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The Journal of Biblical Integration in Business
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JBIB
The Journal of Biblical Integration in Business
JBIB VOL. 15, NO, 1, SPRING 2012
ISSN# 1527-602
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be copied and disseminated for educational use. Articles so
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<author> <issue> <article title>
The Journal of Biblical Integration in Business
A Publication of the Christian Business Faculty Association
CBFA
800 MARTINSBURG RD
MOUNT VERNON, OH 43050
740-504-4524
CONTENTS
Review Board for JBIB Special Issue.............................................................................................................................. 6
EDITOR’S PERSPECTIVE
Introduction to the Special Issue on Organizational Hybridization:
Both for Profit and Not: Biblical Views of Organizational Hybridization................................................................. 7
Margaret Edgell, Guest Editor
PEER-REVIEWED ARTICLES
Blurring the Boundaries: Emerging Legal Forms for Hybrid Organizations—
Implications for Christian Social Entrepreneurs.........................................................................................................11
Teresa Gillespie, Northwest University
Timothy Lucas, Northwest University
Organizational Hybridization: A Business Model to Integrate Best Practices of For-Profit
and Non-Profit Organizations.........................................................................................................................................29
Orneita Burton, Abilene Christian University
Jozell Brister, Abilene Christian University
Teaching Social Entrepreneurship in Christian Higher Education Business Schools.............................................46
Timothy Lucas, Northwest University
Teresa Gillespie, Northwest University
INVITED PERSPECTIVE
Hope for Hybrids: Faithful Presence in Organizational Life..................................................................................... 60
Roland Hoksbergen, Calvin College
INVITED ARTICLES: BUSINESS AS MISSION
“Business as Mission” Hybrids: A Review and Research Agenda............................................................................. 66
Steve Rundle, Biola University
Is Business as Mission (BAM) a Flawed Concept? A Reformed Christian Response to the BAM Movement..... 80
Scott A. Quatro, Covenant College
The Future of BAM in the Academy: A Response to Rundle and Quatro................................................................ 88
R. Joseph Childs, Southeastern University
Response to Quatro and Childs..................................................................................................................................... 98
Steve Rundle, Biola University
Is Business as Mission (BAM) a Flawed Concept? A Response to Childs...............................................................102
Scott Quatro, Covenant College
BOOK REVIEWS
Good to Great in the Social Sectors: Why Business Thinking Is Not the Answer, by Jim Collins..........................104
Reviewed by Michael Zigarelli, Messiah College
Social Entrepreneurship: What Everyone Needs to Know, by D. Bornstein and S. Davis.......................................106
Reviewed by Ruby Simpson, Simpson Commercial Properties
Hybrid Organizations and the Third Sector: Challenges for Practice, Theory, and Policy, by D. Billis (ed.)........108
Reviewed by Jim Dupree, Grove City College
Academic Capitalism and the New Economy: Markets, State, and Higher Education,
by Sheila Slaughter and Gary Rhoades.......................................................................................................................110
Reviewed by Margaret Edgell, Calvin College
ENDINGS
JBIB Information for Contributors.............................................................................................................................114
Call for JBIB Operations Editor..................................................................................................................................117
Call for JBIB Media Review Section Editor...............................................................................................................117
REVIEW BOARD FOR JBIB SPECIAL ISSUE
Orneita Burton
Abilene Christian University
Steve Rundle
Biola University
Melodi Guilbault
Warner University
Steven Whiting
Bethel University
Kenny Holt
Southwest Baptist University
Charlie Williams
Charleston Southern University
EDITOR'S PERSPECTIVE
BOTH FOR PROFIT AND NOT:
BIBLICAL VIEWS OF ORGANIZATIONAL HYBRIDIZATION
Margaret Edgell, Guest Editor
THE HYBRIDIZATION TREND
Recent scholarly literature and discussion,
including past JBIB articles on Business as Mission and recent CBFA presentations on Business
as Mission and social entrepreneurship, indicate
that the activities of organizations are shifting in
ways that blur the dividing line between for-profit
and not-for-profit business. This drift takes the
form of each side borrowing visions, missions,
goals, structures, resources, or strategies from
the opposite end of the spectrum (Strom, 2007).
Christian business scholars and practitioners
are at the forefront of hybridization. Business as
Mission is a Christian movement that promotes
doing business according to Kingdom values of
stewardship, reconciliation, justice, dignity, and
peace (e.g., Johnson, 2009). Social entrepreneurship is a movement of interest to Christians in
business because it “combines the passion of a
social mission with an image of business-like
discipline, innovation, and determination commonly associated with, for instance, the high-tech
pioneers of Silicon Valley” (Dees, 2001, p. 1).
Global interest in hybridization is high. Hybrids are often called “the fourth sector,” as an
added sector after the business, civil society,
and government sectors. The United Nations
produced a report by Goldman Sachs on ways to
evaluate the environmental, social, and management performance of firms, in order to get a better handle on the fuller impact of more sociallyresponsible companies (Strom, 2007).
Examples of hybrids set in a for-profit context
include Jeffrey Immelt, a Christian and CEO of
General Electric, who founded its Ecomagination
unit with $1 billion in research and development
funds to reduce the environmental impact of G.E.
products. Now more than seven percent of G.E.
sales are Ecomagination products. WikiHow is
a for-profit spin-off from the non-profit Wikipedia. It is run as a community service to its members, where profit comes second, in the form of
advertising on its how-to web pages. WikiHow
members are happy that they are never asked for
donations. Its founder receives some of the profit,
of course.
Hybrid activities in the non-profit sector include any profit-making activity that supports
a non-profit organization, for example, national
sales of Girl Scout cookies. Such activities are
7
becoming more sophisticated, as seen in the increasing use of low-interest program-related investments (PRI) loans from foundations to start
up profit-making activities by non-profits (Strom,
2007).
The growing variety of profit/non-profit
blends bring with them opportunity and innovation, as well as risk and unforeseen change. Of
core interest to this line of research are biblical
views on the issues that arise from hybridization.
The benefits of hybridization are more than we
currently know, but they include increasing access to low-interest loans from non-profit foundations, and responding to the rising interest of
investors in the long-term holistic approaches
to business that enhance sustainability. Such
fourth-sector financiers are called patient capital,
because they are willing to wait for profits. Hybridization raises issues such as the tax treatment
of hybrids, the fiduciary responsibilities of asset
managers to maximize profit, and the inherent
difficulties of quantifying long-term social benefits and internalizing the true costs of doing forprofit business.
SCRIPTURAL FOUNDATION FOR
ANALYSIS
The Christian church, as the Body of Christ
in this world, serves society. 1 Peter 4:10, in the
context of Peter’s charge to the church to love and
serve others, states: “Each one should use whatever gift he has received to serve others, faithfully administering God’s grace in its various
forms.” The influence of the church, both among
its members and in society, is evident in Acts
2:42-47:
They devoted themselves to the apostles’
teaching and to the fellowship, to the
breaking of bread and to prayer. Everyone
was filled with awe, and many wonders
and miraculous signs were done by the
apostles. All the believers were together
and had everything in common. Selling
their possessions and goods, they gave
to anyone as he had need. Every day they
8
continued to meet together in the temple
courts. They broke bread in their homes
and ate together with glad and sincere
hearts, praising God and enjoying the favor of all the people. And the Lord added
to their number daily those who were being saved.
The church is the source and sustainer of modern
faith-based organizations.
The Apostle Paul’s tent-making business is
typically considered as a financial support for his
evangelistic work. I suspect that he evangelized
and mentored, needle in hand, just as everything
Paul did was an opportunity to help others walk
victoriously with Christ in all of life. His business was very likely a prime example of Business
as Mission, and as such, a full-on hybrid.
Paul’s holistic approach to life in Christ, and
a Christian view of life as explained by Reformed
thinkers (Kuyper and Dooyeweerd as interpreted
by Greene, 1998), lead me to argue that the trend
of hybridization, at its essence, only reflects the
inherent wholeness of the creation. Man separated profit-generating activities from their religious
roots. Now we rejoin them via hybridization.
A second principle of Kuyperian thought
is sphere sovereignty. Each human activity has
its rightful place or sphere in the creation, over
which its norm for activity is sovereign, and
should not be intruded upon by other spheres.
For example, the norm for the family is troth,
or promise-keeping. Business should follow its
norm of stewardship, but not to the point that
parents cannot keep their godly promises to their
children. The concept of sphere sovereignty has
been applied by Kurt Schaefer and others in the
study of how faith-based organizations interact
with government. It could also be applied to the
analysis of profit and non-profit activities and
norms. For example, if the norm for non-profit
organizations is the common good, hybridization
implies a blending of the norms of stewardship
and the common good. Analysis along these lines
would delineate areas of congruence and areas of
conflict for these two norms.
• How do biblical views of the roles of government, business, and church inform the
hybridization movement?
• Which laws, regulations, and codes are being challenged by hybrids? How are Christians pushing the envelope and contributing to the form that change is taking?
• How is the contribution of civil society,
much of it faith-based, changing with hybridization? What are the potential impacts
on faith-based organizations?
• What advice can scholars and consultants
offer to practitioners during this transition?
• What clashes and conflicts of interest can
be expected in blending often polarized
public versus private motivations, missions, constituencies, and resources? How
can a biblical analysis foster reconciliation
where needed and preserve differentiation
where appropriate?
Prominent recent examples in the news of the
clashes and conflicts of interest accruing from
the hybridization trend include:
• Bill Novelli, former CEO of AARP, discussed on NPR the conflicts of interests
caused by hybridization. For example,
AARP receives royalties when its members buy AARP-endorsed insurance plans,
while AARP simultaneously monitors insurance products for its members.
• The U.S. Olympic Committee, a registered
non-profit organization, fired its CEO, apparently because she had no sports management background. Her unfamiliarity with
Olympian and sports cultures was thought
to be the source of much miscommunication and misunderstanding between the
Committee and its stakeholders. Generic
business background did not transfer to this
major organization.
IMPLICATIONS
Christian business professors observe that
they serve students in two “camps:” hard-core
business students, and social justice types. I find
that the hard-core business students are attracted
to finance, money and banking, or forecasting
courses. I find the social-justice students mainly
in courses on international development or nonprofit management. They divide into two camps
for the same reason that our greater society is divided into two ideologies or logics: industry logic
and social institutional logic (Gumport, 2002).
The implication here is: How can hybrid organizations, which are commonly composed of
both camps, hold together? Strong ideological
and cultural forces pull them apart, so how can
they work together? How can hybrids become
strong organizational cultures? These two student camps come together in courses on organizational hybridization, such as social entrepreneurship courses. Thus the question at hand for
our membership is: How can we teach two opposing camps at once?
I offer one potential response. I understand
that excellent results come from the implementation of polarity management techniques (Johnson,
1996), which bring both sides to understand and
actually value each other’s positions. Such techniques are very useful for our students to learn
and apply as managers in the polarized political
environment that is the United States today.
EDITOR'S PERSPECTIVE
In these ways and others, biblically-based
analyses of this important trend can prepare
Christians in business to respond knowledgeably
to hybridization.
Biblically-based analyses can address issues such
as:
CONCLUSION
This special issue offers discussion and
analysis of the complex nature of organizational
hybridization. Because this is a cutting-edge
trend, regulation has yet to catch up and settle
into clear lines of demarcation in their treatment
of hybrids. Teresa Gillespie and Timothy Lucas
trace developments in the legal terrain that offer
more organizational options for hybrid business-
9
es. They also discusse implications for Christian
social ventures. Timothy Lucas reflects on his
experience teaching social entrepreneurship, a
sub-category of hybrid organizations. He points
out how underdeveloped social entrepreneurship is as a discipline, and offers recommendations for “advancing social entrepreneurship as a
dedicated field of study within Christian higher
education.” Orneita Burton and Jozell Brister
conducted empirical research to shed light on
best practices of non-profit and for-profit business that suggest which form hybrid businesses
can take to maximize stewardship and sustainability. In an invited paper, Roland Hoksbergen,
an expert on civil society and economic development, discusses the place of these three papers
within the larger context of historical trends in
organizational hybridization.
A second section of this special issue focuses
in on one sub-category of organizational hybridization: Business as Mission. Three invited authors respond to each other from their different
disciplinary and theological perspectives. They
raise and debate the question: Is Business as Mission a new field with great potential for Christian
scholarship?
It is our hope at JBIB that our contributions
in this issue will clarify the opportunities and
issues of organizational hybridization and their
implications for business practice, research, and
pedagogy.
10
REFERENCES
Dees, J. G. (2001). The definition of “social entrepreneurship.” Kansas City, MO: Kauffman Center for Entrepreneurial Leadership.
Gumport, P. J. (2002). Universities and Knowledge: Restructuring the City of Intellect. In Brint, S. (Ed.), The
Future of the City of Intellect (pp. 47-81). Stanford: Stanford University Press.
Greene, A. E. (1998). Reclaiming the Future of Christian
Education. Colorado Springs: Association of Christian
Schools International.
Johnson, B. (1996). Polarity Management: Identifying
and Managing Unsolvable Problems. Amherst, MA:
HRD Press.
Johnson, N. (2009). Business as Mission: A Comprehensive Guide to Theory and Practice. Downers Grove, IL:
InterVarsity Press.
Strom, S. (2007, May 3). Businesses Try to Make Money
and Save the World. New York Times, Retrieved November 30, 2009 from http//www.nytimes.com
ABOUT THE AUTHOR
Margaret Edgell is Associate Professor of Business at Calvin College, currently on leave in Seattle. Her research
interests include how higher education
is financed and how business students
grow in Christ. Her recent book with
Johan Hegeman and Henk Jochemsen
is Practice and Profile: Christian Formation for Vocation.
PEER-REVIEWED ARTICLES
BLURRING THE BOUNDARIES: EMERGING LEGAL
FORMS FOR HYBRID ORGANIZATIONS
IMPLICATIONS FOR CHRISTIAN SOCIAL ENTREPRENEURS
Teresa Gillespie and Timothy Lucas
Northwest University
ABSTRACT
Hybrid social enterprise organizations, which combine profit and social goals, are one of the emerging
trends in the business world. Christians are also using new forms to pursue ministry. This article explores
the legal and practical limitations of combining social mission with profit generation in the same organizational structure. This article also addresses some of the broader implications of this trend, especially for
Christian social ventures.
INTRODUCTION
Until recently, there were only two basic
structural choices for an organization: profit or
nonprofit. An entity with a charitable social focus
would be established as a foundation, nonprofit
corporation, or trust. An entity with a product or
service to sell would select a for-profit form, perhaps a corporation or limited liability company.1
But traditional differences between business and
charity are eroding. The division between a profit
and nonprofit organization is no longer sharp and
clear. We now have revenue-generating businesses directing profits to social causes, such as
Tom’s Shoes, which donates one pair of shoes for
every pair sold, with over 1 million shoes given
away (Toms, 2011). There are also nonprofit orga-
nizations using for-profit business models to supplement their revenue streams, such as Northwest
Center, a nonprofit in the Seattle area providing
training and support to the disabled. The Center
operates a number of businesses services, such
as assembly, packaging, document shredding and
a commercial laundry, that employ disabled clients and also helps fund the operation (Northwest
Center, 2011).
For much of American history, philanthropy
was considered the “third sector” of society
alongside government and business. As Thomas
Billitteri (2007) and others have noted, we may
now be seeing an emerging “fourth sector” of
social enterprise organizations. These hybrids
combine charitable mission, corporate methods
11
and social awareness in unprecedented ways,
transcending traditional business and charitable
models (Billitteri, 2007, p. 2). The reasons for the
emergence of these hybrids are varied, but include recognition that charities can benefit from
market efficiencies, the spread of free-market
capitalism and its values of entrepreneurship, innovation and self-reliance. Factors supporting the
growth of hybrid organizations include globalization with greater access and increased awareness
of needs, expanding market opportunities as a
result of new technology, and disillusion with the
obsession of greed and resulting ethical failures
in the traditional business environment.
In his seminal article, “The Meaning of Social Entrepreneurship,” J. Gregory Dees (2001)
noted that while entrepreneurial solutions to
social problems are not an entirely new phenomenon, what has changed is a “blurring of sector
boundaries.”
The time is certainly ripe for entrepreneurial
approaches to social problems. Many governmental and philanthropic efforts have fallen far
short of our expectations. Major social sector institutions are often viewed as inefficient, ineffective and unresponsive. Social entrepreneurs are
needed to develop new models for a new century
(Dees, p.1, 2001).
If form follows function, we will need new
organizational structures for these new hybrids.
Or, to use an analogy from the Gospels, we need
new wineskins to hold new wine (Matthew 9:17).
To provide a context for this discussion, let us
consider the mission of several social entrepreneurs in the Seattle area and review how their
organizational structure is working for them.
Vision House provides transitional housing
with integrated support services to homeless
single mothers and their children and separately
to homeless single men recovering from drug and
alcohol addiction. The founder and executive director started Vision House as a nonprofit after
seeing a documentary on America’s homeless
children. The initial funding was through gov-
12
ernment grants and is the primary reason for the
nonprofit status (Lucas, 2011).
As initial funding expired, the executive
director realized the difficulty of sustaining an
entity solely reliant on donations and grants and,
as a result, created separate Limited Liability
Company (LLC) entities that support the nonprofit. One is a local, upscale daycare facility
that includes both underprivileged children of
mothers supported by the nonprofit, and children
of revenue-paying families from the local community. Another LLC is a plumbing business that
was created to offset one of the largest operating
costs, i.e., plumbing repairs for the transitional
housing facilities, as well as to provide training
and jobs for some of the homeless single men.
The LLCs were created to allow for business
revenue without jeopardizing the legal nonprofit
status, and as a means to offset dependency on
donations and grants (Lucas, 2011).
Operation Military Family is a nonprofit
founded to support military families. The founder
is a former member of the military who recognized that there was an unmet need to address the
unique challenges faced by couples serving in the
armed services. He also identified the detrimental impact of high divorce rates on the military
as an organization. As a result, he formed a nonprofit and created seminars and workshops aimed
at providing assistance to military couples. The
nonprofit accepts federal grant monies and private
donations to support its services. The founder created a separate sole proprietorship to generate additional revenue removed from the nonprofit organization. This includes revenues from book sales
and workshops in addition to public speaking fees.
The founder finds the nonprofit structure, specifically the myriad regulations, reports, restrictions
and fees inherent in the nonprofit structure, to be
burdensome (Lucas, 2011).
Vox Legal is a virtual legal firm that also
earns the distinction of having earned a certified
“Benefit Corporation” designation (or “B Corp,”
described more fully later in this paper). The
founder pursued the certification process to help
DEFINITIONS
The founders of these organizations do not
necessarily describe themselves as social entrepreneurs nor see themselves as engaging in
Business as Mission. However, it is clear that in
their passion for solving a social need and focusing on sustainability, they do not fit neatly into
the “either or” categories of nonprofit and profit
organizations. They are clearly hybrids, but do
they need a separate label? Further, is there a difference between a social venture or enterprise,
social entrepreneurship and Business as Mission?
One problem in this emerging field of hybrids
is a lack of an agreed upon definition (Lucas,
2010). Martin and Osberg (2007) note that “Social
Entrepreneurship is attracting growing amounts
of talent, money and attention. But along with
its increasing popularity has come less certainty
about what exactly a social entrepreneur is and
does” (p. 29).
Neal Johnson (2009), in his comprehensive
text, Business as Mission, also acknowledges the
definitional challenge: “It is difficult to define exactly what BAM (Business as Mission) means…
[and] few really understand how to do it” (p. 27).
Ashoka, a leading association promoting the
field of social entrepreneurship, defines the role
on their front webpage as “men and women with
system-changing solutions for the world’s most
urgent social problems” (2011). The Skoll Foundation, another influential organization in this
new field, identifies social entrepreneurs as “society’s change agents: creators of innovations that
disrupt the status quo and transform our world
for the better” (2011).
While there is not complete agreement on the
definition of these developing hybrids, we take
the position that there are significant distinctions
between social enterprise, social entrepreneurship
and Business as Mission. We use these definitions:
Social enterprise is a for-profit organization
that implements its mission to address a social
need through a business format, regardless of its
legal structure. The business model need not be
original, innovative or unique (Lucas, 2010, p.5).
PEER-REVIEWED ARTICLES
with branding, as its target clients are social entrepreneurs, but also to help with his own internal
decision-making. One area of expertise is advising clients about the various corporate structure
options, particularly the B Corp and L3C options.
One concern the founder had about the B Corp
certification process is how applicable it was to
a sole proprietor business and whether the certification process was stringent enough. There
is a risk that companies will pursue certification
primarily for marketing purposes (Lucas, 2011).
Cedar Park Church in Bothell, Washington,
is organized as a traditional nonprofit, but has
created several Limited Liability Companies to
further support the church ministries. Separate
entities within the domain of the larger nonprofit
include a mechanics shop, a funeral home and an
embryo adoption services organization. Each is
a distinct LLC within the domain of the church.
The pastor believes that work and business are
honorable activities for Christians, as opposed to
early Greek and Roman traditions where slaves
performed work. He also believes the church
should not rely solely on tithing. The reason the
entities were created under separate corporate
structures was to protect the nonprofit status of
the church and not dilute church infrastructure
(Lucas, 2011).
For each of these organizations, the legal
structure is not a perfect fit. Three of the organizations operate a nonprofit entity for their mission
side and a for-profit (sole proprietorship or LLC)
for their revenue-generation side. Keeping the
models separate in a single organization requires
careful attention to the IRS regulatory process,
state corporate law requirements and coordination between the two, as well as separate books,
accounting systems and boards. Can a legal form
be designed that would allow the social mission
and revenue stream to reside in the same organization? Is the B Corp certification process the
answer or is it marketing hype? Before addressing these questions, it will be useful to clarify
terms and consider why the traditional forms are
problematic for social hybrids.
13
Social entrepreneurship is a revenue generating, innovative and unique approach to solving
a social problem where profits are reinvested in
the mission regardless of the distinction between
nonprofit or commercial enterprise (Lucas, 2010,
p. 5).
As the chart below demonstrates, social enterprise, social entrepreneurship and Business
as Mission all share the common blend of social
mission and revenue-generation. However, they
differ in several significant ways. Social enterprise and Business as Mission almost always
use a for-profit business form. Social entrepreneurship is the most flexible as it can use a forprofit or non-profit format. (Revenue generation
in the non-profit form means that any profits are
returned to the organization). Business as Mission can overlap with social entrepreneurship if it
employs an innovative approach.
Business as Mission is a for-profit commercial business venture that is Christian-led, intentionally devoted to being used as an instrument
of God’s mission to the world and is operated in
a cross-cultural environment, either domestic or
international. (Johnson, 2009, pp. 27-28).2
Table 1 Definitions Chart
Social Enterprise
Social Entrepreneur
Business as Mission
Social Mission
X
X
X
Revenue Generator
X
X
X
Innovative
X
Intentional Christian
X
Cross-cultural
X
The differences can be illustrated in a visual form as follows:
Chart 1 Social Enterprise Forms
FOR-PROFIT NON-PROFIT
SOCIAL
ENTERPRISE
SOCIAL
ENTREPRENEUR
BAM
Of the three, social enterprise is the broadest concept. Social entrepreneurship is less broad
as it requires innovation. Business as Mission is
much more exclusive. The terms overlap, how-
14
ever. Business as Mission is a form of social enterprise and, if it is also innovative, would also be
considered social entrepreneurship.
The law insists that poverty must be addressed and redressed, whatever its causes
may be. The series of clauses in Leviticus
25 beginning, ‘If one of your countrymen
becomes poor…’ (vv. 25, 35, 39, 47) give no
hint as to possible causes. It is not a matter
of assigning blame. The question is, what
is now to be done if a brother is in danger
of sinking in to poverty?...Those who are
required to take action are not necessarily
those responsible for the problem (in the
sense of being guilty of causing it). But
they are responsible under God for those in
danger of falling through the cracks of society. Such persons at risk must be restored
one way or another (pp. 172-173).
One of the charges brought by the Old Testament prophets against the nations of Judah and
Israel was their failure to defend the vulnerable
members of their community. “Woe to those
who…deprive the poor of their rights and rob my
oppressed people of justice, making widows their
prey and robbing the fatherless” (Isaiah 10: 1, 2).
“I will be quick to… testify against… those who
defraud laborers of their wages, who oppress the
widows and the fatherless and deprive aliens of
justice” (Malachi 3:5).
In the New Testament, Jesus repeatedly demonstrated his compassion for physical needs by
healing the sick and feeding the hungry. In Luke
4:16-21, Jesus quoted Isaiah’s prophecy as evidence of his authenticity as Messiah:
PEER-REVIEWED ARTICLES
Biblical Basis for Hybrids
Regardless of the label placed on these hybrids, Christian entrepreneurs generally credit
their faith and personal calling as Christians as
a factor in their social-focus enterprise (Lucas,
2010). This is not surprising as there is strong
scriptural foundation supporting social mission.
In particular, the primary characteristics of social
hybrids, which are (1) their focus on social mission, and (2) reinvesting profits in the organization instead of pursuing personal gain, connect
well with biblical values. We also assert that the
additional characteristic of social entrepreneurs,
(3) using an innovative or unique approach, finds
strong support in Scripture and Christian theology. The following discussion of the biblical references to these characteristics will have particular
relevance for Christians teaching and working in
the social entrepreneurship field.
(1) Regarding social mission, Scripture is replete with injunctions to maintain the health of
the community, especially legal and political systems, to steward the earth and care for the needs
of the most vulnerable. This is initially articulated in the context of the Mosaic Law. “Do not
take advantage of a widow or an orphan. If you
do and they cry out to me, I will certainly hear
their cry” (Exodus 22:22)3. “Do not deny justice
to your poor people in their lawsuits” (Exodus
23:6). “Do not oppress an alien” (Exodus 23:9).
“Follow justice and justice alone” (Deut. 16:20).
These are just a few representative passages.
To further illustrate how the Mosaic Law encourages societal responsibility to address one
issue, the problem of poverty, Christopher J. H.
Wright (2004) has commented:
'The Spirit of the Lord is on me, because he
has anointed me to proclaim good news to
the poor. He has sent me to proclaim freedom for the prisoners and recovery of sight
for the blind, to set the oppressed free, to
proclaim the year of the Lord’s favor.'
Thus, for Christians, caring for the needs of
others is one way to represent Christ in the world.
“Religion that God our Father accepts as pure and
faultless is this: to look after orphans and widows
in their distress and to keep oneself from being
polluted by the world” (James 1:27).
Of course, Christians have always been active in addressing social needs, founding schools,
orphanages and hospitals, and fighting against
slavery, sex trafficking and other injustices. What
is different about many social missions today is
how they have embraced a business model.
(2) A second characteristic of social hybrids
is that they seek to generate revenue, but they are
15
not in it just for the money. They are not motivated by personal wealth or financial gain, although
they are committed to using a profitable business
model. They are committed to creating an economic engine that will sustain the mission and
meet their own personal needs instead of relying
exclusively on charitable donations. The first element of this themeusing resources wisely—has
a solid basis in Scripture. Abraham, Isaac and
Jacob were all successful merchants in the cattle
business. “The Lord has blessed my master abundantly,” said Abraham’s servant in Genesis 24:34,
“and he has become wealthy.” Proverbs 10:22
promises that “the blessing of the Lord brings
wealth, and he adds no trouble to it.”
Jesus repeatedly told parables where a business owner (“the Master”) is the hero of the story.
The Parable of the Talents in Matthew 25 and the
Parable of the Shrewd Manager in Luke 16 are
just two examples. Jesus also routinely compared
business practices, such as assessing risk, making investments and planning for growth, to the
nature of faith and discipleship. The Parable of
the Ten Minas in Luke 19 is illustrative, where
the master told his servants to “put this money to
work until I come back.”
Paul assumed that Christians would be
wealthy enough to give generously to provide for
the needs of less fortunate members. “[T]hose
who are rich in this present world…should be
rich in good deeds, and be generous and willing
to share” (1 Timothy 6:16, 17).
Yet, Scripture also counsels about the danger of
pursuing wealth for its own sake. This is the second
part of the element that distinguishes social hybrid
pioneers from many business entrepreneurs. They
use business principles as the economic engine for
funding the mission, but not to grow rich personally. In the Sermon on the Mount, Jesus warns his
disciples: “Do not store up for yourselves treasures
on earth, …but store up for yourselves treasures in
heaven” (Matthew 6: 19 -21).
Paul exhorts Timothy to teach others about
the risk of seeking riches. “Command those who
are rich in this present world not to be arrogant
16
nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly
provides us with everything for our enjoyment”
(1 Timothy 6:17).
James is blunt. “Now listen, you rich people,
weep and wail because of the misery that is coming on you. Your wealth has rotted, and moths
have eaten your clothes. Your gold and silver are
corroded. Their corrosion will testify against you
and eat your flesh like fire. You have hoarded
wealth in the last days” (James 5:1-3).
The balance between using money yet not being consumed with pursuing it is a difficult task.
Yet this seems to be a defining characteristic of
leaders in social hybrid organizations. They are
following Peter’s admonition: don’t be “greedy
for money, but [be] eager to serve” (1 Peter 5:2).
(3) The third characteristic of a social entrepreneur is innovation, which is defined as finding
a unique or creative solution to address a social
need.4 Again, Christians should exemplify this
characteristic because creativity is a significant
aspect of God’s personality. Of the many attributes that describe God (omniscient, merciful,
and more), innovation is illustrated first: “In the
beginning, God created the heavens and the earth”
(Genesis 1:1). The centrality of creativity as an aspect of God’s nature is additionally underscored in
Genesis 1:27: “So God created man in his own image, in the image of God he created him; male and
female he created them.” We were made to reflect
all of God’s nature, including creativity.
The relationship of creativity to Christianity is a far broader topic than can be fully addressed in this article. We are not suggesting that
Christians are or should be more creative than
nonbelievers. We assert, however, that Christians
should affirm and encourage the creative process
in every sphere of life, from business to the arts
to social sciences. This is because Christians
worship the one who imagined the universe and
called it into being.
“For by him [Christ Jesus] all things were created: things in heaven and on earth, visible and
invisible, whether thrones or powers or rulers or
There is much more to Christian faith than
intellectual assent and moral conformity
to the creeds and doctrines. Faith, in fact,
embraces imagination….The imagination is
to be treasured and nurtured, as it replicates
that Divine Creativity to which we owe our
hopes, our faith, our joys, our loves and our
very lives (Peters, 2000, p. 10).
Another indication of why innovation should
be a hallmark of Christian endeavors is to reflect
on the numerous references to “new” in Scripture.
This is a theme in the Old and New Testaments.
The prophets declare that God is bringing forth
“new things” (Isaiah 42:9). We are promised a
“new name” (Isa 62: 2), a “new covenant” (Jeremiah 31:31) and a “new heart and a new spirit
“(Ezekiel 18:31). In the New Testament, we are
presented with the message of “new life” (Acts
5:20). We are promised that “ if anyone is in
Christ, he is a new creation; the old has gone, the
new has come!” (2 Corinthians 5:17). Believers are
counseled to “put on the new self, which is being
renewed in knowledge in the image of its Creator”
(Colossians 3:10). In Christ we have a “new birth"
(1 Peter 1:3) and we look forward to a “new heaven
and a new earth” (Revelation 21: 1). We worship an
inventive, imaginative, bold and creative Heavenly
Father, who has proclaimed: “Behold, I am making everything new!” (Revelation 21: 5).
This repeated emphasis on newness is theologically significant. The order and dynamic of
“old things” is changing because God has broken
into history through the person of Jesus Christ.
As Christians, we experience this newness when
we come to Christ and are transformed. But
this is only the beginning. As Jurgen Moltmann
(1997) describes,
[W]ith Christ in faith, a wholly new life
begins. It is not a restored life, and it is not
a rejuvenated life either. It is not even a
life reborn out of its origin. The resurrection of Christ has no historical prototype.
It is something completely new in history.
It is the beginning of the new creation
of everything…The new birth to eternal
life is not ‘Paradise Regained.’ It reaches
forward into the resurrection world which
‘no eye has seen, nor ear heard…but God
has revealed it to us through the Spirit’ (1
Cor. 2:9) (p. 30).
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authorities; all things were created by him and for
him” (Colossians 1:16).
We also were designed by God to participate
in his creation. “For we are God’s workmanship,
created in Christ Jesus to do good works, which
God prepared in advance for us to do” (Ephesians
2:10). This should be a theme verse for Christian
social entrepreneurs!
Further, as Thomas C. Peters has noted,
The good news is that we don’t need to wait
until the future to experience these new things
now. Christians have a unique relationship with
the Creator and thus should welcome innovation
in every arena: businesses, politics, education
and especially in our responses to social problems. Christian universities should encourage innovation and entrepreneurship in all disciplines.
Function Determines Form
The form of any organization should support
its function. As Reed, Shedd, Morehead and Pagnattaro (2008) discuss, a for-profit entrepreneur
must consider at least five factors in selecting an
organizational form: cost of creating the organization; continuity or stability; control of decisions;
personal liability of the owners; taxation of owner’s earnings; and distribution of profits (p. 339).
Similarly, a nonprofit entity has to make
choices before selecting a legal form, such as
personal liability and tax exemption (Hopkins,
2009, pp. 6–7). Wexler (2009) has identified five
broad categories that social entrepreneurs should
review in selecting an organizational format: tax,
management and control, capital and loans, distribution of funds and liquidation (p. 566). We
believe that additional considerations for hybrid
organizations should include mission, branding
and regulation, based upon research conducted
among L3C pioneers in Vermont by Elizabeth
17
Schmidt (2010). She found that social entrepreneurs chose the L3C model because it “fit their
mission,” was considered “cutting edge” and offered regulatory flexibility (p. 176).5
In the chart below, we have identified significant differences between the main organizational
models and the new hybrid forms based upon the
factors we consider most significant. The models
are described in the next section.6
Table 2 Comparison of Organizational Models
For profit Corp
Nonprofit Corp
L3C
Mission
Single
Single
Dual
Dual
Market/ Brand
Produces goods or
services
Social mission
“better way to do
business”
“nonprofit soul”
Resources
Investors/ loans
Donors
Investors/ loans
Investors/ donors
Control
Board
Board
Board
Members
Taxes
Corp tax rate
Tax exempt
Corp tax rate
Members taxed
Risk
Limited liability
Limited liability
Limited liability
Limited liability
Regulation
Low
High
Medium
Low
The Old Wineskins
The most popular legal structures for business organizations are the corporation and the
Limited Liability Company. Most nonprofits are
organized under a state nonprofit corporation
law. How do these models address the concerns
of social hybrids described above?
The modern corporate structure is an extremely effective way to reduce risk, raise capital and provide management structure for both
complex and simple organizations. In their
fascinating history of the modern corporation,
“The Company,” John Micklethwait and Adrian
Wooldridge explain how the corporation became
one of the West’s great competitive advantages,
becoming perhaps even “one of the greatest single discoveries of modern times” (2005, p. xxi.).
Corporations compete for investment capital
to increase their production capability. This also
benefits investors as they can spread out their
risk by purchasing small and easily marketable
shares. Upon incorporation, the firm becomes
a separate legal entity, distinct from the owners
or managers (Farrar and Hannigan, 1998). The
“personification of the corporation is significant
because it implies a single and unitary source of
18
B Corp
control over the collective property” (Lan and
Heracleous, 2010, p. 295). This control is centralized in a board of directors, who are elected by
shareholders. The directors then hire officers to
manage the daily affairs of the organization.
Since directors are chosen by shareholders
and are using their capital to run the company,
they (and the officers) have a fiduciary responsibility toward them. They must act in their best
interests. The traditional view of corporate law is
that the best interest for shareholders is to receive
a positive return on their investment. Thus, the
primary obligation of a corporation is to return
a profit to shareholders. This was established
in a 1919 lawsuit, when the Supreme Court of
Michigan rejected Ford Motor Company’s decision to reinvest its profits in the business instead
of paying dividends to shareholders (Dodge v.
Ford Motor Co.). The company was criticized
for attempting the run the company like a “semieleemosynary [charity] institution and not as a
business institution” (1919, p. 683).
