When I was seeking my doctorate from Michigan State University in the United States, I found out about the Hong Humanistic Korean Scholarship by chance. Basically, the Hong Humanistic Korean Scholarship awards a small scholarship to academically successful Korean-American graduate students. It did not seem to fit me well and the small amount offered was not attractive, but I decided to apply. When I prepared the application, I saw the essay questions in the application form. I was stunned for a while.

The first question was on what you would contribute to humanity through your studies. My BA is in business administration, my MBA in marketing. At that time, I was seeking a doctorate in international retailing. I never thought about that kind of issue. I thought that only some specific study areas ― such as women’s studies, studies for developing countries, social welfare studies and so on ― were related to benefiting humanity. I firmly thought that business administration was purely based on commercial purposes, not social ones.

I spent a lot of time pondering the question. I wrote that I would like to establish a company which hires a great many people, who might have to provide for their families. I insisted that the sustainability of the business meant my contribution to humanity as a graduate student. I was awarded the Humanistic Korean Scholarship.

I am writing this column more than 10 years since I was awarded the scholarship. After returning to Korea after my doctorate, I established a consulting company, and my employees are parents, as I wrote. I became a marketing professor and have worked on exploring consumer behavior for social enterprises and published many academic performances for them for the past two years.

The body of academic literature on social enterprises is quite small. Most studies have focused on their business models, organizational issues, and sustainability issues. Social enterprises are emerging as a robust area for academic inquiry. Their theoretical underpinnings have not been explored well enough, and the need for academic research into social enterprises is pressing.

To increase the sustainability of social enterprises, studies from a marketing-oriented perspective are needed. Due to the lack of academic studies from a market viewpoint, my current studies have received a great deal of attention.

Social enterprises are often called the “fourth sector.” They have received a great deal of attention lately, as their business model is regarded as a sustainability solution from a company perspective, and as an outlet from a social responsibility perspective. Given the importance and impact of social enterprises, both practitioners and academic researchers have taken an increasing interest in them.

In general, social enterprises have three common features, which are distinguished from commercial enterprises. First, social enterprises have social aims, which is a core value of social enterprises. They take roles which hire and train minorities, and provide jobs and welfare services to minorities. Second, they have social ownerships, which seek both commercial and social gains. That is, they seek profits for their stockholders as a commercial business organization.

They also promote development of local community and public interest, and invest in their local communities as a nonprofit organization at the same time. Third, social enterprises’ employees can be stockholders and customers. Many cases show that social enterprises’ employees share company ownership and consume their products and services as customers. Lastly, social enterprises promote a democratic decision-making process with the participation of stakeholders, including the recipients of services, workers and local residents.

In Korea, social enterprises have rapidly developed since the Law on the Promotion of Social Enterprises was passed in 1996. As many studies indicated, the law has allowed social enterprises to develop in a short time. On the other hand, they have lost sustainability because of the government support.

From a marketing-oriented perspective, unfortunately, social enterprises in Korea do not seem to create both social and commercial value. According to my studies, many people who purchase social enterprises’ products and services have very negative perceptions and attitudes toward social enterprises and their products.

In general, people confuse social enterprises, companies engaged in corporate social responsibility, and good companies, which receive attention in both academia and practitioners. Last week, I conducted in-depth interviews to identify how they were perceived. Surprisingly, those with higher involvement and knowledge about social enterprises had more negative perceptions, attitudes and evaluations of them. Perceptions, attitudes and evaluations of social enterprises were worse than those of companies simply engaged in CSR.

Korea’s social enterprises should be made sustainable through marketing. My current study may provide some clues. We theoretically developed a re-purchase model for social enterprises. A social enterprise can be built on the corporate associations of being environmentally friendly, local community oriented, socially responsible and attentive to employees’ welfare. The study consisted of testing whether the four sub-constructs (functional, symbolic, emotional and social) affected by those corporate associations positively influence sensory experience and cognitive stimulation, and ultimately have a positive effect on consumer behavior.

Thinking back, establishing and managing my own company and my academic approach may be my answers for the first essay question of the Hong Humanistic Korean Scholarship. Consciously, or unconsciously, I might have had a mission and try to keep doing it because of the small scholarship. 

By Choi Eun-jung

The writer is a marketing professor in Business Administration at Sangmyung University in Seoul. ―Ed.