Skip to main content
SpringerLink
Log in

B Corp Certification and Its Impact on Organizations Over Time

  • Original Paper
  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This study explores the impact of B Corp certification and its associated impact assessment on four case studies of small and medium-sized Brazilian companies certified as B Corps. The results reveal that although all companies had achieved high scores in the certification assessment, awarded on the basis of existing performance, they did not subsequently develop road maps for the future to improve their scores in the way which the B Corp Impact Assessment process endorses as one of the benefits of certification. Their incremental changes are discussed in the light of the main motivations and expectations of these companies’ founders with regard to the certification. A central role of the B Corp certification for this group of companies was to improve their external reputation with investors, clients and consumers. They were not strongly driven to reshape internal processes in ways which would advance their scores in the impact assessment and which would tackle complex problems of corporate governance. Our findings contribute to enriching the discussion of stakeholder engagement and corporate governance in hybrid organizations and contribute to the emerging agenda on studying change over time in B Corps.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aglietta, M., & Reberioux, A. (2005). Corporate governance adrift: A critique of shareholder value. Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • B Lab. (2019a). Homepage. Retrieved June 25, 2019, from https://bcorporation.net/.

  • B Lab. (2019b). Sistema B Newsletter. Retrieved June 11, 2019, from https://sistemab.org/brasil/

  • B Lab. (2019c). What is the difference between a B Corp and a social enterprise? Retrieved June 2, 2019, from https://bcorporation.uk/faq-item/what-difference-between-b-corp-and-social-enterprise

  • B Lab. (2019d). About B Corps. Retrieved January 26, 2019, from https://bcorporation.net/about-b-corps

  • B Lab. (2019e). Certification requirements. Retrieved February 20, 2019, from https://bcorporation.net/certification/meet-the-requirements

  • B Lab. (2019f). Version 6 of the B impact assessment. Retrieved January 26, 2019, from https://go.pardot.com/l/39792/2018-12-21/8q5bb7/39792/185472/V6_FINAL_public_document.pdf

  • Bacq, S. C., Janssen, F., & Kickul, J. R. (2011). Governing for impact and performance within social entrepreneurial ventures: The mediating role of organizational capabilities. Frontiers of Entrepreneurship Research, 31(19), 629–643.

    Google Scholar 

  • Battilana, J., & Dorado, S. (2010). Building sustainable hybrid organizations: The case of commercial microfinance organizations. Academy of Management Journal, 53, 1419–1440.

    Google Scholar 

  • Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing—Insights from the study of social enterprises. The Academy of Management Annals, 8(1), 397–441.

    Google Scholar 

  • Battilana, B. J., Lee, M., Walker, J., & Dorsey, C. (2012). In search of the hybrid ideal. Standard Social Innovation Review, 10(3), 51–55.

    Google Scholar 

  • Boeger, N., & Villiers, C. (2018). Shaping the corporate landscape: Towards corporate reform and enterprise diversity. Oxford: Hart Publishing.

    Google Scholar 

  • Bowler, K., Castka, P., & Balzarova, M. (2017). Understanding firms’ approaches to voluntary certification: Evidence from multiple case studies in FSC certification. Journal of Business Ethics, 145(2), 441–456.

    Google Scholar 

  • Bruneel, J., Moray, N., Stevens, R., & Fassin, Y. (2016). Balancing competing logics in for-profit social enterprises: A need for hybrid governance. Journal of Social Entrepreneurship, 7(3), 263–288.

    Google Scholar 

  • Carroll, A. B. (2000). Ethical challenges for business in the new millennium: Corporate social responsibility and models of management morality. Business Ethics Quarterly, 10(1), 33–42.

    Google Scholar 

  • Clark, P., & Hussey, I. (2016). Fair trade certification as oversight: An analysis of fair trade international and the small producers’ symbol. New Political Economy, 21(2), 220–237.

    Google Scholar 

  • Collins, J. (2017). The politics of value: Three movements to change how we think about the economy. Chicago: University of Chicago Press.

    Google Scholar 

  • Collins, J., & Kahn, W. (2017). The Hi-Jacking of a new corporate form? Benefit corporations and corporate personhood. Economy and Society, 45(3–4), 325–349.

    Google Scholar 

  • Conger, M., McMullen, J. S., Bergman, B. J., & York, J. G. (2018). Category membership, identity control and the reevaluation of prosocial opportunities. Journal of Business Venturing, 33(2), 179–206.