One of the tensions in corporate governance
and the corporate social responsibility movement is how to balance the primary obligation of
maximizing shareholder wealth with obligations
There is one and only one social responsibility of business—to use its resources
and engage in activities designed to increase its profits so long as it stays within
the rules of the game, which is to say, engages in open and free competition, without deception or fraud. (1970, p. 8)
Under this traditional view of shareholder
primacy, there is no legal legitimacy to maintain
a dual mission, or for the company to sacrifice
shareholder interests for those of other stakeholders. Officers and directors are limited by their
responsibility as agents acting on behalf of shareholders (Lan and Heracleous, 2010, p. 297). An
alternative view posits that directors and officers
are instead agents of the corporation, which would
allow them to consider broader stakeholder interest in their management decisions, beyond just
maximizing shareholder return (Lan and Heracleous, 2010, p. 300). The view of director primacy is
potentially bolstered by another legal principle, the
Business Judgment Rule, in which courts defer to
a good-faith decision made by a Board of Directors
under a shareholder challenge (Branson, 2002, p.
631). Additionally, some states have passed Constituency statutes, which specifically authorize
directors to consider other interests besides just
stakeholders, such as those of employees, suppliers, creditors, customers, the economy of the community and societal interests, particularly in the
context of a hostile takeover in which community
jobs would be sacrificed (Bretsen, 2006).7
In a 2006 article in the Journal of Biblical
Integration of Business, Bretsen argued that the
combination of the Director Primacy Theory,
Business Judgment Rule and Constituency Statutes would together allow sufficient flexibility for
a social enterprise, such as a Christian company
operating as a Business as Mission, to pursue
its spiritual and social bottom lines while using
a traditional corporate model. However, he also
acknowledged that a publically traded corporation attempting to operate as a “faithful business”
(Bretsen’s phrase for Business as Mission) will
likely face issues related to takeover proposals,
where another entity attempts to gain control of
a corporation through the purchase or exchange
of stock (p. 69). Yet, while Constituency Statutes
may provide a safety net for a Christian hybrid,
not all states have these. Bretson’s article was
written before the increased popularity of social
hybrids and the emergence of the B Corp and
LC3 models.
For smaller social hybrid corporations that
do not rely on investment capital, the shareholder
versus stakeholder dilemma may not be an issue
at all. But even if maximizing shareholder returns is not a concern, the corporate model does
not help the social entrepreneur’s need to brand
the organization as a hybrid. There is no way to
get around the obvious fact that a corporation
“is designed to make money” (Mickelthwait and
Wooldridge, 2005, p. 191). There is also no mechanism for a for-profit to acknowledge contributions as tax deductible or to obtain some of the
beneficial tax treatments allocated to nonprofits.
Another popular organizational structure
is the Limited Liability Company (LLC), which
blends the benefits of corporations and partnerships. Like a corporation, the LLC offers limited
liability to its owners. Like a partnership, owners, which are called members (not shareholders),
can craft a membership agreement that divides
management responsibilities, as well as profits
and losses, as they wish. Members are taxed individually, similarly to the partnership model.
The main benefit of the LLC model to social
hybrids is its flexibility. A social enterprise LLC
could consist of for-profit and nonprofit members,
with the potential to allow for-profit members
to share in the profits while allowing nonprofit
members to retain decision-making power (Kelley, 2009). The pass-through tax features of the
LLC may be attractive to social enterprises that
prefer the individual tax rates. The form is available in all states and there is a settled body of
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to employees, customers, suppliers, and other
stakeholders. Milton Friedman is most famously
quoted on this issue:
19
state and tax law about LLCs. Although LLC
membership agreements can be complicated,
most attorneys who work in this area are familiar
with the model.
The problem with using the LLC form for social hybrids is primarily branding. “LLC” signals
a for-profit organization. Under IRS regulations,
it will not qualify for charitable grants. It may
also be challenging to convince socially responsible investors that the hybrid is committed to a
social mission.
Is the nonprofit corporation model a good fit?
Historically, a nonprofit structure has been the
only choice for organizations focused on social
mission. But does it meet the needs of hybrids?
The main characteristic of an organization that
is qualified as a nonprofit under Internal Revenue
Code regulations is that it is “barred from distributing its net earnings, if any, to individuals
who exercise control over it, such as members,
officers, directors, or trustees” (Hopkins, 2009,
p. 6). This is known as the “private inurement
doctrine.” The purpose of the rule is to ensure
that a charitable organization is serving public interests, not private interests. This does not mean
that a nonprofit organization cannot generate a
profit. They can engage in commercial activities
if this will enable them to achieve their charitable
purpose. What they cannot do is transfer the
profits to private individuals, such as paying an
executive director an excessive and unreasonable
salary. “The existence of a single commercial or
otherwise nonexempt and substantial purpose
will destroy or prevent the [tax] exemption”
(Hopkins, 2009, pp. 52-3). A non-profit entity is
thus prohibited from pursuing a dual mission.
In addition, in order for the nonprofit to qualify as tax-exempt, and be able to receive contributions that are tax deductible, the organization
must comply with IRS reporting regulations.
These include a comprehensive initial filing and
annual compliance filings of Form 990. As Hopkins reports, when the IRS revised the 990 Form
in 2007, the nonprofit community was stunned.
“If this is the annual return we will have to file,
20
we don’t want to be tax-exempt anymore” (Hopkins, p. 115). Thus, the nonprofit model, with
its limits on revenue production, owner control
and excessive regulation is also not a good fit for
many social hybrid organizations.
The New Wineskins
Social hybrid pioneers have lamented the
shortcomings of the traditional for-profit and
nonprofit models described above. If only the
benefits of each could be combined and the detriments eliminated! This is the motivation behind
two new organizational forms explicitly created
for social hybrids: the Benefit Corporation (“B
Corp”) and the Low-Profit Limited Liability Corporation (“L3C”). Although other organizational
models have been proposed, such as the Flexible
Purpose Corporation in California and the Socially Responsible Business Corporation in Minnesota and Hawaii, so far, only B Corp and L3C
statutes have been enacted.8 These seem to be
gaining wider acceptance, although they still do
not address all of the concerns of social hybrids.
The B Corp is both a corporate form under
state law and a certification process. Under the
corporation model, a B Corp is incorporated in
a state with a B Corp statute, and is treated similarly to a regular corporation for liability, tax and
governance purposes. States that have enacted
the B Corp structure include Maryland (effective in October 2010) and Vermont (effective July
2011), with other states considering the model or
a similar concept (Douglas, 2010). The difference
in the B Corp structure is that the incorporation
documents include a general and specific social benefit mission statement. In the Maryland
statute, a general public benefit is defined as “a
material, positive impact on society and the environment, as measured by a third-party standard,
through activities that promote a combination of
specific public benefits” (Md. Corporations Code
Annotations, Section 6C-1c). The third-party entity or person must be independent of the benefit
corporation and follow a transparent, publicly
available standard. A B Corp can also identify a
specific public benefit, such as:
• Promoting economic opportunities beyond
the creation of jobs;
• Promoting the arts, sciences or advancement of knowledge;
• Increasing the flow of capital to entities
with a public benefit purpose; or
• The accomplishment of any other particular benefit for society or the environment
(Md. Corporations Code Annotations, Section 6C-1d).
In addition, the B Corp must report annually
to shareholders on the organization’s progress in
pursuing its goals. The third-party standard review also reports on the status of the missions
and additionally evaluates whether the corporation has considered stakeholder interests in its
decision-making. The business is additionally
assessed on whether it is complying with best
practices pertaining to employment and environmental standards. A nonprofit entity, the B Lab, is
available as the certifying organization, although
others could qualify for this as well (B Corporation: Become a B Corporation, 2011).
The B Corp certification route is available to
businesses that are already incorporated or do
not wish to incorporate in Maryland, Vermont or
other states that have a B corporation statute. Under this process, the business must first complete
a self-assessment which addresses such issues
as governance (“Has the company explicitly integrated social mission into its written corporate
mission?), compensation (“Is a living wage paid
to all full-time and part-time employees?”), work
environment (“Is there a formal method by which
employees can raise complaints without fear of
reprisal?”), community relationships, energy
usage and so on (B Corporation, “Become a B
Corporation,” 2011). The B Lab, a nonprofit company, reviews this initial assessment and determines whether or not the business meets the qualifications. Periodic and comprehensive audits are
planned to ensure compliance. Once a company
becomes certified, they join the “B community”
and are encouraged to share resources and discounts with other B Corp businesses. There are
419 businesses certified as of May 27, 2011 (B
Corporation: B Community, 2011).
The new model has attracted favorable reviews. “Is the Benefit Corporation Really Such a
Big Deal?” asks corporate philanthropy attorney
Allen Bromberger. “In a word, yes…for a new
breed of companies that want to do both [profit
and social mission], the new form offers something unique” (Para. 2, 2010).
The Washington Post reported on January 24,
2011: [The B Corporation]…is new ground, but
it can play a more important role in compelling
entrepreneurs to do social good while they make
a profit,” (Duncan, 2011).9
Seattle attorney Brian Howe chose the B Lab
certification for his law firm because it identifies
his business as both cutting-edge and focused on
social mission. Others point to the possibility of
attracting socially conscious investors. There is
also a “B community” that offers discounts on
goods or services to other B companies. Additionally, working in a B-certified firm may boost
employee morale (B Corporation: The Business
Case, 2011).
The B Corp and B Lab certification should
help hybrid organizations with branding, although the concept is so new that many people
are not aware of it. Other potential drawbacks
are that the concept is untested. The law is somewhat imprecise and can be confusing. There is
obviously a lack of interpretative law and no set
standards yet on best practices. Investors may be
reluctant to participate in ventures where their
interests are not placed first. Enterprises that may
attract contributions will not be able to provide
tax deductions. Finally, there is an additional layer of analysis for management to consider, that of
stakeholder interest (Wexler, 2009).
Another new option available to social hybrids is the Low Profit Limited Liability Company
(L3C), a variant of the limited liability corporation. This retains the flexibility of the limited lia-
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• Providing individuals or communities with
beneficial products or services;
21
bility company (LLC) but was created especially
for a hybrid organization, hence the “low profit”
label. Its unofficial motto is “the for-profit with a
non-profit soul” (Schmidt 2010, p. 164). The other
unique feature of the L3C is that it was designed
to qualify for “program related investment” loans
from private foundations, based upon Internal
Revenue Code requirements. These investment
loans would allow foundations to advance social
benefit goals, such as building affordable housing, charter schools, alternative energy facilities,
health care facilities in depressed neighborhoods,
and so on. The model was first adopted in Vermont in April 2008. Since then, legislators in
several other states, including Illinois, Michigan,
Wyoming, Louisiana and North Carolina have
also passed a Low-Profit Limited Liability Act
(Schmidt, 2010).
The L3C model has received both rave reviews and strong criticism. Its strong point is its
branding, particularly the tag line, “the for-profit
with the nonprofit soul.” In research conducted
among the early adopters of the L3C in Vermont,
Elizabeth Schmidt reported that most were attracted to the form by its branding potential.
According to several LC3 pioneers, a social-hybrid business form is both a perfect
fit for their organizations and a perfect fit
for our times. The L3C was created for
organizations that want to operate at the
intersection of mission and profit….We
have been trying to…weave together 50+
years of for-profit, nonprofit and government agency experience. In [their] minds,
there is no better way to do that than with
the LC3 (Schmidt, 2010, p. 182).
Criticism of L3Cs primarily focuses on the
challenge of compliance with the IRS Program
Related Investment (PRI) rules. A PRI is an investment made by a charitable foundation to further a tax exempt purpose of the foundation. It can
be a loan, a loan guarantee, or other transaction, as
long as it meets three requirements: 1) the primary
purpose will accomplish a charitable purpose, 2)
22
no significant purpose includes the production of
income or appreciation of property and 3) it does
not involve lobbying or participation in a political
campaign (Schmidt, 2010, p. 165).
Law Professor Daniel S. Kleinberger argues
that private foundation investments in L3Cs
“will not have any PRI-related advantage over
investment in ordinary LLCs” because the PRI
rules still do not allow for foundations to invest
in a private benefit organization as this would
be a violation of the private inurement doctrine
described (2010, pp. 37–38). Additionally, the
L3C statute contradicts itself. In order to attract
foundation Program Related Investments, the
legislation states that “no significant purpose of
the company [can be] the production of income”
yet the L3C is still designed to be a low profit
limited liability company (Kleinberger, 2010, pp.
37–38). Clearly, as with any new legislation, there
are details to be worked out.
Implications
Aside from the benefits and detriments discussed above, what are potential consequences
from these new organizational forms? We identify
six possible outcomes that merit further research
and discussion. Some of these implications are
of particular concern for Christians engaged in
social enterprises and Christian business schools.
1. States will continue to compete with innovative organizational models.
We believe this is a positive development.
State governments have routinely functioned as
laboratories for new laws, and the same will be
true for both the B Corp and L3C models. Maryland is already proclaiming itself as the “Delaware” of B corporations (B Corp Blog, 2011).
Competition among states to attract socially responsible businesses is a good strategy for states,
signaling a climate that is both business-friendly
and socially progressive. There is also some potential for additional revenue, particularly for
states that are able to offer the most attractive
package, although it is unlikely that another state
will be able to match the “cottage industry” of
2. There will be more variations in tax policies for nonprofits and social hybrids.
We expect that policy makers will become
more interested in the opportunities for additional tax revenue from nonprofits as well as a sliding scale of tax breaks for social benefit hybrids.
Why should socially beneficial for-profit companies not enjoy some of the tax benefits available
to nonprofits? Why not have for-profit charities?
A 2007 article in the Virginia Law Review argues that organizational form is not a logical reason for the government to base tax subsidies for
charitable activities.
Existing theories of nonprofit status are
not persuasive justifications for coupling
the nonprofit form and tax breaks for
community-benefit activities. The government should not condition such breaks
on taking the nonprofit form, that is,
complying with the nondistribution constraint. Exclusively subsidizing this form
distorts entrepreneurs’ incentives and encourages inefficient production (Malani
and Posner, 2007, p. 2023).
Others have challenged this view. A 2010
article in the Michigan Law Review counters
that there are a host of public policy reasons to
keep the current system. One is that giving a tax
break to for-profit charities would be a nightmare
to administrate and “would create new avenues
for tax avoidance” (Hines, Horwitz and Nichols,
2010, pp. 1214–1215). Extending tax breaks to socially beneficial for-profits may eventually lead to
a reduction in the deductibility of contributions,
further eroding contribution levels and charitable
activity. In other words, if we “mess” with the
system, there is a risk that everyone loses.
Nonprofits have already begun to feel the
pinch of new fees and taxes from local governments desperate for cash. The Wall Street Journal
reported in December 2010 that a number of cities,
including Houston, Minneapolis and Richmond,
among others, are finding creative ways to address
budgetary shortfalls. Taxing nonprofits “marks a
sharp departure from long-standing tax exemptions mandated by state law or adopted on the
theory that churches, schools and charitable organizations work alongside governments to provide
services to the community” (Dugan, 2010, p. 1).
This may be only the beginning. Despite the
historical tradition and oversight challenges, governments may welcome the opportunity to expand
the tax base. Why not offer a sliding tax scale
based on social benefit? An efficient nonprofit
may qualify at the 90% tax-free rate, with less
efficient nonprofits taxed at 80%. Social hybrid
organizations should pay a lower tax rate than the
business corporation rate. Again, this would add
more complexities to the system, but such considerations have never slowed Congressional or IRS
regulators. If there really is no logical reason to
base tax-exemption on organizational structure
(profit v. nonprofit), then a change in tax policy
is inevitable.
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corporate governance support that Delaware has
established for many years.
There is also a benefit in allowing multiple
models to spring up that can be tested by earlyadopting states. As already discussed, there are
problems with both the B Corp and L3C laws.
States that have not already adopted a social hybrid form would do well to watch how the laws
work out in other states. If the critics of the current L3C model are right, they will be vindicated
in tax court cases and other litigation. After a
few years, these issues should get sorted out and
L3C state law will either be modified or scrapped
altogether. The benefits to the early adopters are
already taken. States without an L3C, B Corp or
other hybrid model should wait until the potential
problems with these models get resolved.
3. Responsible businesses will feel pressured
to pursue social mission.
This is not a good development. If we value
social entrepreneurs or Business as Mission organizations more highly than ordinary revenuegenerating companies, we will perpetuate the
dualism between sacred and secular that has
plagued modern Christianity, especially in the
23
business arena. Not everyone is called to be an
entrepreneur nor are all gifted with the abilities
required for effective social mission. Christian
business students in particular should be encouraged to be “salt and light” in the business world
and participate in the honorable pursuit of capital.
The entirety of business is a ministry, as it provides goods and services, employment, and economic vibrancy. As the Christian Business Faculty Association and others continue to develop
a Business as Mission theology and curriculum,
we should guard against establishing a hierarchy
where the ordinary business discipline becomes a
second-class citizen.
4. Churches and Christian missions will turn
to social ventures to generate revenue.
This is good news. Encouraging revenuegenerating models to assist churches and Christian
mission organizations will open up more opportunities for ministry and innovation. These groups
need not be completely dependent on dwindling
contributions. The New York Times recently
reported that there has been a huge decline in
private foundation funding as a result of the economic crisis and increased IRS scrutiny (Sullivan,
2011). Another recent study reported that giving to
churches overall declined to 2.4 percent of a donor’s income, lower than during the first years of
the Great Depression (Bunte, 2010).
New churches and other mission startups will
especially benefit from operating a social hybrid
organization. If a new pastor, or founding team,
is engaged in a revenue-generating business
while planting a new church, they will already
be connecting with and serving the very community they are attempting to reach. This could even
change how we “do” church. Churches and other
missions groups that use a social hybrid structure
will have incorporated an outreach into the beginning “DNA” of the organization. Serving the
community will not just be a “tacked on” activity. Seminaries, schools of ministry, denominational church headquarters and mission-sending
organizations should pay particular attention to
24
how this development impacts their selection and
training of new pastors and missionaries.
5. Branding for social hybrids will continue
to be confusing.
Branding is not just an issue for public relations or marketing, but is more definitional for social hybrids: what are these entities? This is problematic not just for potential customers and clients,
but also for investors, donors, board members and
the integrity of the hybrid organization itself. The
risk is not just that this is a new model and people
do not understand what hybrids do, but that structures for legal and financial accountability are not
in place. While B Corporations and L3Cs are an
attempt in this direction, it will take time—and
mistakes, failures, and lawsuits­—before some of
the details get sorted out regarding how these new
creatures are to function.
One key indicator to watch is investment in
hybrids. In an article in the online journal Inc.
com, Suzi Sosa noted that capital is not yet flowing into hybrid organizations because investment
funding requires transparency and certainty,
which hybrids still lack. “[W]ithout widespread
legal infrastructure to codify decision-making
authority, the risk of weak accountability is too
high” for investment in hybrid organizations
(2010, para. 8). There are a handful of funds that
are attracting interest, such as SOCAP (Social
Capital Markets, “At the Intersection of Money
and Meaning”) and the Global Impact Investing
Rating System. Kevin Jones, founder of Good
Capital and a co-founder of the SOCAP conference, believes we are in a new era. In an interview
with the Bay Citizen before the fall 2010 SOCAP conference in San Francisco, he explained,
“There is a changing investor mindset. There is a
true moral hunger for a new asset class” (Weber,
2010). Yet, as the interviewer wryly noted, “It remains an open question how quickly that moral
hunger will translate into signatures on checks”
(Weber, 2010).
Reluctant investment is only a symptom of
underlying issues that board members of hybrid
organizations will need to wrestle with. Board
6. Hybrid organizations will find it challenging to do dual missions well.
Related to the definitional branding issue described above, this challenge gets to the heart of
what social hybrids truly want to do, which is the
dual mission. Is it really possible for an organization to generate revenue and meet their social mission equally well? When there is a decision regarding costs or quality or growth, which bottom line
will win out: mission or profit? It is challenging
enough for a single-focus organization to stay ontrack with their mission. Having a dual mission
compounds the decision-making, the stakes, and
the complexity of operation. “Mixing mission and
money is tricky business, requiring strong leadership to articulate and maintain clear priorities and
accountability” (Sosa, 2010, para. 12).
Some hybrids have already given up. Unitus, a Seattle nonprofit (“innovative solutions to
global poverty”) shut down its microloan venture
capital arm and laid off employees in a surprise
announcement in July 2010 (Holtzman, 2010).
Another example is GlobalGiving, which the New
York Times reported failed to generate sufficient
profits from its technology platform partner,
ManyFutures (Strom, 2010). If neither side of a social hybrid is achieving its mission, pulling them
apart can be even harder. Laura Callanan, a consultant with McKinsey & Company’s social sector
office has commented, “When everything is going
well, everyone is getting along and interests are
aligned. But when financial challenges hit, the fact
that there are different objectives creates questions
about how the pain is shared” (Strom, 2010).
Despite this daunting task and the challenges
that hybrid organizations and their entrepreneurial founders face, we are optimistic about the
future of this field. We believe that the positive
benefits of social hybrid structures outweigh the
negatives. We also see new opportunities for
business schools to teach and encourage social
entrepreneurs as part of the regular business curriculum. Social entrepreneurship is all about in-
novation, the ability to see what needs to change
and to see change as an opportunity, not a threat.
William Pollard, the 19th-century English clergyman, once said, “Without change there is no
innovation, creativity, or incentive for improvement. Those who initiate change will have a
better opportunity to manage the change that is
inevitable” (Brainy Quote, 2011).
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ENDNOTES
1. Other business structure formats are partnership, limited liability partnership and sole
proprietor.
2. Johnson also differentiates among ministry
from “outsiders” (non-business Christians) to
those inside the business world; ministry within
the marketplace, by Christians in business to
others in business; and ministry through the
marketplace, where Christian business people
use business to help others in a cross-cultural or
international context. Johnson would limit Business as Mission to this last group. Other authors
use slightly different terminology, such as
“Great Commission Companies,” in the Rundle
and Steffen book of the same name. A “Great
Commission Company” is a “socially responsible, income-producing business managed by
kingdom professionals and created for the specific purpose of glorifying God and promoting
the growth and multiplication of local churches
in the least-evangelized and least-developed
parts of the world” (2003, p. 41). Stephen Bretsen prefers the term “Faithful Business,” defined
as a “firm holistically integrating Christian theo-
logical and social principles with its business
operations for the glory of God” (n.d., p. 124)
3. All Scripture is from the New International Version, 2011, retrieved from http://www.
biblegateway.com/versions/New-InternationalVersion-NIV-Bible/
4. The innovation need not be a dramatic
breakthrough, such as a new patent. It could
simply be the application of a concept from one
field to another or in a new location.
5. The most common reason for selecting
the L3C entity was that they hoped to receive
Program Related Investment funds, even though
none of the respondents in the survey received
any PRI funds (Schmidt, 2010).
6. The Appendix includes a list of questions
we wrote for an entrepreneur to consider under
each category.
7. Most Contingency statutes were enacted
to protect directors who reject a hostile takeover
bid, so that local jobs can be protected. See Bretsen’s article for a fuller discussion.
8. As of February 1, 2011. The California bill
was introduced in 2010. The Minnesota bill was
proposed in 2007 and the Hawaii bill in 2006.
9. Current media reports on B Corp and B
Certification process can be assessed at the B
Corporation media link at http://www.bcorporation.net/media
PEER-REVIEWED ARTICLES
Rundle, S. & Steffen, T. (2003). Great Commission
Companies: The Emerging Role of Business in Missions.
Downers Grove, IL: InterVarsity Press.
ABOUT THE AUTHORS
Teresa Gillespie is Dean of the School
of Business and Management at
Northwest University in Kirkland,
Washington, where she also teaches
Business Law and Ethics. Prior to
this, she was in-house counsel for a
Fortune 500 company for 17 years.
She received her J.D. from the University of Washington School of Law.
Tim Lucas teaches management and
economics at Northwest University.
Prior to teaching he was in corporate
positions at Eastern and Continental
Airlines, and in the hospitality industry. He is currently pursuing his DBA
degree at George Fox University. His
doctoral research dissertation is focused on social entrepreneurship.
27
APPENDIX
QUESTIONS TO HELP ENTREPRENEURS SELECT AN ORGANIZATIONAL FORM
Mission
  1. Who are we?
  2. What do we do?
  3. Whom do we serve primarily? Secondarily?
  4. Are we crossing cultural or internationally boundaries?
  5. What are our goals?
  6. What are our priorities?
  7. How will we measure success?
  8. How can we demonstrate that we have
met our mission?
Market and Brand
  9. Who are our stakeholders? (clients, employees, vendors, investors, etc.)
10. Will our stakeholders understand who we
are?
11. How do we want others to see us? Do we
want others to know we are primarily a
revenue-producing entity or a nonprofit
that can give tax deductions for contributions? Are we a cutting-edge hybrid that
combines revenue production with social
mission?
12. What do our investors or donors want
from us? Return on equity? Charitable
tax deduction? Confirmation of mission?
Resources
28
15. Will we have different categories of investors? Will we be able to attract Program Related Investments from foundations?
Control
16. Who is in charge of our direction?
(founder, board, owners or members)
17. How will we make decisions?
18. Whom are we accountable to?
19. What if we want to change direction?
20. What does the founder want to personally get out of this?
21. What if the founder leaves, dies or wants
to sell?
Taxes
22. Do we need or want to avoid tax liability?
23. Are we prepared to comply with regulatory rules for 501(c)(3) organizations?
Risk
24. What’s our liability risk? Do we need or
want to limit personal liability?
25. Do we need to separate out the more
risky aspects of the business?
Regulation
26. Are we prepared to comply with extensive IRS regulation (for nonprofits) or an
outside auditing process (for B Corp certification)?
13. What are our sources of funding? (revenue, donations, investment, loans)
27. How quickly do we want to establish our
organization?
14. What additional resources do we need for
growth?
28. What is our preference regarding organizational structure? Do we care about
simplicity? Complexity? Flexibility?
A BUSINESS MODEL TO INTEGRATE BEST PRACTICES OF
FOR-PROFIT AND NON-PROFIT ORGANIZATIONS
Orneita Burton and Jozell Brister
Abilene Christian University
ABSTRACT
PEER-REVIEWED ARTICLES
ORGANIZATIONAL HYBRIDIZATION:
The goal of this research is to identify factors that occur in highly competitive, profit-oriented businesses
that are also successful in serving the needs of customers and employees and key constituents of the operation’s stakeholder network. This research defines factors needed to bridge the best practices of non-profit or
not-for-profit (NFP) and for-profit (FP) entities to suggest a hybrid business form that serves as a stewardship model to promote ethical management practices in profit-making businesses. Best practices are defined
as suggested by professionals who manage for-profit businesses as hybrid organizations by successfully
incorporating fundamental principles of a non-profit organization. Such practices focus on management
processes that sustain business operations while positively impacting the people served by the organization
and the environment where the company operates. The first phase of a survey has been developed to address the question, “Which non-profit business practices promote the longevity of for-profit organizations
that successfully serve the needs of people?” The integrative nature of this research implies the need for a
second research question: “Which indicators of successful operations co-exist in for-profit and non-profit
businesses?”
Key Words: for-profit, non-profit, hybrid business models, agency, resource dependence
INTRODUCTION
The global economy continues in its attempts
to recover from the impact of unethical, consumer-unfriendly practices that have weakened several economies and threatened the competitive
position of both US and international businesses
(Authers, 2010). Recent reports of unethical business decisions to generate profit in lieu of consumer safety continue to emphasize the reality
of the pressures faced by managers at all levels
in for-profit organizations to place profit generation over the interests of the consumer (Mishkin,
2010).
However, the need to sacrifice one business
goal to achieve another suggests either an ineffective business model or fragmented business
structures that separate business concerns and do
not properly identify and integrate key aspects of
business strategy. In fact, the need to integrate
business strategy, people, and technology to create a cohesive business environment is a concern
that has received heightened attention in many
business schools and justifies investments in enterprise resource planning systems (Rosenberg
et al., 2010). Such institutions recognize the need
to develop enterprise architectures that, 1) cre-
29
ate conditions of sustainability and profitability
in business, and, 2) meet the needs of people or
stakeholders, as both external or internal customers and partners.
The importance of this research is reinforced
by continued concerns regarding the instability
of financial markets and failing confidence in
the ability of government and business sectors
to independently manage financial assets to promote the economic well-being of people. There
is a particular interest in current research around
management processes that are robust to prevent
exploitation and that discourage the unintended
use of public resources to promote private ambitions (Burton et al., 2009). Profit-making incentives that motivate managers to excel can also
inadvertently encourage management practices
that create positions of dominance or result in decisions that underutilize resources or create a disproportionate distribution of wealth. As a result,
internal resources that are uniquely aligned with
organizations and individuals as well as external
resources that are strategically positioned within
a firm are misused and often are not properly allocated to address the interests of either party.
This research contributes to prior efforts to
improve instruction in business management to
better equip students for Christian service in both
for-profit (FP) and non-profit or not-for-profit
(NFP) organizations. This initial effort attempts
to address this issue by defining indicators of successful operations that co-exist in for-profit and
non-profit businesses to create conditions of both
sustainability and charity in business management. In this research, a Delphi study approach
is used to collect data from representatives from
for-profit and not-for-profit sectors to identify key
management practices that govern the operations
of successful businesses that, 1) ensure longevity
and sustainability of business operations, and 2)
focus on the needs of people as customers and
employees. In this paper, we attempt to answer
the following research question: “What nonprofit business practices promote the longevity
of for-profit organizations that strive to serve the
30
needs of people?” A second research question
extends this effort in support of the integrative
nature of this issue, and asks, “Which indicators
of successful operations co-exist in for-profit and
non-profit businesses?”
The remaining sections present the following areas: 1) non-technical literature to present
theoretical and historical perspectives around
the development of non-profit organizations and
their impact on for-profit businesses; 2) a review
of technical literature to present theories used
to motivate this research. Literature in this section was also used to formulate questions and
to demonstrate the overall intent and approach
used in this research; 3) the research method and
data collection environment; 4) an analysis of the
data; 5) a discussion of results and limitations;
and 6) plans for future research.
LITERATURE REVIEW
The Need for Non-Profit Interests
Throughout the history of Western civilization, those who live and interact in a communal
culture have always demanded services that address the issues of societal preservation. It has
been the challenge of many governments to solve
the ever-evolving economic problem of allocating resources to meet the needs of its citizens.
In many cultures, this is addressed through the
formation of social policies that enable a government to reach out to those most in need of these
services.
Of particular interest is the historical heritage aspect of social policy formation (Axinn,
1996). An example of this would be the impact of
Elizabethan poor law on early colonial America.
Social welfare was a prevalent obstacle faced by
this culture, and the chosen method of addressing this problem was to use the English system
of governance, in that it was familiar to this class
of people. A close examination of this legal concept reveals its true function, as best described by
Section 43:2 of the Elizabethan poor law:
This set of laws attempted to satisfy the social
requirement to create a system that served both
the essential needs of those in the community incapable of doing so themselves as well as employ
those capable of providing human capital to sustain economic processes (Matt. 26:2). However,
consideration for the poor seemed to institutionalize poverty in the Elizabethan poor law and led
to a belief that poverty was inevitable and incurable by means other than government mandate.
In addition to these established regulations,
there were noteworthy advocates of social welfare who independently responded to the present
need. Early in the development of colonial America, John Winthrop delivered a speech calling on
the formation of a “Model of Christian Charity”
to his Puritan associates (Winthrop, 1630). This
highly influential address set the tone for the
Christian’s God-given duty to render aid to those
in need, as demonstrated by the early church. The
nature of his speech is well depicted in the following segment:
By the first of these laws [the moral law],
man, as he was enabled so, [is] commanded to love his neighbor as himself; upon
this ground stand all the precepts of the
moral law, which concerns our dealings
with men. To apply this to the works of
mercy, this law requires two things: first,
that every man afford his help to another
in every want or distress; secondly, that
he perform this out of the same affection
which makes him careful of his own good
according to that of our savior: “Whatsoever you would that men should do to
you.” This was practiced by Abraham and
Lot in entertaining the angels and the old
man of Gibea. (Winthrop, 1838, p. 40)
The infusion of Puritan ideologies in colonial
government was crucial in meeting the level of
social welfare needed by the people of that time.
However, the principles asserted by John Winthrop and others like himself called for the independent support only available through the goodwill of the citizens of the era. Although activities
of the church continued to support the efforts of
social welfare policy throughout the development
of the American colonies and proved to be invaluable in assisting the needs of the poor, a more
organic, hierarchical structure of provision is
implied by these efforts to integrate the fullness
of God’s provision for society (Phil. 4:19; Deut.
8:18; 2 Thess. 3:10). Prior research suggests that
a misuse of structures, or in not allowing for provision through the development of natural structures, often results in inefficiencies, i.e., waste,
want, and problems of resource misallocation
(Williamson, 1975; Dyck et al., 2006). Pope John
Paul II in his 1991 encyclical Centesimus Annus,
challenged the “social assistance state,” writing
that the Welfare State of his time was contradicting the principle of “subsidiarity” by intervening
directly and depriving society of its responsibility. The Catholic principle of subsidiarity holds
that nothing should be done by a larger and more
complex organization which can be done as well
by a smaller and simpler organization, i.e., higher
order means of provision should not interfere
with what lower orders are capable of performing
(Bosnich, 2011). The Pontiff suggested that such
practice “leads to a loss of human energies and an
inordinate increase of public agencies which are
dominated more by bureaucratic ways of thinking than by concern for serving their clients and
which are accompanied by an enormous increase
in spending.” It is worthwhile to note that this
principle is consistent with natural structuring
mechanisms suggested in organizational theories, which describe how certain costs influence
the development of markets vs. organizational
hierarchies (Williamson, 1975).
However, some sources suggest that radical
measures of giving are supported by Scripture
PEER-REVIEWED ARTICLES
It is agreed and ordered by this present
assembly, that each towne shall provide
carefully for the relief of the poor, to
maintain the impotent, and to employ the
able, and shall appoint an overseer for the
same purpose. (Quigley, 1996, p. 3)
31
(Dyck et al., 2006; Deut. 15:7-11; 1 Tim. 6:17-18).
Although such provision has often been regarded
as unconventional, motivated by selfless acts of
obedience (Surdyk, 2009), such actions can become inconsistent with God’s provision when
motivated outside of divine directive (Chauncey,
1752; 2 Thess. 3:10). Seemingly excessive acts of
monetary giving have been widely challenged
in that they do not take advantage of the full
measure of God’s purpose in providing for the
multi-faceted needs of people (e.g., emotional, relational, sacrificial, and more) through joint participation in a viable, working community (Phil.
4:19; Deut. 8:18; 2 Thess. 3:10).
Official Recognition and Limitations of the
American Non-Profit
Societal recognition of need, and a philanthropic approach to addressing such concerns,
is evident throughout the course of American
history. It wasn’t until the 1950s, however, that
these efforts were formally recognized by the
government and special provisions established.
With the enactment and subsequent revisions of
the Internal Revenue Code of 1954, a non-profit
entity was legally recognized and given certain
considerations by the American government.
In sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code of 1954, non-profit entities are
classified according to their affiliation and function. The creation of such entities allowed the efforts of those attempting to provide support for a
specific purpose the ability to do so without the
burden of government-imposed taxes. With the
business structure of many non-profits closely resembling that of a for-profit business, the absence
of tax liability should allow for greater outreach
and potential for accomplishing the desired goal.
However, the origins of today’s non-profit are
closely intertwined with the early development
of social welfare policy and the Old Testament
laws that guided it (Prov. 31:8-9; Jeremiah 7:5-7).
Additionally, religious institutions have always
promulgated this effort and continue to have a
significant impact on the way non-profit business
is conducted. With both legal and moral motiva-
32
tions to maintain a separation of church and state,
the American response to social welfare needs
has become a multi-faceted endeavor addressed
by government entities, businesses and other
non-government organizations (NGOs), and the
general populace. Therefore, today’s non-profit,
although regarded as a not-for-profit business entity, is an example of a socially derived organizational structure that is entirely supplemental and
significantly influenced by everyone, including
government programs established to provide aid
in times of economic failure.
Now that more and more NGOs are assisting
in charitable efforts in a formally recognized fashion, the increased availability of funding sources
heightens the response to need and contributes
to societies’ demand for action in this effort. Although the societal needs of the poor have been
identified as spiritual as well as material, charitable demands are typically met through financial
means, placing the management of non-profit services under the governance of economic principles. This condition implies an expected supplydemand relationship at the foundation of both FP
and NFP operations. As such, we can represent
the social welfare relationship as one of suppliers of social services provided by government
programs, FP enterprises, NFP organizations,
and other NGOs and the many who legitimately
require these services. However, demand in this
case is derived from millions of individuals now
supported through government mandate, including many who could be compensated through the
private sector, and swamps the expected increase
in the quantity of social services intended mainly
for the unemployable. This relationship simply
suggests that, as the supply for social welfare increases, the demand for such provisions also increases, thus creating an increase in the price of
providing for these needs. Although the analogy
may appear intuitive, the question to consider is,
“To what extent should both for-profit (FP) and
not-for-profit (NFP) business models exist in a
fully functioning economy?” We have considered this question based on historical accounts of
Motivation: Not-For-Profit/For-Profit
Management Approaches
“Elite business schools are
overhauling their M.B.A.
curricula in an effort to
produce more ethical and
globally savvy leaders.”
