Entrepreneurial Responsibility
In the move fast and break things era of startups, the focus is often exclusively on growth, speed, and disruption. However, as new ventures increasingly impact society—from AI ethics to gig-economy labor—a new question has moved to the forefront: What is an entrepreneur actually responsible for?
Recent research suggests that responsibility isn't just a "nice-to-have" add-on at the end of the journey; it is an active, evolving force that shifts as a startup grows. This is the core of Entrepreneurial Responsibility (ER).
What is Entrepreneurial Responsibility?
Unlike Corporate Social Responsibility (CSR), which often deals with established companies and philanthropy, Entrepreneurial Responsibility is about the ethical choices made during the process of creation.
According to the latest framework by Hägg et al. (2024), ER is characterized by Ethical Dualism. This means entrepreneurs are constantly caught between two types of responsibility:
- Moral Responsibility: The duty to do the right thing based on societal values and personal ethics (e.g., protecting user privacy).
- Functional Responsibility: The duty to ensure the venture survives and thrives (e.g., hitting revenue targets to pay employees).
The challenge for any founder is that these two duties are often in conflict. Choosing one frequently means compromising the other.
The Ethical Dualism in Practice
The Hägg et al. framework highlights how responsibility changes at different stages of the entrepreneurial life cycle:
| Phase | The Responsible Tension | Example |
|---|---|---|
| Ideation | The responsibility to evaluate the potential harm of an idea before it exists. | A founder choosing not to build an addictive feature in an app, even if it increases "engagement." |
| Exploitation | The responsibility toward stakeholders (employees, investors) to make the business viable. | Balancing the need for a "lean" budget with the responsibility to pay a living wage to the first hires. |
| Growth/Scale | The responsibility for systemic impact as the company becomes a market leader. | A delivery startup managing its carbon footprint as it expands from one city to fifty. |
Why "Ethical Dualism" Matters for Founders
Most entrepreneurs fail not because they are "bad people," but because they lose sight of the balance. If you focus only on Moral Responsibility, you may fail to build a sustainable business and eventually help no one. If you focus only on Functional Responsibility, you may build a profitable "zombie" or a harmful product that loses its social license to operate.
Hägg et al. argue that we must view the entrepreneur as a "moral agent" who must consciously navigate these two poles at every turn.
Conclusion
Entrepreneurial Responsibility isn't about being perfect; it’s about being intentional. By acknowledging the "Ethical Dualism" of your role, you can make better decisions that protect both your conscience and your company's bottom line.
Related Theories
"Ethical Dualism" suggests that a founder's role is a constant negotiation between conscience and capital. These frameworks explore the strategic and social facets of that responsibility:
1. Ethics & Systemic Impact
- Entrepreneurship & Democracy: Impact of business on democratic stability.
- Well-Being Frameworks: Responsibility to promote founder and team health.
- Social Entrepreneurship: When moral mission is the primary driver.
2. Stakeholders & Fairness
- Stakeholder Theory: Mapping exactly who a founder is responsible to.
- Contract Theory: Managing functional duties through formal deals.
- Procedural Justice: Maintaining fairness in decision-making processes.
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