Week 4 Assignment

Before digging in on Chapter 3 or Module 3, take a moment to complete this brief Qualtrics questionnaire intended to capture your understanding of the circular economy, perceptions, and behaviors. This is your Week 4 assignment.

https://utsa.az1.qualtrics.com/jfe/form/SV_6m7UpdtHmKONl5k

IMPORTANT:

• Please answer these questions as honestly as possible. No previous research or knowledge is required before completing the questionnaire. Your responses won’t be viewed by the professor until after the end of the semester, and your TA will grade this assignment for completion only.
• Your name and course section will be requested on the final page of the questionnaire – your TA needs this information to give you credit for completing this assignment.

Chapter 3: Ethical and Social Entrepreneurship^[1]

What does it mean to be both ethical and socially responsible as an entrepreneur? When Martin Shkreli decided to increase the price overnight of a lifesaving HIV drug from $13.50 to $750 per pill, the public immediately characterized his actions as unethical. However, he viewed his position as responsible behavior that served the best interests of his company and his shareholders. Although Shkreli’s decision to raise prices was within legal limits, his actions were critically judged in the court of public opinion.

As an entrepreneur, should Shkreli’s concerns be with ensuring the sustainability of his business or with providing patients with a more affordable (less profitable) lifesaving drug? This fundamental question raises a number of related questions about the ethics of the situation. Was the decision to raise the price of the HIV drug by 5,000 percent in the best interest of the business? Was Shkreli aware of all aspects (ethical, legal, financial, reputational, and political) of the decision he made? To critically examine the decisions of an individual such as Shkreli, one needs an enhanced awareness of the multitude of stakeholders to be considered, as opposed to only shareholders.

Stakeholders

A comprehensive view of business and entrepreneurial ethics requires an understanding of the difference between shareholders, a small group who are the owners (or stockholders), and stakeholders, a large group that includes all those people and organizations with a vested interest in the business. Serving the needs of the shareholders, as perhaps Shkreli thought he was doing, is based on a relatively limited view of a business’s purpose.

This view, known as the “shareholder primacy” doctrine, stems from a famous Michigan Supreme Court case involving the Ford Motor Company and two shareholders named the Dodge brothers (who would go on to form the Dodge Motor Company).^[2] Henry Ford, the company’s president and majority stockholder, wanted to discontinue special dividends for shareholders to enable large investments in new plants. These investments would dramatically increase production as well as the number of people employed, while also lowering the costs and prices of cars. In short, Ford envisioned benefits that would accrue to the community, employees, and customers. In 1919, the court rule against Ford and issued the following statement as part of its judgement:

“A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end and does not extend to a change in the end itself, to the reduction of profits or to the non-distribution of profits among stockholders in order to devote them to other purposes.”

This case established a precedent that has lasted for decades, built on the premise that a CEO and their company must prioritize shareholder returns over other stakeholders.

However, this concept has been increasingly challenged by a viewpoint calling for the consideration of all stakeholders when making key business decisions that have potentially far-reaching consequences. As an example of this new awareness, the Business Roundtable, a group of CEOs from some of the biggest and most successful companies in the U.S., recently released a new statement addressing business ethics. The CEOs prefaced this statement as follows:

“Together with partners in the public, private and non-profit sectors, Business Roundtable CEOs are committed to driving solutions that make a meaningful difference for workers, families, communities and businesses of all sizes.”^[3]

The aim of this chapter is twofold: first, to assist entrepreneurs in understanding the significance of ethics and the role that entrepreneurs play in developing an ethical and responsible organization. This includes the ability to recognize and identify both ethical dilemmas and legal issues that might arise. Second, we want to enable entrepreneurs to develop a moral compass that allows them to lead their business organization in a manner consistent with ethical and legal principles as well as their personal values.