February 2011, Chronicle of Higher
Education
Business leaders and educators in higher education recognize the need to improve business
outcomes through a more holistic approach to
educating students in business disciplines (Hegeman et al., 2011). Therefore, this research further
motivates the need to consider hybrid structures
that integrate best practices of business, government, and civil organizations to help in educating
students in providing ethical, more socially effective and economically efficient business outcomes (Dees & Anderson, 2003; Dekker, 2009).
A worthwhile approach to this problem would be
to form legal hybrid FP/NFP institutions where
economic activity is channeled through distinct
organizational structures that, 1) provide for a
true societal need, and 2) efficiently manage the
supply-demand relationship. Although variations
exist in either business model, typical FP and
NFP organizational forms operate according to
their legal description, serving either profitable or
charitable ends (Dees, 2007). However, the advantages of such structures are not well-defined
in a single business model, as performance deficiencies exist in the management of both FP and
NFP organizations.
A gap that has been widely considered and
confirmed in literature where business practice intersects religious values is the problem of
shared or conflicting motivation (Pattison, 1997;
Chewning, R.C., 2009; Machowsky, 2010; Robbins, 2010). Global research in the economics
of both for-profit and non-profit management
relationships has characterized the problem as
one of agency, where the preferences of agents
or employees are not aligned with those of upper management who in turn represent the interests of corporate stakeholder groups (Jensen &
Meckling, 1976; Fama and Jensen, 1983a; Callen et al., 2010). This work suggests that Agency
Theory and Resource Dependence (Boundary
Spanning) Theory can be used to explain relationships where stakeholder interests are not
congruent with governance mechanisms. Pfeffer
and Salancik (1978) define Resource Dependence
as “the organization’s need to construct internal
mechanisms toward managing or strategically
adapting to its external environments.” Nonprofit
organizations manage their external environment by establishing a board of directors who are
capable of influencing the outside world to the
organization’s advantage through such activities
as fundraising, helping the organization interface
with government or other organizations, or by
improving the organization’s public image. In the
nonprofit literature, this is typically referred to as
‘‘boundary spanning’’ (Harlan & Saidel, 1994;
Jun & Armstrong, 1997). In this research stream,
Callen et al. (2010) found that the two theories
are complementary and address different areas of
nonprofit performance.
Miller-Millesen (2003) emphasizes the importance of employing unambiguous objectives
such as profit maximization to improve NFP performance outcomes. Economic theory suggests
that the profit maximizing firm will maximize its
profit if it produces where marginal cost equals
marginal revenue, MC = MR. The authors claim
that such measures are needed to mitigate a more
complex set of performance deteriorating effects faced by NFP boards when compared to FP
PEER-REVIEWED ARTICLES
the formation and formal recognition of NFP organizations. Yet, we see from this literature that,
although there exists a growing demand for the
provision of social services, many NFP activities
are strongly influenced by imbalances in a system of separated provision, and are not the product of natural social and economic activity. As a
result, severe inefficiencies exist in the provision
of social welfare that occurs through government
intervention.
33
boards. NFP boards face factors such as a large
number of stakeholder types, a mixture of ideologies, and a heterogeneous set of goals when
compared with FP boards (Miller-Millesen,
2003). This measure is the proper course for
firms if their goal is, in fact, to maximize profit.
However, the extant literature suggests that upper level management of large corporations may
not maximize profit in the short run (Baumol &
Blinder, 2010). Rather, managers of even FP companies may have goals which are quite distinct
from profit maximization.
Prior research also suggests that managers
of firms may set a goal to “satisfice” rather than
maximize their company’s profits. Satisficing is a
term coined by Herbert Simon (1989), defined as
having an aim to achieve only satisfactory results,
recognizing that aiming for the best-achievable
result would call for additional costs, effort, and
accepting higher levels of risk. As such, proper
governance becomes a factor in influencing management to opt for goals that satisfice vs. those
that promote profit maximization and other goals
that emphasize the competing interests of managers. As such, related interest on biblical perspectives in management may support objectives that
satisfice, denouncing profit or wealth maximization as a strategic yet undesirable state in the
proper stewardship of God’s resources (Dyck et
al., 2006; Luke 16:1-12)
John Kenneth Galbraith’s seminal work, “The
New Industrial State,” established the position
that competing goals and objectives exist because
the managers of a firm and the owners of the firm
are often not the same group of people (Galbraith,
1967). For example, the shareholders of a firm are
only the putative owners—owners in name only.
According to Galbraith, the degree to which one
owns something is the degree to which one controls that asset or resource. As such, Galbraith
claims that the shareholders do not control the
corporation; in fact, the “techno-structure” typically runs the modern corporation. The technostructure is a set of overlapping and interlocking
committees composed of technicians, managers,
34
engineers, and computer specialists. However,
because of the scientific or technical nature of
this group, members of the techno-structure tend
to focus more on individual effort and are often
interested in maintaining or improving their own
position. Because this collective intelligence runs
the modern corporation, within certain contexts,
major decisions in giant corporations are made
by a techno-structure with competing goals and
interests.
Miller-Millesen (2003) discusses similar occurrences when NFP boards experience agency
issues in dealing with executive staff. The author
concludes that NFP boards are less likely to engage in activities such as monitoring managers
to mediate agency problems when this group is
professionalized and knowledgeable, where the
board actually becomes dependent upon managers (typically executive level managers) for
information. Executives who are knowledgeable
and responsible in the day-to-day running of the
organization are more likely to be in a superior
position to affect the agenda and decisions of the
board.
While agency theory suggests that governing bodies such as boards would not improve
NFP performance by monitoring a professionally trained staff, the resource dependence perspective would suggest a positive impact using
boundary spanning (Hyndman & McDonnell,
2009). Based upon the insights from MillerMillesen (2003) and Fama and Jensen (1983a, b),
nonprofit boards that depend on management are
less likely to involve themselves in administrative issues, and involve themselves instead in
boundary spanning activities. For example, Pfeffer (1973) finds that hospital boards dependent
on local communities for support tend to recruit
local well-known community leaders in order to
raise funds. In contrast, hospitals dependent upon
religious groups or the federal government for
support have boards that are involved to a greater
extent in administrative vs. boundary spanning
activities. As such, we would expect administra-
RESEARCH APPROACH
Data Collection
Because organizational performance has numerous dimensions and is judged differently in
various contexts, no one theory can adequately
explain the proper dimensions of a hybrid NFPFP business model. When a research area is relatively new or if many unknowns exist, modeling
is used to quantify and evaluate the conditions
under consideration. However, modeling with
limited knowledge is analogous to modeling in a
vacuum; the result would be models at levels of
abstraction that are of little or no practical use.
In prior research, studies conducted under
these conditions have obtained some insight from
domain experts using Delphi Study methods
(Linstone, 1975). The Delphi Study method is an
iterative process that creates an interactive communication structure between the researcher and
experts in a field. This approach has been used
to provide the insight needed to develop realistic models and has been invaluable in revealing expertise and knowledge that resides only
within the expert. Prior studies have defined
this as knowledge that is not codified or “tacit”
knowledge (Nonaka & Takeuchi, 1995). Giddens
(1984) makes a distinction between discursive
and practical knowledge where the former relates to knowledge that can be articulated and the
latter refers to tacit knowledge that experts are
able to utilize but not necessarily able to express
(Orlikowski, 1992). Related research has defined
uncodified knowledge as “unconscious” learning
(Lewis, 2000).
The Delphi process involves asking qualitative and quantitative questions of domain experts. Respondent information is analyzed and
fed back to each person using additional questions. Participants’ responses are then analyzed
and iteratively shared with all experts until a
consensus is reached to offer synthesis and clarity on the factors under investigation. Because
the study involves "experts" it is assumed that
some reasonable level of quality information is
attained. Because it is an iterative process, it is
assumed that good quality knowledge evolved
from this effort.
Data collected from the Delphi Study group
was analyzed using a grounded theory approach
using open coding techniques, where concepts
were identified and their properties and dimensions were defined by the data. Results from both
analyses were used to identify patterns of relevance in identifying a hybrid structure to bridge
best practices of FP and NFP operations.
Interviews were conducted with six participants who currently or in recent years have overseen operations for FP and/or NFP businesses.
Data were collected from upper level executives,
each with management and leadership experience in at least one of six different industries: financial services, computer and natural sciences,
computer application development, accounting,
management consulting, and non-profit management. Each participant interviewed has guided
organizations using strategies that create profitability and also focus on the long-term sustainability of the organization. These organizations
balance financial goals with a special emphasis
on meeting the needs of its employees and customers.
To identify key characteristics of their management processes, the following questions were
asked during the initial round of interviews:
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tive costs to be higher in NFP/NFP relationships
compared to NFP/FP relationships.
Q1) In your opinion, what decisions can managers of for-profit and/or non-profit organizations
actively make to promote the longevity of their
operation? Please respond to either or both areas based on your background.
Q2) In for-profit businesses, customer relationships are key to sustaining a successful company.
Considering your background, who would you
consider to be your customers? What measures
do you take to enhance these relationships? How
does that correlate to the growth of a company/
organization?
35
Q3) Your involvement in business has been recognized as most successful in promoting positive
returns/outcomes for a business/organization.
What business practices and/or decisions do you
attribute to this success?
round were conducted during separate visits to
the manager’s job site. Second round interviews
were conducted through face-to-face interviews
with one interview conducted by phone.
ANALYSIS
Q4) What do you consider to be your company’s
or organization’s bottom line? Is this measured
qualitatively, quantitatively or a combination of
both?
Content Analysis
An analysis of the content of the six interviews was conducted using a field study approach
as suggested by Miles and Huberman (1994). A
deductive coding scheme was used to initially
guide the analysis of data obtained from the respondents to, as suggested by grounded theory,
identify, “the properties that we can use to examine the incident in the data” (Glaser & Strauss,
2006). In this case, we are looking for properties
that would define the structure that generates the
FP-NFP model.
Table 1 identifies the key concept associated
with each question and responses summarized
from the Delphi group under each concept. In
some cases, for clarification, more detailed responses are quoted for the benefit of the reader.
For each concept, we have also added a term beginning with the letter “S” to develop a 6S model
for this structure, representing the six participants in this field study.
Q5) What can professors do at the university level to foster the development of future managers
equipping them to make these decisions in their
own careers?
During the second-round interviews, an additional question was presented to clarify responses
that would apply specifically to FP vs. NFP entities, to establish consensus around the responses,
and to identify uniquely novel approaches to FP/
NFP integration:
Q6) If you were to integrate the best business
practices of non-profit and for-profit organizations, what would you do that is uniquely different from other managers or organizations?
Each manager received a copy of the questions
prior to the interview. Interviews in the first
Table 1
Open-Ended Responses
Question 1: Longevity (What Sustains)
1. Reactive to changing business climate
2. Relationships are key to the success and
longevity of business
i. Identification of stakeholder (i.e.,
partner/customer/donor/stockholder)
relationships
ii. Responsiveness to customers
iii. Customer satisfaction (pleasing)
iv. Employee/Customer Selection
v. Employee training/empowerment
3. Strong, healthy performance (in terms of
bottom line/accomplishing a mission)
4. Exceptional performance relative to
competition
5. Nurture and sustain key
36
stakeholdersemployees, customers
Focus on business integrity
Definition and management of the
company’s culture is of utmost importance
to its continued success
8. NFP should not focus on longevity, but
instead on relevance and flexibility
9. FP should become an institutional entity;
desperate to survive/preserve
10. Learn to survive or merge: 7 of the top 10
players will go away in 10 years
Question 2: Customer Service (What it means to
serve)
1. Eat, sleep and breathe customer service
2. Availability
3. Consistency of operations between locations
6.
7.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Equitable treatment of customers
Careful maintenance and selection of
customers
Deliver a quality product/service that is
good for the customer
Obtain customer feedback and incorporate
responses into your business model
(Responsiveness)
Everything you do speaks about you and
your company
Being genuinely kind, polite, hospitable
View business services through the eyes of
the customer
Know your customers
Don’t rely on third-party analysis of
customer information
Cultivate customers
Allow customers to be actively engaged in
prioritizing the company
Meet with customers on a regular basis
Constantly improve product/service
offerings
Identify hurdles that hinder company from
offering unparalleled service
“Wow” the customer, going above and
beyond customer expectations
Rewarding associates for “exceptional”
customer service
Mass communication of superior service
offered by associates in interacting with
customers
Question 3: Practices leading to Success (what
works)
1. Establish and communicate financial indicators (i.e., growth measures)
2. Establish an environment that differentiates
between leaders and managers
3. Establish an environment that differentiates
between a job and work
4. Reward managers for retention, development of people, contribution to revenue
stream, and contribution to margin
5. Be a good steward
6. Be responsible
7. Be flexible; NFP should be relevant or go
away
8. Be flexible; FP will go away if they do not
change
9. Manage through influence vs. power
10. Know what you can control and what you
can not
11. Create environment that allows change to
happen healthily
12. Treating customers/stakeholders with
respect and integrity will sometimes be
reciprocated
13. Good companies can change bad companies
through their interactions
14. Have a Christian worldview that values
more than profit
15. Staying true to your value fulfills our purpose and reaps dividends
16. In B2B relationships, consider the wellbeing of your suppliers
17. Make profit and grow it; focus on the creation of capital vs. redistribution
Question 4: Bottom Line (Scorecard—what to
measure)
1. Growth measures
2. Employee and customer satisfaction surveys
3. Emphasis on quantitative measures that
drive qualitative measures
4. Tracking of location specific issues to
facilitate resolution
5. Consider future trade-off versus current
trade-off of every business decision
6. Evaluate business partner alignment
(customer, supplier, shareholder, others)
7. Company culture measures (integrity,
others)
8. Consideration of correlations between
financial and social measures
9. Ratios drive the bottom line and how you
define value
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4.
5.
Question 5: Equipping Students (what to teach)
1. Model based learning within the context
of business to understand factors and
relationships
2. Stakeholder models
3. Low cost vs. usury models
4. Core values, critical behaviors
5. Mentorship and coaching
6. Teamwork and peer reviewing– nothing is
an individual contribution
7. The value of win-win outcomes
8. Make a distinction between leaders and
managers and train appropriately
9. Teach what is in the book - knowledge of
core business principles
10. Teach what is not in the book, e.g., forces,
control, value vs. what feels good
37
11. Knowledge and understanding of key
business performance measures
12. Math, critical thinking, integrity, ethics,
values, cultural differences
13. Practical knowledge regarding the way a
business functions at its core
14. How to gain an understanding of the current
business environment
15. Fresh business ideas that are relevant to the
current environment
16. Sharing of real-world experience
17. A thorough understanding of “customer”
and customer service
18. Understanding of baseline vs. exceptional
performance and the impact on the company
19. Understand how the business operates
in community with people (customers,
employees, and others)
20. Use of business cases to ensure relevancy
of business concepts and provide actual
examples of real world business operations
21. How businesses solve their problems and
issues
22. Focus on how to generate vs. redistribute
wealth
23. Modest living
Question 6: Integration (what is Special, unique)
1.
Terminology may be different, but more
relevant
2.
Full stakeholder analysismust identify
names and needs
3.
Model-based understanding needed of
business within its proper context
4.
Focus on balance of purpose and
performance
5.
Define true value, include hard (quantitative)
measures and ratios
6.
Maintain relevance, purpose
7.
Plan to survive or merge to accommodate
change, maintain relevance
Development of Stewardship Model
In developing the stewardship model, Table 2 has been provided to compile and categorize NFP business practices that, as stated in our research question, promote longevity of FP organizations that successfully serve the needs of people. A grounded theory approach requires that, in order to define the point of
integration between two models, the researcher must first be able to define the properties and dimensions
of each entity (Strauss and Corbin, 1998). Following this approach and using responses from the Delphi
group, the properties of the resulting stewardship models are shown in Column 1. To define the point of
integration, Table 2 also compares characteristics of FP and NFP models as provided by respondents. These
characteristics form the dimensions for both FP and NFP businesses as shown in Column 3 and Column
4, respectively. The integrated 6S stewardship model proposed by this research as a response to the second
question, “Which indicators of successful operations co-exist in for-profit and non-profit businesses?” is
provided in Column 5 of the table.
Table 2
Entity Properties—Dimensions
38
Column 1
Column 2
Column 3
Column 4
Column 5
6S
Properties
Description
FP
NFP
FP-NFP
Sustainability
What sustains
Focus: ROI
flexibility, service, profit, true
value, real growth
Focus: mission, flexibility,
relevance, mission
Focus: balance—
survive or merge,
purpose w/
performance
Stakeholders
What is service
fit, treat w/respect/integrity
purpose, modesty
Balanced stakeholder
model
Success
What works
Christian worldview, agency
relationships
flexibility, resource
dependence
context based
relationships
What to measure
True value, ind/mkt/perf ratios
purpose, relevance
value, purpose, ratios
Students
What to teach
leadership, math, financials,
balanced focus, mentorship,
influence, responsibility, winwin, value, forces, control,
service
management, modest
lifestyles, service,
responsibility
All in context
in model-based
relationships,
stewardship
Special
What is different
institutional
need sunset
thrive or merge for
relevance
DISCUSSION
These results suggest that all six members of
the Delphi study group favor the importance of
an integrated approach to business management
to ensure the success of both the company and
the stakeholders or people involved in various
business relationships. Although all respondents
agreed that the purpose of a NFP is different
when compared to a FP organization, an integration of business practices would add value to both
environments.
The following sections discuss each property
and associated dimensions in greater detail. Implications of each are also provided to extend this
work in future research by developing a survey to
administer to a larger population.
Sustainability (Longevity)
“NFPs live forever, often
whether or not they need
to.”
(Anonymous Delphi respondent)
All respondents associated longevity or the
long term sustainability of a FP company with
meeting customer and stakeholder needs and a
strong bottom line performance. To sustain operations, the FP must satisfy investors who seek to
maximize their return on investment (ROI). Otherwise, investors will fund other ventures, and the
company will not continue. Therefore, a focus on
service, profitability, true value, and real growth
are necessary to sustain the FP organization.
Most agreed that the FP company must also
be “in it for the long haul.” To do so, the organization must be flexible and create an environment
for change to occur naturally, in a healthy manner. However, the objective of the NFP should not
be longevity or sustainability; instead, the goal of
the NFP should be to fulfill its mission, to serve
its purpose. With this in mind, the NFP must be
flexible enough to fulfill its mission, and, then,
when fulfilled, go away or adopt another.
The implication is that the organization following an integrated model may need to seek balanced approaches to ensure both survival and relevance. A measure of this would be to determine
if the company has a working mission statement
and performance measures in place that monitor
profitability.
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Scorecard
Stakeholders (Service)
The customer relations property quickly expanded into a stakeholder category with many
dimensions. Delphi respondents all emphasized
the importance of people in every aspect of the
business, from employee, to customer, to stockholder, to include even the interests of the supplier. FP companies express the importance of fit
when hiring associates and in choosing customers. Considering the network of business relationships, it is also important to treat all people with
respect and integrity, even if the need arises to
separate from the company.
NFPs serve a mission or purpose. It is therefore important for managers of NFPs to keep a
healthy focus on the spirit and intent of the mission and not to live in a way contrary to the interests of the same (Luke 16:11). One respondent
provided an example of when an influx of missionaries to an impoverished village resulted in
an increase in the price of housing, thus making
housing unaffordable for local residents.
39
Because stakeholders can take many forms
in the integrated FP-NFP model, a stakeholder
analysis would play a critical role in the larger
survey. Companies with interests in both the people as well as the performance of an organization
and its impact on the environment should have a
full understanding of who is to be served by the
mission of the organization and understand the
unique needs of each party.
Success (what works)
We intentionally chose Christian leaders with
an active spiritual relationship to participate in
the Delphi study group. Although this could be
considered a limitation of this study (threats to
validity, i.e., selection bias, Miles & Huberman,
1994), the intent was to ensure outcomes consistent with the will of God. As a result, each respondent emphasized the importance of having a
Christian worldview. A Christian worldview suggests being led by a divine power, not thinking as
the world thinks, even in FP business ventures.
Respondents supplied numerous statements to
define this worldview as an influential FP leader
and a NFP manager:
“Treating customers/
stakeholders with respect
and integrity will sometimes
be reciprocated.”
“Good companies can
change bad companies
through their interactions.”
“Have a Christian
worldview that values more
than profit.”
“Staying true to your values
fulfills our purpose and
reaps dividends.”
The theories suggested through the literature review support the positive contributions made by
following a Christian worldview. Agency theory
explains the impact on organizations when interests between owners and agents or managers
differ and are not aligned—in strategy, motiva-
40
tion, and goals. Although the reasons vary across
industries, the cause still rests in the hearts and
minds of individuals, where, by nature, selfpromoting interests will reign. Although agency
problems can be mitigated to some extent by
governance mechanisms and contracts or agreements, the most effective solution is to create an
environment where people in the organization
understand the impact on the bottom line of holding a Christian worldview.
Resource dependence theory (RDT), which
explains how organizational behavior is influenced by external resources, can especially be
operationalized through a Christian worldview.
The basic tenets of RDT are:
• Organizations depend on resources;
• These resources exist within the organizational environment;
• This environment includes other organizations;
• The resources needed by one organization
often exist in another organization;
• Resources are a basis of power;
• Legally independent organizations can be
dependent on each other;
• Power and resource dependence are directly linked; and
• Power is thus relational, situational and potentially mutual.
Resource Dependence Theory is one of many organizational theories that take a resource-based
view of the firm. To fully understand how to successfully appropriate interlinking resources is
beyond the ability of individuals, even with good
intentions, and even more so beyond the ability of
a diverse management team in a complex, global
operation. Such management requires the adoption of a Christian worldview to be true to values implanted by an all-knowing God, to allow
the allocation of His Spirit to operate in a fallen
world (1 Corinth. 13:4). One Delphi participant
provided a real-life example of how the company
veloped in this research, we propose investigating complementary relationships where, as one
participant recommended, NFPs are reframed
as Service Organizations (SO) with performance
measures similar to a FP organization. For example, the profit-maximizing relationship in
economic models, where MR = MC, could be
used to frame a similar relationship where the SO
maximizes the service component of their mission, i.e., where Marginal Service (MS) equals
Marginal Cost (MC). In this way, efficiencies are
introduced into the operation of the NFP or Service Organization, and an appropriate “sunset”
or endpoint is established.
Scorecard (what is measured)
A consensus was reached during the secondround iteration that quantitative measures were
needed to successfully operate both FP and NFP
organizations. In FPs, although quantitative measures or key performance indicators (KPIs) are
available, it was agreed that many stakeholders
below the executive level did not understand the
meaning of various ratios or how to use them
to manage operations or make decisions. Most
agreed that quantitative measures are typically
not a part of the NFPs’ scorecard, but that success
is measured by a mission fulfilled. However, the
reality is that, as one participant phrased it, “the
NFP often lives on forever whether or not they
really need to.”
Without relevant performance measures,
inefficiencies persist and resources continue to
be misallocated by individuals with good intentioned yet subjective motivations. Agency problems go unchecked and organizations flounder
under the blind guide of mismanagement. Many
financial measures exist that could be used to
guide the NFP manager. However, in the FP environment (as introduced in the literature review),
theoretical guides such as profit maximization,
are not always the goal of groups such as the corporate techno-structure.
For an integrated FP-NFP model, different
relationships must be considered to balance the
focus of an organization. Although not fully de-
Students (what is taught)
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he managed, along with a team of individuals
who shared a Christian worldview, was saved
from the downfall with Enron. His company
was a sister company of Arthur Andersen that
operated under a separate corporate identity. The
separation happened shortly before the Enron
scandal. He attributes the decision to separate as
resulting from “having integrity…staying true
to your values…keep focused…do what is right,
which means do the right thing…keep the end
in mind.” Of the many suggestions made by the
Delphi group, holding to a Christian worldview
was stated as the most reliable contributor to a
successful business.
“Goal of Business
Education: To be good
stewards of things that don’t
belong to us.”
(Anonymous Delphi respondent)
The Delphi participants suggested a fairly extensive list of requirements for preparing students
for leadership in FP companies. Most members
placed a clear distinction between leadership and
management. Leaders were said to be vision casters, where one leader might oversee a number of
managers. NFPs are often managed by an executive staff under the direction of a board. Although
specific areas of preparation were provided for
the NFP manager, the emphasis is that corporate
responsibility carries with it demanding requirements for the leader of a FP business. For this
study, the significance of the difference is that
students are often taught to be good managers yet
are not prepared to be good leaders. With this in
mind, students must be taught both management
and leadership skills, as leaders have great influence on the outcome of the FP business.
An aspect of this study that is particularly
interesting is the impact that a professionally prepared executive or management staff can have on
maintaining the focus of the NFP organization.
Because prior research confirms the observation
that nonprofit boards that depend on management
41
are less likely to involve themselves in administrative issues, students that are properly trained
in business schools increase the likelihood that
board members will involve themselves in
boundary-spanning activities and thus increase
their involvement in activities that the board was
enlisted to perform. When we add to the model
the provision for social needs through FP activity and contrast this with NFPs that depend upon
religious groups, including individuals with good
intentions who lack sufficient business education,
or the federal government for support, and therefore have governing bodies that are involved to
a greater extent in administrative vs. boundaryspanning activities, we would anticipate lower
administrative costs and an overall increase in
efficiency when serving societal needs with NFPFP relationships.
Special (what is special)
In the second round of interviews, we attempted to identify the unique or “special” aspects of integrating FP and NFP models. A number of the suggestions in this research are common practices, or “what is already in the book,”
in the FP business school curriculum. However,
in the tradition of true research, our goal is to
make a significant contribution to the existing
body of knowledge. Therefore, the Delphi group
was asked, “If you were to integrate the best
business practices of non-profit and for-profit organizations, what would you do that is uniquely
different from other managers or organizations?
The statement that follows is short, yet it
summarizes the consensus of a group of Christian business leaders devoted to improving the
quality of the business function:
Be relevant; thrive or merge (partner with
others) as good stewards who are entrusted to
lead and serve people by managing resources
that do not belong to us. Teach others (students)
to do so within the context of real business, using
model-based relationships to ensure they understand how to influence others (individuals, organizations, and their environment) for good.
42
CONCLUSION
The FP-NFP column in Table 2 provides
a list of guiding principles that can be used to
teach students the importance of business leadership (agency) and the management of unique
resources (resource dependence) using modelbased relationships to successfully create an
integrated for-profit/not-for-profit or service organization. These principles are critical to any
effort to integrate best practices of both structures to improve operations through both models,
and particularly the for-profit model. Historical
perspectives on the development of non-profits
suggest that the origins of today’s non-profit are
closely intertwined with the early development of
social welfare policy and the laws that guided it.
Additionally, religious institutions have always
promulgated this effort and continue to have a
significant impact on the way non-profit business
is conducted. The separation of church and state,
although necessary for religious freedom, has
also created an unintended outcome in the provision of societal needs. As a result, inefficiencies
and resource allocation problems persist in business activity through misguided management
and lack of leadership, which together continue to
drain resources needed to balance the economy
and spur economic growth.
In this research, we attempt to bring to light
the impact Christian business schools can have on
for-profit businesses without the direct influence
of government or social welfare policy. Effective
(i.e., Christ-centered, integrated, people-focused,
relevant, outcome-based, measureable) management practices as taught by Christian institutions
of higher education can have a significant impact
on the business environment by properly equipping students with proven approaches that ensure
the sustainability of businesses and the communities served through business operations.
Historical records establish that the creation
of a non-profit sector allowed the efforts of entities attempting to provide support for a specific
purpose the ability to do so without the burden of
government-imposed taxes. Although this benefit
ported in Scripture, where the daily interactions
of people are often complementary in serving individual needs as well as those of the community.
LIMITATIONS
Although the findings of this initial effort
are of importance, we recognize the limitations
in this research in the number and scope of responses. Data was collected from six executives
with management and leadership experience in
six industries: financial services, computer and
natural sciences, computer application development, accounting, management consulting, and
non-profit management. Additional data would be
needed from a larger population for validity and
significance to be established with confidence in
the results achieved. Responses are also needed
from a larger subset of managers of non-profit
organizations to balance the results obtained in
this research. Although more variability in responses would be expected in surveying a wider
industry base and population, additional insight
is expected from the extended data set after insignificant variability is identified and separated in
the analysis of data from the full survey.
PEER-REVIEWED ARTICLES
alleviates certain financial concerns for organizations with altruistic missions, tax- or government-motivated incentives can offset core management practices as businesses work to comply
with tax requirements that conflict with a company’s business strategy. Prior research supports
findings that successful businesses understand
and operate under basic economic principles
such as supply and demand; whereas government
policy-makers often ignore such principles when
establishing regulations and policies (Lewis,
2007). As a result, government intervention often
results in economic imbalances, where, for example, demand might dramatically exceed supply. Government interference with free markets
usually has unintended, detrimental side effects
(Olasky, 2008; Baumol & Blinder, 2010). Such
intervention often results in increasingly higher
prices, which can invariably lead to unhealthy
corrections in financial markets and global
economies. Because the business structures of
many non-profits closely resemble those of forprofit businesses, economic principles apply to
non-profits as well. Therefore, the emphasis on
relevant business practices governed by sound
economic, leadership, and management principles vs. government regulation or tax liability
can provide the foundation needed for managers
to successfully operate both organizations.
Preliminary results from this analysis suggest
that for-profit and non-profit business structures
have congruent goals: longevity/sustainability
and/or relevance, and meeting the needs of people. Although the business motivation and people-orientation (i.e., identification of significant
stakeholder relationships) may differ for the two
sectors, both for-profit and non-profit organizations recognize the need to focus on the interests
of people to ensure continuity of operations. This
idea is supported in practice by general economic
principles, where buyers and sellers in free market economies complement each other, when, by
pursuing their own self-interests, people inadvertently promote societal well-being as a whole
(Baumol & Binder, 2010). The idea is also sup-
PLANS FOR FUTURE RESEARCH
This research is an initial attempt to understand the for-profit and non-profit business environment and to identify factors that can be used
by Christian and other universities in equipping
students in management approaches that combine
the best practices of for-profit and non-profit organizations. Plans are to continue this research effort
by adding additional responses from key for-profit
managers as well as successful managers of nonprofit organizations to develop a survey instrument
that can be administered to a larger population.
The resulting data will then be used to develop
business models and performance measures that
can be used to guide business operations and also
provide guidance in the instruction of students
to equip them in effectively leading, supporting,
and managing a business, regardless of its mission
or business structure. The anticipated outcome
43
of this second research effort is to help develop
strategies to equip business schools with the tools
needed to properly identify and train leaders in the
practices and success indicators of “best of brand”
businesses that are profitable and also serve their
stakeholder network.
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ABOUT THE AUTHORS
Orneita Burton is an Assistant Professor of Management and Information Systems at Abilene Christian University in
Abilene, TX. She holds a PhD in Business
and Computer Information Systems from
Arizona State University and conducts research on
the integration of faith-based approaches in business
management and in information systems design. Orneita lives in Abilene with her husband, Dwain, and
her son, Brian.
Jozell Brister, Associate Professor of Economics at Abilene Christian University.
Research areas: Labor Economics, Case
Studies in Economics, including "The
Economic Effects of Downsizing Lessons
for Eastern Europe," and more recently, Not-for-Profit
Enterprise.
45
TEACHING SOCIAL ENTREPRENEURSHIP IN
CHRISTIAN HIGHER EDUCATION BUSINESS SCHOOLS
Timothy Lucas and Teresa Gillespie
Northwest University
ABSTRACT
Social entrepreneurship (SE) is a growing field of study in U.S. higher education and a lack of academic
research dedicated to the field creates challenges for educators. Inclusion in Christian higher education business program curricula provides an opportunity for Christian colleges and universities to prepare students
to become social entrepreneurs and equip students to become leaders in this important and evolving field.
In this paper, the authors, who have been teaching SE at the masters level for two years, include reflections
and recommendations for program development. A unified understanding of what defines an individual as
a social entrepreneur or an organization as a social entrepreneurship (SE) has yet to be conclusively determined by practitioners or researchers. Further research related to the social entrepreneurial process itself
is warranted (Barendsen & Gardner, 2004; 2006). This gap provides Christian educators an opportunity to
develop a Christian framework under an overarching construct of Business as Ministry designed to reach
budding social entrepreneurs and advance SE both academically and in the field. This article provides a recommended path for advancing social entrepreneurship as a dedicated field of study within Christian higher
education. Topics include a review of the field within this context, reflections of our experience with this
new type of student, a theology of SE discussion, curriculum suggestions, and recommendations. Pedagogical examples are incorporated throughout the article rather than in one section.
INTRODUCTION
Social entrepreneurship (SE) is a form of
entrepreneurship differentiated from traditional
business entrepreneurship by its overarching
commitment to achieving a social benefit or purpose over profit (Austin, Stevenson, & Wei-Skillern, 2006). The literature regarding social entrepreneurship and the social entrepreneur indicates
that a unified understanding of what defines an
individual as a social entrepreneur or an organization as a social entrepreneurship (SE) has yet
to be conclusively determined by practitioners
or researchers (Dacin, Dacin, & Matear, 2010).
This lack of an agreed-upon definition provides
46
a timely opportunity for the Christian academy
to advance its position and influence within the
SE domain and also presents challenges for curriculum development. SE is different from constructs such as social enterprise, where for-profit
businesses designate a portion of their revenues
or segment specific business units to social good,
or intentionally Christian-focused organizations under the auspices of Business as Mission
(BAM) or Great Commission companies (GCC)
(for a more detailed discussion see Gillespie and
Lucas, 2011).
In 2009, Northwest University, a private,
faith-based institution in the Seattle area, began
WHAT IS SOCIAL
ENTREPRENEURSHIP?
The research pertaining to social entrepreneurship is rooted in the commercial entrepreneurship literature and is predicated on the fact
that business entrepreneurs exist to exploit an opportunity for the purpose of profit. It is important
for educators to realize that within the student
domain of social entrepreneurship there are two
polarities, those who seek to do social good via
a for-profit model and those committed to a nonprofit model. Educators must ask: Who are social
entrepreneurs and what do they want and what do
they need as students?
The goal of this article is to review the basic premise of social entrepreneurship and its fit
within Christian college and university business
school curricula. Discussion topics include: 1) an
overview of the concept and definition of social
entrepreneurship based on existing literature, 2)
inclusion of SE in business schools, 3) curriculum
development, 4) identifying SEs and SE student
profiles, 5) theology of SE, and 6) recommendations. Pedagogical applications are included as
appropriate in each section.
OVERVIEW OF SOCIAL
ENTREPRENEURSHIP
Roberts and Woods (2005) identify social
entrepreneurship as a practitioner-led field of
study still in its infancy and recognize a need for
a practical definition that purposefully increases
awareness and credibility of the field. This is
addressed specifically by Martin and Osberg
(2007) in their call for a more specific definition
for social entrepreneurship that distinguishes it
from its commercial roots. They provide a concise history of the commercial entrepreneurship
definitions from early nineteenth-century French
philosopher Jean Baptiste Say, early twentiethcentury Austrian economist Joseph Schumpeter
and more recently American management expert
Peter Drucker. A more intentional definition will
thereby promote social entrepreneurship and create a definitional benchmark for research applications. To achieve a working definition based on
their research, they conducted a review of the literature related to both commercial and social enterprises and compared their findings with available literature and case studies of active social
entrepreneurs to posit a definition that branched
both the academic and practitioner perspectives.
From this they derived the following definition:
“Social entrepreneurship is the construction,
evaluation and pursuit of opportunities for transformative social change carried out by visionary,
passionately dedicated individuals” (p. 49). This
definition addresses the individual aspects of the
social entrepreneur; however it does not specifically address the social benefit versus profit dynamic that distinguishes the social entrepreneur
from the commercial entrepreneur. Distribution
of profit and corporate structure pertaining to the
definition of SE is one area that has not yet been
conclusively determined in the literature (Bielefeld, 2009).