    Google Scholar 

  • Cornforth, C. (2014). Understanding and combating mission drift in social enterprises. Social Enterprise Journal, 10(1), 3–20.

    Google Scholar 

  • Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization (4th ed.). Oxford: Oxford University Press.

    Google Scholar 

  • Doherty, B., Haugh, H., & Lyon, F. (2014). Social enterprises as hybrid organizations: A review and research agenda. International Journal of Management Reviews, 16(4), 417–436.

    Google Scholar 

  • Driver, C., & Thompson, G. (Eds.). (2018). Corporate governance in contention. Oxford: Oxford University Press.

    Google Scholar 

  • Ebrahim, A., Battilana, J., & Mair, J. (2014). The governance of social enterprises: Mission drift and accountability challenges in hybrid organizations. Research in Organizational Behavior, 34, 81–100.

    Google Scholar 

  • Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550.

    Google Scholar 

  • Ferreras, I. (2017). Firms as political entities: Saving democracy through economic bicameralism. Cambridge: Cambridge University Press.

    Google Scholar 

  • Fitzgerald, L., & Dopson, S. (2009). Comparative case study designs: Their utility and development in organizational research. In D. Buchanan & A. Bryman (Eds.), The Sage handbook of organizational research methods (pp. 466–483). London: Sage.

    Google Scholar 

  • Gamble, E.N., Parker, S.C., & Moroz, P.W. (2019) Measuring the integration of social and environmental missions in hybrid organizations. Journal of Business Ethics 1–14.

  • Gehman, J., & Grimes, M. (2017). Hidden Badge of Honor: How contextual distinctiveness affects category promotion among certified B Corporations. Academy of Management Journal, 60(6), 2294–2320.

    Google Scholar 

  • Goodpaster, K. (1991). Business ethics and stakeholder analysis. Business Ethics Quarterly, 1(1), 53–73.

    Google Scholar 

  • Grimes, M. G., Gehman, J., & Cao, K. (2018). Positively deviant: Identity work through B Corporation certification. Journal of Business Venturing, 33(2), 130–148.

    Google Scholar 

  • Gulbrandsen, L. H. (2012). Transnational environmental governance: The emergence and effects of the certification of forests and fisheries. Cheltenham: Edward Elgar.

    Google Scholar 

  • Haigh, N., & Hoffman, A. J. (2014). The new heretics: Hybrid organizations and the challenges they present to corporate sustainability. Organization & Environment, 27(3), 223–241.

    Google Scholar 

  • Haigh, N., Walker, J., Bacq, S., & Kickul, J. (2015). Hybrid organizations: Origins, strategies, impacts, and implications. Californian Management Review, 57(3), 5–12.

    Google Scholar 

  • Honeyman, R. (2014). The B Corp handbook. San Francisco: Berrett-Koehler Publishers.

    Google Scholar 

  • Hota, P.K., Subramanian, B. & Narayanamurthy, G. (2019). Mapping the intellectual structure of social entrepreneurship research: A citation/co-citation analysis. Journal of Business Ethics, 1–26.

  • Jaffee, D. (2010). Fair trade standards, corporate participation, and social movement responses in the United States. Journal of Business Ethics, 92, 267–285.

    Google Scholar 

  • Jay, J. (2012). Navigating paradox as a mechanism of change and innovation in hybrid organizations. Academy of Management Journal, 56(1), 137–159.

    Google Scholar 

  • Jayaraman, L. L., & Min, B. K. (1993). Business ethics—A developmental perspective: The evolution of the free and mature corporation. Journal of Business Ethics, 12(9), 665–675.

    Google Scholar 

  • Joyner, B., & Payne, D. (2002). Evolution and implementation: A study of values, business ethics and corporate social responsibility. Journal of Business Ethics, 41(4), 297–311.

    Google Scholar 

  • Kerssens-van Drongelen, I. C., & Fisscher, O. A. M. (2003). Ethical dilemmas in performance measurement. Journal of Business Ethics, 45(1–2), 51–63.

    Google Scholar 

  • Levillain, K., Parker, S., Ridly-Duff, R., Segrestin, B., Veldman, J., & Willmott, H. (2018). Protecting long term commitment: Legal and organizational means. In C. Driver & G. Thompson (Eds.), Corporate governance in contention (pp. 42–65). Oxford: Oxford University Press.