Being an Ethical Entrepreneur

Whenever you think about the behavior you expect of yourself, in both your professional and personal life, you are engaging in a philosophical dialogue with yourself to establish the standards of behavior you choose to uphold—that is, your ethics. You may decide you should always tell the truth to family, friends, customers, clients, and stakeholders. You may also choose never to defraud or mislead your business partners. You may decide, as well, that while you are pursuing profit in your business, you will not require that all the money earned comes your way. Instead, there might be sufficient profits to distribute a portion of them to other stakeholders in addition to yourself—for example, those who are important because they have helped you or are affected one way or another by your business (i.e., your stakeholders). These stakeholders might include employees (profit sharing), shareholders (dividends), the local community (time), and social causes or charities (donations).

Being successful as an entrepreneur may therefore consist of much more than simply making money and growing a venture. Success may also mean treating employees, customers, and the community at large with honesty and respect. Success may come from the sense of pride felt when engaging in honest transactions—not just because the law demands it, but because we demand it of ourselves. Success may lie in knowing the profit we make does not come from shortchanging others. Thus, business ethics guides the conduct by which entrepreneurs and their companies abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment.

Nearly all systems of moral, ethical, spiritual, and/or religious beliefs stress the building blocks of engaging others with respect, empathy, and honesty. These foundational beliefs, in turn, prepare us for the codes of ethical behavior that serve as ideal guides for business. Still, we need not subscribe to any particular faith to hold that ethical behavior in business is necessary. Just by virtue of being human, we all share obligations to one another, and principal among these is the requirement that we treat others with fairness and dignity, including in our commercial transactions.

Ethical conduct by entrepreneurs/business owners is not only the right way to behave, but it also burnishes our own professional reputation as business leaders of integrity. Integrity – that is, unity between what we say and what we do – is a highly valued trait. But it is more than just consistency of character. Acting with integrity means we adhere strongly to a system of ethical values. Such values often serve as the foundation for the creation of ethical codes, or codes of conduct. A code of ethics acts to guide conduct and may be derived from a variety of sources. It could be a personal, internal code of conduct, or an official code adopted by a business organization. Or it could be an external code based on one’s profession (e.g., CPAs, attorneys, CFPs, and others have professional codes of ethics), or a more broadly applicable external code such as that of the Business Roundtable (discussed above). Being a professional of integrity means consistently striving to be the best person and professional that you can be in all your interactions with others. Integrity in business brings many advantages, not the least of which is that it is a critical factor in allowing businesses and society to function properly. It is also a fundamental basis for developing and maintaining trust, which is vital to all contractual and informal commitments between businesses and all their key stakeholders.

Successful entrepreneurs and the companies they represent will take pride in their enterprise if they engage in business with transparency, intentionality, and integrity. To treat customers, clients, employees, and all those affected by a venture with dignity and respect is ethical. In addition, ethical business practices serve the long-term interests of businesses, because customers, clients, employees, and society at large will be much more willing to patronize a business and work hard on the business’s behalf if that business is perceived as caring about the community it serves. And what type of firm has long-term customers and employees? One whose track record gives evidence of honest business practices.

Research on the performance of the World’s Most Ethical Companies (WMEC) indicates a positive association between ethical conduct and successful long-term financial performance. These businesses often outperform their market expectations, both in periods of market growth and decline. The WMEC list of companies shows an average annual excess return of more than 8 percent higher than expected profitability. This may be due to a variety of reasons, including what researchers term a positive effect on business culture, stakeholders, and reputation.^[5] In other words, being ethical beneficially influences employees, investors, and customers.

Many people confuse ethical and legal compliance. However, these concepts are not interchangeable and call for different standards of behavior. The law is needed to establish and maintain a functioning society. Without it, our society would be in chaos. Compliance with legal standards is mandatory. If we violate these standards, we are subject to punishment as established by the law. Therefore, compliance generally refers to the extent to which a company conducts its business operations in accordance with applicable regulations, statutes, and laws. Yet this represents only a baseline minimum. Ethical observance builds on this baseline and reveals the principles of an individual business leader or a specific organization. Ethical acts are generally considered voluntary and personal—often based on our individual perception of what is right and wrong.