Harding (2007) provides a working definition of social entrepreneurship from the Global
Entrepreneurship Monitor (GEM) report that addresses both the business and social aspects of
the field:
PEER-REVIEWED ARTICLES
to offer a Master of Arts in SE within the School
of Business and Management (both authors are
instructors in the program). This article describes
some of our initial experiences and challenges in
this developing field of study. We propose that
there is a great opportunity for Christian educators in higher education to lead curriculum development and training for a new generation of
Christian social entrepreneurs under the auspices
of Business as Ministry.1 The term Business as
Ministry is an intentionally generic term meant
to convey the idea that Christians can combine
the business concept of profit generation and social benefit regardless of corporate structure or
industry identification. We define Business as
Ministry as an overarching Christian construct
meant to convey the idea that one’s profession or
calling within the auspices of a business endeavor
is a form of ministry.
47
Social entrepreneurship is any attempt
at new social enterprise activity or new
enterprise creation, such as self-employment, a new enterprise, or the expansion
of an existing social enterprise by an individual, team of individuals or established
social enterprise, with social or community goals as its base and where the profit
is invested in the activity or venture itself
rather than returned to investors.
This definition provides a context from which
to identify social entrepreneurship as distinct
from commercial entrepreneurship and includes
a specific reference to profit. From this context,
a framework delineating the process of social
entrepreneurship creation can be modeled. We
have found that some students struggle with the
concept of profit, for example in the context of
benefitting from a social problem via revenue
generated to solve the social problem.
A hybrid of Harding’s definition and the Roberts and Woods definition has been developed by
one of the authors as follows: social entrepreneurship is a revenue-generating, innovative,
and unique approach to solving a social problem
where profits are reinvested in the mission regardless of the distinction between nonprofit or
commercial enterprise (Lucas, 2010).
The distinction of what constitutes an approach as innovative is addressed by Martin and
Osberg (2007) in their article profiling successful commercial entrepreneurs in an effort to gain
insight into the distinction between commercial
and social entrepreneurship. Specifically, they
posit that the social entrepreneur is enticed by a
“suboptimal equilibrium, seeing embedded in it
an opportunity to provide a new solution, product, service or process” (p. 32).
The degree of innovation necessary to qualify
a business as a social entrepreneurship is another
ambiguous definitional parameter within the SE
construct. As attributed to Schumpeter (2008),
entrepreneurs need not be inventors. Schumpeter
is credited with the concept of creative destruction and is one of the pioneering economists
48
known for his economic theories detailing the
entrepreneurial function and entrepreneurship.
Schumpeter (2008) defined the function of entrepreneurship as follows:
[T]he function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting the invention or,
more generally, an untried technological
possibility for producing a new commodity or producing an old one in a new way,
by opening up a new source of supply of
materials or a new outlet for products, by
reorganizing an industry (p. 132).
Schumpeter views entrepreneurship as vital to
capitalism and addresses the constant destruction
of existing structures and their replacement with
new ones as paramount to a free market society.
He links the process of how capitalism and free
markets operate to the importance of business
strategy and stresses the necessity by managers
and entrepreneurs to understand the dynamic and
ever changing nature of industry. This “Creative
Destruction is the essential fact about capitalism” (Schumpeter, p. 83). Understanding this
basic premise of creative destruction as it relates
to magnitude of change and degree of innovation
parameters in addition to the role and purpose of
profits is a fundamental element in the social entrepreneur’s formal educational needs.
It is worth noting that Schumpeter alludes to
the concept of risk in the context that while entrepreneurs exploit opportunities in new ways, they
need not be inventors. Also, risk is not necessarily
borne entirely by the entrepreneur. This supports
a more broad definition of social entrepreneurship with regard to innovation and magnitude of
change. We view the innovative element as subjective and suggest that the minimum delimiter is
a new combination of existing resources or relationships to solve a social problem.
Magnitude of change is also an element of the
social entrepreneurship definition without consensus among academics or practitioners. Light’s
(2008) identification of social entrepreneurial organizations as intent on achieving systemic alter-
a separate article in this publication (Gillespie &
Lucas, 2011).
SHOULD SE BE TAUGHT IN
BUSINESS SCHOOL CURRICULA?
Our answer is yes. While the literature is
mixed regarding whether social entrepreneurship
merits its own classification, we believe while SE
is distinct from other forms of entrepreneurship,
it should be included in a business curriculum,
especially in Christian colleges or universities.
A successful social entrepreneur needs some of
the same skills required for successful business
entrepreneurship, such as an understanding of internal and external market forces, organizational
dynamics, and capital structure, as well as the
disciplines of operations, finance, marketing and
so on. To illustrate, interviews conducted with
Christian social entrepreneurs by the authors and
student interviews revealed that exposure to the
suffering of others while participating in missions did nurture an interest in future social entrepreneurial endeavors. Many have no academic
or professional business background. Social
entrepreneurs may lack the business experience
and business education of their commercial counterparts. Therefore it is important to address the
business aspects of entrepreneurship previously
mentioned for the SE students. Educators must
be cognizant of the fact that the student audience
may not be as familiar or as comfortable with
the concepts as traditional business entrepreneur
students.
Brooks (2009), borrowing from the literature
related to business entrepreneurs, explains the
concept of social entrepreneurship as a process
beginning with opportunity identification and the
pursuit of identified opportunities not hindered by
a lack of current available resources. Similar to
Light (2008), he describes a process identified with
commercial entrepreneurship that includes opportunity recognition, concept development, resource
determination and acquisition, launch and venture
growth, and goal attainment (pp. 4-5). Whereas a
business entrepreneur perceives that a potential
PEER-REVIEWED ARTICLES
ations to the social equilibrium as the overarching goal is one example. The issue of magnitude
of change delimiters is intentionally not included
in our working definition, given this subjectivity.
When considered in the context of Schumpeter’s
(2008) model of creative destruction, Light’s
model fits within the domain of entrepreneurship
without specifying magnitude of change.
Social entrepreneurship is an evolving niche
filling a void between nonprofit and commercial
ventures. Cooney (2006) cites statistics from the
nonprofit sector reflecting that revenues from
commercial endeavors increased from 36% in
1980 to 54% in 1996, while revenues from the
government sector decreased to 36% from 48%
during the same time frame. Likewise, Cooney
indicates a trend in nonprofits “launching business ventures to generate unrestricted funds
that cross subsidize other agency activities” (p.
143). Cooney refers to the format of nonprofit as
a hybrid model and addresses the issue of how
these hybrids organize their hierarchy between
the revenue-generating business element and the
mission-focused social services element. The
nonprofit sector is not disappearing, nonetheless,
there is a population of entrepreneurs not satisfied with the traditional nonprofit structures for
venture creation (Bielefeld, 2009). A fundamental element inherent in this article is how educators can develop curricula that address trends in
the literature with the goal to effectively teach
SE. A key question to consider for program development is: What is the common denominator
that distinguishes social entrepreneurship as its
own unique construct? It begins with who owns
the company, and course topics such as corporate
governance and structure are important components. For example, a revenue-generating portion
of the business may sustain the nonprofit portion
of the business, or an individual may create two
separate entities to accomplish the social benefit,
one nonprofit and one a revenue-generating type
to support the nonprofit. A third form known as
the low-profit limited liability corporation is another option and all are addressed thoroughly in
49
opportunity exists that can lead to profitability, the
social entrepreneur perceives that an opportunity
exists to solve a social problem.
The second step Brooks (2009) identifies after opportunity recognition is concept development. He refers to the idea that an opportunity
must manifest itself into a sound business concept. For example, drawing from Professor Yunus and the development of the Grameen Bank,
the need for affordable loans to the working poor
of India translated into the business concept of
micro loans (Bornstein, 2007; Clinton, 2007).
Resource determination and acquisition, the
next step, involves the methods with which entrepreneurs identify and secure funding and human resource support for their ventures (Brooks,
2009). University courses addressing capital
structure and start-up funding will help social
entrepreneurs learn how compete for available
resources and identify opportunities regarding
their abilities to obtain resources.
The final steps are launch and venture growth,
and goal attainment. These steps address the business aspects of taking the social entrepreneurial
venture from the idea and funding phase to the execution and growth stage of the ongoing venture.
Critical to the success of the organization, growth
and goal attainment are additional areas ripe for
Christian universities to address in program curricula specific to social entrepreneurs.
Brooks (2009) applies the five steps derived
from the commercial entrepreneurship process
to the social entrepreneurship model and thus
creates a base from which to evaluate the social
entrepreneurial process. For example, at Northwest University students in our MASE program
take an Entrepreneurial Planning course in which
they write a business plan for their social venture
following these steps.
WHAT SHOULD BE TAUGHT IN SE
CURRICULA?
The Northwest University MASE program
is a 32-hour cohort model program consisting of
ten sequential courses. Students also work on a
50
Master’s level thesis (Social Enterprise Project I,
II and III), which can be either a research paper
involving a Social Entrepreneurship question or a
“business plan” for a social venture (see Table 1).
Table I Course Descriptions
Course #
Course Description
BUSM 5213
Leadership Development
BUSM 5413
Organizational Management
BUSM 5703
Social Enterprise
BUSM 5253
Entrepreneurial Planning
BUSM 5433
Project Management
BUSM 5442
Law and Ethics for Non-Profits
BUSM 6343
Entrepreneurial Finance
BUSM 6363
Marketing for Social Ventures
BUSM 5711,
5721, 5731
Social Enterprise Project I, II, III
BUSM 6423
Management of Non-Profits
BUSM 6332
Public Policy Advocacy
Our initial assumption was that most students
would be interested in a non-profit model with
some aspect of revenue generation. For example,
initially we designed our business plan course
around the text Forces for Good: The Six Practices of High Impact Nonprofits (Crutchfield &
Grant, 2008). While this is an excellent book and
we continue to use it, we had to modify some of
our assumptions to allow for a higher than anticipated percentage of students interested in the forprofit sector. As a result we modified our business
plan process from one course to three separate
sections to allow for both the nonprofit, for-profit
and hybrid models and assigned different professors to each section. This is one example of how
we are rethinking what we are teaching by evaluating each cohort’s overall preferences.
In our introductory course to the field, BUSM
5703 Social Enterprise, we engaged students in
participating in the developing field of social entrepreneurship. (See Appendix A for complete
course descriptions). This introductory course
included active involvement in an interactive
course blog that included weekly discussion questions, article summaries and current events, and
WHO IS AN SE? WHO IS AN SE
STUDENT?
We found that students’ initial definitions
of SE varied from “any enterprise for the social
good that does not have profit as its primary
goal” to “a business venture that defines success
by the evident combinations of three factors: individually profitable, serves others by creating
social change, and sustainability” and even “an
organization or enterprise whose focus is to promote social change or provide a service to those
in need. A very broad term that covers many
types of organizations. Unclear on how profits
are distributed” (See Appendix B).
One reason for the variety of student SE
definitions stemmed from the variety of student
backgrounds. Some of our students were fairly
recent college graduates who were still deciding on a career path. Others had worked many
years in the nonprofit sector. Two were ordained
ministers actively leading their own congregations. One was the head of his family’s foundation. One surprise to us was that our Social Entrepreneurship students were so much different
than our typical MBA student. Most of our MBA
students are in the program to further their ca-
reer advancement and most were either business
undergraduates or had been working in the business environment for several years. By contrast,
the Social Entrepreneurship students were generally liberal arts undergraduates with limited
experience and understanding of business. Their
primary motive in studying with us was to learn
essential business skills that they could use in a
service or ministry capacity, such as providing
better services to homeless veterans, or emergency housing for foster care children. They were
also more entrepreneurial in that they were less
interested in organizational dynamics such as
workplace issues, management theory, and facts
and figures as examples.
Familiarity with a specific problem area was a
prevailing characteristic amongst our SE students,
and is an area under discussion in the SE literature. Does expertise on a specific social problem
translate into effectiveness in establishing an innovative and transformative approach to attempt to
solve the problem? The literature regarding this is
not conclusive. Dorado (2006) finds that while the
“research… does establish a connection between
entrepreneurs backgrounds and the opportunities
they create” (p. 331), the research does not “specify whether entrepreneurs with backgrounds in a
particular problem area versus those with backgrounds in a particular industry have a differentiated advantage when identifying and exploiting
an entrepreneurial opportunity” (p. 331). Understanding the background and previous experience
of social entrepreneurs will help guide curriculum
development and integration of business courses
aimed at enhancing the skill set of budding social
entrepreneurs.
From this theoretical base, further distinctions can be addressed between commercial
and social entrepreneurship. Martin and Osberg
(2007) describe as the point of distinction between the commercial and social entrepreneur as
“the combination of a context in which an opportunity is situated, a set of personal characteristics required to identify and pursue this opportunity and the creation of a particular outcome”
PEER-REVIEWED ARTICLES
each student was required to follow and report
on weekly SE-related Twitter feeds. In addition,
we invited a number of social entrepreneurs to
speak in class, including an attorney specializing
in advising social entrepreneurs, and individuals
who generated revenue through public speaking,
consulting and publishing as a means to support
their nonprofit ventures.
We begin the course by asking each student to
provide a written definition of SE. This became
the basis for class discussion on aspects of social
entrepreneurship, such as innovation, magnitude
of change, for-profit vs. nonprofit and other definitional elements not yet conclusively determined
in the literature. At the end of the course the students again defined social entrepreneurship and
noted any changes in perception as a result of the
course. (See Appendix C for examples).
51
(p. 31). The authors describe an entrepreneurial
context in which the business entrepreneurs they
profile gain their opportunity recognition from
industry experiences. For example, entrepreneurial orientation (EO) is a construct prevalent in the
business literature and one that provides a model
for analyzing an entrepreneurial firm’s strategic
path (Lumpkin & Dess, 1996). By assessing the
processes, actions, and bureaucratic activities of
such a firm, EO encapsulates the ability of firms
to operate entrepreneurially (Dess & Lumpkin,
2005).
Therefore, case study profiles of commercial
entrepreneurial organizations and founders are
recommended for inclusion into the SE course
curriculum. Moreover, intent of the organizational mission mattered to SE students when viewing the appropriateness of commercial structures
that did have an element of profit distribution.
Background of the entrepreneur is central to this
analysis and one of our recommendations for further research. Religious background is addressed
in the following section.
THEOLOGY OF SE/BIBLICAL
PERSPECTIVES OF COMMERCE
The social entrepreneur is tasked with two
missions, social benefit and profit. Thus, corporate structure and the distribution of profits are
key components for curriculum development.
Sowell (2004) cites that profits are arguably the
least understood subject in economics. He also
posits that profit and loss is crucial to the basic
economic function pertaining to the allocation of
scarce resources with alternative uses.
The concept of profit is one of the least understood concepts related to social entrepreneurship and profit is often viewed negatively (Lucas,
2011). Evidence of this is the previously mentioned lack of agreed-upon definition for social
entrepreneurship and also the earlier mentioned
insight gained by the authors when interviewing
both practicing social entrepreneurs and graduate
students. Further, given that many social entrepreneurs’ previous experience is in the nonprofit
52
sector where profits are not distributed, a polarity
may exist within the SE student base related to
the acceptability of profit generation and distribution under the auspices of a social entrepreneurship (see Appendix A).
This polarity is exemplified in James 1:9-10:
“The brother in humble circumstances ought to
take pride in his high position. But the one who
is rich should take pride in his low position, because he will pass away like a wild fire”(NIV).
While much of James is critical of the rich, it is in
the context of wealthy Christians understanding
that God has blessed them not with possessions,
but with values. Likewise, poorer Christians
may take pride in their ”high position” as believers. Social entrepreneurship provides a path for
Christians gifted in business to follow the Word
despite the accumulation of wealth through the
generation of profit. The question in James 2:14:
“What good is it, my brothers, if a man claims
to have faith but has no deeds” goes further to
illustrate the tensions that exist between the
faithful and the need to do good work despite
one’s economic circumstances. Similarly, “I will
show you my faith by what I do” (James 2:18-19)
compliments 1 John 3:17-18: “If anyone has material possessions and sees his brother in need but
has no pity on him, how can the love of God be
in him? …Let us not love with words or tongue
but with action, and in truth." Educators can acknowledge the Scriptural admonitions aimed at
the rich and powerful and the reality that scholars
may debate the messages of James and Paul and
their different interpretations of faith and work.
Nonetheless, some Christians do accumulate
wealth and are gifted with business acumen. Social entrepreneurship is one avenue for Christian
business students who choose to create wealth
and those who seek to utilize business as ministry regardless of their professional and academic
backgrounds. Pedagogical applications through
classroom discussion and written deliverables
can address the tensions between profit and social
benefit as a means to incorporate the financial elements of entrepreneurship.
STUDENT EXPERIENCE
A graduate student cited Matthew 13:31-33 in
an assignment requesting a biblical passage that
best represents his/her understanding of SE: “The
kingdom of heaven is like a pine nut that a farmer
plants. It is quite small as seeds go, but in the course
of years it grows into a huge pine tree, and eagles
build nests in it. Another story. God’s kingdom is
like yeast that a women works into the dough for
dozens of loaves of barley bread—and waits while
the dough rises” (Peterson, 2003). The student referenced this Matthew passage as exemplary of her
idea of social entrepreneurship, with the pine nut
example a lesson in nurturing individuals to their
full potential. Likewise, flour and yeast require
action to be combined and initiate change—the
social entrepreneur as change-maker.
This example is included here to provide insight into the classroom. Just as one class may
include students from one end of the spectrum to
the other with regard to profit and social benefit
(nonprofit to commercial), a reality experienced
by the authors is that a similar polarity exists
amongst students in the context of religious
background. Specifically, the student referred to
above was a believer, however she was not from a
particularly strong religious background and her
faith was stronger than her experience interpreting Scripture. She approached one of the authors
with apprehension regarding the assignment,
and voiced concern that her lack of scriptural
expertise would cause her to do poorly on the assignment. She was provided with encouragement
and assurance that any exercise involving reading of the Word should be a positive experience,
and she was directed to some reliable sources
for interpretation assistance. Her interpretation
of Matthew may differ from many reading this
article, however she successfully completed the
assignment and furthered her understanding of
the concept of SE and increased her comfort level
in reading Scripture. While Peterson is not suited
for biblical scholars, it did serve a positive purpose in this instance. It is worth noting that the
same cohort contained two ordained ministers
and the difference in religious background can
serve as a metaphor for the differences in student
worldview with regard to SE. Her tentativeness
is illustrative of the challenges in teaching social
PEER-REVIEWED ARTICLES
This polarity between doing good and doing
well, or social benefit and profit, can be further
explored in the classroom through the process
credited to Johnson (1992) known as polarity
mapping. This concept is an exercise with a goal
of bringing individuals with opposing viewpoints
together as a process to be managed where each
view is supplemented in order to understand the
overall situation more effectively. The premise
is that neglect of opposing viewpoints degrades
the overall effectiveness of organizations and
process mapping allows both realities to be confirmed as a means to more effectively implement
strategy and problem solving. In the example of
SE, both views toward nonprofit and commercial
endeavors and specifically the generation and
distribution of profits must be understood by all
who fit within the broad profile of the social entrepreneur. A biblical context in support of such
goals is crucial and Christian university SE business programs can incorporate vigorous theological analysis related to doing well and doing good.
How much profit is acceptable for a business
known as a social enterprise while competing in
the commercial sector is an example of the challenges that the entrepreneur must be prepared to
address to customers, investors, shareholders,
and stakeholders. This was addressed directly by
one student in our introductory course in her end
of the course response to how her understanding
of SE was impacted by the course: “One discussion that was left unanswered in our class sessions
was the issue of salaries. I still have not come to
terms with the question: ‘what is the acceptable
salary for someone who works in social enterprise?’" (See Appendix C). A core understanding of the entrepreneurial function in a market
economy will prepare the social entrepreneur to
address this type of unique paradox.
53
entrepreneurship, given its lack of clear definition
and the tensions between profit and social benefit.
RECOMMENDATIONS
Social entrepreneurship is a growing field of
study in higher education (Bielefeld, 2009). As
more institutions of higher education develop
degree programs specific to social entrepreneurship, curriculum development is dependent upon
current and accurate research (Dorado, 2006).
The discussion points in this article exemplify
information relevant to the new social entrepreneur and are important for educators to consider
when developing SE business curricula. SE is
an evolving trend and its inclusion in Christian
higher education business school programs is
the focus of this article. Each of the Ivy League
universities have incorporated social entrepreneurship in their business programs for example
while less than ten percent of the 111 members of
the Council for Christian Colleges and Universities (CCCU) offer any type of SE course offering
(Lucas, 2010).
Further exploration of definitional elements
such as magnitude of change, degree of innovation, and capital structure in conjunction with
a Christian application to SE is warranted. We
recommend that our colleagues offer at least
one introductory SE course at the undergraduate
business level that provides a general overview of
social entrepreneurship. For example, Northwest
University requires all undergraduate business
majors to compete in our social venture business
plan competition. Teams are formed and students
compete based on the most innovative idea that
has been developed into a viable working business model. The competition is a one-hour undergraduate credit open to all majors and culminates
with a campus wide trade-show format event.
We have found that other majors do participate
and we have seen business majors repeat the
event a second year. This has also created positive campus-wide publicity for the department
amongst faculty, staff and students. Moreover,
the competition reaches out to local businessmen
54
and women eager to participate with students
as coaches, evaluators, and/or attendees of the
competition. This year we offered cash prizes
of $1000 raised from private donations. Initially
we offered the one-hour course and the top three
teams competed in Seattle Pacific University’s
(SPU) social venture competition. The second
year we launched our own competition and the
three top winners of our competition then went to
SPU to compete.
The most challenging aspect of the business
plan competition is the financial element. We
have found that many of the graduate students
come from the nonprofit sector and many struggle with the idea of profit and capital structure.
The constraints associated with some forms of
nonprofit funding imply varying capital structure
options that must be understood by the social
entrepreneur. Miller (2003) identifies that capital
structures change as a result of organizational development and lifecycles. This can be conveyed
through curricula developed specifically to aid an
individual who may be familiar with a problem
area but lacking in other business-related experience. Our Entrepreneurial Planning course in the
Master’s SE program is one example.
Likewise, Bryce (2007) refers to the issue
of public trust as an important element in donor
behavior. How an enterprise manages its inputs
and outputs and conveys this to the public has an
impact on potential revenue sources, including
donations and purchases (Bryce). This compliments Collins’(2005) reference to the importance
of building and maintaining the brand as a means
to maintain the core business and facilitate progress. We also include a Marketing course in our
Master’s SE curriculum, Marketing for Social
Ventures. How social entrepreneurs are taught
the traditional business fundamentals in addition to profit distribution and capital structure is
a relevant component related to this field of study
and will determine course curriculum and provide insight for students and educators. This year,
for example, we plan to integrate the graduate
MASE students into the undergraduate business
REFERENCES
Austin, J., Stevenson, H., & Wei-Skillern, J. (2006). Social and commercial entrepreneurship: Same, different,
or both? [Article]. Entrepreneurship: Theory & Practice, 30, 1-22.
Barendsen, L., & Gardner, H. (2004). Is the social entrepreneur a new type of leader?, Leader to Leader (Vol.
2004, pp. 43-50): John Wiley & Sons.
Bielefeld, W. (2009). Issues in social enterprise and social entrepreneurship. Journal of Public Affairs Education, 15(1), 69-86.
Bornstein, D. (2007). How to change the world: Social
entrepreneurs and the power of new ideas. New York:
Oxford University Press.
Brooks, A. C. (2009). Social entrepreneurship: A modern approach to social value creation. Upper Saddle
River, New Jersey: Pearson Prentice Hall.
Bryce, H. J. (2007). The public’s trust in nonprofit organizations: The role of relationship marketing and
management. California Management Review, 49(4),
112-131.
PEER-REVIEWED ARTICLES
plan competition as coaches and readers to provide an experiential classroom activity evaluating different business plans.
A common denominator linking business and
nonprofit elements is the key to understanding
the emerging construct identified as social entrepreneurship and we recommend that more Christian faculty contribute SE articles and research to
mainstream business journals. Adding the Christian perspective will help fuse this important and
emerging business trend with Christian higher
education and enhance the ideal of Business as
Ministry. Additional recommendations of course
content discussed in this article include polarity
management exercises, case study analysis of SE
and commercial ventures, a historical perspective of SE in business, biblical integration, and
specifics related to formal metrics and business
strategies focused on enterprises with social benefit as a stated outcome.
In addition, research directed at the religious
background and motivations of social entrepreneurs is one recommendation for further study.
Creating a consensus regarding the definition and
teaching of social entrepreneurship within the
Christian academy is a worthy goal. A key theme
in the book of Esther is “And who knows but that
you have come to your position for such a time as
this?” (Esther 4:14). The reference to Esther here
is intentional: it is the only book in the Bible with
no direct reference to God. Likewise, social entrepreneurship is not an overtly Christian trend,
yet the tenets that form its foundation are decidedly Christian. An opportunity exists to formalize the link between social entrepreneurship
and Christian business programs. Other areas
of further research include founder motivations,
reviewing the evolution of new corporate legal
structures. and potential new sources of funding.
Further discussion is needed.
Clinton, B. (2007). Giving: How each of us can change
the world. London: Hutchinson.
Collins, J. (2005). Good to great and the social sectors:
A monograph to accompany good to great. Boulder, CO:
Jim Collins.
Cooney, K. (2006). The institutional and technical structuring of nonprofit ventures: Case study of a U.S. hybrid
organization caught between two fields. Voluntas, 17,
143-161.
Crutchfield, L. R., & Grant, H. M. (2008). Forces for
good: The six practices of high-impact nonprofits. San
Francisco: Jossey-Bass.
Dacin, P. A., Dacin, M. T., & Matear, M. (2010). Social
entrepreneurship: Why we don’t need a new theory and
how we move forward from here. Academy of Management Perspectives, 24(3), 37-57.
Dess, G. G., & Lumpkin, G. T. (2005). The role of entrepreneurial orientation in stimulating effective corporate
entrepreneurship. Academy of Management Executive,
19(1), 147-156.
Dorado, S. (2006). Social entrepreneurial ventures: Different values so different process of creation, no? [Article]. Journal of Developmental Entrepreneurship, 11,
319-343.
Gillespie, T., & Lucas, T. (2011). Blurring the
boundaries: Emerging legal forms for hybrid
organizations:Implications for Christian social entrepreneurs.
55
Harding, R. (2007). Understanding social entrepreneurship. Industry & Higher Education, 21(1), 73-84.
Schumpeter, J. A. (2008). Capitalism, socialism and democracy. New York: HarperCollins.
Johnson, B. (1992). Polarity Management: Identifying
and solving unsolvable problems. Amherst, MA: HRD
Press.
Sowell, T. (2004). Basic economics: A citizen’s guide to
the economy. New York: Basic Books.
Light, P. C. (2008). The search for social entrepreneurship. Washington, D.C.: Brookings Institution Press.
ENDNOTES
Lucas, T. (2010). Social Entrepreneurship: Exploring
the Link Between Concept Definition and Application
in Christian University Business Programs. Paper presented at the Christian Business Faculty Association,
Lakeland, FL.
Lucas, T. (2011). Personal communication.
Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the
entrepreneurial orientation construct and linking it to
performance, Academy of Management Review (Vol. 21,
pp. 135-172): Academy of Management.
Martin, R. L., & Osberg, S. (2007). Social Entrepreneurship: The case for definition. Stanford Social Innovation
Review (Spring 2007).
Miller, C. (2003). Hidden in plain sight: Understanding nonprofit capital structure. The Nonprofit
Quarterly(Spring 2003), 1-7.
Peterson, E. H. (2003). The message: Remix. Colorado
Springs: Navpress.
Roberts, D., & Woods, C. (2005). Changing the world
on a shoestring: The concept of social entrepreneurship.
University of Auckland Business Review, 7(1), 45-51.
1. This is not to be confused with Business as
Mission (BAM). For further discussion related
to BAM, see Gillespie & Lucas, 2011.
ABOUT THE AUTHORS
Teresa Gillespie is Dean of the School
of Business and Management at
Northwest University in Kirkland,
Washington, where she also teaches
Business Law and Ethics. Prior to
this, she was in-house counsel for a
Fortune 500 company for 17 years.
She received her J.D. from the University of Washington School of Law.
Tim Lucas teaches management and
economics at Northwest University.
Prior to teaching he was in corporate
positions at Eastern and Continental
Airlines, and in the hospitality industry. He is currently pursuing his DBA
degree at George Fox University. His
doctoral research dissertation is focused on social entrepreneurship.
APPENDIX A
Northwest University
Master of Arts in Social Entrepreneurship (MASE)
Course Descriptions
BUSM 5213 Leadership Development A
study in communication theory as it impacts interpersonal relationships, small group processes
and complex organizations. Students learn to
improve professional leadership skills, including
oral and written communication, conflict resolution and negotiation. Ethical issues involving
management are also addressed.
56
BUSM 5413 Organizational Management A
study in the structure and functioning of complex
organizations, as are organizational change processes. Topics covered include leadership, individual and group behavior, systems and culture.
Issues relating to managing change and ethics are
addressed through the use of case studies.
BUSM 5253 Entrepreneurial Planning A review of the entrepreneurial planning process for
social ventures and methodology for research involving social venture issues. Students either prepare and launch their own social venture or write
a research paper on social entrepreneurship that
will be completed over the next 3 semesters.
BUSM 5433 Project Management A focus on
the tools and techniques required to plan, direct,
control and manage resources to meet the technical requirements, cost targets and time constraints
of a project and to meet project objectives.
BUSM 5442 Law and Ethics for Nonprofits Examines the foundational legal issues and
ethical challenges typically faced by nonprofit
organizations. Topics include liability issues for
boards of directors, identifying and resolving
conflicts of interest and negotiation.
BUSM 6343 Entrepreneurial Finance A
study of the financial concepts especially perti-
nent to social enterprise. Strategies to create a
viable and economically sound organization will
also be addressed.
BUSM 6363 Marketing for Social Ventures A
study of the strategies for marketing an organization’s image, mission and services, including
the effective use of media and public relations.
Cause-related marketing partnerships between
business and nonprofits are also investigated.
BUSM 5711, 5721, 5731, Social Enterprise
Project I, II and III Students continue to work
on their social venture plan or research project
and present their findings in a public forum.
PEER-REVIEWED ARTICLES
BUSM 5703 Social Enterprise An introduction to the concept of social enterprise: a profit
or non-profit organization that intends a positive
social impact. Students observe local social enterprise organizations, read case studies and discuss best practices for successful social ventures.
BUSM 6423 Management of Non-Profits A
study of the unique challenges of leading and
managing nonprofit organizations. Topics include working with a Board and volunteers, and
strategic planning and assessing the effectiveness
of the organization’s mission.
BUSM 6332 Public Policy Advocacy A study
of practices that enable nonprofits to effectively
work with businesses and government to promote
mutual interests and comply with lobbying regulations.
APPENDIX B
University Student Definitions of Social Entrepreneurship
Student 1: King Solomon wrote that “there is
nothing new under the sun.” So creativity in addressing social problems (for the Christian seen
as opportunities to demonstrate Christ’s love in
practical ways), in my opinion, is simply recombining people and resources in fresh, creative
forms to meet current needs.
I see social entrepreneurship to be any enterprise for the social good that does not have profit
as its primary goal. This definition opens up social entrepreneurship to not only traditional nonprofit organizations, but also to for profit busi-
nesses and hybrids such as “low profit limited liability companies (L3c). I see an SE enterprise as
one which all purposes, functions and activities
are aimed at producing social good. If the organization is for profit, but its purposes are primarily
for social good, then its profit only further serves
the social benefits of the organization.
The social entrepreneur does not necessarily
need to be doing something original or new. He/
she simply needs to be addressing a problem by
combining people and resources to meet a need
that otherwise would not be met.
57
Student 2: An organization or enterprise whose
focus is to promote social change or provide a
service to those in need. A very broad term that
covers many types of organizations. Unclear on
how profits are distributed (after expense and
payroll?). Can be global or local. Does not need
to be new or innovative, but applied in a way that
has not been tried before, or a sector/location
where it has not been addressed, or foundational
need lacking in a community.
Student 3: Social entrepreneurship is a problem
solving methodology whereby innovative business management skills are created to address
social problems of ever escalating magnitude at
the source level (addressing attitude, behavioral,
as well as system deficiencies), that have either
defied remedy, or have been, or continue to be,
inadequately addressed by traditional strategies
employed by governmental or non-governmental
institutions.
Organizational delimiters: Primary objective
is to solve a social problem/maximize social impact, not drive profit or shareholder wealth. Create a sustainable and effectively socially responsible organization addressing social problems at
their root causes, as opposed to symptomatically.
Does not conform to traditional and established business models…leading to emergence of
a new institution that advances a new approach.
Innovative in the sense that it does not employ a
traditional top down centralized problem solving.
Student 4: A business model, which caters toward
the aid of social needs, instead of for the purpose
of profit (such as traditional for profit business
models). The structure can range from for profit
to raise money to sustain a nonprofit, to a pure
nonprofit… or a hybrid corporation.. Defined by
its commitment and purpose towards primarily
solving social needs as well as serving people to
better increase their education possibilities, their
health, their job skills, their economy etc.
58
A for profit social business distributes their
income somewhat differently than a traditional
for profit business. The bulk of income would go
toward the social cause, then expenses and salaries. SE approach is a way that has not been done
before.
Student 5: SE is the active implementation of ideas
and concepts that help advance common good and
welfare. The implemented ideas and concepts
usually help influence the invention of additional
ideas and concepts, including, but not limited to
educational, economic, and ecological aid.
Can be for profit or nonprofit, not dependent
upon the accumulation of wealth, does not matter
how profits are distributed. Magnitude of change
is not a delimiter.
Student 6: An art of designing, organizing, and
operating a for-profit or nonprofit entity which
can become indigenously positively affecting our
societal issues while maintaining sustainability.
Student 7: A process through which an individual or individuals in a given community identify
challenges and opportunities within their social,
economic and political settings and use their
creativity to seek means and ways of addressing them within the social cultural context of the
community.
SE adds value to life not only by applying entrepreneurship principles of generation of profit
and increasing production but helps in enhancing
the capacities of the communities to enable them
to address underlying causes of poverty, disease,
illiteracy, and political marginalization.
Student 8: A business venture that defines success by the evident combinations of 3 factors:
individually profitable, serves others by creating
social change, and sustainability.
Student SE Perceptions/Definitions Revisited
(Post BUSM 5703 Introductory SE Course)
Student Comments Example 1: A for-profit,
or non-profit business that’s driving purpose is
to maximize social change and benefits, above
maximizing profit or catering to investors or
shareholders.
Student Comments Example 2: One discussion
that was left unanswered in our class sessions together was the issue of salaries. I still have not
come to terms with the question: what is the acceptable salary for someone who works at a social enterprise? Does devoting one’s self to social
needs means having to be threatened by poverty
ourselves? Should salaries of social enterprise
workers be comparable to regular corporations?
Who knows? Maybe this topic will be answered
as I complete my program.
Student Comments Example 3: Can social entrepreneurs have a negative impact on society?
This is something that I would like to explore
more. Since, there are unintended consequences
associated to every social venture; would having too many negative unintended consequences
disqualify an organization as a social enterprise
venture?
PEER-REVIEWED ARTICLES
APPENDIX C
59
INVITED PERSPECTIVE
HOPE FOR HYBRIDS:
FAITHFUL PRESENCE IN ORGANIZATIONAL LIFE
Roland Hoksbergen
Calvin College
CHANGING STRUCTURES FOR
CHANGING TIMES
Throughout biblical history the people of
God struggled in an ever-changing world to live
faithfully. Technology, the physical environment,
geopolitics, and even the spiritual world evolved
over long periods of time in striking and fascinating ways. As times changed, the people of God,
under the direction of the Father, the Son or the
Spirit, changed the way they lived. Throughout
the biblical story, and ever since, very few things
on this earth, with exceptions like the character
of God himself, have been exempt from evolutionary change. Human organizations are certainly not exempt. Institutions and organizational
structures in such arenas as family, education,
church, culture, society and politics are ever
changing as they respond to new conditions and
needs. So it is too with economic and business
institutions. They change and adapt in response
to new challenges
In papers prepared for this volume, Orneita
Burton and Timothy Lucas both point out that
Joseph Schumpeter captured the character of this
evolutionary change in his memorable phrase
“creative destruction.” As new and better in-
60
stitutions are created, the older, less effective
ones fade away. For Christians living in the era
of Christ’s Church, we also participate in this
process of creative destruction as we strive to be
faithful to Christ’s call to be God’s witnesses and
agents of salt and light in a sinful world.