    Google Scholar 

  • Locke, R. M. (2013). The promises and limites of private power: Promoting labor standards in global economy. Cambridge: Cambridge University Press.

    Google Scholar 

  • Mair, J., Mayer, J., & Lutz, E. (2015). Navigating institutional plurality: Organizational governance in hybrid organizations. Organization Studies, 36(6), 713–739.

    Google Scholar 

  • Mayer, C. (2013). Firm commitment: Why the corporation is failing us and how to restore trust in it. Oxford: Oxford University Press.

    Google Scholar 

  • Mayer, C. (2016). Reinventing the corporation. Journal of the British Academy, 4, 53–72.

    Google Scholar 

  • Mayer, C. (2018). Prosperity: Better business makes the greater good. Oxford: Oxford University Press.

    Google Scholar 

  • Moroz, P. W., Branzei, O., Parker, S. C., & Gamble, E. N. (2018). Imprinting with purpose: Prosocial opportunities and B Corp certification. Journal of Business Venturing, 33(2), 117–129.

    Google Scholar 

  • Pache, A.-C., & Santos, F. (2013). Inside the hybrid organization: Selective coupling as a response to conflicting institutional logics. Academy of Management Journal, 56, 972–1001.

    Google Scholar 

  • Parker, S. C., Gamble, E. N., Moroz, P. W., & Branzei, O. (2019). The impact of B Lab certification on firm growth. Academy of Management Discoveries, 5(1), 57–77.

    Google Scholar 

  • Rawhouser, H., Cummings, M., & Crane, A. (2015). Benefit corporation legislation and the emergence of a social hybrid category. California Management Review, 57(3), 13–35.

    Google Scholar 

  • Reiser, D. B. (2011). Benefit corporations—A sustainable form of organization? Wake Forest Law Review, 46, 591–625.

    Google Scholar 

  • Sharma, G., Beveridge, A. J., & Haigh, N. (2018). A configural framework of practice change for B corporations. Journal of Business Venturing, 33(2), 207–224.

    Google Scholar 

  • Smith, N. C., & Ronnegard, D. (2016). Shareholder primacy, corporate social responsibility and the role of business schools. Journal of Business Ethics, 134(3), 463–478.

    Google Scholar 

  • Spear, R., Cornforth, C., & Aiken, M. (2009). The governance challenges of social enterprises: Evidence from a UK empirical study. Annals of Public and Cooperative Economics, 80(2), 247–273.

    Google Scholar 

  • Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporation, stakeholders and sustainable development: A theoretical exploration of business-society relations. Journal of Business Ethics, 61(3), 263–281.

    Google Scholar 

  • Stout, L. A. (2012). The shareholder value myth: How putting shareholders first harms investors, corporations, and the public. San Francisco: Berrett-Koehler.

    Google Scholar 

  • Stubbs, W. (2017). Sustainable entrepreneurship and B Corps. Business Strategy and the Environment, 26(3), 331–344.

    Google Scholar 

  • Winkler, A-L. P., Brown, J. A., & Finegold, D. L. (2018). Employees as conduits for effective stakeholder engagement: An example from B Corporations. Journal of Business Ethics, 1–24.

  • Yin, R. K. (1994). Case study research: Design and methods (2nd ed.). Thousand Oaks, CA: Sage.

    Google Scholar 

  • Zadek, S., Evans, R., & Pruzan, P. (1997). Building corporate accountability. London: Routledge.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management, School of Economics, Finance and Management, University of Bristol, Priory Road Complex, Bristol, BS8 1TN, UK

    Malu Villela

  2. FGV-EAESP and Universidade Positivo, Rua Prof. Pedro Viriato Parigot de Souza, 5300 - Cidade Industrial, Curitiba, PR, 81280-330, Brazil

    Sergio Bulgacov

  3. Department of Management, School of Economics, Finance and Management, University of Bristol, Priory Road Complex, Bristol, BS8 1TN, UK

    Glenn Morgan

Authors
  1. Malu Villela
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sergio Bulgacov
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Glenn Morgan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Malu Villela.

Ethics declarations

Conflict of interest

All authors declare that they have no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Villela, M., Bulgacov, S. & Morgan, G. B Corp Certification and Its Impact on Organizations Over Time. J Bus Ethics 170, 343–357 (2021). https://doi.org/10.1007/s10551-019-04372-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-019-04372-9

Keywords

Search

Navigation