Some professions, such as medicine and the law, have traditional and established codes of ethics. The Hippocratic Oath, for example, is embraced by most professionals in healthcare today as an appropriate standard always owed to patients by physicians, nurses, and others in the field. This obligation traces its lineage to ancient Greece and the physician Hippocrates. Businesses are different in not having a mutually shared standard of ethics. This is changing, however, as evidenced by the array of codes of conduct and mission statements many companies have adopted over the past century. These beliefs have many points in common, and their shared content may eventually produce a code universally claimed by business practitioners. What central point might constitute such a code? Essentially, a commitment to treat with honesty and integrity customers, clients, employees, and others affiliated with a business.

The law is typically indebted to tradition and precedent, and compelling reasons are needed to support any change. Ethical reasoning often is more topical and reflects the changes in consciousness that individuals and society undergo. Often, ethical thought precedes and sets the stage for changes in the law.

Behaving ethically requires that we meet the mandatory standards of the law, but that is not enough. For example, an action may be legal that we personally consider unacceptable (consider how many viewed Shkreli’s legal price hike). Entrepreneurs today are called to not only comply with the letter of the law but also to go above and beyond that basic mandatory requirement to consider their stakeholders and do what is right. While it remains with the courts to determine the underlying intent, legal implications, and consequences of Shkreli’s decision, evidence from this and other case studies shows that some corporate leaders have not developed ethical capabilities, or they have not internalized a moral compass that enables them to differentiate between right and wrong.

A moral compass is a state of mind where an individual has developed the needed capabilities to differentiate between right and wrong, or between just and unjust in challenging circumstances. When individuals are able to act in an ethical manner systematically, habitually, and without struggling to decide how to act or what to do in difficult situations, they have internalized that moral compass. To develop and internalize a moral compass, an entrepreneur needs to continually exercise and develop their ethical “muscles.” These ethics-based muscles include qualities such as trust, truthfulness, respect, responsibility, commitment, care, love, and justice.

Corporate Social Responsibility and Social Entrepreneurship

Few directives in business can override the core mission of maximizing shareholder wealth. Today, that often captured in goals related to increasing quarterly profits. However, such an intense focus on one variable over a short time (i.e., a short-term perspective) can lead to a short-sighted view of what constitutes business success.

Moreover, measuring true profitability requires taking a long-term perspective. We cannot accurately measure success within a quarter of a year; a longer time is often required for a product or service to find its market and gain traction against competitors, or for the effects of a new business policy to be felt. Satisfying consumers’ demands, going green, being socially responsible, and acting above and beyond the basic requirements all take time and money. However, studies have shown that the extra cost and effort can in fact enhance firm profitability in the long run. If we measure success from this perspective, we are more likely to understand the positive effect that ethical and socially responsible behavior can have on all stakeholders associated with a particular business, including shareholders.

Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) is the practice by which a business views itself within a broader context: as a member of society with certain implicit social obligations and environmental considerations and issues. As previously stated, there is a distinct difference between legal compliance and ethical responsibility, and the law does not fully address all ethical dilemmas that businesses face. A focus on CSR helps a company to engage in sound ethical practices and policies in accordance with the company’s culture and mission, above and beyond any mandatory legal standards.

Following the law, doing what’s right ethically, and giving back to society are closely related but distinct concepts. Table 3.1 offers a breakdown of four unique areas of responsibility that companies should consider, as well as compliance expectations for each. Notice which duties, or responsibilities, are mandatory versus discretionary.