Among the creative organizational changes
in which Christians have participated, we can
include banking and finance systems, stock
markets, corporations, the regulatory state, civil
society organizations, urban centers, media and
so many more. What motivates us is our overriding mission to follow through on the Cultural
Mandate by continually searching for ever better
ways of carrying out God’s will during our short
lives in our world. In our pursuit of this mission,
our guidelines in discerning what improvements
to make are summarized quite simply by Jesus
himself; love God and love our neighbor (Matthew 22:34-40). As we seek to be faithful living
out these commands in the contemporary world,
we do well to follow Paul’s guidance to the Thessalonians, “Test everything. Hold on to the good”
(1 Thesssalonians 5:21).
For those of us called to address how resources are stewarded for the production and distribu-
institutions in ways that will make us more effective as God’s stewards.
THEOLOGICAL INSIGHTS AND
PRINCIPLES
The first principle is mission, which all the
papers in this volume emphasize, along with their
desire to find ways to carry out that mission more
effectively. Each in its own way argues or assumes that our mission is a broad one, intended to
bring about the well-being of all of God’s people,
with special attention toward those who are poor,
left out, oppressed or forgotten. All three papers
thus intentionally take up the second great commandment and ask how hybrid organizations can
meet the needs of the poor. They explore first how
hybrid organizations can be effective in meeting
currently unaddressed needs and follow this by
asking how those organizations can be sustainable over the long run. One major concern is how
hybrid organizations can generate the revenue
streams that keep them afloat and functioning.
Another is how to focus the creative abilities of
young social entrepreneurs as they discover innovative ways to meet needs in new ways. If our
younger generations are to take up this task seriously, then they must be trained, which is why we
need to focus, as Lucas does, on the role of Christian colleges and universities. All of these efforts
are ultimately focused on achieving what Catholic Social Teaching refers to as “the common
good,” a beautifully descriptive term that draws
attention to the importance of being effective in
our ministry. If we really care for the people God
cares about, then those of us with resources and
capabilities must, as stewards, employ them in
pursuit of God’s purposes.
A second principle, or set of principles, is the
pairing of freedom with responsibility. In giving us a mandate at Creation, God also gives us
the freedom to build a world in keeping with his
designs. In giving us such wide open freedom,
he also marked out the path and gave us a sense
of what we were responsible for, like caring for
his creation and loving each other. These themes
INVITED PERSPECTIVE
tion of goods and services, a basic and recurring
issue is what kind of organizational structures
are best suited to carry out our mission. It is in
this context that we ask what role “hybrid organizations” might play and whether the Christian
community should organize to develop and employ them. The collective answer to this question
by the contributors to this volume is clearly in the
affirmative, because 1) we find ourselves inspired
by the knowledge that mission is prior to profit
and 2) we are in the midst of a roiling pot of ideas
and practices about institutional forms that seek
to prioritize mission over mere organizational
survival.
For reasons that will become clear, I too am
an enthusiastic supporter of the work of the three
main papers presented in this journal. Orneita
Burton searches for the best practices from the
present day for-profit and not-for-profit institutions in an effort to structure a new and improved
type of “hybrid” institution. Teresa Gillespie
considers the changing legal climate that will
provide a law-based foundation to new types
of institutions, and Timothy Lucas asks how
Christian colleges and universities can train our
young people to be leaders in these new missionoriented institutions. All three of these papers are
helpful contributions to the efforts of Christ followers to be transformative agents in the world
of production and distribution of the goods and
services needed by God’s people everywhere.
In my attempt to persuade you to join us in
our collective hope and enthusiasm about hybrid
organizations, I will present four arguments.
First, a few notes about theological/biblical principles that support the creation of new institutions. Second, a reference to a contemporary and
compelling argument by James Davison Hunter
on how Christians can be effective world changers. Third, some comments on some new trends
in organizational development that are addressing social needs in new and creative ways. And
fourth, an overview of what the Christian community needs to succeed in fashioning hybrid
61
are woven throughout the biblical drama in story
after story as God’s people live up to them, fail
at them, return to God and find their way again.
After the resurrection, when the Church is instituted, we learn to look to Jesus as Savior and
Lord and are led by the Spirit as we “work out
(our) salvation with fear and trembling” (Philippians 2:12). In Paul’s letter to the Galatians we
get a hard-hitting summary of what our freedom
means. In a powerful opening to chapter 5, Paul
says “It is for freedom that Christ has set us free.”
A few verses later Paul underscored the point:
“You, my brothers, were called to be free.” He
then reminds us that freedom is tightly conjoined
with responsibility; “do not use your freedom to
indulge the sinful nature; rather, serve one another in love. The entire law is summed up in a
single command: ‘Love your neighbor as yourself’” (Galatians 5:1, 13-15).
We thus enjoy the freedom to organize, reorganize, innovate and develop new organizational
forms that help us pursue the common good.
As Paul says, where life-giving innovations
that bring about all good things are concerned,
“against such things there is no law” (Galatians
5:23b).
Finally, let us consider “subsidiarity,” that insightful conceptual innovation arising in Catholic Social Thought. Subsidiarity teaches that all
of us, even at the most basic levels of society, are
to be invested and creatively engaged. Some use
this principle to suggest that large institutions
like the state are not to overstep their authority
by making decisions that inhibit freedom and
creativity throughout society. The principle thus
appropriately serves as a check on an overly interventionary state, but there is another side to
this coin, which is that subsidiarity demands that
entrepreneurs at all levels of society be active in
creating new institutions that fulfill the common
good better than the institutional arrangements
we currently live with. If the common person is
not innovating and working for the good, then it
should be no surprise that the State, also instituted for our good (Romans 13:4a), should inter-
62
vene. In fact, that’s the job of the higher authorities when the lower ones fail. All the more reason
that the Christian community should be creating
and promoting organizations that serve the common good.
TO CHANGE THE WORLD
These three principles are all on vivid display
in James Davison Hunter’s recent book, To Change
the World (2010). Hunter reviews Christian history
to discover when, where and how the Christian
community exercised significant constructive
influence on the direction of social change. He
then analyzes the strategies of the contemporary
Christian community and assesses both their successes to date and their potential for success in
days ahead. What he finds is that Christians do
best when they focus on bringing about innovative
changes at all levels of society, in whatever niche
we happen to occupy. Such a strategy, he argues,
is much more effective than trying to manipulate
or gain access to national political powers and
institutions, which he believes has been the main
thrust of the Christian community in recent years.
Hunter calls this type of life orientation “faithful
presence,” which he says
obligates us to do what we are able, under
the sovereignty of God, to shape the patterns of life and work and relationship—
that is, the institutions of which our lives
are constituted—toward a shalom that
seeks the welfare not only of those in the
household of God but of all (p. 254).
Some examples Hunter provides of faithful
presence include business leaders in Houston
who build and manage schools in low income
neighborhoods, a computer company that has
established a film and cultural renewal fund and
a car company that focuses as much on the wellbeing of its employees as it does on the bottom
line. Though Hunter does not use the term, all
these are, in different degrees and forms, hybrid
organizations that are finding creative new ways
to meet the needs around them. He concludes
We are not bound by the ‘necessities’
of history and society but are free from
them. He broke their sovereignty and, as
a result, all things are possible. It is this
reality that frees all Christians to actively,
creatively, and constructively seek the
good in their relationships, in their tasks,
in their spheres of influence, and in their
cities (p. 286).
CREATIVE TRENDS IN
ORGANIZATIONAL DESIGN
In recent decades there has been an explosion of creative and novel developments in the
organizational world. From the development of
KIVA as a source of online lending for micro
entrepreneurs around the world to the Business
as Mission (BAM) movement, there is today an
effervescence in the organizational design community that is truly astounding.
There are numerous historical and global
realities that feed into all this creativity, among
the most important of which is the coincidence
of major new social problems, like global environmental concerns and international security
issues, with the perceived inability of our current
organizational structures to address them. Population is rising, inequality is increasing, environmental concerns are spreading, which build on
each other in leading to a more conflictive and
dangerous world. Not to be ignored are the global
media that inform us almost instantaneously of
troubling events as they occur across the world.
In the midst of all this, governments, traditional
businesses and civil society organizations seem
incapable of responding to all the needs.
It is times like these that spawn new efforts to
reorganize ourselves in ways that meet the new
challenges, with entrepreneurial types from all
sectors seeking to combine the strengths of one
sector with the strengths of others to create new
and more effective institutions. This is the impe-
tus behind much of the social entrepreneurship
that has risen in practice and in our consciousness over the last twenty years or so. One such
creative leader is Muhammad Yunus, who famously played a leading role in the microfinance
revolution. More recently, Yunus is promoting the
development of what he calls “social businesses.”
Yunus says that a social business would take on
as its primary mission the pursuit of “specific
social goals,” but the organization would nevertheless remain a “business.” As a “business,” it
would be managed for efficiency, but as a “social”
business, its profits would be reinvested in the
organization instead of distributed to the stockholders (Yunus, 2007).
Yunus is now an old-timer, but visions similar to his are increasingly present among today’s
younger generation. Just a few days ago I had a
conversation with a recent graduate of our business program at Calvin College. She is now in
learning mode in a first job with the financial
community, but her dream is to engage in “impact investing” that will make financial resources
available to entrepreneurs who are pursuing
broad social missions. She may very well attend
the Stanford Business School and take advantage
of its Center for Social Innovation. This is the
same school that graduated Jessica Jackley of
KIVA fame and Jacqueline Novogratz, author of
The Blue Sweater (2009) and founder of the Acumen Fund. This recent graduate mentions Hub
Ventures (http://hubventures.hubbayarea.com/),
the Unreasonable Institute (http://unreasonableinstitute.org/) and Social Finance (http://www.
socialfinance.org.uk/work/sibs) as organizations
that inspire her. To give you a flavor of what these
organizations do, the opening lines on Hub Ventures’ web site are: “Hub Ventures is a 12-week
evening program providing funding and resources to a community of 16 entrepreneurs building
for-profit solutions for a better world.”
Yet another creative organizational trend
comes from the world of international development, which is fertile ground for creative change.
A growing trend is the creation of new types of
INVITED PERSPECTIVE
with a ringing endorsement of freedom and the
need for creativity.
63
partnerships that bring business, non-governmental organizations, and government agencies
together in productive relationships. These creative partnerships may tackle environmental,
health or educational issues with innovative organizational structures that, hopefully, combine
the strengths of all three types of organizations.
Two recent books on the promise of such partnerships are Alliances for Sustainable Development:
Business and NGO Partnerships (Berlie, 2010)
and Partnerships, Governance and Sustainable
Development: Reflections on Theory and Practice (Glasbergen, et.al., Eds. 2007).
CHRISTIAN COMMITMENT AND
LEADERSHIP
Intermixed in all the secular organizations are
a good number of Christians engaging in the sort
of faithful presence James Davison Hunter calls for.
For the new organizational structures to be successful, they must meet five requirements, all of which
are addressed by the papers in this volume.
First, successful organizations must have a
mission with a clear social purpose, like ending
malaria or managing forests sustainably. Within
this grand mission, there are plenty of specific
missions, especially if we remember that Christ
is reconciling “all things” to himself (Colossians
1: 15-20). One striking fact is how setting the
mission as priority #1 is so different from the way
the reigning Western mindset, which sees the primary mission of business as earning a profit and
then finding business activities that generate this
profit. Approaching things this way leaves many
important specific missions unattended.
Second, in carrying out activities oriented
to the common good, organizations must create
products that meet real needs. Two of countless
examples are bed nets to prevent malaria and
ecotourism activities that provide jobs to locals
while protecting the environment.
Third, organizations must be sustainable over
the long run, for which they must be managed
well internally, have sufficient revenue streams
and be competitive with other organizations. To
64
meet the changing needs of today’s world, many
of these organizations need to be reimagined and
recreated. This will necessarily mean the creation of hybrid organizations that bring together
the best insights and practices from our current
panoply of organizations types (see Burton in
this volume).
Fourth, new hybrid organizations need a facilitating and nurturing legal and cultural climate
within which to find a socially legitimate niche.
Creating new legal structures, like LLC and L3C
models or the B Corporation is another arena of
faithful presence for leaders from the Christian
community (see Gillespie in this volume).
Finally, the new organizations must be
populated with visionary entrepreneurs, inspiring leaders and capable managers endowed and
nurtured with the virtues, knowledge and skills
to create and lead the organizations that will
increasingly allow us all to be faithful to God’s
commands to love him and to love our neighbors
in practical and real ways (see Lucas in this volume).
It is often said that the only constant is
change. In terms of the world around us, this
is certainly true, but another delightful truth in
these changing times is that we continue to serve
a risen Lord, one member of the triune God who
loves and protects us, but who also expects us to
join him in the mission of loving the world and
loving our neighbors. Hybrid organizations are
one hopeful means through which we can carry
out this mission. Let us create them, test them,
and hold on to the good.
REFERENCES
Berlie, L. S. (2010). Alliance for Sustainable Development: Business and NGO Partnerships. New York: Palgrave Macmillan.
Glasbergen, P., Biermann, F., & Mol, A. P. J., Eds. (2007).
Partnerships, Governance and Sustainable Development: Reflections on Theory and Practice. Northamption, MA: Edward Elgar.
Hunter, J. D. (2010). To Change the World: The Irony,
Tragedy, & Possibility of Christianity in the Late Modern World. New York: Oxford University Press.
Yunus, M. (2007). Creating a World Without Poverty:
Social Business and the Future of Capitalism. New
York: Public Affairs.
ABOUT THE AUTHOR
Roland Hoksbergen teaches economics and directs the International Development Studies program at Calvin
College.
INVITED PERSPECTIVE
Novogratz, J. (2009). The Blue Sweater: Bridging the
Gap between Rich and Poor in an Interconnected World.
New York: Rodale.
65
INVITED ARTICLES: BUSINESS AS MISSION
“BUSINESS AS MISSION” HYBRIDS:
A REVIEW AND RESEARCH AGENDA
Steve Rundle
Biola University
INTRODUCTION
“Business as Mission,” as the name suggests, involves businesses that have a missionary
impulse, and as such, fit the definition of hybrid
organizations. Neither motivated by money, nor
embarrassed about making it, these enterprises
and the entrepreneurs who start them defy easy
classification. They are hybrids in their purpose,
and in many cases, their organizational structures. Many are organized as “regular” for-profit
businesses, but others have ties, either formal or
informal, to the tax-exempt, nonprofit world.
The term itself—often abbreviated simply as
“BAM”—first began to appear in the Christian
business lexicon about twelve years ago. Since
then, many Christian universities have created
courses, convened seminars and conferences,
and organized student trips around this theme.
Serious scholarly work also started appearing on
the subject at about the same time.1 Those who
have followed the “Social Entrepreneurship”
1. See, for example, Rundle (2000), Befus (2001), Lai (2003),
Johnson (2003), Rundle and Steffen (2003), Silvoso (2002),
and Yamamori and Eldred (2003).
66
(SE) literature will notice many similarities. In
fact, I often encourage people who are trying to
gain a better understanding of the management
and legal issues associated with starting a BAM
business to consult the SE literature. It is in many
ways more mature and well developed than the
BAM literature, and many of the challenges (e.g.,
how to avoid mistakes that can invite trouble with
the IRS) are the same. Clearly the motivations are
different; social entrepreneurs want to do good
for their fellow man, while so-called “BAMers”
are motivated, ultimately, by a desire to serve
God and draw people’s attention to Him. On the
surface the differences can be subtle, and in fact
there are many things the two groups can learn
from each other. But the Christ-centered nature
of BAM is a significant difference that gives rise
to different questions and requires a more interdisciplinary approach to the subject.
The purpose of this paper is to provide a brief
overview of the emergence of BAM as a movement and a field of scholarly inquiry. It is not an
all-encompassing literature review, but rather a
limited one that is meant to provide a chronology of this young field. This is followed by some
A BRIEF HISTORY OF BAM
SCHOLARSHIP
While the practice of Business as Mission
in various forms can be traced throughout the
church’s history,2 as a field of scholarship, BAM
is new and undeveloped. Baker (2006) notes that
the words “business,” “commerce” or “industry”
are rarely mentioned in the standard histories or
theologies of Christian mission. One is similarly
hard pressed to find any mention of “world mission” or “Great Commission” in the business
literature, although discussions about faith in
business have a long history. (See for example,
Miller, 2007.)
Tentmaking: The Forerunner to BAM
Scholarly interest in the role of business in
world mission first began to appear around the
middle of the 20th Century under the heading of
“Tentmaking.” Based on the missionary model
of the Apostle Paul and his friends Priscilla and
Aquila (Acts 18:3, Romans 16:3, 2 Timothy 4:19),
mission experts began experimenting with the
idea that one’s professional skills can be used as
instruments to advance God’s kingdom, particularly in less-Christianized countries.
It is worth pausing here to reflect on Paul’s
motivations and strategies, because they reveal
some interesting and surprising facts that have
important implications for the tentmaking debate. First, a strong case can be made that Paul’s
mission work was, with a few exceptions, largely
2. See, for example, Danker (1971), Baker (2006), Pointer
and Cooper (2006), and Owens (2006).
self-supported. At a minimum, he earned his own
way in Corinth (1 Cor. 9), Ephesus (Acts 20:3435), and Thessalonica (1 Thess. 2:9, 2 Thess. 3:8).
Second, he worked even though he did not have
to. In 1 Cor. 9 he makes the strongest case in the
Bible in favor of donor support for those in spiritual ministry. He did receive some financial support from the Philippians (Phil. 4:15-16), but his
vigorous refusals to accept support in 1 Cor. 9:12
and 15 suggests that it was not his modus operandi. Given that Paul’s passion in life was to preach
the gospel (1 Cor. 9:16) and see churches spring
up in the spiritually driest places (Rom. 15:20),
this raises the important question of “Why did
Paul work when he had every right to live off the
financial support of others instead?”
A careful study of his letters reveals the answer. For Paul, self-support was an integral part
of his missionary strategy. Preaching the gospel
for free added credibility to his message (2 Cor.
2:17, Titus 1:10-11) and served as a model for his
converts to follow (2 Thess. 3:7-9, 1 Thess. 2:1011, Eph. 4:28-32, 1 Cor. 4:12, 16, 1 Cor. 9:12-18).
Remember that many of his followers were reformed idolaters, adulterers, thieves, drunkards,
and extortionists (1 Cor. 6:9-11) who likely had
no idea what a Godly lifestyle looked like. By
modeling a disciplined and Christ-centered lifestyle, Paul helped transform not only their spiritual worldviews, but their economic and social
conditions as well.
Inspired by Paul’s model, modern tentmaking
pioneers like Ruth Seimens, J. Christy Wilson
and Ken Crowell set out in the mid-20th Century
to demonstrate that the model works today; that
one’s professional training and experience can
in fact be assets for world mission rather than
liabilities.3 However, the “sacred-secular dichotomy” was deeply entrenched in the church, and
tentmaking was viewed with great suspicion. The
INVITED ARTICLES: BUSINESS AS MISSION
suggestions for further research. One limitation
of this review is that the observations and suggestions are those of an economist only. If this
is indeed an interdisciplinary field, then a more
comprehensive understanding of this field and
the areas where further research is needed will
by definition require contributions by scholars
from other fields. The paper concludes with a few
thoughts about how to encourage more scholarship in this area.
3. Admittedly all three were reluctant pioneers because their
initial plans were to serve as traditional missionaries, but for
various reasons they found those avenues to be closed. See
Seimens (1997), Wilson (1979) and Goheen (2004).
67
concerns tended to revolve around several key
issues:
1. Time management, and specifically
whether tentmakers were disadvantaged
because the time they spent at work meant
less time for “doing ministry;”
2. Sources of income, and specifically
whether it was better for tentmakers to be
self-supported or donor-supported; and
3. Accountability, that is, whether selfsupported tentmakers represented a new
breed of “lone wolf missionaries” who
did not want to submit to the authority of
a sending church or missionary sending
agency.
On the issues of time management and income, Siemens, Wilson and Crowell were in basic agreement that tentmaking was by definition
a self-supporting missions model, and that there
is no necessary tradeoff between work and ministry. It is important to note, however, that unlike the more recent “Faith and Work” literature,
the word “ministry” was understood to mean
evangelism. In other words, work was consistent
with ministry only in the sense that it created opportunities for evangelism. With the exception of
Ginter (1998), there were few tentmaking advocates who were emphasizing the God-pleasing
nature of the work itself, or otherwise promoting
a broader definition of ministry or mission. On
the third issue of tentmaker accountability, there
was more disagreement. While some believed
formal ties with a missionary sending agency
was a good thing, Seimens was an outspoken
critic of such links, believing that agencies were
not sending true “Pauline-style” tentmakers, but
“missionaries in disguise” instead. She did favor
accountability, but felt that it should be with the
tentmaker’s home church, not a missionary sending agency.
The first noteworthy scholarly contribution to
this field was the now classic book by William
Danker (1971) called Profit for the Lord: Economic Activities in Moravian Missions and the Basel
68
Mission Trading Company.4 This remarkable
study documented the role businesses played in
the missionary strategies of the Moravian Church
and the Basel Mission Society in the 18th and
19th Centuries. At times the businesses served as
funding engines for their missionary endeavors
abroad, and at other times the businesses were
more integrally part of the missionary strategy.
Put in today’s language, the businesses were at
times examples of “Business for Mission” and at
other times, examples of “Business as Mission.”
In either case, the businesses were always intended to be financially self-sustaining, and there
was no distinction made between secular work
and sacred work. All work was seen as sacred
(Danker, p. 29). The book is essential reading for
BAM scholars and practitioners alike, as it offers
a candid appraisal of the successes and failures of
these pioneering businesses, and the lessons have
surprising relevance today.
Possibly more significant for the tentmaking
and BAM movements was the publication in 1979
of J. Christy Wilson’s book Today’s Tentmakers.
Written at a more popular level, its primary focus
was on the contemporary importance of tentmaking. In addition to a short autobiography, the book
provides a biblical basis for tentmaking along
with practical advice for individuals and churches that are considering tentmaking as a possible
mission strategy. Wilson defends the validity of
self-funded missions, and maintains that there is
no necessary tradeoff between work and ministry. A careful reading of his book, however, suggests that work’s primary kingdom significance
is as a platform for evangelism, rather than an act
of worship and a ministry of its own kind. Wilson
is also a strong advocate of tentmakers forming
teams and seeking an accountability relationship
with either a sending church and/or missionary
sending agency.
Reinforcing this view of tentmaking was an
empirical study by Hamilton (1987) that sought
4. Subsequently republished in 2002 by Wipf & Stock Publishers.
1. Prior experience leading an evangelistic
Bible study;
2. Their primary motivation for going abroad
was to evangelize;
3. They believed God called them to be tentmakers rather than traditional missionaries;
4. They had prior experience sharing their
faith to others at home;
5. They had a strong relationship with their
home church; and
6. They were enthusiastic about tentmaking
to the point of recruiting others to be tentmakers.
By the late 1980s, tentmaking was becoming quite trendy in evangelical missions circles,
a trend that was endorsed by mission statesman
Tetsunao (Ted) Yamamori’s influential book
God’s New Envoys in 1987, and the Lausanne
Committee for World Evangelization’s first-ever
statement on tentmaking in 1989.5 The Lausanne
statement affirmed the role Christian lay people
could play in world missions, and gave local
churches the responsibility for recruiting and
equipping people to be cross-cultural witnesses
5. The Lausanne Tentmaking Statement can be found at
http://www.globalopps.org/lausanne.htm
among unreached people groups. Church congregations were also given the responsibility of providing pastoral care for their tentmakers while on
the field, and helping them with re-entry culture
shock when they returned home.
It is impossible to pinpoint the exact date or
cause, but by this time many missionaries with
little or no work experience outside of a church
were being encouraged to consider tentmaking
as a way to gain entry into countries that were
otherwise closed to missionaries. New mission
agencies began springing up that were specifically focused on getting missionaries into these
“creative access countries.” This new generation
of tentmaker was encouraged to raise donor support (to create a system of accountability and
prayer support) and find tentmaking “platforms”
that would not require too much time and thus
distract them from their ministry goals. For the
average Christian, there was no longer much of
a difference between a tentmaker and a donorsupported missionary, except that missionaries
operated openly in their host country, and tentmakers had to be more discreet about their true
purpose for being in the country.
In response, some mission leaders started
distancing themselves from the tentmaker label.
For example, the U.S. affiliate of Tentmakers
International Exchange—an organization called
Intent—introduced the term “kingdom professional” to describe people who, rather than being
ambivalent about work, were unapologetically
committed to their professions, and saw their
work as the necessary context for holistic ministry. In another example, tentmaking pioneer
Gary Taylor (1998) wrote a blunt criticism entitled “Don’t Call Me a Tentmaker,” in which he
complained that he “found few in the missions
industry who could work in the normal secular
sense of the term. It seemed very few cues remained from pre-missionary work-life to guide
them into producing for their living and witnessing for their calling” (p. 24).
Another tentmaking pioneer, Patrick Lai,
tried to clarify rather than abandon the tentmak-
INVITED ARTICLES: BUSINESS AS MISSION
to identify the factors that contribute to a tentmaker’s effectiveness, or lack thereof. He defined
tentmakers as cross-cultural, self-funded Christian workers who are recognized in the host culture as something other than a religious worker,
but trained, called and motivated like any other
missionary. His definition of “effectiveness” is
less clear, although he states that his evaluation
was based at least in part by a modified Engel
Scale (p. 98). This measure of one’s spiritual
progress, together with an emphasis in the book
on evangelism, suggests that spiritual outcomes
were his main concern. By this definition, the
tentmakers that ranked as most effective had the
following characteristics:
69
ing label by introducing a nomenclature that differentiated tentmakers into five categories. At one
end (T-1) were working professionals who were
transferred by their employers to an overseas assignment but who were not well trained in crosscultural ministry, and therefore not very effective
as tentmakers. At the other end of the spectrum
(T-5) were donor-supported missionaries who
perceived their tentmaking “platform” mainly
as a cover for missionary work. In between these
two extremes, says Lai, was the Apostle Paul
(T-3), who had a single-minded focus on church
planting but who nevertheless took his work seriously and was not averse to receiving donor support on occasion.6
Despite these efforts to clarify, and other
attempts to defend a more biblical perspective
on tentmaking by people like Seimens (1998),
Ginter (1998), Rundle (2000) and English (2001),
confusion over the definition and purpose of tentmaking continued to grow.
The Emergence of BAM
As far as I am aware, the term “Business as
Mission” first began to appear in the late 1990s
at a pair of conferences focusing on the redemptive potential of Christian-managed businesses in
Central Asia. BAM was similar to early definitions of tentmaking in that it was self-supporting and laity-driven, but it was also different
because of its exclusive focus on business, and
its embrace of a more holistic understanding of
mission. Indeed, in a presentation given at those
conferences, Markiewicz (1999) emphasized the
role businesses can play in promoting the social
and economic transformation of a nation, and affirmed the missional legitimacy of business on
those grounds alone.
Several theologians and missiologists provided important refinements of this point. Among
6. Lai’s nomenclature was originally drafted in 2001, and
widely circulated on the internet. Today the only place it can
be found on the internet is at the end of a response by David English at http://www.globalopps.org/papers/tentmaking%20definition.htm. A revised version can also be found
in Lai (2005), pages 21-28.
70
missiologists, Myers (1999) and Kirk (2000)
made strong biblical cases in support of a broader
understanding of mission—one that sees the purpose of the church as going beyond mere evangelism, and including all manner of personal and
social reconciliation. Among theologians, Sherman and Hendricks (1990), Novak (1996) and
Stevens (1999, 2001), among others, defended the
intrinsic value of work and confronted the socalled “sacred-secular dichotomy” as it pertains
to work, ministry and business. According to
these theologians, to the extent that our “secular”
work and our businesses contribute to the common good, our work is “missional” and “sacred,”
and pleasing to God. By encouraging lay people
to leave the marketplace to go into a more narrowly defined “ministry,” the church actually
undermines its global impact.
Encouraged by the affirmation of this message, the idea of “Business as Mission” struck
a chord with Christian business professionals
and the term took on a life of its own. Within
a short time there were conferences being held
and books being produced on this topic.7 By
2004 the Lausanne Committee for World Evangelization identified BAM as an important new
development in world mission and invited about
70 people from around the world to discuss this
matter at its conference in Pattaya, Thailand.
The official document that was subsequently
produced (see Tunehag, McGee and Plummer,
2004) states plainly that “Business is a mission, a
calling, a ministry in its own right.” It goes on to
say that “Ultimately churches, mission agencies
and kingdom businesses have the same purpose:
to bring glory to God’s name among all nations.”
The week-long Lausanne meeting was made
up of a geographically and ethnically diverse
group of business and mission scholars, business
professionals, missionaries, and pastors. As might
be expected for such a diverse group, there were
several areas of disagreement, even at the end,
7. See, for example, Befus (2001), Silvoso (2002), Rundle and
Steffen (2003) and Yamamori and Eldred (2003).
8. The alternative being “fake businesses” run by “undercover missionaries.”
In fact, emphases on BAM as cross-cultural,
intentional, and holistic witness within an authentic, for-profit business context can be found
in most definitions of BAM or BAM practitioners, including those presented in Rundle and
Steffen (2003), Rundle (2003), Eldred (2005),
Baer (2006), Tunehag (2008) and Russell (2010).
The exceptions, while few in number, come in
two extremes. At one end are those who maintain that, to the extent that they are fulfilling
their calling, all Christians in business are doing BAM, regardless of their location, intentions
or impact. At the other extreme are those that,
like one mission agency’s recent advertisement
for a BAM seminar, define BAM as “missions
projects with business providing cover for the
missionary.” These exceptions notwithstanding,
it appears that a consensus is emerging on the
definition of BAM, one that emphasizes several
basic points. Specifically, BAM is:
1. Self-funded (hence the need for profitability);
2. Laity-driven (hence the frequent reminders about “calling” and the doctrine of the
“Priesthood of all Believers”);
INVITED ARTICLES: BUSINESS AS MISSION
which are discussed in more detail in Johnson and
Rundle (2006). For example, do businesses that
are started by (nonprofit) mission agencies and
sustained with the help of donor subsidized labor
or capital qualify as “real businesses?”8 If there
are no concrete evangelism and church planting goals, can it still be considered BAM? And
what are the essential ingredients of a mutually
beneficial partnership between a business and
a mission agency or church? Like their secular
counterparts, Christian-led hybrid organizations
have much to learn about effectively managing
and governing these enterprises. Mission leaders naturally prefer that agencies and/or churches
have final authority over the endeavor, but many
business people see that as a recipe for ruin. The
preference of business leaders is to control key
aspects of the partnership themselves so as to not
jeopardize the viability of the business. In so doing, the outcomes that are favored by the mission
leaders may be at risk.
The final document that was produced was
not intended to resolve every question, and is
ambiguous enough in these areas as to allow for
a variety of interpretations. That said, a survey
of other definitions seems to reinforce many key
ideas that are found in the Lausanne statement.
For example, Eldred (2005) describes BAM as
“for-profit business ventures designed to facilitate God’s transformation of people and nations”
(p. 60). Johnson and Rundle (2006) define BAM
simply as “the utilization of for-profit businesses
as instruments for global mission” (p. 25), where
“mission” is understood to include transformation at the personal and social level. Johnson
(2010) later elaborates on this by describing a
BAM business as “a for-profit commercial business venture that is Christian led, intentionally
devoted to being used as an instrument of God’s
mission (missio Dei) to the world, and is operated
in a crosscultural environment, either domestic
or international” (p. 28).
3. Intentional (which excludes those who are
not thinking strategically about their missional impact);
4. Holistic (that is, focused on the multiple
“bottom lines” of economic, social and
spiritual outcomes); and
5. Cross-cultural (and specifically concerned
about the world’s poorest and least-Christianized peoples, although depressed urban settings in the developed world may
also qualify).
It is important to note, however, that nothing in this list necessarily excludes businesses
that are owned by nonprofit organizations. I will
confess to being much more of a purist about this
issue in the past. I believed then, and still believe
now, that the newest and most interesting development in this area is that “regular” Christians
in business are being forced to think globally
71
in terms of their production processes, customers and supply chains. It is through these market
pressures that God is raising up a new kind of
missionary for a new generation. By comparison,
nonprofit-funded missionaries are not new at all,
and even the operation of business by missionaries is not entirely new.
My views on this matter have been evolving,
however, in large part because I do not believe it is
a “hill worth dying on.” The social entrepreneurship literature has settled this matter long ago by
accepting that different circumstances can call
for different organizational structures. Gregory
Dees (1998), who is one of the most influential
SE scholars, makes this point with the following
diagram. It illustrates social entrepreneurship as
a continuum between “pure charity” and “pure
business.”
Figure 1: The “Social Enterprise Spectrum”
Stakeholders
Pure Charity
Hybrid
Pure Business
Customers/Beneficiaries
Pay nothing
Subsidized rates or mix of payers &
nonpayers
Market rates
Capital
Donations & grants
Below-market capital or of donations
& market-rate capital
Market rates
Workforce
Volunteers or donorsupported
Below-market wages or mix of
volunteers and fully paid staff
Market rates
Suppliers
In-kind donations
Special discounts or mix of donations
& purchased supplies
Market rates
Adopted from Dees (1998)
In the Christian missions world, one can
think of the traditional missionary as being a
“pure charity” in that he or she does not charge
money for his/her services, and therefore is funded by donors. Conversely, the “regular” business
described earlier is a “pure business” in that it
charges a market rate for its products or services
and pays market rates for its capital, labor and
supplies. God can work through either a charity
or a business, or a hybrid organization that is a
combination of both. The task of Christian business scholars is to help identify the strengths and
weaknesses of each approach, and to begin equipping the next generation of missionary. With this
foundation in place, we are now ready to turn our
attention to mapping out a research agenda.
72
AVENUES FOR FURTHER
RESEARCH
Perhaps the most obvious and urgent area that
requires further research is the question of BAM’s
effectiveness, and how it differs from what one
might call “business as usual” or “missions as
usual.” Four recent studies have attempted to answer these questions, and have reached somewhat
contradictory conclusions. The first and most ambitious is a study by Patrick Lai (2003) that was
part of his work toward a doctoral degree at the
Asia Graduate School of Theology. Subsequently
revised and republished in 2005 under the title
Tentmaking: Business as Mission, Lai surveyed
about 450 tentmakers (not all were in a business
context) who were serving in the so-called 10/40
Window, questioning them about their back-
9. More on the characteristics of an effective tentmaker can
be found in chapter 4 of his book Tentmaking: Business as
Mission.
who had a single-minded focus on evangelism
and church planting were surprisingly less effective at producing converts than those who had a
broader definition of effectiveness. Stated differently, those with a more holistic understanding
of their purpose for being in the country actually generate more spiritual fruit than those who
have a single-minded focus on spiritual fruit! As
interesting and significant as these findings are,
however, they also have limited generalizability
because of the small sample and the locationspecific nature of the study.
A third study was conducted as part of a Master’s thesis at Eastern University by Christopher
Brown. Subsequently published by Bronkema
and Brown (2009), the study looks specifically
at the impact of BAM in the area of social and
developmental transformation. The authors find
evidence that, while much is said about the “multiple bottom lines” of BAM, in practice, societal
and developmental concerns take a distant back
seat to the economic and evangelistic bottom
lines. Indeed, of the 39 “practitioners and theorists” surveyed, none identified societal or developmental transformation as one of the expected
outcomes or best practices. They attribute this
to the lingering ambivalence many evangelicals
have toward incorporating social concerns into
their mission goals. Their point may be a valid
one, but given that there are likely thousands who
would identify themselves as BAM practitioners,
one cannot draw too strong a conclusion from
such a small sampling.
Finally, in another study that was part of a
Master’s thesis, this time at Copenhagen Business School, Christiansen (2008) attended a class
for aspiring BAM practitioners and found that,
contrary to Brown’s study, the seminar participants were in fact more interested in societal and
spiritual outcomes than in the economic impact
and viability of their businesses. This arguably is
a predictable finding for a study in which half of
the participants are missionaries or church leaders who were either just thinking about BAM or
in the start-up phase of their businesses. But it
INVITED ARTICLES: BUSINESS AS MISSION
grounds, motives, habits and outcomes. Like the
Hamilton study some twenty years earlier, Lai’s
definition of “effective” centered on evangelistic
outcomes, and specifically: (1) the number of
people they (the tentmaker) led to Christ; (2) the
number of people they discipled in the Word; and
(3) the number of churches they planted. Most of
his subjects were affiliated with missionary sending agencies that emphasized evangelistic outcomes over other measures of kingdom impact.
