, inclusivity, and community empowerment.

Characteristics of a Social Entrepreneur

Recent research underscores social entrepreneurs' unique role as innovators and system-changers, effectively bridging the worlds of business and societal impact. Drawing from foundational theories and contemporary studies, several distinctive characteristics emerge:

• Systems Thinking: Social entrepreneurs address complex societal challenges by identifying and tackling root causes rather than symptoms. (Bacq and Alt, 2018; Smith and Besharov, 2019)
• Pro-Social Motivation: Intrinsic motivation rooted in altruistic goals is a hallmark of social entrepreneurs, distinguishing them from traditional entrepreneurs (Maier et al. ,2021; Grimes et al. 2018)
• Resilience and Crisis Adaptability: Social entrepreneurs demonstrate exceptional resilience and improvisation (Santos et al. 2020), particularly during periods of crisis (Hoogendoorn, Pennings, and Thurik, 2020).
• Cross-Sector Collaboration: Successful social entrepreneurs excel in forming partnerships that transcend traditional boundaries, combining expertise, resources, and influence across sectors (Austin, Gutierrez, and Wei-Skillern, 2020).
• Moral Legitimacy: Beyond practical effectiveness, social entrepreneurs are increasingly evaluated on their alignment with ethical and societal values (Maier and Meyer, 2022; Zahra and Wright (2021).

Together, these characteristics illustrate the multifaceted nature of social entrepreneurs, who operate at the intersection of business innovation, ethics, and resilience to drive lasting change.

Framework for understanding social enterprises

The theory-of-change framework is valuable for understanding, operating, and expanding research on social entrepreneurial enterprises. It's revised critical components include:

• Purpose: A mission-driven focus on solving societal challenges, such as poverty, inequality, or climate change (Bacq & Lumpkin, 2021; Santos, 2012)
• Stakeholder Engagement: Collaborative approaches to co-create value with diverse actors, including beneficiaries, policymakers, and private sector partners (Saebi, Foss & Linder, 2019).
• Hybrid Value Creation: organizational structures that blend social and economic objectives, using creative funding and operational models to achieve sustainability and manage tensions between the dual goals. (Maier et al., 2020; Doherty, Haugh, and Lyon, 2019)
• Impact Measurement: Advanced frameworks like the SDG Impact Standards and the Global Reporting Initiative (GRI) allow for rigorous evaluation of a venture’s contributions to society and the environment.

Entrepreneurship vs. social entrepreneurship

Gregory Dees’ seminal work (1998) provides foundational work for understanding the differences between traditional and social entrepreneurs. While both share traits such as creativity, resilience, and a focus on opportunity, Dees highlights critical distinctions rooted in their objectives, value propositions, and operational approaches.

Examples of Businesses with a Purpose

The concept of purpose-driven businesses is familiar but has gained momentum in recent years. Companies like Patagonia, Ben & Jerry’s, and TOMS Shoes have set benchmarks for combining profitability with social good. For instance, TOMS’ "buy one, give one" model redefines consumer engagement, aligning purchasing decisions with tangible social impact.

Large organizations are filing for the status of entreprise à mission to address their impact beyond their factories and offices. Similarly, hospitality businesses are increasingly filing for B Corporation certifications, a testament to their commitment to accountability, sustainability, and stakeholder engagement. Initiatives like the Long-Term Stock Exchange further emphasize the need for businesses to prioritize long-term societal value over short-term gains.

Examples of Social Entrepreneurship in Hospitality

Social impact and its active arm, social entrepreneurship in hospitality, is more than just a trend; it is a paradigm shift.

Entrepreneurs in this space are leveraging the specificities and economic models of the industry to address pressing social issues, from environmental sustainability to community development.

From Too Good to Go, to Reffetorio, or AlbergoEtico these ventures are redefining success in the industry. They are training, feeding, educating, restoring dignity, and supporting the commons for a positive impact of hospitality business on society.

“Hospitality for Society” is a pivotal movement within the industry which we can take learning from businesses that have successfully demonstrated social entrepreneurship.

Discover inspiring businesses like the ones featured in the EHL Insights Depository, which showcases their business models and social missions.

Through practical and real-life examples, we demonstrate that it is possible to find solutions.

The hospitality industry can stand at the forefront of positive societal change. Its past and current negative externalities reveal that it plays a critical role in society with its significant outreach.