Table  3.1  Corporate Social Responsibility, Ethics, and Law

A business that practices corporate social responsibility makes a concerted effort to consider the interests of non-shareholder stakeholders. This places all stakeholders within a broader contextual framework for evaluating strategic decisions, to avoid pursuing shareholder returns at other stakeholders’ expense. For instance, a mining company that sole-mindedly pursues profits may risk infringing on the rights of its local community to clean air and water. Even if its actions do not fall outside of what is required by law, they may raise concerns that the company is not acting fairly (i.e., ethical responsibility) or being a good “corporate citizen” (i.e., social responsibility).

From a historical perspective, the development of CSR has been somewhat of a rollercoaster ride, characterized by low points with extreme ethical failures followed by high points in which corporate conduct improved, largely due to statutory laws and/or agency regulations being enacted in response to those failures. For example, the Enron collapse and the 2008/2009 mortgage industry/derivatives scandal led Congress to enact laws such as the Insider Trading and Securities Fraud Enforcement Act and the Dodd-Frank Act, respectively.

Examples of organizations that have experienced ethical lapses that have caused serious and costly problems can be seen in Table 3.2. Each has had a profound and far-reaching impact on the lives of individuals, the communities in which they operate, and/or the global environment. These crises led to multi-billion dollar losses for these companies, as well as loss of lives, loss of jobs, property damage, depletion of life savings, and environmental devastation.

Table  3.2 Examples of Multi-Billion Dollar Corporate Responsibility Problems

In addition to the enactment of statutory reforms, various government agencies have also promulgated new regulations in an attempt to prevent companies from engaging in unethical, illegal, and otherwise damaging activities. Examples of agencies that have created new regulations in response to ethical failures in the business sector include the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), the Consumer Financial Protection Bureau (CFPB), and the Financial Industry Regulatory Authority (FINRA).

One vulnerability in the corrective measures discussed to address the scandals listed in Table 3.2 is that they do not necessarily prevent the repeat of ethical deviations, because they are primarily compliance and fear-based. In some instances, instead of preventing unethical activity, the system has enabled unethical leadership to take minimum actions and merely pay fines, rather than correct their actions or change their approach.

An additional perspective on CSR argues that ethical business leaders can aim to do good at the same time that they do well. In short, CSR, when conducted in good faith, can be beneficial to corporations as well as their stakeholders. The suggestion is that although a corporation is entitled to make money, it should not only make money – it should also be a good civic neighbor and commit to enabling the general prosperity of society as a whole. These ends are clearly not mutually exclusive – it is possible to strive for both. When a company approaches business in this fashion, it demonstrates a commitment to CSR.

An interesting example of an entrepreneurial company that practices CSR is the New Belgium Brewing Company (NBBC), maker of Fat Tire Beer, among other brands. NBBC is 100 percent employee-owned, which makes this company different from the more traditional corporation in which investors own the company rather than the employees. This type of company with employee ownership means that the workers benefit directly from the profits generated by their efforts for the company, a sort of democratized capitalism. NBBC is also focused on the environment. Its brewery in Fort Collins, CO produces almost 20 percent of its own electricity through solar panels and wastewater – a large percentage for a commercial factory. Furthermore, it makes a corporate commitment to contribute to bicycle-related organizations supplying people with green personal transportation options. According to the company’s director of CSR, NBBC considers social and environmental wellbeing to be a high priority for the company.^[7]

In recent years, many organizations have embraced this view of CSR, in which the company’s expected actions include not only producing a reliable product, charging a fair price with fair profit margins, and paying a fair wage to employees, but also caring for the environment and acting on other social concerns. In essence, CSR can focus managers on demonstrating the social good of their endeavors. Some companies go the extra mile and become officially certified as B-corporation (described further below).

To critics, CSR may be perceived as an opportunistic response to the backlash that corporations face for a long track record of harming the environment and communities in their efforts to be more efficient and profitable. This can lead to claims that a company is “greenwashing” or “impact-washing”. However, the trend for companies to adopt CSR practices may represent a unique opportunity to consider stakeholders, such as the natural environment and communities who live near manufacturing facilities, who have historically been given low priority and little voice in strategic decision making.