Predictably, those who stood out as most effective were spiritually mature and evangelistically zealous, as well as socially well-adjusted,
focused, and well organized.9 Yet, Lai also discovered something counterintuitive: those who
believed the ultimate objective of mission was
simply to win people to Christ were actually less
effective in accomplishing these goals. The most
consistently effective tentmakers were those who
defined their objective as “transforming society”
more generally. Evangelism and discipleship mattered a great deal to these tentmakers, but their
ultimate objective was much broader than that.
These findings are important and interesting, but
the narrow definition of “effective” combined
with the sample selection bias raises questions
about the generalizability of the findings.
Another study, which also considered the
effectiveness of BAM, reached a similar conclusion. Like the previous study, this one was part of
a doctoral program undertaken at Asbury Theological Seminary (Russell, 2008) that was later
published in 2010 under the title The Missional
Entrepreneur: Principles and Practices for Business as Mission. In an effort to hold as many
cultural and geopolitical variables constant as
possible, Russell focused on a single city—Chiang Mai, Thailand—and conducted an in-depth
study of twelve self-identified missionary-run
businesses there. The results were similar to
Lai’s, although much more pronounced—those
73
nevertheless reinforces the point that we simply
do not know yet what motivates BAM practitioners or whether they are having a noticeable impact in their communities.
The author also investigates whether the
Christian values associated with a BAM business
can be a source of competitive advantage, and
concludes that they might be, but only in the short
run because non-Christian companies practicing
“Corporate Social Responsibility” are close substitutes. While this finding is extremely tentative,
it is an interesting question nonetheless because
many Christians uncritically assume that their
Christian conduct in business will be a long-term
source of competitive advantage.
As these studies suggest, much more theoretical and empirical work is needed before we can
say with any confidence whether, how and under
what circumstances BAM is effective. Among
the areas where further study is needed is the idea
of “effectiveness” itself: What are the non-negotiable outcomes of an effective BAM business,
and what metrics are most useful for assessing
its effectiveness? What are the motivations, backgrounds and support structures of an effective
BAM practitioner or management team? How
can the resources and skills of the management
team be expanded? Longitudinal studies would
be especially helpful as they would add to our
understanding of the evolution of these ventures
and the factors that contribute to their eventual
success or failure.10
Closely related are questions about the structure and governance of a BAM business. Like
the “Social Enterprise Spectrum” in Figure 1,
the population of self-described BAM businesses
currently reveals a wide range of organizational
structures and governance arrangements. At
the “pure business” end of the continuum are
10. Toward that end, Rundle and Steffen (2003) was revised
and updated in 2011, with the second edition providing updates on the original case studies. Two companies, however,
are no longer in business and are only mentioned in the preface. A separate study of failed BAM businesses could be
very enlightening.
74
independently owned and operated businesses,
founded and managed by sincere Christians who
find themselves for various economic reasons
located in a part of the world that has great social and spiritual need. As career business professionals, they are not preconditioned to seek
advice from pastors or missionaries, but rather,
they start meeting needs in their own way. Untrained but nevertheless led by the Holy Spirit,
some of the most interesting things happening in
the BAM arena are being done by these people,
and are off the radar of most mission agencies
and churches.
At the other end of the continuum are small
businesses owned by missionaries or their agencies that are principally motivated by the spiritual rather than the economic opportunity. The
ownership and control of the businesses is often
ambiguous, although many agencies are beginning to take a closer look at this in order to avoid
jeopardizing their status as tax-exempt charities.
The management teams are often recruited more
for their ministry experience, and held accountable to evangelistic goals. Not surprisingly, these
people often show more interest in the church
planting goals, although as we saw in the studies
by Lai (2003) and Russell (2008), it is an open
question as to whether they are any more successful than the other group at achieving those goals.
In between these two extremes are a plethora
of hybrid organizational and governance structures, including arrangements similar to licensing agreements, partnerships, joint ventures and
quasi-franchises. This suggests another fruitful
avenue for further research, one that would study
these arrangements to determine which ones are
most useful, and under what circumstances they
are mutually beneficial. A short paper by Rundle
and Sudyk (2007) identifies some of the most
common financial arrangements, but more rigorous study is needed that can help prospective
BAM practitioners understand the impacts and
limitations of those arrangements, as well as the
legal implications.
the question around, what are the political, legal
or cultural preconditions for success? Figure 2
is an illustration from Ken Eldred’s 2005 book
God is at Work that suggests that countries with
weak socioeconomic, legal and cultural foundations are less suitable for “Overseas Private Equity” businesses, what we are referring to here
as BAM. This is a thought-provoking and potentially important assertion that to my knowledge
has never been tested.
Figure 2: Ideal Business-Mission Strategy
Share of Total Kingdom Business Effort
100%
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A third avenue with almost unlimited potential for further research is the environmental
factors that can inhibit or contribute to the goals
and strategies of BAM. For example, in countries
with severe market imperfections, is one model
or one form of governance more effective than
another? In what ways can governments or nongovernmental organizations (NGOs) help or hinder the efforts of a BAM business? In what ways
can BAM businesses help improve a society’s
political, legal or cultural climate? Or turning
0%
Low
Medium
High
Level of Socioeconomic, Legal, and Cultural Infrastructure
MED (Microenterprise Development): Very small businesses founded with less than $5,000.
SME (Small- and Medium-Enterprise): Businesses capitalized in the $5,000 to $100,000 range.
OPE (Overseas Private Equity): Businesses requiring initial capitalization of $100,000 or more.
Source: Ken Eldred (2005)
This list of gaps in our knowledge base is far
from complete. There is undoubtedly a similarly
long list of questions that can be raised by missiologists, anthropologists, psychologists, theologians and other scholars, which is why an interdisciplinary association of scholars may need to
be formed so that the various “dots” of research
can be connected.
A Word about Microenterprise Development
When some people hear the term “Business as Mission,” they instinctively think about
microfinance and microenterprise development
75
(MED), that is, efforts by NGOs to help poor people start their own small businesses.11 Because of
the vastly different purpose and approach of the
organizations involved, some BAM advocates
insist that this represents a separate topic. I will
let others debate that question. Certainly these
efforts have a missional component and involve
businesses, and a similar debate is taking place
there in the sense of whether microfinance is best
carried out by a for-profit or a nonprofit organization. The reason this paper did not review any of
that literature, or discuss any of the challenges associated with MED and microfinance, is because
that area of scholarship has a longer history and is
farther along in its development. Those interested
in exploring the Christian contributions to this
literature are encouraged to read Myers (1999),
Bussau and Mask (2003), Smith and Thurman
(2007), Greer and Smith (2009), Corbett and
Fikkert (2009) and Hoksbergen (2007, 2009), to
name a few.
CONCLUDING THOUGHTS
Not long ago the Wall Street Journal noted a
significant change in the attitudes of university
business students (Middleton, 2009). Compared
to other incoming classes in recent memory, today’s young people are more interested in using
their business skills to make a positive difference
in society. Undoubtedly, many have been inspired
by social enterprises like Tom’s Shoes, Kiva, and
Chipotle’s Mexican Grill, as well as turned off
by stories of corporate excess on Wall Street. In
Christian circles we are seeing something very
similar. The main difference is that “Business as
Mission” goes beyond addressing the physical
needs of the poor (or the ethical treatment of pigs
and chickens, as in Chipotle’s case), and includes
a desire to make Christ known and see people
freed from spiritual bondage. Clearly the inspiration for this comes only from the Holy Spirit. That
11. For simplicity I am not making a distinction between
Microenterprises and Small- and Medium-Size Enterprises
(SMEs).
76
is a significant difference to be sure, but there is
nevertheless much that BAM scholars can learn
from the SE literature, particularly in the area of
financing and managing hybrid organizations.
Thus far most of the scholarly discussion
about BAM has focused on theological questions
related to the compatibility of business and mission, or the compatibility of work and ministry
more generally.12 In my view, those questions
have been largely settled, and the value of additional scholarship in that area is probably small.
My plea to Christian business scholars is to begin looking at the strategic and operations side
of BAM, where there has been much less work
done. For example:
• Are there predictable advantages or disadvantages to different organizational forms
for BAM businesses?
• What are some of the incentives and constraints that might shape the business strategies or the behavior of a BAM practitioner? Can they be condensed into a list of
best practices?
• Are those best practices a function of one’s
cultural or geographical context, and if so,
how?
• Do the best practices vary depending on
the organizational form of the enterprise?
• How can spiritual outcomes be better defined and measured? How can practitioners
be better trained and supported?
• What are the legal and ethical challenges
facing Christians who “bring their faith to
work”?
• How can Christian business scholars do a
better job of equipping people for marketplace ministry both at home and abroad?
12. See Part 1 of Johnson (2009) for a fairly comprehensive
review of this very large field of theological literature. In addition are two excellent, recent contributions by Van Duzer
(2010) and Wong and Rae (2011).
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INVITED ARTICLES: BUSINESS AS MISSION
These questions represent only the “tip of the
iceberg.” Business as Mission has the potential of
being a major force for good in the neediest parts
of the world, but scholarship in this area has been
lagging. To facilitate more research in this area,
there is a need for an interdisciplinary association
of Christian scholars that are united in their interest in this subject. Such an association would include anthropologists, theologians, missiologists,
political science scholars, sociologists and many
others. They do not need to organize their own
conferences, necessarily, at least at first. Instead
they could organize paper sessions at conferences
related to their own disciplines, communicating
their results and sharing their papers via a shared
electronic network. The establishment of a venue
for publication would also be an important step
toward generating more research in this field. It
is my hope that this paper will stimulate more
interest in this important and rapidly developing
subject.
Greer, P. & Smith, P. (2009). The Poor Will be Glad:
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Grand Rapids, MI: Zondervan.
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ABOUT THE AUTHOR
Dr. Steve Rundle is Professor of Economics at Biola University. His teaching and research interests are focused
on the intersection between international business and world mission.
He also assists, consults, or has cofounded several organizations aimed
at helping Christian-owned businesses prosper in less-developed countries.
INVITED ARTICLES: BUSINESS AS MISSION
Tunehag, M., McGee, W. & Plummer, J. (Eds.)
(2004). Business as Mission. Lausanne Occasional
Paper #59. Available at: http://www.lausanne.org/
documents/2004forum/LOP59_IG30.pdf
79
IS BUSINESS AS MISSION (BAM)
A FLAWED CONCEPT?
A REFORMED CHRISTIAN RESPONSE TO THE BAM MOVEMENT
Scott A. Quatro
Covenant College
IS THE CHRISTIAN BUSINESS
ACADEMY AND PRACTITIONER
COMMUNITY IN DANGER OF
UNDERMINING ITSELF?
I was increasingly troubled and provoked as
the Saturday morning plenary session unfolded
at the CBFA conference back in October of 2010.
The plenary session was a panel discussion/
presentation entitled “Business as Mission: A
Discipline Gathering Momentum.” The title of
the session itself was enough to grab my attention and get me in my seat. As I settled into that
seat I asked myself some questions: “Is business a
mission, or is business simply business?” and “If
BAM is an academic discipline, what does that
mean for my plain old discipline of ‘business as
business’?” Once settled, some of the thoughts
espoused by the panel (among them, that “BAM
is an academic discipline worthy of major programs of study” and “the Great Commission
and church planting go hand-in-hand with business enterprise”) were almost enough to make
me literally fall out of my seat. That moment,
coupled with the invitation from JBIB to respond
to Steve Rundle’s fine context-setting paper for
this special issue on organizational hybridization, catalyzed this response. Interestingly, the
very concept of organizational hybridization itself prompts response on my part, as discussed in
more detail later in this paper.
But I begin by applauding the collective work
of the thought leaders (Johnson, 2009; Lai, 2005;
80
Rundle & Steffen, 2003; Russell, 2009) in the
BAM movement. As expertly outlined by Rundle,
the BAM enthusiasts and thought leaders have
admirably pushed the business academic and
practitioner communities to think intentionally
about business. Much of their thinking resonates
with me in that it recognizes the pervasive impact
that business has on God’s world, as they sound a
clarion call for business to be conducted in ways
that bring good to society. But has their conceptualization of the “good” that business is to bring
to society been taken too far or misapprehended
in some key ways? I propose that perhaps it has.
Put simply, I am troubled by the BAM movement as I believe it has the potential to undermine the legitimacy of Christian business education and practice. This is particularly true given
the systematic Reformed theological tradition
(Calvin, 2007; Kuyper, 1931; McGrath, 1990;
NAPARC1) that shapes the way I think about
business and understand its essential role as a key
component of God’s good creation. Thus, in the
balance of this paper I attempt to demonstrate
how Reformed theological principles lead me to
posit that BAM is perhaps fundamentally flawed
in the following key ways:
1. BAM is based on a dualistic foundation:
BAM actually reinforces the false sacred/
secular dichotomy by positioning business as mission as sacred, and business as
business as secular. In contrast, Reformed
theology declares all legitimate business
2. BAM reinforces a dual-class citizenship:
Related to the first point, BAM creates
a dual-class citizenship among business
academics and practitioners alike. In contrast, Reformed theology declares all of
God’s people working in business or in
any other context as co-creators with Him,
equally but differentially contributing to
the ongoing revelation of His kingdom.
3. BAM violates God’s sovereign intent for
His creation: BAM imposes the God-given/designed mandate of the church onto
business, and vice-versa. Contrastingly,
the Reformed tradition celebrates God’s
good intent for business as being separate
and distinct from His good intent for the
organized church.
4. BAM undermines profit: BAM distorts the
core essentials of business, thereby threatening sustainable business enterprise. In
contrast, Reformed theology reinforces
profit making as a morally and religiously
sound mandate unique to business.
5. BAM is inauthentic: BAM enterprises run
the risk of disenfranchising many of their
stakeholders due to mixed motives and lack
of full disclosure. In contrast, Reformed
theology celebrates the ideal of business being a primary means of extending shalom
to all people, and even to all of creation.
Before commencing with the heart of the
argument (organized around these five proposed
flaws) two specific words of caution and clarification are warranted. First, I am not questioning
the BAM movement in its entirety. As mentioned
above, there is much about the movement that
resonates with me. For example, BAM clearly
calls Christian business professionals to be integral in their actions by living out their faith
through business practice. This is of course good
and right, and even essential in order for business
to thrive as God intends. Second, I am not positioning the Reformed theological tradition as the
only source of normative Christian thought relative to business practice. I simply chose to speak
out of that tradition because I personally find it
compelling and informative as a means of investigating the merits of the BAM movement. That
said, I know that I have much to consider from
other Christian traditions, and I am hopeful that
this response fosters dialogue in that vein.
SUMMARIZING THE DIRECT
TENETS AND INDIRECT
IMPLICATIONS OF THE BAM
MOVEMENT
In order to further set the stage for direct
discussion of the flaws that I propose relative to
BAM, the major tenets and related implications
of the BAM movement must be summarized. To
be sure, the BAM literature (including Rundle’s
paper herein) does not use the language I delineate below to describe BAM. In fact, as conveyed
by Rundle’s acknowledgement of his “evolving”
view of what broadly constitutes a BAM business, it’s almost as if the BAM enthusiasts and
thought leaders don’t want to “fess up” to the
core/essential distinctives of BAM. But I would
propose that a review of the BAM movement and
related literature leads to a clear picture of these
“essentials” of the BAM “doctrine.” And while
an admittedly macro-level view is conveyed here,
I believe that these “essentials” (major/direct tenets of BAM) include the following:
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work as a sacred means of imaging God
and contributing to the ongoing revelation
of His kingdom
Direct Tenets
1. BAM places evangelization at the core of
the purpose of a business enterprise. In
short, a BAM company exists to evangelize the nations. A company without this
as a core purpose is not a BAM company.
2. BAM places spiritual development at the
core of the purpose of a business enterprise.
That is, a BAM company exists to disciple
the nations. A company without this as a
core purpose is not a BAM company.
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3. BAM prioritizes the least-developed and
least-evangelized parts of the world. Put
simply, a BAM company exists to develop
the nations. A company without this as a
core purpose is not a BAM company.
Again, these tenets are not explicitly espoused (at
least not universally) by the BAM thought leaders and enthusiasts. But I suggest that a plenary
review of the movement leads precisely to these
conclusions.
With these major/direct tenets serving as the
foundation, the following indirect implications
can be discerned (each of which corresponds in
kind with the proposed flaws introduced above):
Indirect Implications
1. BAM companies represent God’s true intent for business.
2. BAM business students and practitioners
are truly doing God’s work.
3. BAM companies rightly embrace the
Great Commission as an organizational
mandate.
4. BAM companies are ministries, and thus
rightly resist profit maximization as an organizational mandate.
5. BAM companies (occasionally) rightly
distort and/or conceal their core intentions
relative to evangelism and discipleship.
To further galvanize and provide a macrolevel overview of my response, all of this (including related Reformed theological responses) is
conveyed by Table 1 below.
Table 1: The Direct Tenets and Indirect Implications of BAM,
and Related Reformed Theological Responses
Direct Tenets of BAM
BAM companies exist to
evangelize the nations.
BAM companies exist to
disciple the nations.
BAM companies exist to
develop the nations.
Indirect Implications of BAM
BAM companies represent God’s true
intent for business.
BAM companies rightly embrace the
Great Commission as an organizational
mandate.
Business is about pursuing the
Cultural Mandate and extending
common grace.
BAM companies are ministries, and
thus rightly resist profit maximization as
an organizational mandate.
Business is about stewarding
resources in pursuit of profit.
BAM companies (occasionally)
rightly distort and/or conceal their core
intentions relative to evangelism and
discipleship.
Business is about extending
shalom to stakeholders.
We can now turn to more detailed discussion
of the proposed flaws of BAM. To do so I address
each of the proposed flaws in the order introduced
above, illumining each from the perspective of
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Business is a sacred calling.
BAM business students and
practitioners are truly doing God’s
work.
REFORMED RESPONSES TO BAM
Reformed theology.
Reformed Response
Business as Business is a Sacred Calling
The first and second proposed flaws of BAM
(i.e., BAM is based on dualistic thinking and
reinforces a dual-class citizenship among God’s
people in business) are quite ironic given the
amount of time and energy expended by BAM
enthusiasts directly advocating for the sacred
practitioners at the bottom. But the BAM conceptualization of business actually reinforces
this false hierarchy such that BAM business work
is positioned as sacred, and non-BAM business
work as secular (see Figure 1 below).
Figure 1: The Implicit Spiritual Hierarchy of Work According to the BAM Movement
Missionaries and
BAM Practitioners
Missionaries and
"Sacred" Work
Pastors
"Helping'
Professionals
"Business as Business"
Practitioners
"Secular" Work
The conceptualization of a BAM business
having evangelism, discipleship, and third-world
economic/community development at the core of
the purpose of the business is what explicitly reinforces this hierarchy. And the implicit message
is that “business as business” is relegated to the
bottom of the hierarchy once again.
From a Reformed perspective this is potentially very troubling. Put simply, I believe that all
of God’s people image Him through their professional practice in business, regardless of whether
the company for which they work intentionally
evangelizes/disciples/develops the nations. That
is, in all lawful business enterprise (with some
exceptions dependent upon the product/service
being provided) they are engaged in sacred activity, living out their sacred vocation.2
In fact, Christian business practitioners have
before them the quite remarkable task of exercis-
ing dominion in the world. Thus, business professionals are afforded ultimate task significance in
that through their work they image God and contribute to the upholding and on-going unfolding
of His creation, and to the continued revelation of
His kingdom, thereby loving Him with all their
hearts, souls, and minds. In this vein, certainly
the practice of business serves as a key conduit
through which the needs of our neighbors are effectively met. For example, when people around
the globe or around the corner are praying earnestly for their daily “bread,” the business professionals at Sara Lee, as well as at the local smalltown bakery, are already hard at work baking,
distributing, and retailing that “bread.” Clearly,
this holds true for all legitimate needs (as indicated by placing the word bread in quotations),
and ultimately involves meeting needs for many
categories of neighbor, including consumers, em-
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nature of business activity. To their credit, they
strongly speak out against the false spiritual hierarchy that places full-time foreign missionaries (especially those called to third-world nation
states) at the top of the hierarchy, and business
83
ployees, suppliers, shareholders, and members of
the general communities in which businesses operate. Viewed in this light, business as business is
clearly a sacred calling.
Business Is About Pursuing the Cultural
Mandate and Extending Common Grace
The third proposed flaw, namely that BAM
violates God’s sovereign intent for his creation,
can best be understood from the backdrop of
sphere sovereignty. The concept of sphere sovereignty was codified by the Dutch Reformed theologian and statesman Abraham Kuyper, for whom
Princeton University named and maintains today
the Abraham Kuyper Center for Public Theology.
The essence of Kuyper’s seminal doctrine is that
God intentionally orders creation with diversity
and integrity such that each sphere of society is
independently good, and must be appreciated as
such. His work brings an interesting dynamic to
the larger discussion of organizational hybridization, and whether such movements as BAM, social entrepreneurship, and even for-profit higher
education are universally embraceable from the
perspective of Christian worldview thinking. I
herein suggest that embracing such movements
without deep and broad thinking as to the larger
impact on God’s world, and His intended design
for that world, is reckless at best and outright
folly at worst.
The broad implication of Kuyper’s thinking is that economic life, family life, civic life,
school life, and even church life are distinct,
and sovereign. The specific implication is that
there are different God-ordained norms for each
sphere such that a business must not be run like a
church, or an educational institution must not be
run like a governmental agency. This is not to say
that God has not ordained universal norms that
transcend all spheres (e.g., admonitions against
the love of money, or the command to love your
neighbor as yourself). But it is to say that some
God-ordained norms are constrained to specific
spheres (e.g., the command to care for the poor,
or the command to evangelize the nations). Thus,
God’s people in business contexts must embrace
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and live out God’s good design for the sphere of
business as opposed to His equally good design
for the sphere of the church.
In this vein, it can be argued from the panoply
of both special and general revelation3 that business is fundamentally about stewarding and prospering creation in line with the Cultural Mandate
articulated in Genesis 1:28. This passage from
the first chapter of Genesis declares that God’s
image bearers are to care for, subdue, rule over,
and make fruitful, the earth. In short, as God’s
people in business we are charged with the task
of prospering all that God has created. In doing
so, God uses us to extend common grace4 to all
people, meeting legitimate product/service needs
and providing livelihood and generating wealth
for many. That is, God equally shows His goodness to both His people and to the unredeemed
through business activity. This is by God’s design, and it represents His sovereign will for
the business sphere of His creation. This is distinct from His design and sovereign will for the
Church, where the principle mandate is the Great
Commission articulated in Matthew 28. Here
God’s people are charged with evangelizing and
discipling the nations, acting both individually
and as the organized church. The obvious lesson
here is that Gods intends for business and the
Church to be separate, and yet complimentary
spheres of His creation. It is a tricky endeavor
indeed to merge the mandates imposed on these
different components of God’s creation.
Business Is About Stewarding Resources in
Pursuit of Profit and Extending Shalom to All
Stakeholders
The last two proposed flaws of BAM (i.e.,
that BAM undermines profit and is inauthentic
relative to stakeholder engagement/interaction)
are directly related to God’s sovereign design for
the sphere of business (as articulated above). In
short, it appears from the perspective of general
revelation (as conveyed by the history of capitalistic enterprise) that business is fundamentally
designed to be a profit-making endeavor whereby
shalom is extended to all business stakeholders.
Consider Chattem, an OTC pharmaceuticals
and personal care products headquartered in
Chattanooga, Tennessee just a few miles from
my home. Many of the company’s products are
household staples, including Gold Bond lotion,
Act mouthwash, and Icy Hot topical pain relievers. The company has provided stable employment for hundreds of employees, dependable
revenue for thousands of suppliers and retailers,
attractive returns for millions of investors, and
quality products for hundreds of millions of consumers for over 130 years now. I happen to know
that many of the employees at Chattem are professing/practicing Christians, and that there are
even aspects of the company culture that are normatively “Christian.”5 But I also know that this
is not a BAM company. If it was, it would have
intentionally interjected evangelism, discipleship, and third-world economic/community development into the corporate mandate. As such,
I suspect would never have survived and thrived
as long as it has. That said, I also know that two
of the most senior executives of the firm strongly
support and engage in domestic and world missions-related endeavors, but they do so through
the church. They don’t shirk the Great Commission at work, but they certainly don’t interject it
into their professional practice in ways that are
inconsistent with their calling as God’s stewards
and agents of shalom in business. They don’t engage in business activity with the underlying goal
of proselytizing or discipling colleagues, or invest Chattem resources in parts of the world that
don’t offer a comparative advantage. This would
undermine profit and disenfranchise stakeholders
alike, which would be a lose-lose for the Kingdom, and for society as a whole.
BUSINESS IN THE CONSUMMATED
KINGDOM?
In closing, I turn to the meta-narrative that is
often employed to convey big-picture Reformed
thinking about God, His people, and His creation. Doing so illumines and summarizes many
of the key points proposed above.
Creation—God created all things good, including business. Business is part of God’s good creation, and arguably His primary means for prospering creation and extending common grace to
all people. Business is not a product of the fall.
Fall—All things have fallen from that original
goodness, including business. Business has been
infected by the fall. All the more reason that we
desperately need God’s people in business.
Redemption—Christ has redeemed all things,
ushering in His kingdom and declaring again His
original good design for all of creation, including
business. Business is in a state of being transformed back to God’s original good design. It is
already redeemed, but doesn’t yet fully reflect
that reality. Again, all the more reason we desperately need God’s people in business. That is,
Christ is making all things new, including business, through His people.
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That is, business must be profitable to be sustainable, and, when it is both, all stakeholders
share in the shalom (peace and prosperity, with
as much wholeness as is possible) engendered by
the business.
Consummation—Christ will return again and
fully consummate His kingdom. He will complete His work of making all things new, including business. We will live and reign with Christ
for eternity in the new heaven and the new earth,
as His people.
I don’t pretend to know what it will be like to
live in the new heaven and the new earth. But I increasingly dream that it will still involve business
enterprise as a key means through which God
showers His grace and extends His shalom to all
of creation—but perfectly so. Ironically (relative
to this discussion of BAM), if the new earth is
the domain for our existence and we continue to
have communal needs, there will be no need for
BAM businesses at all. Just good old “business as
business” enterprises will be needed.
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ENDNOTES
1. NAPARC is the North American Presbyterian and Reformed Council, which exists
to celebrate and protect the orthodoxy of the
Reformed faith. NAPARC requires member
denominations to be in full commitment to the
Bible in its entirety as the Word of God written,
without error in all its parts, and to its teaching as set forth in the Heidelberg Catechism,
the Belgic Confession, the Canons of Dort, the
Westminster Confession of Faith, and the Westminster Larger and Shorter Catechisms. The
systematic theology codified therein shapes and
informs my worldview, and hence my personal
response to BAM.
2. The Greek word for vocation used throughout the Bible is the word “klesis,” literally meaning “calling.” In general, this refers to the calling
of the gospel. Thus, when the hearts of God’s
people are regenerated and they respond in faith
to the calling of the gospel, they become followers of Jesus Christ and accept as their vocation
a life of devotion to Christian ideals and principles. When Jesus Christ was asked to share his
teaching on the essence of all Christian ideals
and principles he answered “Love the Lord your
God with all your heart and with all your soul
and with all your mind. This is the first and
greatest commandment. And the second is just
like it: ‘Love your neighbor as yourself.’ All the
law and the prophets hang on these two commandments.” (Matthew 22:37-40, NIV) Thus,
vocation is ultimately all about loving God and
neighbor, in part through our occupation. Therefore, all lawful occupations are equally sacred
means through which God’s people live out their
vocation in Christ.
3. Special revelation refers to the Bible as
God’s inerrant and infallible word. General
revelation refers to God’s continued revelation
of himself through His creation. Related to this,
the Reformed worldview would argue quite
forcefully that “all truth is God’s truth,” (which
is a commonly employed paraphrase of Calvin’s
86
thinking as broadly articulated in his Institutes
of the Christian Religion) and hence the truths of
God are continually revealed in His creation, of
which business is a critical component.
4. Common grace refers to the Reformed
tenet that God causes His goodness and grace
to fall upon all people equally in many ways
related to living in secure, civil, prosperous
society. For example, by providing low-cost,
reliable, safe, and even “fun” commercial airline
transportation, Southwest Airlines has equally
improved the lives of the redeemed and the unredeemed alike. Hence, Southwest Airlines has
been employed by God as an agent of common
grace for over 38 years now.
5. I have worked regularly with Chattem on a
consultancy basis since July of 2007. This considerable exposure to the company serves as the basis
for my claims here. Among the normative “Christian” values at the core of Chattem’s culture are
collaboration, intentionality, and egalitarianism.
REFERENCES
Calvin, J. (2007). Institutes of the Christian religion.
Peabody, MA: Hendrickson Publishers.
Johnson, C. (2009). Business as mission: A comprehensive guide to theory and practice. Downers Grove, IL:
IVP Academic.
Kuyper, A. 1931). Lectures on Calvinism. Grand Rapids,
MI: Eerdmans.
Lai, P. (2005). Tentmaking: The life and work of business
as missions. Colorado Springs, CO: Authentic Publishing.
McGrath, A. (1990). The life of John Calvin: A study in
the shaping of Western culture. Cambridge, MA: Basil
Blackwell.
Rundle, S., & Steffen, T. (2003). Great commission
companies: The emerging role of business in missions.
Downers Grove, IL: InterVarsity Press.
Russell, M.L. (2009). The missional entrepreneur: Principles and practice for business as mission. Birmingham, AL: New Hope Publishers.
Scott A. Quatro is Associate Professor of Management at Covenant College. His teaching, consulting, and research work focus on strategic human
resource management, holistic leadership development, and organizational
purpose/spirituality. His most recent
books are Executive Ethics: Ethical
Dilemmas and Challenges for the C-Suite (2008) and
The Praeger Handbook of Human Resource Management (2009).
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ABOUT THE AUTHOR
87
THE FUTURE OF BAM IN THE ACADEMY:
A RESPONSE TO RUNDLE AND QUATRO
R. Joseph Childs
Southeastern University
ABSTRACT
Business as Mission (BAM) is beginning to gain momentum in the academic community in such a way
that it requires more organized venues for scholarly dialog and curriculum development. BAM is similar
to and can draw from the more secular social enterprise (SE) literature, the difference being that BAM
represents profit-making organizations that incorporate social and Christian spiritual goals. To this end,
this article responds to contrasting views regarding the legitimacy of BAM as a practice worthy of being
pursued by serious scholars and practitioners. The article concludes by suggesting specific proposals on
how the Christian academy and interested scholars may choose to address curricular issues and contribute
intellectually to BAM.
INTRODUCTION
This issue of JBIB provides an ideal opportunity to provide scholarly reflection on Business
as Mission (BAM) as an emerging example of a
hybrid organization. Typically, hybrid organizations blend the goals of a for-profit firm with either the social mission of a non-profit or the public
mission of a governmental agency. It is generally
agreed now that the purpose of a BAM organization is to create a sustainable, profit-making firm
that has companion purposes to meet social and
spiritual needs. The other-than-profit purposes of
BAM are both kerygmatic—the proclamation of
the gospel—and missional—the meeting of tangible social and material needs of a target market;
hence, BAM qualifies as a hybrid organization.
While examples of BAM-type organizations and
practitioners can be identified throughout history, the organized BAM movement is relatively
recent. Scholars and universities are beginning to
take note.
88
The topic of the 2010 plenary session of the
Christian Business Faculty Association (CBFA)
meeting asked the question: Should BAM as a
concept be advanced in the Christian academy
by inclusion into curriculum and embraced as
serious scholarly inquiry? Moderated by yours
truly, the panel included presentations from
Steve Rundle, Mark Russell, David Befus, C.
Neal Johnson, and Robert Houlihan. Each was
asked to respond to the session title: Business as
Mission: A Discipline Gaining Momentum. The
follow-on question-and-answer period with audience members was engaging and spilled over
to additional discussions about establishing an
academic journal focusing on BAM. Two of the
outcomes from the 2010 and 2011 CBFA conferences were the papers by Steve Rundle and Scott
Quatro that appear in this issue of JBIB.
In his article, economist Steve Rundle of
Biola University provides a brief, but thorough
review of the development of the movement. He
RESPONSE TO RUNDLE
One of the greatest contributions of Rundle’s
piece is his succinct literature review of the
historical development of the scholarly work in
the BAM movement. He traces the emergence
of BAM from the tentmaking movement of the
mid-21st Century to its current state. His review
references the theoretical contributions from his
previous work (Rundle, 2003; Rundle & Steffen,
2003) and that of Hamilton (1987), Yamamori
(1987), Befus (2005), Tunehag (2008), and Johnson (2009). He reviews the more recent empirical
research by Lai (2003), Russell (2008), Bronkema and Brown (2008), and Christiansen (2008).
Rundle also provides biblical support for BAM
in evidence of how the Apostle Paul used his
skills to not only generate income to support missionary journeys, but to encourage first-century
Christ-followers to remain committed to their
professions.
The key contribution of tentmaking to BAM
theory was the conviction that one’s professional
vocational skills can be leveraged to advance
God’s Kingdom. This philosophy also created
new opportunities for lay people to venture into
ministry by using their vocations to both fund
and provide access to the mission field. However,
Rundle points out that one of the limitations of
the tentmaking movement was its emphasis that
the utility of one’s profession was validated to
the extent that it provided opportunities to engage in evangelism. This, he argues, reinforced
the secular-sacred tension that prompted early
BAM pioneers to distinguish their work from
tentmaking by affirming the profit-making purpose of business. He concludes by stating the difference: “BAM was similar to early definitions
of tentmaking in that it was self-supporting and
laity-driven, but it was also different because of
its exclusive focus on business and its embrace
of a more holistic understanding of mission [emphasis added]."
Rundle also notes contributions to BAM from
missiologists and theologians including Myers
(1999), Kirk (2000), Novak (1996), and Stevens
(1999). These works helped to dispel the dualistic
secular-sacred divide between work and missions
inherent in the early tentmaking movement. I
might add that Grudemen’s work (2003) also
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includes a historical review as well as theological
reflection. His review pulls from the social entrepreneurship, economic development, and missions literature. By drawing from both his previous work and other notable BAM thought leaders
such as David Befus, C. Neal Johnson, Mark
Russell, and Mats Tunehag, Rundle offers a comprehensive definition of BAM. He concludes with
suggestions for future research and advocates for
the advancement of BAM in a more organized
and collective effort, including the formation
of an academic association that would organize
meetings and conferences and potentially publish
a scholarly journal.
As is characteristic of any vibrant academic
discipline, not all scholars agree with the emerging or established paradigm. Scott Quatro’s presentation at the 2011 CBFA Conference (and his
paper revised for this journal) provides a polemic
to Rundle’s reflection of the BAM movement.
Writing from a spirit of collegiality, Quatro observes that the BAM movement is theoretically
flawed and is inconsistent in its theological claims
regarding a spiritual hierarchy of work. His critique is grounded in the Reformed tradition and
draws heavily from Abraham Kuyper’s doctrine
of sphere sovereignty. Quatro suggests that the
BAM movement violates sphere sovereignty because it unnecessarily blurs the God-given norms
and purposes of business with those of the church
and charities. He argues that a hybrid organization, where for-profit purposes are co-opted for,
or blended with, an evangelical purpose violates
God’s sovereign design for the institutions of
business and the church.
For the remainder of this article I’ll provide a
more thorough critique of Rundle’s and Quatro’s
perspectives. I will then offer concluding recommendations about how the Christian academy
can address the emerging interest in BAM.
89
gives a theological voice to the intrinsic value of
work and business. Another recent contribution
includes Fettke (2010), who proposed a revival of
Luther’s concept of the priesthood of all believers
by suggesting a theology of the laity where the
professional clergy and professional lay-person
serve a common and complementary service. In
addition, recent contributions from missiologists
such as Steffen & Barnett (2006), Harries (2008)
and Houlihan (2010) provide additional support
to making missional efforts more holistic. They
include both social and economic development in
their strategies.