From the environmental impact, the proximity to local communities, the employment opportunities, the role in national infrastructures, and people’s well-being, hospitality outreach is substantial.

“Hospitality for Society”: Join our Mission

Critical views on how business was and is conducted are essential today but, unfortunately, insufficient. We need to gather our collective intelligence to put it into practice and combine our business, engineering, and social knowledge to imagine the companies of the future.

We trust that by learning about those who successfully manage to not only raise funds but economically sustain their activities, we can address the grand challenges of poverty, immigration, discrimination, education, and many more.

The future of hospitality lies in its ability to create positive social change. “Hospitality for Society” is a movement and a call to action.

We invite you to join us in a more sustainable and equitable industry. We want to hear from you if you are passionate about social entrepreneurship and hospitality.

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Whether you are an entrepreneur, investor, academic, or someone who cares about making a difference, there are countless ways to get involved. Let’s collaborate, share ideas, and work together to amplify the impact of social ventures in hospitality. 

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References

• Ashoka. (n.d.). Ashoka in few numbers. Retrieved November 4, 2024, from https://www.ashoka.org/en-us/about-ashoka
• Bacq, S., & Alt, E. (2018). Feeling capable and valued: A prosocial perspective on the link between empathy and social entrepreneurial intentions. Journal of Business Venturing, 33(3), 333–350. https://doi.org/10.1016/j.jbusvent.2018.01.004
• Bacq, S., & Lumpkin, G. T. (2021). Social entrepreneurship and COVID-19. Journal of Management Studies.
• Bacq, S., Ofstein, L., Kickul, J., & Gundry, L. (2022). Perceived challenges in scaling social impact: The critical role of entrepreneurial behavior. Journal of Business Venturing.
• Catalyst 2030. (n.d.). Catalysing Change 2022. Retrieved November 4, 2024, from https://catalyst2030.net/about-catalyst-2030/
• Dees, J. G. (1998). The meaning of social entrepreneurship. Kauffman Center for Entrepreneurial Leadership.
• Doherty, B., Haugh, H., & Lyon, F. (2019). Social enterprises as hybrid organizations: A review and research agenda. International Journal of Management Reviews, 21(1), 57–81. https://doi.org/10.1111/ijmr.12114
• Global Reporting Initiative. (n.d.). Standards. Retrieved from https://www.globalreporting.org
• Grimes, M. G., Gehman, J., & Cao, K. (2018). Positively deviant: Identity work through B Corporation certification. Journal of Business Venturing, 33(2), 130–148. https://doi.org/10.1016/j.jbusvent.2018.01.002
• Hoogendoorn, B., Pennings, E., & Thurik, R. (2020). Scaling impact in social entrepreneurship: Balancing ambition and capabilities. Entrepreneurship Theory and Practice.
• Lynn Stout. (2012). The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. PublicAffairs.
• Maier, F., & Meyer, M. (2021). Social enterprises and hybrid organizations: Theory and research. Academy of Management Annals.
• Marquis, C. (2024). The Profiteers: How Business Privatizes Profits and Socializes Costs. PublicAffairs. Retrieved from https://chrismarquis.com/the-profiteers-how-business-privatizes-profit-and-socializes-cost/
• United Nations Development Programme. (n.d.). SDG Impact Standards. Retrieved from https://sdgimpact.undp.org
• Saebi, T., Foss, N. J., & Linder, S. (2019). Social entrepreneurship research: Past achievements and future promises. Journal of Management.
• Santos, F., Pache, A.-C., & Birkholz, C. (2020). Making hybrids work: Aligning business models and organizational design for social enterprises. California Management Review, 62(4), 51–77.
• Smith, W. K., & Besharov, M. L. (2019). Bowing before dual gods: How structured flexibility sustains organizational hybridity. Administrative Science Quarterly, 64(1), 1–44. https://www.researchgate.net/publication/322011349_Bowing_before_Dual_Gods_How_Structured_Flexibility_Sustains_Organizational_Hybridity
• World Economic Forum. (2024, April 18). The State of Social Enterprise 2024: The Global Alliance for Social Entrepreneurship. Retrieved November 4, 2024, from https://www.weforum.org/publications/the-state-of-social-enterprise-a-review-of-global-data-2013-2023/
• Zahra, S. A., & Wright, M. (2021). Understanding the social in social entrepreneurship: Theoretical foundations and research challenges. Academy of Management Perspectives, 35(1), 6–29.