Social Entrepreneurship

Social entrepreneurship describes ventures launched by entrepreneurs who are first and foremost advocates or champions for a social cause. However, they are able to leverage that cause as a platform to develop and maintain an economically viable organization. These individuals are primarily driven and motivated by a higher vision or purpose.

This new breed of entrepreneur leverages the power of their position, their standing in the community, and the potential synergy and wealth-creation power of an enterprise as a vehicle or platform to advance their social goals and personal agenda. These social causes often include a solution for a costly and chronic social problem or pain, a social wrong or injustice that must be corrected, or a global issue that has been either overlooked or marginalized by society or organizations.

While the primary goal and end-state for a typical entrepreneur is wealth creation, the dominant goal for a social entrepreneur is to serve a specific cause as they generate wealth to support that cause. This means that a social entrepreneur works to advance society instead of accumulating greater wealth for the shareholder. Social entrepreneurs often share qualities such as a prosocial motivation, a sense of obligation and responsibility towards someone or something, a strong commitment to make a change, and a resilience to withstand failure. There are countless examples of entrepreneurs have created startups based primarily on the idea of giving back. In fact, many of those ventures have become well-known, such as TOMS Shoes (discussed further below), Bombas Socks, and Warby Parker Eyewear. Each of these companies donates one of its products (shoes, socks, glasses) for each one purchased.

Environmental Entrepreneurship

In recent decades, businesses also have responded to stakeholder concerns about the environment and sustainability. There is a growing awareness that human actions can, and do, harm the environment. During the last few decades, there has been an explosion of studies on how business activities affect our planet. In one study, Tony Juniper points out that population growth, with its accompanying demand for natural resources and the impact of environmental disasters, has had a profound and lasting impact on the planet. Juniper states that we have increased our consumption of natural resources tenfold, increased grain production fourfold, increased freshwater usage fivefold, increased fish capture fourfold, doubled our consumption of earth’s renewable production, and increased the concentrations of greenhouse gases in the atmosphere.^[8]

Destruction of the environment can ultimately lead to reduction of resources, declining business opportunities, and lowered quality of life. Similar to social entrepreneurship, environmental entrepreneurship aims to identify opportunities that are financially sound from a business standpoint and, at the same time, address environmental issues and preserve our ecosystem. This includes ventures related to clean and renewable energy, waste management, programs to counteract climate change, improved water supplies, protection of biodiversity, and reduction of environmental degradation and deforestation.^[9]

There are multiple ways in which an entrepreneur can demonstrate a commitment to environmental issues. One way is to start a company that directly helps clean up the environment. Consider Ocean Cleanup, a nonprofit started by a twenty-five-year-old entrepreneur to clean up the Great Pacific Garbage Patch. Another option is to run a traditional for-profit company that pledges to operate in an environmentally responsible way. A great example of this is Patagonia – this outdoor retailer has committed to responsible sourcing and many other initiatives aimed at being good stewards of the environment. A third option for entrepreneurs is to join an advocacy organization such as E2. E2 is “a national, nonpartisan group of business leaders, investors and others who advocate for smart policies that are good for the economy and good for the environment.”^[10] This group strives to influence policies at the state, regional, and federal levels dealing with energy, climate, oceans, water, transportation, and smart growth. These policies are primarily intended to improve air, water, public health, as well as job creation in these areas. One example of an initiative that has resulted from this group deals with passing the nation’s first automobile emissions standards.