Rundle brings the topic current by integrating work from the 2004 meeting of the Lausanne
Committee for World Evangelization, as well as
the contributions from his previous work (Rundle
& Steffen, 2003; Johnson & Rundle, 2006), as
well as Eldred (2005), Baer (2006) and Russell
(2010). He then suggests a comprehensive definition of BAM as being a self-funded, for-profit
business that is laity-driven, with intentional missional impact, holistic by emphasizing multiple
bottom-lines, and that targets economic underdeveloped markets in a cross-cultural context.
Rundle does point out that there remain competing views on whether or not BAM organizations should be for-profit or non-profit entities.
He suggests the social entrepreneurship model
by Dees (1998) that accommodates a spectrum
from pure charity to pure business, with the hybrid model in the balance. I agree with Rundle
that Dees (1998) is a useful starting point for
developing a taxonomy of BAM-defined organizations. The value of the Dees model is that it
accommodates various degrees of emphasis on
either profits or purposes. I might add that there
are differences in opinion as to whether or not
BAM organizations are defined primarily within
a cross-cultural context. Bretsen (2010) places
BAM within a broader framework that he calls
a faithful business which can be either cross-cultural or domestic. While my readings of Johnson
(2009) and Russell (2010) accommodate for BAM
in both cross-cultural and familiar contexts, Run-
90
dle remains rather convinced that the definition is
constrained to a cross-cultural context.
Governance and structure is another area of
needed research identified by Rundle. The recent
development of the Low-profit Limited Liability
Company (L3C) is an attempt to create a legal
entity from which hybrid and social enterprise
organizations can operate and receive appropriate tax consideration. The L3C was created by
Robert Lang (2011) and advanced through the
Americans for Community Development (ACD).
To qualify as a L3C the primary purpose of the
organization must be charitable. Profit-generation is an essential, but secondary purpose.
Future BAM entrepreneurs may find the L3C a
more suitable legal entity that a traditional sole
proprietorship, LLC, C- or S-Corporation. Yunus
(2010) also suggests various legal entities appropriate for social enterprises, including the community interest company (CIC) being used in the
United Kingdom, which is similar to the L3C.
Still, there is much to uncover about BAM.
Recent scholarship from the social entrepreneurship field should be consulted. A volume edited
by Kerlin (2009) and the seminal work by Sommerrock (2010) on research methodologies and
priorities may prove useful for BAM theorybuilding. Work by Cacin, Dacin & Mater (2010)
also provides a comprehensive review of the social entrepreneurship literature and demonstrates
the value of cross-disciplinary contributions
from established theories in forging new inquiry.
Although still in its infancy, the social enterprise
field has over 20 years of empirical work from
which to draw more refined research questions
and researchable hypotheses that can apply to
BAM. As Rundle points out in the beginning
of his piece, BAM researchers who familiarize
themselves with this field will help to avoid the
proverbial “reinvention of the wheel” syndrome.
He concludes by speculating about the future of
BAM scholarship by suggesting the benefit of
a more formal, organized and interdisciplinary
approach, perhaps through special sessions at
existing associations, or through a new academic
RESPONSE TO QUATRO
While Rundle believes the theological questions have been adequately vetted and that there
is little to add from this field, Quatro’s piece
provides fodder for additional dialog. Arguing
from a Reformed position, he raises objections
to the entire BAM movement on grounds that it
violates the doctrine of sphere sovereignty and is
inconsistent with God’s design for business and
business education. Based on Quatro’s reasoning,
this would be true of any kind of so-called hybrid
business organization whose purpose was other
than solely profit-making, or of a missions organization which incorporated market-based solutions to accomplish social or evangelistic goals.
While I take issue with Quatro on several levels,
it is noteworthy that he does raise important concerns. I’d like to briefly address each of the five
fundamental flaws he raises regarding BAM.
Quatro’s first two points are related, so I will
address them together: BAM is based on a dualistic foundation and BAM reinforces a dual-class
citizenship. He believes that BAM advocates
claim that evangelism is the primary and hidden
purpose of a BAM business; however, Quatro
provides no references from academic BAM
thought leaders to reinforce this assumption.
There may be voices from the lay-practitioner or
pastoral realms that posit that saving souls is the
highest and most important purpose of BAM, but
the existing literature with which I’m familiar
emphasizes a balanced, multiple-bottom-lines
approach. Furthermore, the literature is replete
and consistent in its opposition to the so-called
sacred/secular dichotomy that Quatro claims is
present. Rundle (2003), Tunehag (2004), Johnson
(2009), and Russell (2010) spend considerable
space on this point. Often referenced in the literature are the works of Stevens (1999; 2006) and
Ryken (1986) which also provide strong theological arguments against a hierarchical distinction.
My review of Rundle’s piece above includes additional references to this point. Thus, a general
reading of BAM literature will show that Quatro
is mistaken on this point.
However, he does raise an important caution.
It is possible to becoming overly zealous to the
point that proponents overhype BAM as a more
sanctified business model for Christians. If so,
this would likely relegate to the basement the
more traditional and functional business vocations such as accounting or marketing. This is
especially pronounced if the ultimate purpose
of BAM is evangelism or discipleship, and it is
hyped as the normative course of study for Christian students over the single-purpose, for-profit
“Business as Businesses” disciplines.
It must be remembered that BAM is simply
one type of hybridized organization and is ideally suited for those who are seeking a business
model that includes multiple bottom lines as its
purpose. BAM supporters and business schools
need to carefully avoid the trap of assuming that
non-BAM business models and those who own
and manage them are second-class Christians. In
this respect, I agree with Quatro that non-BAM
vocations, or business-as-business vocations
should always be viewed as callings in which its
participants enjoy being “co-creators with Him.”
Furthermore, this concept is not unique to the
Reformed tradition. Tunehag (2004) summarized
the thinking from the Lausanne BAM paper, in
which over 70 people from across the globe and
from different theological traditions, agreed.
INVITED ARTICLES: BUSINESS AS MISSION
association that publishes its own journal. He
suggests priority be given to the pragmatic questions: What makes BAM effective? What best
practices and effective strategies can be identified? What should be measured? What kinds of
organizational structures should be considered?
Many would agree that Rundle’s contributions over the past 10 years have been foundational to the BAM theory-building to date. He
should be regarded as one of the key pioneers of
scholarship in the field and I look forward to his
wise council and thought leadership as the movement progresses.
God established the institution and practice of business as a means of fulfilling
91
His creation mandate to steward and care
for all creation.… Business people are
being challenged to look anew at their
business activities as an expression of
their calling and service to God. They are
being affirmed in their vocation as business people and used as instruments for
extending God’s Kingdom (p. 2).
In his third point, Quatro invokes Kuyper’s
concept of sphere sovereignty and suggests that
BAM violates God’s sovereign intent for his creation. Sphere sovereignty is a concept popular in
both neo-Calvinist and Catholic social teaching
circles. It asserts that God’s design and purpose
in various earthly institutions are distinctive from
those of the Church. The Church was established
to conduct sacerdotal services, the state for civic
affairs, and business for economic activities. Under this doctrine the state has no sovereignty over
the church, nor should the Church seek to enact
civil justice. This doctrine is a useful safeguard,
particularly where there are those who suggest
that Sharia Law should replace business and civil
laws. It also protects an institution from performing a societal role for which it is not best suited
to address. For instance, an argument can be
made that tax dollars are more efficiently spent
by local authorities who have better insight into
the problems and solutions than a distant federal
bureaucrat. Or that poverty can be better resolved
when private enterprise is generally free to create jobs which provide a more dignified source of
family income than state- or Church-sponsored
handouts.
There are two comments I wish to make here.
First, if his point is that God’s design for business
is equally as good as the design for the Church,
then there really is no disagreement. I also accept
his argument that business-as-business serves to
extend common grace. Johnson (2009) sums this
up when he quotes Smith:
The call to business is not a call to second
class ministry in God’s view. And we don’t
have to be doing overt evangelism, closing
92
our chick stores on Sundays, or giving big
money to ‘real ministries’ for God to be
pleased with a business that is providing
valuable goods for society (p. 49).
Second, if Quatro is using the sphere sovereignty
concept to suggest that business and ministry
must necessarily remain distinct and siloed institutions, then I would object (provided the two
are appropriately integrated). As Christian scholars continue their inquiry, they will be wise to
shape BAM theory through a cross-disciplinary
lens. This will help ensure that the competencies
of business and ministry can be appropriately
blended. BAM is at risk if it becomes neither
grounded in, nor informed by sound theology,
missiology, sociology, economics, management,
etc. We don’t need a movement that is built on
proof-texting and unexamined assumptions. Nor
do we need our theologians who may not understand the moral virtues of capitalism to object on
the grounds that BAM embraces market-based
solutions to resolve social problems.
Quatro’s fourth point is that BAM undermines profit because it distorts the normal market
mechanisms and threatens sustainability. Properly understood, BAM is simply one of many
business models. Yes, BAM does channel some
profits to social and spiritual causes which otherwise would inure to private shareholders to do
as they see fit. However, most BAM practitioners
and scholars believe that BAM organizations
must be profit-oriented. The social enterprise
literature also contributes to this debate by distinguishing the degree to which an organization
is oriented more toward profits or more toward
non-profit causes (Dees, 1998; Yunus, 2010;
and Sommerrock, 2010). In fact, Sommerrock,
(2010) and Bretsen (2011) present evidence that
suggests that an organization’s social cause can
become a source of competitive advantage and
thereby increase its profit-making potential. Finally, I have no quibble with Milton Friedman’s
idea or Quatro’s point that the moral purpose of a
business-as-business is to make profits; however,
I also believe university curriculum should be of-
REFLECTIONS ON BAM IN THE
ACADEMY
It was on a return flight from a corporate
business trip to Moscow in 1990 when I began
to reflect seriously on the missional purpose of
business. I had just completed meeting with the
Minister of Communication on a project to install 100 privately-managed satellite TV receiveonly systems throughout the USSR. The systems
would provide access to broadcast media from
Western European satellite feeds. The initiative
was part of Mikhail Gorbachev’s glasnost initiative of more open government and wider dissemination of news and information. The Silicon
Valley-based company I was working for at the
time was a key vendor and systems integrator. It
was a hybrid project in that it was intended to be
a profitable venture with positive social benefits.
By the time the fifth system was delivered, the
Soviet Empire fell and the project team was disbanded. In retrospect, I regard this opportunity
as one of my most memorable professional experiences. However, it also stirred in me a desire to
give greater consideration to God’s purpose for
my career.
In the former USSR I observed an insatiable
appetite and yearning for economic freedom
mixed with a curiosity about the American experiment. I had discovered that many young
adults who grew up behind the Iron Curtain had
the assumption that the American capitalist success was due in part to its Judeo-Christian values.
I saw the opportunity to share my understanding
of basic American business principles within
the context of a Judeo-Christian value system.
I shared with some friends that Eastern Europe
would be a great location for those who had a
mind for business and a heart for missions to invest their lives. Those words eventually boomeranged back to me and began my journey of experimenting with blending entrepreneurial profitmaking activities with a distinctively Christian
missional intent.
By summer of 1991, I moved with my young
family to Romania to teach market economics
INVITED ARTICLES: BUSINESS AS MISSION
fered to equip faith-based social entrepreneurs to
build sustainable organizations that create goods
and services in which profits are used to fulfill
social and spiritual purposes.
Quatro’s fifth argument suggests that BAM is
inauthentic when its motives are disguised from
its customers and stakeholders. I agree. While
there are likely many missionaries and tentmakers who are using business as a cover for ministry,
a full reading of the BAM literature will show
that this issue has been addressed. As pointed out
by Rundle, BAM has evolved to a point where it
need not have hidden motives, but rather holistic
purposes, including the goal of advancing God’s
Kingdom through the sharing of one’s faith in the
marketplace. As Quatro points out, businesses
should embrace the concept of extending shalom
to their stakeholders. This is expressed by being
truthful in all transactions, but for BAM organizations, this is especially true when it comes to
governance and legal structures. Authentic BAM
organizations must be transparent to their stakeholders regarding their purposes.
Finally, I commend Quatro for his paper and
encourage further dialog. While he has developed his position from a Reformed perspective,
my critique isn’t with Reformed theology, but
primarily with his misreading of the mainstream
BAM literature. He makes some useful critiques,
which provide the opportunity to refine, reflect
and engage in new ideas. Although there will
never be agreement on all points, my hope is
that scholars at Christian universities can agree
to disagree with collegiality, grace and humility.
I anticipate there may be unique contributions
to BAM from other traditions. For instance, are
there Pentecostal, Wesleyan-Arminian, Dispensational, Orthodox, or Catholic perspectives on
BAM? Will BAM develop its own biblical hermeneutic? What types of research questions will
dissertations and other veins of BAM scholarship
address in the coming years? These are all exciting opportunities that can be aired in conferences, journals and books.
93
at the University of Oradea in Oradea. I told my
friends and supporters that I would be a business
missionary. There were those who admonished
me with great unction that the two were mutually exclusive. Others asked if I was going to be
tentmaking in a restricted access country. I didn’t
necessarily think of my paid job from the university as tentmaking (using a profession to fund a
mission effort), nor was I thinking that the joint
venture I formed to conduct business in Romania
was a clandestine cover for a stealth evangelism
operation in a (formerly) communist country.
My goals were simply to teach what I knew
about managing and leading businesses within a
free market system, to learn how to operate a successful business in Romania for personal profitgaining motives, and to share my Christian faith
and values with those who wanted to know about
them. What opened the door for the latter was my
response to the often asked questions, “How is it
possible to have freedom to run a business? Won’t
business people just cheat their customers?” My
response was to explain that economic freedom
works more efficiently when society expects individuals to exercise moral self-restraint in their
economic decisions. “Historically, the USA economic system has been fortunate to have moral
values informed by Judeo-Christian culture,
such as the Golden Rule and looking out for one’s
neighbor. Let me share with you more about my
culture…,” would begin my opening.
While I had little guidance and certainly no
education or theories to direct my efforts, I somehow managed to feel I made a difference. Twenty
years have now past. After a recent trip back to Romania, I had the pleasure of seeing the fruit, which
helped to validate my feelings a little more. But
I wonder how much more effective could I have
been 20 years ago if there was a body of BAM
scholarship and literature from which to draw?
In my current position as a business Dean, I
am tasked primarily with two things: 1) to ensure
that our curriculum is rigorous, innovative, and
sufficiently relevant; and 2) to ensure that our
faculty members are sufficiently qualified and
94
adequately resourced to teach in the classroom,
to serve within the academy and community, and
to contribute intellectually to their disciplines.
One of the most important data points for me is
the anecdotal stories and seemingly serendipitous conversations I have with students. I often
ask students to share with me their understanding of the divine design for their lives and vocations. Call it selective listening, but what shouts
out to me are the numerous narratives I hear that
sound like this: “I want to learn about business
so I can use my entrepreneurial skills to help empower those less fortunate and thus, show them
the love of Christ.” While the 18-to-22-year-old
generation has been characterized as entitled and
coddled, there are many who have a deeply sincere devotion to Christ that is expressed in acts
of service. These students have missional intent,
or, as Hirsch (2006) described, an mDNA or the
missional-incarnational impulse. Rundle points
this out in his article as well by referencing the
Middleton (2009) article from the Wall Street
Journal.
While avoiding the trap of idolizing capitalistic impulses, many students have discovered
that for-profit businesses are essential institutions
key to creating and sustaining standards of living
that affirm the dignity of humanity. In addition, I
am finding that many students at the distinctively
Christ-centered university where I serve are also
expecting guidance on how to live out their missional impulses to share the gospel with, and express Christian charity to, the less fortunate.
Some colleagues have caught on. They are
now exploring ways to shape curriculum to create meaningful learning experiences for students
interested in BAM. These efforts begin as concepts are embedded within a course, then standalone courses are developed, and then, as demand
and institutional mission guides, certificates and
full-fledged BAM degree programs are created.
As of yet, there are no known BAM degree programs (Tripp, Childs, Kilpatrick, 2010). A handful of schools and seminaries have courses in
BAM, such as Rundle’s course at Biola, David
programs in accounting, finance, marketing,
etc. Students who pursue such vocations should
neither sense guilt, nor be subjected to mixed
messages that these are secular disciplines not
in keeping with being a serious Christian. But
there is also a legitimate place within business
schools to explore, develop and shape scholarship
and curriculum that embraces the hybrid-type
business model called BAM. There are already
secular expressions of this. For instance, the toptier university Johns Hopkins recently designed
its new full-time Global MBA program to incorporate a social-enterprise experience in which
all students participate in a semester-long project
within a developing community.
CONCLUSION
Datar, Garvin & Cullen (2010) have called on
all business schools to rethink their curricula and
ensure that graduates not only possess the technical skills to manage in a global economy, but also
the ability to critically evaluate their own values,
attitudes, and belief systems that inform the way
they will address needs of the organizations they
will lead. Christian schools should do the same.
Some will conclude that their mission will drive
them to give serious consideration to those students who feel called to serve in holistic ministries and BAM-type organizations. This can be
done effectively only to the extent that faculty can
draw from a body of scholarship based on empirical inquiry, sound theory and theology consistent
with the historic faith. Healthy scholarship gives
voice to novel ideas, dissenting views and challenges to existing paradigms.
Thus, I embrace Rundle’s call for the formation of an academic society that will attract scholars from across multiple disciplines devoted to
the discovery and explanation of the practice of
Business as Mission. Let’s call it the Association
for Business as Mission (ABAM). ABAM could
elect officers, recruit members and begin by
meeting in conjunction with another established
organization, such as CBFA and/or the Evangelical Mission Society (EMS), until such time there
INVITED ARTICLES: BUSINESS AS MISSION
Befus’s course on BAM (but called Economic
Development) at Denver Seminary and C. Neal
Johnson’s work at Hope International University. Eastern University also has had a tradition
of offering economic development programs
and MDiv/MBA programs. One promising trend
was uncovered by Lucas (2010). He reviewed the
course offerings from 109 Council for Christian Colleges and Universities (CCCU) affiliated schools and discovered that 17 offered some
variations of social entrepreneurship courses or
curriculum with concentrations, including three
with undergraduate degree programs and three
with either graduate certificates or a master’s
degree. My own institution, Southeastern University, launched in the 2011-12 academic year an
18-credit undergraduate minor program in Business as Mission, which includes basic business
classes, an assortment of missions courses and
a capstone Business as Mission course. A weeklong field experience is included as an elective.
For these curricular efforts to become sufficiently rigorous to warrant college credit, they
must integrate theoretically sound business practices with the essential components of holistic
mission practices. Moreover, to avoid heterodoxy, theoretical and theological development of
the field must be informed by the historic faith.
For instance, drawing on the work of practical
theologians such as Kelly (2008) can inform how
universities shape innovative missional-oriented
curricula. Hence, Christian universities, particularly those affiliated with the CCCU, would be
the likely source for such programs to develop.
While essential Christian themes would expect
to remain consistent from one institution to the
next, variations and emphases would vary according to the theological traditions of the institution. Faculty members should also be resourced
to do empirical research that undergirds curriculum. But there must be legitimate outlets to do so.
As Quatro correctly points out, there is a
moral purpose of business-as-business as an end
in itself. Business schools should affirm this in
their curricula and continue to offer traditional
95
was sufficient justification to hold stand-alone
meetings. ABAM would eventually publish its
own journal. Let’s call it the Journal of Business
as Mission (JBAM).
The Journal of Business as Mission would
become an international, interdenominational,
interdisciplinary journal focused on the theoretical development and practice of Business as Mission. It would provide a peer-reviewed outlet for
those engaged in the empirical study and practice
of business as mission, faith-based social entrepreneurship, micro-finance/enterprise, holistic
missions, economic development, theology of
the laity, marketplace missions, etc. Pedagogic
topics such as curriculum development, innovative teaching methods, program assessment, case
studies, and faculty development relating to Business as Mission would be welcomed. The journal
would target professors, scholars, administrators,
missionaries, practitioners, and scholarly societies throughout the world involved in the research,
development, and practice of BAM.
The future of BAM in the academy is now.
Those faculty members and administrators who
are innovators and early adopters to embrace
BAM will position themselves to reap the benefits of the hundreds or perhaps thousands of
prospective students who sense a call to BAM
and are seeking academic programs that will
help prepare them to be effective. Along with
adopting curriculum, universities should direct
resources enabling faculty to engage intellectually with BAM. This is of particular importance
as BAM will likely be in a pre-paradigmatic state
for years. For BAM to mature as a discipline, it
will need to be informed by scholars who will devote substantial portions of their careers to do the
necessary empirical work to formulate theories
and define best practices.
REFERENCES
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are no jobs. Miami, FL: LAM.
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Baer, M. R. (2006). Business as mission: The power of
business in the kingdom of God. Seattle, WA: YWAM
Publishing.
Bretsen, S. N. (2011). In competition with godless
hordes: Are some strategic approaches more appropriate
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Bronkema, D. &. Brown, C. M. (2009). Business as mission through the lens of development. Transformation,
26(2), 82-88.
Christiansen, L. ( 2008). Faith-based social entrepreneurship: Business as mission. Unpublished master’s
thesis. Copenhagen Business School, Copenhagen,
Denmark. Retrieved from http://studenttheses.cbs.
dk/bitstream/handle/10417/681/linda_christiansen.
pdf?sequence=1
Dacin, P.A., Dacin, M. T., & Matear, M. (2010). Social
entrepreneurship: Why we don’t need a new theory and
how we move forward from here. Academy of management perspectives. 24(3), 37-57.
Datar, S. M., Garvin, D. A., & Cullen, P. G. (2010). Rethinking the MBA: Business education at a crossroads.
Boston, MA: Harvard Business Press.
Dees, J. G. (1998). Enterprising nonprofits. Harvard
Business Review, 76(1), 54-67.
Eldred, K. (2005). God is at work: Transforming people and nations through business. Ventura, CA: Regal
Books.
Grudem, W. A. (2003). Business for the glory of God:
The Bible’s teaching on the moral goodness of business.
Wheaton, IL: Crossway Books.
Hamilton, D. 1987. Tentmakers speak: practical advice
from over 400 missionary tentmakers. Duarte, CA:
TMQ Research.
Harries, J. (2008). ‘Material provision’ or preaching the
gospel: reconsidering ‘holistic’ (integral) mission. Evangelical Review of Theology, 32(3), 257-270.
Houlihan, R. (2010). Missional hope: Holistically transforming a nation. Paper presented at the annual meeting
of the Society for Pentecostal Studies, Minneapolis, MN.
Johnson, C. N. (2009). Business as mission: A comprehensive guide to theory and practice. Downers Grove,
IL: IVP Academic.
Johnson, C. N., & Rundle, S. (2006). The distinctives
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Carey Library.
Kerlin, J. A. (Ed.). (2009). Social enterprise: A global
comparison. Lebanon, NH: Tufts University Press.
Kirk, A. (2000). What is mission? Theological explorations. Minneapolis, MN: Fortress Press.
Lai, P. (2003). Problems and solutions for enhancing the
effectiveness of tentmakers doing church planting in the
10/40 window. Unpublished doctoral dissertation. Asia
Graduate School of Theology, Quezon City, Philippines.
Lang, R. (2011). The concept of the L3C. Retrieved from
http://americansforcommunitydevelopment.org/concept.php
Middleton, D. (2009). MBAs seek social change. The
Wall Street Journal (Oct. 15), p. B7.
Myers, B. (1999). Walking with the poor: Principles and
practices of tranformational development. Maryknoll,
NY: Orbis Books.
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examined life. New York: The Free Press.
Nicholls, A. (2006). Social entrepreneurship new models
of sustainable social change. New York: Oxford University Press.
Rundle, Steven. 2003. Preparing the next generation of
kingdom entrepreneurs in T. Yamamori & K. Eldred
(Eds.), On kingdom business: Transforming world mission through kingdom entrepreneurs (pp. 225-244).
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Rundle, S. & Steffen, T. (2003). Great commission
companies: The emerging role of business in missions.
Downers Grove: InterVarsity Press.
Russell, M. L. (2008). The use of business in missions
in Chiang Mai, Thailand. Unpublished doctoral dissertation. Asbury Theological Seminary, Wilmore, Kentucky.
Russell, M. L. (2010). The Missional entrepreneur: Principles and practices for business as mission. Birmingham, AL: New Hope Publishers.
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Sommerrock, K. (2010). Social entrepreneurship business models: Incentive strategies tocatalyze public
goods provision. New York, NY: Palgrave Macmillan.
Steffen, T., & Barnett, M. (Eds.) (2006). Business as mission: From impoverished to empowered. Pasadena, CA:
William Carey Library.
Stevens, R. P. (1999). The other six days: Vocation, work,
and ministry in biblical perspective. Grand Rapids, MI:
W.B. Eerdmans.
Stevens, R. P. (2006). Doing God’s business: Meaning
and motivation for the marketplace. Grand Rapids, MI:
W. B. Eerdmans.
Tripp, C. L., Childs, R. J. & Kilpatrick, J. W. (2010). An
examination of the integration of ‘business as mission’
curriculum in the b-schools of Christian universities. A
paper presented at the annual meeting of the Christian
Business Faculty Association. Lakeland, FL.
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(2004). Business as mission: Lausanne occasional
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documents/2004forum/LOP59_IG30.pdf
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Kelly, B. (2008). The Christian university as messianic
community in missional engagement with church and
the word. In Transformational Leadership: A Tribute to
Dr. Mark Rutland, Lakeland, FL: Small Dogma Publishing.
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needs. New York, NY: PublicAffairs.
ABOUT THE AUTHOR
Dr. R. Joseph Childs is currently the
Dean of the College of Business and
Legal Studies at Southeastern University in Lakeland, FL. Along with his
administrative and teaching responsibilities, he maintains a consulting
practice. In the early 1990s he worked
with mission organizations, NGOs
and governments in the former Soviet
Union, Romania, Hungary, and Poland to advise on
transitioning to market economies.
97
RESPONSE TO QUATRO AND CHILDS
Steve Rundle
Biola University
In his response to my essay, Quatro expresses
deep misgivings not only about BAM, but also
about Social Entrepreneurship and even for-profit
higher education. Indeed, his concerns extend
to any business activity that trespasses other divinely appointed “spheres” of God’s activity, to
use Abraham Kuyper’s language. His complaint
is that by encouraging businesses to have goals
that are more appropriately the responsibility of
the “organized church,” advocates of BAM are
violating God’s sovereign intent for business, and
reinforcing the very sacred-secular dichotomy
that they claim to oppose.
The concern about creating a new form of
sacred-secular dichotomy is certainly valid, and I
applaud Quatro for sounding the alarm. In fact, I
raised a similar concern in the CBFA plenary session that he refers to, both in my prepared remarks,
and in my response to one of the questions from
the audience. For this very reason, I am at best
ambivalent about efforts by some schools to create
degree programs in BAM, which are offered as an
alternative to the “regular” business degrees.
Yet, while I share that concern, I disagree
with Quatro on many of his other points. Some
of it, I hope, is simply a matter of semantics. For
example, I suspect that even he does not teach
“business as business” in the dog-eat-dog sense
that the term is commonly understood. In fact, he
admits that all “legitimate” businesses contribute
to the ongoing revelation of God’s Kingdom. By
using the qualifier “legitimate,” it is clear that he
sees some businesses as more aligned with God’s
purposes than others. I have no doubt that he en-
98
courages his students to treat business as more
than “just a business,” but rather as a sacred calling and as a way of reflecting Christ in the marketplace. This is not what most people think of
when they hear the term “business as business.”
My deeper concern has to do with his use of
“sphere sovereignty” to (ironically) dichotomize
the purpose of business and the purpose of the
church. Here again, some of the disagreement
may be over semantics. His reference to the
“organized church” leads me to believe he is referring to professional religious workers, rather
than “the body of Christ” more generally, which
is how “the church” is usually understood in the
BAM arena. I suspect that once all the semantic
issues are worked out, Quatro and I would agree
more than disagree.
This response will begin with a restatement of
the origin and definition of the term “Business as
Mission,” which I hope will either eliminate the disagreements or clarify the genuine areas of disagreement. The paper concludes with a few thoughts
about BAM as a distinct academic discipline.
WHAT IS BUSINESS AS MISSION?
The term “Business as Mission” has been
problematic almost from the beginning. Missiologists initially balked at the word “mission,”
which they understand to mean Missio Dei, the
timeless and unchanging plan of God for this
world. As part of that plan, there is now a body
of believers (a.k.a., the church) that is imitating,
albeit imperfectly, the life and ministry of Jesus
Christ. Much of the work God is doing in the
The latter term, which thankfully never
caught on, was meant to describe businesses that have a Christian reputation,
but are not thinking or acting strategically in a global mission sense. In contrast, BAM arises out of a deep concern
for the least-developed and least-reached
nations of the world, especially those in
the 10/40 window. Like Paul, it proceeds
from a compelling desire to see the Gos-
pel taken to places where Christ has never
been preached (Rom. 15:20) (p. 24).
Paul, the church’s first foreign missionary,
never claimed that his work was more important
than Peter’s work in Jerusalem. Neither do BAM
advocates claim that a focus on the poorest and
least-reached parts of the world is better, or more
sacred. Paul expresses a preference, a bias if you
will, toward those places where there is less of
a Christian presence. Likewise, BAM reflects a
bias towards those same places. I believe such
biases—either for Jerusalem, Samaria, or the uttermost parts of the earth—are God-given, and
meant to fulfill his purposes.
Unfortunately, much of what is now written or said about BAM reflects a distortion of
one kind or another. On one hand are those who
embrace the all-inclusiveness of Missio Dei to
say that all “legitimate” businesses—regardless
of location or impact—are participating in mission, and therefore qualify as BAM businesses.
My response to this is “Yes, and no.” Yes, there
is a sense in which businesses are participating
in Missio Dei whether they realize it or not. In
this sense, “business as business” is BAM. But
the specific label BAM was originally intended to
mean more than that, and to describe businesses
that are more intentional about their impact.
At the other extreme are those who subtly add
an “s” to the word “mission,” which changes its
meaning from “God’s timeless and unchanging
plan for the world,” to “the methods and strategies used by the church to achieve its goals.” For
this group, BAM is an instrument for world missions. It is a means to an end, and not necessarily
something that God cares about outside of its usefulness as a means of accomplishing other goals.
As Childs correctly points out in his response
to Quatro, the main thought leaders in BAM take
a more nuanced position. Yes, businesses have a
divinely appointed purpose that is different from
the purpose of government, different from the
purpose of the family, etc. As such, any legitimate business contributes in its own unique way
to Missio Dei, and those who are divinely called
INVITED ARTICLES: BUSINESS AS MISSION
world is through that body of believers, although
God is not limited to only using the church to
accomplish his purposes. Put another way, the
church participates in Missio Dei, but its work is
not identical to Missio Dei.
Many missiologists, including the co-author
of my book Great Commission Companies,
initially understood “Business as Mission” to
mean “business is mission,” or “business is synonymous with mission.” For this reason, the term
was never used in the first edition of our book
(although it is used quite liberally in the second
edition). To claim that business is God’s exclusive
instrument for accomplishing his purposes is, of
course, an absurdity. Instead, those who coined
the term understood it to mean “business is, or
at least can be, a participant in mission.” On
this point, BAM advocates would be in complete
agreement with Quatro and Kuyper; that there is
a divinely-appointed purpose for business. Some
excellent and recent contributions that make similar claims include Van Duzer (2010), Wong and
Rae (2011) and Grudem (2003).
But as Quatro points out, advocates of BAM
take it a bit farther. In another paper describing
the origins of the term BAM, Johnson and Rundle (2006) refer to a small group of people who
met in 1999 to try to bring clarity to the emerging idea of business as a participant in mission.
What exactly is different or unusual about BAM?
As a counterexample, the group used what they
considered to be a more typical Christian-owned
or managed business, something they called a
“Business with a Christian Hat.”
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into business are engaged in full-time ministry.
This is an incredibly important message that
needs to be consistently and clearly communicated in our classrooms and in our pulpits!
But there are many business people today
who are feeling compelled (either by the Holy
Spirit or by the forces of globalization) to do business in a less-developed or less-reached country.
This is an important development because (1) it
is prompting a healthy reexamination of what
it means to be called into ministry, and (2) this
newly engaged segment of the body of Christ has
the potential of reaching segments of society that
are not being effectively reached by professional
missionaries or Christian charities.
Contrary to Quatro’s claims, the main thought
leaders of BAM do not downplay or discourage
the profit motive. Nor do they define a BAM business purely in terms of evangelistic outcomes, or
encourage business professionals to conceal their
true intentions. Are there people who have coopted the BAM label and are defining a successful BAM business purely in evangelistic terms,
or advocating the use of business as a “cover” for
missionary work? Absolutely yes! Do they reflect
a proper understanding of BAM? Absolutely no!
CONCLUDING THOUGHTS
Quatro raises some valid concerns. One can
easily get the impression that BAM businesses
are better, and more aligned with God’s will than
“regular” businesses. This is precisely why I have
misgivings about creating degree programs in
BAM. During my prepared remarks at the 2010
CBFA conference, I compared it to creating a
stand-alone ethics degree within our business
programs:
I cringe at the thought of making students choose between majoring in, say,
marketing or BAM, or accounting or
BAM. Imagine if your undergraduate
students had to choose between ethics
and accounting, or ethics and marketing
as separate majors. What message does
that send? I would prefer to see BAM,
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like business ethics, woven into the very
fabric of everything we teach [emphasis
added].
As an area of scholarship (by which I mean
research), however, I believe BAM is a legitimate field of study. The same is true for Social
Entrepreneurship, and other recent developments where the lines between business, charity
and church work are beginning to blur. I believe
this is evidence that the Holy Spirit is prompting business professionals to think more broadly
about their calling and the impact that business
can have. As Christian business scholars, these
are all fertile and legitimate areas for further research. But care should be taken to not create the
impression that by studying, documenting, and
affirming these developments, we are advocating
a new version of the sacred-secular hierarchy.
One final comment about the need for more
theological reflection. Yes, Childs is correct that
Quatro’s paper is a perfect case in point for why
more theological reflection is still needed. But I
continue to believe that the more pressing need
is for more empirical and theoretical work. Theologians are much less likely to tackle the questions raised in my first paper. Those important
areas where more research is needed (and there
are many others) are uniquely suited for business
scholars. If we don’t do it, who will? I am not
arguing against more theological reflection. I’m
simply saying that the relatively bigger gaps in
the literature are in other areas.
REFERENCES
Grudem, W. (2003). Business for the Glory of God: The
Bible’s Teaching on the Moral Goodness of Business.
Wheaton, IL: Crossway Books.
Johnson, C. N. & Rundle, S. (2006). The Distinctives
and Challenges of Business as Mission. In T. Steffen &
M. Barnett (Eds), Business as Mission: From Impoverished to Empowered (pp. 19-36). Pasadena, CA: William
Carey Library.
Rundle, S. & Steffen, T. (2011). Great Commission Companies: The Emerging Role of Business in Missions (2nd
ed.). Downers Grove, IL: InterVarsity Press.
Wong, K. & Rae, S. (2011). Business for the Common
Good: A Christian Vision for the Marketplace. Downers
Grove, IL: IVP Academic.
INVITED ARTICLES: BUSINESS AS MISSION
Van Duzer, J. (2010). Why Business Matters to God (And
What Still Needs to Be Fixed). Downers Grove, IL: IVP
Academic.
101
IS BUSINESS AS MISSION (BAM)
A FLAWED CONCEPT?
A RESPONSE TO CHILDS
Scott Quatro
Covenant College
I am appreciative of Childs’ contribution to
this dialogue on BAM, and I agree with his characterization of Rundle’s context-setting article
herein as providing a fine, overarching view of the
BAM movement. I find Childs’ writing to be clear
and compelling, and his knowledge of the BAM
literature to be quite admirable. Indeed, his engagement with the BAM movement and literature
is arguably much closer than mine. Put simply, he
is a BAM enthusiast in both an advocacy sense
and a scholarly sense, and I am not. And this fact
is perhaps central to my willingness and capacity
to view the movement quite differently, from the
admittedly “safe” position of an outsider looking
in. In doing so, I am compelled to point out the following most salient points of disagreement relative
to Childs’ response to my paper and position.
ON THE PURPOSE OF BUSINESS
AND “PROFIT-MAKING”
Childs appears to oversimplify my concern
with organizational hybridization, and BAM in
particular, by commenting that I would propose
that any business with a purpose beyond “solely
profit-making” is in violation of God’s good design for business. I question this characterization
of my thinking. It’s obviously not that simple, as
I discuss at length in my paper (relative to business as an agency of shalom and common grace).
Business must be about much more than “solely
profit-making.” Yet clearly profit-making must be
102
a central mandate for any sustainable business.