Sustainability

In 1999, Dow Jones began publishing an annual list of companies for which sustainability was important. Sustainability, in this context, is the practice of preserving resources and operating in a way that is ecologically responsible in the long term.^[11] The Dow Jones Sustainability Indices “serve as benchmarks for investors who integrate sustainability considerations into their portfolios.”“Dow Jones Sustainability Indices.” RobecoSAM. https://www.robecosam.com/csa/indices/djsi-index-family.html ^[12]

However, sustainability means more than just environmental awareness. A simple definition of sustainability relates to the ability for something to be “sustained” at a certain rate or level. The idea of sustainability, at its root, is to think long term as opposed to short term. Thus, operating a business sustainably concerns not only the environment, but also natural resources, human resources, product supply chains, and other related concepts. As an entrepreneur aware of sustainability issues, one would consider a wide range of alternatives – such as responsibly using electricity or water, participating in supplier diversity/responsible sourcing programs, or funding worker wellness initiatives. Sustainability also deals with actions and a way of life that considers the continuity of future generations. It is deeply rooted in a conviction to do what is moral/ethical. For example, sustainability advocates argue that is unjust to take actions that benefit the current generation at the detriment of future generations.

As virtually all businesses are reliant on natural resources in one way or another, it is good business practice to be aware that a business’s long-term sustainability, and indeed its profitability, depend greatly on the natural environment. In light of the growing impact of climate change and risks related to resource overuse, companies ignoring the interdependencies between business and the environment may not only elicit public backlash and the attention of lawmakers – they may also threaten their own viability.

Entrepreneurial Opportunities for Social Impact

There are multiple types of business entities that function with a social purpose in mind. Nonprofit ventures typically partner with federal, state, or local government organizations, public and private institutions, foundations, or individuals with financial means and community standing to serve the greater public. One example of a nonprofit initiative is the National Kidney Foundation of Arizona.^[13] This organization seeks solutions for kidney and urinary diseases through education, prevention, and treatment.

A cooperative venture leverages the talents, finances, and intellectual resources of the members of an organization to operate and deliver value to the members of the organization. One difference between a cooperative and a nonprofit corporation is how money flows back into the community. In a nonprofit organization, the managers cannot distribute profits to members or investors; the remaining money stays in the nonprofit. In contrast, a cooperative generally can distribute profits to members based on member participation/temporary ownership. One example of a cooperative would be the Unity One Credit Union, which is a member-owned, not-for-profit cooperative, working for its members’ benefit.

Social enterprises (also known as social businesses or social ventures) are primarily driven by the goal to address a meaningful social cause. Social entrepreneurs are able to meet their strategic organizational goals and objectives by selling a value-added product/service that closes a gap, addresses a problem or pain, and/or corrects a social injustice. A social enterprise is typically designed to be financially self-sufficient. One example of a social entrepreneur and a social enterprise is the Grameen Bank founded by Muhammed Yunus, a Nobel Peace Prize laureate who defined the term micro-lending and micro-finance. Grameen Bank gives small loans to those individuals who have very little to no collateral and wish to start a business to support their family.^[14] Another well-known examples is TOMS Shoes, discussed further below.

B-corporations (or B-Corps) comprise a set of organizations that have formally committed to considering the impact of their decisions on their workers, customers, suppliers, community, and the environment. Becoming a certified B-corporation is a formalized process managed by a nonprofit organization called B-Lab – this involves compliance with various standards as well as regular audits.^[16] The essence of B-corporations is that “they recognize the imperative to do no harm and create positive impact throughout the value chain.”^[17] As of 2019, there were approximately 3,000 certified B-corps in 65 countries, covering 150 different industries.^[18] One example of a certified B-corporation is Kickstarter, the crowdfunding website. Kickstarter is one of the world’s largest funding communities for creative projects—everything from films, games, restaurants, and music to art, design, and technology—and offers entrepreneurs a way to raise funds when they cannot borrow from a bank.

Identifying Your Values and Mission

The ability to establish a new venture is an exciting opportunity and privilege. Developing a social venture also typically reflects the entrepreneur’s personal values and goals to have a social impact through their career. The values that we choose to honor are the essence of ourselves, and we carry them with us wherever we live, work, and play. As we noted, the entrepreneurial path you choose should reflect your values, whether you create a for-profit or nonprofit organization. Whatever your entrepreneurial path, it remains important not to let your well-considered values be diminished by others who do not share them.

How do you keep personal values close at hand? The best way is by writing them down, prioritizing them, and fashioning them into a personal mission statement. Most companies have mission statements, and people can have them, too. Yours will guide you on your path, clear away distractions on the road, and help you correct any missteps. It should be flexible, too, to account for changes in yourself and your goals. Your mission statement is not a global positioning system, so much as a compass that guides you toward discovering who you are and what drives you (Figure 3.1).

Figure  3.1 Your Mission Statement is a Compass

(Credit: modification of “Adventure Compass Hand Macro” by “Pexels”/Pixabay, CC0)

Let’s write your mission statement. Because it will reflect your values, start by identifying a handful of values that matter most to you. You can do this by answering the questions in Table 3.4; you may also find it beneficial to keep a journal and update your answers to these questions regularly.

Table  3.4  Identifying Your Values

Now you can incorporate these values into your business mission statement, which can take the form of a narrative or action. There are many formats you can follow, but the basic idea is to unite your values with the goals you have set for your life and career. You can, for instance, link the benefit you want to create, the market or audience for which you want to create it, and the outcome you hope to achieve.^[19]

Keep your statement brief. Richard Branson, founder of the Virgin Group, wants “to have fun in [my] journey through life and learn from [my] mistakes.” Denise Morrison, CEO of Campbell Soup, aims “to serve as a leader, live a balanced life, and apply ethical principles to make a significant difference.”^[20] Your own statement can be as simple as, for instance, “to listen to and inspire others,” or “to have a positive influence on everyone I meet.”

Putting Your Values and Mission Statement to the Test

There may be no better place to put your personal values and mission to the test than in an entrepreneurial role. Startups cannot be run on concepts alone. More than almost any other kind of venture, they demand practical solutions and efficient methods. Entrepreneurs usually begin by identifying a product or service that is hard to come by in a particular market or that might be abundantly available but is overpriced or unreliable. The overall guiding force that inspires the startup then is the execution of the company’s mission, which dictates much of the primary direction for the firm, including the identification of underserved customers, the geographic site for operations, and the partners, suppliers, employees, and financing that help the company get off the ground and then expand. In a brand-new organization, though, where does that mission come from?

The founder(s) of a new venture typically develop their company’s mission directly from their own personal beliefs, values, and experiences. For example, Bertha Jimenez, an immigrant from Ecuador who was studying engineering at New York University, noticed that craft breweries were riding a wave of popularity in her adopted city. She was troubled by the fact that they were throwing away a lot of barley grain that still had nutritional value but that no one could figure out how to reuse. After a few attempts, Jimenez and two friends finally hit on the idea of making flour out of this barley grain. Thus, the Queens, New York–based startup Rise Products was born, with its website proclaiming that “Upcycling is the future of food.” Rise Products supplies local bakers and pasta makers with its protein- and fiber-packed “super” barley flour for use in products from pizza dough to brownies. It has also sent product samples on request to Kellogg, Whole Foods, and Nestlé, as well as to a top chef in Italy. Jimenez and her fellow cofounders say, “In the long term, we can bring this to countries like ours. We want to look at technologies that won’t be prohibitive for other people to have.”^[21]

If we were to diagram the relationship between founders’ values and the entrepreneurial mission, it would look something like this:

Personal Values → Personal Mission Statement → Entrepreneurial Mission Statement

Just as a personal mission statement can change over time, so can the company mission be adapted to fit changing circumstances, industry developments, and client needs. TOMS Shoes, profiled earlier, is an example of a business that has expanded its mission to also offer eyeglasses and improved access to clean water to people in developing countries, in addition to its original mission of shoes for the needy. It calls itself the “One for One” company, promoting founder Blake Mycoskie’s promise that “With every product you purchase, TOMS will help a person in need.”^[22] The point is, if you have clarified your personal values and personal mission statement, there are countless ways that you can apply them to your business goals and decisions to “do good and do well” in your entrepreneurial career.