On this last point, Childs and I appear to be in
agreement.
ON THE CORE DOCTRINES OF
BAM AND IMPLIED DUALISM
Childs posits that I have “misread” the literature in asserting that BAM organizations place
evangelism and discipleship at the core of their
purpose, and that BAM (ironically, given the effort expended by BAM enthusiasts to encourage
readers to not reach this conclusion) reinforces
the false secular/sacred dichotomy. I suggest that
a close and fresh reading of the BAM literature
leads to exactly these two conclusions. That is,
evangelism and discipleship must be core purposes (not necessarily the core purpose, but core
purposes nonetheless) of a BAM business, and by
very definition this forces non-BAM businesses
and business-persons into the “secular” camp. I
assert that it is not possible to interpret the BAM
literature and movement any other way. In that
sense, I suggest that a close and fresh reading
of the BAM literature involves “reading” what
is not said (but implied). It involves taking the
implicit (i.e., “BAM must include evangelism and
discipleship,” and “BAM is more sacred than is
Business as Business”) and making it an explicit
part of the dialogue. In short, I suggest that I have
not only not “misread” the BAM literature, but
I have appropriately “read between the lines.”
ON SPHERE SOVEREIGNTY
AND GOD’S GOOD DESIGN FOR
BUSINESS
Childs agrees with my general assertion that
“God’s design for business is equally as good
as the Church,” thereby generally supporting
the Kuyperian construct of sphere sovereignty.
However, I would question his characterization
of Kuyper’s thinking extending to the extreme of
the “state having no sovereignty over the Church,”
or, put more squarely into the context of the BAM
dialogue, the state having no sovereignty over
business. Clearly there are critical ways in which
this must not be the case. Consider the work of the
SEC relative to the governance of publicly-traded
businesses, or the work of the EEOC relative to the
employment practices of U.S.-based businesses.
The interjection of the state into the sovereign
sphere of business through these mechanisms is
not only wise, but often warranted. Where I believe it becomes a bit more troubling is when the
Church extends its core mandates (evangelism and
discipleship) into the sphere of business, a concern
that Childs does not address at all. And while I
agree with Childs that the BAM movement must
continue to evolve and even be evaluated through
a cross-disciplinary lens, I believe that such investigation will lead to an increasingly troubled/muddied picture of what BAM is really about, and an
increasingly troubled picture of whether BAM is
itself a legitimate academic discipline (especially
as a “pre-professional” discipline like business or
education).
ON BAM AS AN ACADEMIC
DISCIPLINE AND MAJOR FIELD OF
STUDY
Lastly, I am troubled by Childs’ proposition
that BAM academic programs be codified and
launched at Christian colleges and universities.
I suggest that doing so undermines our very purpose as a unique part of the larger business academy: that is, to produce well-equipped Christian business practitioners who extend shalom
and common grace and prosper God’s creation
through their calling as business professionals.
I of course also believe that Christian colleges
and universities must produce well-equipped and
mature Church members who embrace the Great
Commission and proclaim the Gospel in word
and deed. But that is in many ways a separate
(although clearly interdependent) endeavor when
it comes to the core mandates of the Church relative to evangelism and discipleship. Put simply,
when Bank of America hires graduates from
the business major here at Covenant College, it
doesn’t hire them to evangelize and disciple the
“nations” at Bank of America. It hires them to
prosper Bank of America. I would go so far as
to caution against establishing “businesses” in
line with BAM thinking, and even worry that
counseling/”equipping” students in this direction
may distort right discernment of their occupational calling and minimize their role/impact in
revealing God’s kingdom. I suggest that perhaps
the work of such students and the work of BAM
“businesses” are best left to NGOs, the Church,
and the state. And counseling students into academic programs (i.e., Community Development,
Missions, Social Work, Public Administration)
consistent with such occupational callings is (in
my mind) doing right by them, and right by our
God.
INVITED ARTICLES: BUSINESS AS MISSION
In doing so, I hope to catalyze further dialogue
around these two concerns. I believe this dialogue will be critical to engendering wholeness
and collegiality among the Christian business
academy, and even to protecting the very legitimacy of that academy.
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BOOK REVIEWS
GOOD TO GREAT IN THE SOCIAL SECTORS:
WHY BUSINESS THINKING IS NOT THE ANSWER
By Jim Collins,
Boulder, Colorado
Reviewed by Michael Zigarelli,
Messiah College
This is a worthwhile read, and refreshingly,
one that fits everyone’s time budget. At a svelte
36 pages (yes 36, that’s no typo), most readers
will be returning it to the shelf in a half an hour.
Beware, though: if you do, you will have missed
something truly valuable.
Good to Great in the Social Sectors is a resource to be studied not merely read, just as the
book for which it is a supplement, Collins’ classic
Good to Great (2001), is a book to be studied. His
ideas will assist nonprofit leaders in all contexts to
advance their cause and to deliver on their mission.
For years these leaders have been plagued by
the mantra “you must become more like a business.” Collins, in his opening paragraph (as well
as his subtitle), provides a quick antidote for that
plague:
“We must reject the idea—well-intentioned, but dead wrong—that the primary
path to greatness in the social sector is
to become ‘more like a business.’ Most
businesses—like most of anything else
in life—fall somewhere between medio-
104
cre and good. Few are great. When you
compare great companies with good ones,
many widely practiced business norms
turn out to correlate with mediocrity, not
greatness. So, then, why would we want
to import the practices of mediocrity into
the social sectors?”
What should social sector organizations become,
if not more like businesses? Simply stated, they
should become great organizations, and Jim Collins intends to demonstrate how.
In Good to Great, Collins used paired-comparisons of several for-profit businesses to investigate what separates the gold medalist from the
silver medalists—the companies that consistently
achieve above market returns from those similarly-situated companies that achieve merely good
returns. But after being inundated with emails
from “non-business” people who devoured the
book (about 30 to 50 percent of the feedback he
received), Collins chose to create this addendum,
specifically designed for the nonprofit or what he
calls the “social sector” leader.
• The “Level 5 Leadership” style (personal
humility combined with passion for the
cause) is even more important in the social
sector where decisions are less top-down
and where power is more diffuse. In fact,
we may find, on balance, better leadership
in the social sector than in the for-profit
sector, since many nonprofit employees,
volunteers and donors do not have to follow.
• The “First Who” principle (getting the right
people on the bus and the wrong people off
the bus) may also be more important in the
social sector, where people are generally
paid less—or not at all. To get there, Collins recommends being exceedingly selective when hiring people, conjecturing that
setting the bar high tends to attract the best
people.
• The “Hedgehog Principle” (focus on doing one thing very well) is essential in the
social sector where distraction and scattered purposes can be fatal. Consequently,
leaders should reject resource streams and
other temptations that take them away from
their core mission.
• The strength of the nonprofit organization’s
brand is the key to getting the “Flywheel”
turning (eventual, self-sustaining momentum). When an organization has a credible
and trustworthy brand, donors will offer
more “unrestricted” resources, instead of
the earmarked, restricted resources that often prevent nonprofits from growing to the
next level.
On page after page, readers will find themselves smiling or nodding or scribbling notes
because the ideas make sense—all the more for
those who have led or consulted with nonprofits.
But conspicuously absent are the data-driven
conclusions that so many have come to expect
from Collins’ work. The conclusions in this book
come across as intuitive but sometimes subjective because there are no quantitative results …
yet. Collins has indeed set the bar high with Built
to Last and Good to Great, and most recently
with How the Mighty Fall, so sometimes this
good book does not seem nearly good enough.
Notwithstanding, and despite its brevity, this
is an incisive resource and a stimulating set of
hypotheses. Beyond that, the stories of “great”
organizations like the Cleveland Orchestra, the
NYPD, the Stanford athletic program, the Girl
Scouts of America, the Center for the Homeless,
and Teach for America are inspiring and illustrative. Even seasoned nonprofit leaders will enjoy a
few epiphanies.
So take an hour and read it twice. Then take a
few more and rethink everything.
BOOK REVIEWS
However, his methodology is not the same
here, nor is it as painstaking or compelling. After interviewing “more than 100 social sector
leaders,” Collins issued this “monograph to accompany Good to Great,” essentially an interim
report while he and his team begin to apply the
more rigorous methodology to this sector for a
later book.
His conclusions map to the ideas from the
original work. Here is a sampling:
ABOUT THE AUTHOR
Michael Zigarelli is a Professor of
Leadership and Strategy at Messiah
College and the former Dean of the
Regent University School of Business. His research in the fields of
management, practical theology, law,
and ethics has appeared in a number
of scholarly journals and magazines,
and he is the author of ten books, including Influencing Like Jesus, The Minister’s MBA,
Cultivating Christian Character, and Management by
Proverbs.
105
SOCIAL ENTREPRENEURSHIP:
WHAT EVERYONE NEEDS TO KNOW
Bornstein, D. & Davis, S.
Oxford: Oxford University Press., (2010)
Reviewed by Ruby Simpson, CCIM
President, Simpson Commercial Properties
My son’s school friend Jean-Pierre was asked
by his eighth grade teacher, “What would you
like to do when you grow up?” Jean-Pierre responded, “I want to help people.” “Great,” replied
the teacher, “think of something people need and
build a business to provide it. Then you can use
your profits however you want, to build houses,
provide medical care, or provide other fine things
poor people can’t afford.” Alas, Jean-Pierre did
not have the courage of his convictions to start
something, run it and take full responsibility
for the outcome like any good entrepreneur. He
preferred to go to work for a big agency, draw a
salary, and allocate money he had not earned by
himself.
Bornstein and Davis have written a text for
those who want to transform their desire for societal change into action that will promote such
change. They define social entrepreneurship as
“a process by which citizens build or transform
institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses, and
corruption, in order to make life better for many.”
Sadly, the book is missing any reference whatsoever to Christianity or ministry to the needy
and focuses instead on secular organizations
including governmental, non-profit, and major
foundation grants or business entities for both
funding sources and modeling, thereby missing
the example Christianity has set for doing the
work most efficiently.
The introduction makes reference to “changemakers” who have enabled millions of people all
106
over the world to take action to solve problems.
Throughout the book, the examples that resonate best are those about innovators who labored
long for deeply held ideas and then adapted those
ideas when it became apparent that change was
necessary. Grameen Bank “began making loans
primarily to women after seven years of experimentation lending mainly to men.” This ability
to correct a faulty assumption is central to entrepreneurship.
On the other hand, critical thinking about
the role of government would be helpful. While
the authors discuss the issue of “funding” they
never seem to grasp that government generates
its income solely from taxpayers, and taxpayers
may legitimately question whether the proper
role of government, especially America’s limited government, should be, as an example, to
designate tax money for the reduction of energy
consumption. Congress has allocated enormous
grants to the production of ethanol in the belief
that a government subsidy of corn to cut the
use of fossil fuels (read: oil) is a good thing. As
private citizens note shocking increases in the
cost of food, and foreign importers of grain note
alarming shortages, the authors’ unwillingness
to confront the consequences of an unquestioning acceptance of global warming theories seems
a serious omission. Instead, we see rising energy
prices in America, while ethanol subsidies continue to incentivize farmers to grow grain for fuel
rather than food, even as the country approaches
a fiscal crisis. Social entrepreneurship works best
when, as with run-of-the-mill business entrepre-
thirsty, clothe the naked, shelter the homeless,
visit the sick, visit those in prison, and bury the
dead. Only 25 English words. Nothing about
fund raising, no reliance on government, foundations or grants. Social Entrepreneurship is a
secular book and never mentions Christ’s call to
works of mercy. Thankfully Bornstein and Davis
do credit Silicon Valley entrepreneurs who donate millions and billions for favored and worthy
causes, as well as private citizens who spend their
working lives generating income, and then spend
their retirement years doing good, supporting
themselves, and directing their own savings to
the fulfillment of long-nourished dreams to use
their talents in ministry to others.
Social entrepreneurship in its generic meaning refers to good works being done efficiently
using a business model. At the individual level
the results are exciting as individuals see a need
and work to fill it, bringing others along as the
idea matures and integrating a business model
that requires planning and measuring results.
At the national and global level, too often social
entrepreneurship ceases to be entrepreneurial
and evolves into a bureaucracy answerable only
to another bureaucracy. The challenge for social
entrepreneurs is how they can grow without succumbing to the inefficiencies, lack of accountability, and decreased effectiveness of most bureaucracies. Unfortunately Bornstein and Davis
are too willing to let social entrepreneurship follow predictable, and predictably unsatisfactory,
channels once the enterprises have grown beyond
their initial stages.
The Gospel’s call to the corporal works of
mercy is a simpler, more efficient model and neatly follows the authors’ suggestion at the book’s
end, number 24 in Thoughts for Changemakers:
“Find sources for inspiration and use them.”
BOOK REVIEWS
neurship, those who dream of making the world
a better place organize, manage and assume the
risk of building on that idea and must deal with
consequences good and bad.
The first segment, “Defining Social Entrepreneurship” consists of chapters that set social
entrepreneurship apart from business entrepreneurship, activism and government. The authors
rightly note that systemic change takes longer
than a one- or two-year grant, and that politicians
must answer to constituents. Still, they bridle at
reporting requirements and transparency: “Social entrepreneurs, in contrast, insist on being insulated from day-to-day political pressures.” But
surely if one wants to be insulated, one should
look to self-financing. I would have liked more
examples like those of social innovators over
the age of 60 pursuing service-oriented encore
careers, which are likely self-funding, and fewer
examples like the citation that one quarter of college seniors’ dream is to work in arts or public
service while only half that number actually plan
to do so. The authors approvingly note that the
“evaporation of high-paying jobs made it easier”
for some Harvard students to choose work they
care about, but if that attitude spreads among
young people entering the work force, exactly
where will the money come from to make these
dreams a reality? Or will those caring, nurturing
graduates be content to live their lives effectively
taking a vow of poverty?
The biggest unanswered questions for the authors are as follows: where does the money come
from? What constitutes success and who decides?
These questions are answered simply at the local
level, but arguably can never be answered at the
global level.
The Gospels teach the seven corporal works
of mercy: feed the hungry, give drink to the
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HYBRID ORGANIZATIONS AND THE THIRD SECTOR:
CHALLENGES FOR PRACTICE, THEORY, AND POLICY
Billis, D. (Ed). (2010).
London: Palgrave MacMillan.
Reviewed by Jim Dupree,
Grove City College
Social Enterprise is a rising star in both academe and the marketplace. As government and
non-government funding for service and socially
oriented organizations are in rapid decline, a new
model for funding and operation of the traditional mission-oriented firm is desperately needed.
Enter the hybrid organization, which maintains
the mission-orientation while drawing on the best
operational and funding practices of the marketoriented firm.
Billis in Hybrid Organizations seeks to address three distinct audiences: the practitioner,
the academic researcher, and the government policy maker. Compiling deeply researched articles
from an impressive stable of 17 writers (including Billis) who come from academe, ministry,
and public service, he offers a substantial book
on British hybrid organizations. For a course in
international business, organizational theory/
behavior with an international element, international social enterprise, or an entrepreneurship
course with an international element, Hybrid Organizations brings significant value.
However, for the standard non-profit or social
enterprise course, the content of the text is not
very applicable because of the very heavy British orientation. In fact Billis “takes a shot across
the bow” citing a UK journal editor who warns
one to not look to the U.S. for good practice in
Third-Sector Organizations (TSOs) because of
stagnation of practice and the separation of those
organizations from their served constituencies.
I guess they just won’t get over the revolution;
108
nevertheless I’m not quite sure that’s fair with all
the recent effort at building what we would call
social enterprise. I would argue that there is an
explosive expansion of social enterprises to replace traditional governmental agencies that are
being cut back in order to meet the welfare needs
of our populations in both the UK and US. There
has been an impressive expansion of training and
education for the mission sector by the market
sector to enhance the ability to meet those needs
with fewer resources.
The reader can draw principles for volunteer
management, organizational governance, and
interface with governmental agencies. And the
implications and questions Billis draws in his
concluding chapter provide significant food for
planning and action regardless of which side of
the pond on which the reader resides. Yet, the
particulars—governmental agencies discussed,
policies, and governance practices—are quite
British. “Translation help” if I may put it that way,
is provided by both mechanics—an early list of
abbreviations—and writing style—careful explanation of acronyms, organizational terms and
practices. This is a wonderful study of how these
organizations have developed, grow, and flourish
in the British policy and social environment. It
is a seminal work providing impetus for research
about and refining practice in hybrid TSOs.
The authoring team combines distinguished
professors, policy wonks, research fellows and
active practitioners who are either managing or
ministering in these service organizations. Hy-
1. What is the nature of change in the third
sector?
2. What are hybrid TSOs and how can the issues of accountability and transparency be
addressed?
3. Can theory help [enhance TSO performance and service]?
4. What are the wider questions and implications for practice and policy?
Hybrid Organizations builds a foundation
for research into these questions. In the first four
chapters—Part I—he sets forth basic definitions,
an explanation of social and public policy, a preliminary theory for modeling TSOs, closing with
an explanation of governance of these new hybrid
organizations. In this first portion he provides a
preliminary basis of theory for policy formation,
organizational governance, and structure. Most
important here is Billis’ model of hybrid TSOs
built around the role of staff and source and
abundance of funding. His model applies organizational growth patterns to TSOs focusing on the
two elements mentioned above. His concerns are
the complexity of accountability and the degree
of transparency of the organization.
In the second part he walks the reader through
seven studies of actual practice, each focusing on
one element of the hybrid TSO; managing volunteers, managing the faith-based TSO, the ins and
outs of the community-service type organization,
TSO ownership, “joint-venture or partnership
TSOs,” dealing with the tensions of a publicprivate hybrid, and the role of the individual.
His concluding chapter is actually a third part, in
that he ties together the previous work, drawing
implications and predicting the consequences of
a failure to successfully implement policies and
processes that will foster hybrid organizations.
This concluding chapter translates well to any
culture, policy climate, and social context.
Hybrid Organizations lays a foundation for
further research by framing the key issues of
meeting social welfare needs through TSOs in
terms of organizational structure and funding;
the more organic the TSO the more accountability and transparency. Billis’ argument is that by
using his organic to entrenched models of organizational growth, form, and governance one can
achieve and maintain the appropriate clarity of
roles, levels of accountability, and transparency
demanded of mission-oriented hybrid organizations. A heavy read due to the density of material
and the Anglo focus, but a remarkable piece of
research.
BOOK REVIEWS
brid Organizations develops the impact of the
third sector of the marketplace in meeting the
welfare needs of the population. In Britain the
marketplace is segmented like in the U.S. into
public, private, and non-profit sectors, the last
being what the author titles third sector. For the
last 40 years TSOs (third sector organizations)—
voluntary, NGO, and non-profit organizations—
have met the welfare needs of their service constituents. The recent financial collapse around
the world has significantly impacted government
support of welfare systems. The use of hybrids
by the US (the author cites a 2008 US study) and
the UK governments implement social policy. As
a result the field of TSO practice and study is in
a growth phase.
Billis wants to foster research into hybrid organizations and so offers four categories of questions as a research agenda:
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ACADEMIC CAPITALISM AND THE NEW ECONOMY:
MARKETS, STATE, AND HIGHER EDUCATION
Sheila Slaughter and Gary Rhoades (2004).
Baltimore: Johns Hopkins University Press.
Reviewed by Margaret Edgell,
Calvin College
THE KNOWLEDGE ECONOMY AND
ACADEMIC CAPITALISM
Scholars Sheila Slaughter and Gary Rhoades
are known for their incisive analyses of trends in
the knowledge economy. In this book, they study
non-profit higher education as a key contributor
to the knowledge economy. They substantiate a
body of distinct commercializing trends in nonprofit higher education, which they describe in
toto as the rise of an academic capitalism regime.
INTEREST FOR CHRISTIAN
BUSINESS FACULTY
Many of us Christian business faculty have
observed the commercialization in higher education over time, sometimes piecemeal, sometimes
as through a glass darkly. The rise of neoliberal
economics over the past three decades has affected all sectors of the economy, in both positive and
negative ways. In their study of the application of
neoliberalism in the sector of higher education,
Slaughter and Rhoades describe neoliberalism as
focusing “not on social welfare for the citizenry
as a whole but on enabling individuals as economic actors.” This kind of neoliberal ideology
has become the basis for what the authors term
“the regime of academic capitalism” in the higher
education sector.
The authors explore the positive and negative
aspects of the academic capitalism regime in a
fairly even-handed manner. This new regime of
academic capitalism partly displaces, yet still
coexists with, the previously dominant regime
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of knowledge for the public good. Both regimes
function alongside each other and also compete
for increasingly limited resources.
Understanding the dynamics of these two
regimes is essential for Christian business faculty to thrive in higher education. We need to
choose paths in a complex terrain that lead us to
strengthen our mission. That may mean a path of
differentiation, whereby we reject commercializing forces that are changing other institutions
around us. We may be led to do so by our commitments to quality teaching, mentoring, and
moral development, and to broad access to higher
education.
Alternatively, we may find flexibility in the
new regime that allows us to take advantage of
trends that equip our students for the new economy. Business programs could easily place themselves at the forefront of new economy activities,
such as collaborative research with industry.
New learning technologies bring opportunities to
copyright and disseminate innovative, appropriate curricula.
By offering one more perspective on the
knowledge economy—this time through the
lens of the higher education sector—this book
offers another handle on our changing business
environment. This study is relevant to our discussion of organizational hybridization by giving
examples and lessons from the original hybrid
organization—tertiary education. Colleges and
universities have always had one foot in the public commons and one foot in the marketplace.
HIGHER EDUCATION AS HYBRID
ORGANIZATION
Slaughter and Rhoades trace the recent development of hybridization in this sector. Industries
and universities formed joint lobbying organizations to promote state funding of job retraining
programs in the 1980s, for example. Industries
welcomed this kind of market orientation of education, because they gained an inherent subsidy
for job retraining. Universities, for their part,
gained many new ways to earn revenues by looking to the marketplace.
Trends beginning in the 1980s moved in the
direction of hybridization in higher education.
The distance education movement brought together people from the public, non-profit, and forprofit sectors to form hybrid networks of experts
to deliver distance learning. Changes in copyright
and patent laws in the 1980s allowed universities
to own and profit from the curriculum and the
new knowledge they created. Conflict of interest laws were eased to allow universities to own
startup companies based on the new knowledge
they created, even if these companies did business with the university. According to Slaughter
and Rhoades, these developments breached “the
historic firewall between public and private sectors” (p. 81).
TWO REGIMES, OLD AND NEW
The old regime is described as a social contract between academe and society. Scholars enjoyed autonomy in their research agendas, which
were funded by the state and industry, often via
the military-industrial complex. Researchers in
turn gave society the fruits of research guided by
peer review and unfettered by partisan or commercial priorities. Any defense or commercial
applications were serendipitous, as researchers
followed their quest for knowledge. The authors
point out that this social contract was in fact
supported by a political coalition dedicated to
funding defense expenditures during the Cold
War, and a system of higher education that limited access by women and minorities, such that
the authors consider nostalgia for the old social
contract misplaced. It is worth noting that other
scholars of higher education value the increasingly progressive aspects of the old social contract
and elicit concern for the regressive aspects of the
new regime (Kezar, 2004; Neave, 2006).
After the end of the Vietnam War, the focus
of political support shifted to commercial uses
of technology. With the advent of the knowledge economy (the development of which is not
the topic of this book), universities took center
stage as sources of what the authors term “alienable knowledge”—discoveries that could be
separated from their laboratory origins and sold.
Knowledge is the raw material for the knowledge
economy. Organizations have used a growing array of legal devices, like patents and copyrights,
to capture knowledge and turn it into products for
profit. Slaughter and Rhoades define academic
capitalism as “an alternative system of rewards
in which discovery is valued because of its commercial properties and economic rewards, broad
scientific questions are couched so that they are
relevant to commercial possibilities (biotechnology, telecommunications, computer science),
knowledge is regarded as a commodity rather
than a free good, and universities have the organization capacity (and are permitted by law) to
license, invest, and profit from these commodities” (p.107).
BOOK REVIEWS
Historically, most institutions of higher education benefited from revenues from both the state
and tuition. Higher education in turn benefited
both society and private individuals by educating
citizens and workers.
METHODOLOGIES
The authors draw their findings on academic
capitalism from three methodologies. They first
analyze salient case studies in higher education, such as the Internet 2 movement, through
which institutions of higher education built the
user-friendly Internet that we depend upon today.
Second, they analyzed reams of quantitative data
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on research and financial aid in higher education.
Their third methodology was to interview faculty
on the negative impacts of academic capitalism.
CRITIQUE
The researchers provide valid evidences at
a micro level to substantiate a macro-level phenomenon: a sweeping transition to academic
capitalism. The evidences they provide are good,
but they are of necessity partial, and as such do
not support their sweeping causal statements.
For example, they state that the dense overlapping of boards of trustees revealed by their research probably creates a flow of communication
through the network that makes entrepreneurial
startups based on university research more likely.
This is a broad causal statement that their work
does not support.
In my opinion, their analysis would benefit from an industrial policy perspective that
includes the macro level to better understand motivations that they studied at micro levels. A second way to do macro-level analysis is to compare
countries. The authors’ research is limited to the
United States higher education sector.
POSITIVE ASPECTS OF ACADEMIC
CAPITALISM
The neoliberal academic capitalist regime expands revenue sources for higher education during times when state budgets are tight. The authors also note the trend of increasing professionalism in administrative support for new economy
activities. Unfortunately, these same new layers
of administration contribute to the rising costs
of higher education, in some cases negating the
revenues from academic capitalism.
The authors point out that the new regime
still promotes the common good, but it redefines
the common good in terms of economic development. The strong coalition of political support enjoyed by the former social contract has shifted its
support to the new social contract for economic
development.
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The new regime increases the range of options for faculty work and remuneration into more
commercial activities. Higher education can thus
compete well to attract the best and brightest in a
global pool of academic labor.
Another advantage of the market-oriented
regime is that it allows the market to allocate
research resources on a competitive basis to research applications showing evidence of potential success. This approach is more targeted and
efficient than pursuing pure science and hoping
for serendipitous applications.
NEGATIVE ASPECTS OF ACADEMIC
CAPITALISM
Slaughter and Rhoades give a laundry list of
significant problems inherent in the academic
capitalist regime. These issues belie its assumed
market-orientation and efficiency. First, the extensive public subsidy of higher education is especially contradictory to neoliberal philosophy.
Second, academic capitalist approaches more
often than not absorb more revenues than they
produce. Third, unanticipated consequences are
often negative.
“Treating knowledge as a private good may
make much of it inaccessible, perhaps constraining discovery and innovation. Conferring
decision-making power on institutions other than
faculty may impinge on academic freedom. Basic
science for use and basic technology may provide
narrow forms of discovery and education that do
not sit well with concepts of public good” (p. 29).
Such detrimental aspects of the new regime may
jeopardize the public support that higher education has traditionally enjoyed, the authors warn.
IMPLICATIONS FOR CHRISTIAN
BUSINESS FACULTY
As mentioned earlier, this book aids business
faculty in our understanding of and critique of
trends in our changing business environment.
The authors suggest that we can go much farther.
We can envision an alternative to the neoliberal
future traced by academic capitalism. They sug-
ing tuition proceeds with endowment income.
Appoint trustees, presidents, and administrators
committed to the mission who understand nonprofit culture and management as well as profit
maximization. Involve faculty in big decisions
that impact mission. Grow in our niche by improving faculty development, both pre-tenure
and post-tenure. Collaborate with Christians in
business to help students fulfill our mission in
the new economy. Plumb new funding resources
flowing from academic capitalism to support
innovations in teaching and learning along the
lines of mission. Keeping mission central is the
essence of our differentiation in the higher education market.
BOOK REVIEWS
gest that colleges and universities can do more
than maximize revenues from alienable knowledge. They recommend a niche strategy that
responds to regional social benefits. Their examples include research in clean and sustainable energy. An interdisciplinary approach would bring
discoveries in the social sciences and humanities
alongside scientific discoveries to address effectively the human challenges of a changing world.
Such an interdisciplinary approach might find
means to distribute pharmaceutical discoveries
in generic form to low-income regions, for example. Alternatively, the proceeds from research
could go into a public trust guided by a coalition
that includes student interests. Much of copyrighted curriculum is subsidized by public funds;
the originating university might give discounts to
students to recognize their contribution. These
are just a few of the ideas that arise when profit
maximization is not the only goal of academic
capitalism.
Christian colleges and universities would also
benefit from the authors’ advice to differentiate
our responses to academic capitalism. It makes
no strategic sense for every institution to strive to
create its own Silicon Valley or Research Triangle, and many attempts to create industrial parks
beside universities have failed for this reason. If
we see the core distinctive of Christian Colleges
and Universities as our commitment to the mission of faith integration, we can draw certain inferences from Slaughter and Rhoades’ work.
Here are just a few. Rally financial support
around mission, working to supplement shift-
REFERENCES
Kezar, A. (2004). Obtaining integrity? Reviewing and
examining the charter between higher education and society. The Review of Higher Education, 27(4), 429–459.
Neave, G. (2006). Redefining the social contract. Higher
education policy, 19, 269–286.
ABOUT THE AUTHOR
Margaret Edgell is Associate Professor of Business at Calvin College, currently on leave in Seattle. Her research
interests include how higher education
is financed and how business students
grow in Christ. Her recent book with
Johan Hegeman and Henk Jochemsen
is Practice and Profile: Christian Formation for Vocation.
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JOURNAL OF BIBLICAL INTEGRATION IN BUSINESS
INFORMATION FOR CONTRIBUTORS
PURPOSE OF THE JOURNAL
The mission of the Journal of Biblical Integration in Business (JBIB) is to publish theoretical and empirical papers that integrate biblical principles and truths into the business disciplines. The journal is a
broad, double-blind peer review forum that aims to publish manuscripts that add to the body of knowledge.
Such manuscripts will be:
➢Scholarly in design, tone, and depth, reflecting accurately the literature in the business discipline
concerned.
➢Directly related to biblical presuppositions, passages and perspectives throughout the paper.
Domain of the JBIB
The JBIB is open to many topics and approaches. The field of biblical integration in business is relatively young and much creative work
remains, both in theory development and theory
testing. Electronic copies of past issues can be accessed at www.cbfa.org.
The aim of the editorial team is to support
scholarship and professional growth among
Christian business academics. We see ourselves
as being in partnership with authors, and take joy
in working with them to develop manuscripts of
the highest quality. The spiritual and professional
calling of faith-business integration is enhanced
to the degree that we are inventive creators and
effective carriers of ideas.
MANUSCRIPT GUIDELINES
Content and Length of Articles.
Focus. Articles in the Journal of Biblical
Integration in Business (JBIB) focus on the integration of biblical perspectives and passages
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with the academic disciplines of business and
economics. Biblical citations and discussion is
a prominent part of each article. The editorial
process includes a close examination of biblical
passages used, with proper regard for exegetical
and hermeneutic principles.
The editorial process also examines whether
the manuscript is appropriately grounded in the
existing literature in the business discipline. An
author must correctly understand previous academic work in the area under discussion and how
his or her idea links to that literature. Appropriate
citations and bibliography are important.
Links to previous JBIB discussions. In the
cover letter, please state how your paper advances
the ongoing debates in the Journal of Biblical Integration in Business or whether it begins a new
discussion. What will the reader learn from this
article that he or she did not, or could not, have
known before? Please also state this in the article,
with appropriate reference to earlier articles in
the journal.
Audience. The primary audience of the
JBIB is Christian professors who teach business
at colleges and universities. However the JBIB
is increasingly being read by those outside the
academic arena. Therefore, the author should
maintain a writing style accessible to a variety
of disciplines and practitioners. This means that
Style Instructions.
When submitting articles, please use the following guidelines:
1. Articles in the JBIB should follow American Psychological Association (APA)
style. For example, articles should be written using textual citations rather than footnotes. Authors can refer to the Publication
Manual of the American Psychological
Association for any questions regarding
this style.
2. Manuscripts should include a cover page
with the title, authors, their affiliations,
and contact information. An author’s name
should not appear in the body of the paper
or in the headings or footers. The first page
of the paper should include the paper title,
followed by an abstract of not more than
150 words, and then followed by the first
section titled “INTRODUCTION.”
3. Up to three levels of bolded section headings are allowed: LEVEL ONE IS CENTERED AND ALL CAPS. Level Two is
Left Justified With The First Letter of Each
Word Capitalized. Level three is Italicized
and at the beginning of the paragraph.
4. Tables and figures should be numbered,
starting with 1. Note in the body of the paper approximately where tables or figures
should be placed using double lines with
“insert Table 1 here” between the double
lines. Place any tables, figures, and appendices after the reference section. Tables
and figures should be in portrait orientation with 1 inch margins on all sides.
5. Use endnotes, not footnotes, and avoid excessive use of endnotes. The endnotes section should appear at the end of the paper
but before the references section.
POLICY REGARDING PREVIOUSLY
PUBLISHED MATERIAL
(INCLUDING CBFA MEETING
PRESENTATIONS)
The JBIB does not publish manuscripts (or
book reviews) that have been published in other
journals, books, or magazines. The JBIB will consider manuscripts of papers presented at regional
or national meetings, including those presented
at the CBFA national conference. However, the
JBIB’s standards for manuscript acceptance may
be different from those of conferences. Frequently, authors use conferences as forums for early
versions of papers.
It is the position of the JBIB that papers presented at meetings would normally be revised
before submission to the JBIB. While it is not
practical to quantify the degree of change, it is
expected that the author(s) will document the
changes made in the manuscript in a letter accompanying the manuscript. The JBIB reserves
the right to not publish material that has been
substantially published elsewhere.
The JBIB is a double-blind, peer-reviewed
academic journal, meaning that authors and reviewers are unknown to each other. Authors who
submit manuscripts developed from conference
presentations should recognize that they forfeit
some of the “blindness” in the blind peer review
process since such papers are often published in
meeting proceedings.
INFORMATION FOR CONTRIBUTORS
technical terms should be explained and that
business-oriented examples should be developed.
The intent is to avoid jargon and “academicspeak” and communicate clearly across boundaries of disciplines and vocations.
Content. The JBIB publishes both empirical
and theoretical articles.
Length. Feature articles tend to be about
7,000 words, excluding references, figures and
tables. Manuscripts of greater or lesser length
will also be considered if the value of the paper
merits it. Submissions to the Insights section are
generally between 1,500—3,000 words.
Past Issues. Those considering submitting
to the JBIB can review past issues to determine
content, length and other standards implicit in articles accepted for publication. Electronic copies
of past issues can be accessed at www.cbfa.org.
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SUBMISSION INSTRUCTIONS
Manuscripts should be submitted electronically as an email attachment in doc. or docx.
format. If you are submitting to a special section,
please specify the focus area of your manuscript
in the cover letter. Email a file of your submission
to:
Yvonne Smith, Editor
Professor of Management
College of Business and Public Management
University of La Verne
1950 Third Street
La Verne, CA 91750
Office: (909) 593-3511 x4769
Cell: (760) 240-5787
[email protected]
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CALL FOR JBIB OPERATIONS EDITOR
The Journal of Biblical Integration in Business (JBIB) is searching for an Operations Editor
to join the editorial team.
The Operations Editor would work with the
JBIB editor to identify data bases and journal
listings that the JBIB should be in, to assist with
printing and other logistics, and to help guide the
future of the JBIB in the fast-paced academic
journal industry. This person would not be re-
sponsible for JBIB content, rather he or she would
direct the delivery of the content in appropriate
channels. The JBIB Operations Editor should
have an understanding of academic business
journals, data bases, and electronic research.
If you are interested in this volunteer position,
please send a copy of your vita and a letter detailing your interest and qualifications to: Yvonne S.
Smith, Editor, JBIB, [email protected].
CALL FOR JBIB MEDIA REVIEW SECTION EDITOR
The Journal of Biblical Integration in Business (JBIB) is searching for a Section Editor for
Book and Media Reviews.
There are many resources available for professors interested in biblical integration. Which
are of good quality? Which do students appreciate? Who has time to check them all? The JBIB
desires to assist professors in this important discernment by publishing book and media reviews.
The Book and Media Editor would work with
the editorial staff of the JBIB to manage media
reviews for the journal. The Editor should understand the nature of media in the 21st century, be
organized, be experienced in the classroom, and
be of an inquiring mind.
If you are interested in this volunteer position,
please send a copy of your vita and a letter detailing your interest and qualifications to: Yvonne S.
Smith, Editor, JBIB, [email protected]
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ARTICLES
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