Vol.:(0123456789) 1 3 Journal of Business Ethics https://doi.org/10.1007/s10551-018-3853-y ORIGINAL PAPER Two Birds with One Stone: The Quest for Addressing Both Business Goals and Social Needs with Innovation Marina Candi 1  · Monia Melia 2  · Maria Colurcio 2 Received: 16 March 2017 / Accepted: 2 February 2018 © Springer Science+Business Media B.V., part of Springer Nature 2018 Abstract This research examines whether and how frms can meet both business goals and social needs through their innovation activi- ties. We examine antecedents and consequences of innovation that addresses social needs, in addition to business goals, using data collected from European for-proft frms. We fnd that innovation including social intent is more likely under conditions of high market turbulence, which represents an important form of demand-driven threats. Meanwhile, we fnd no relation- ship with competitive intensity, a form of pressure driven threats. Together, these fndings suggest that customers and other stakeholders are more likely to drive frms to focus on the social dimension than competitors. The fndings also indicate that innovation including social intent is positively related with customer acceptance, which supports the notion that innovation can meet both business goals and social needs. This relationship is partially mediated by perceived market turbulence, which highlights the importance of customers and their demands for social responsibility. This research advances both theory and practice as we add to existing discourses on innovation by providing a broader than common perspective that includes the social dimension as a potential part of innovation conducted to meet business goals. Furthermore, we shed light on how and when frms are likely to include intended social outcomes in their innovation (with resultant improvement in performance) and when they are less likely to do so, which highlights a potential untapped opportunity. Keywords Innovation including social intent · External threats · Customer acceptance Introduction Increasing global competition, coupled with grow- ing demands for ethical business practices that take into account multiple stakeholders (Freeman 1984) including society as a whole (Baltazar Herrera 2015), calls for com- bining the pursuit of business competitiveness with consid- eration of social needs (Porter and Kramer 2011). In fact, the dichotomy between for-proft business concerned only with shareholder value and non-proft endeavors focused on multiple stakeholders is blurring and there are “changing views of the “proper” places for economic and social value creation” (Wilson and Post 2013, p. 718). Along these lines, the European Commission emphasizes the social aspects of corporate behavior and their embeddedness within economic ecosystems, highlighting the need for voluntary integration of social and environmental concerns into business opera- tions (Vilanova et al. 2009). Frankenberger et al. (2014) highlight a shift from frm- centric business models toward more open business mod- els that take into account multiple stakeholder concerns. However, although existing research provides hints about a potential social dimension of business models, there is a scarcity of research that addresses this issue. We aim to bridge this gap by examining the potential social dimension of frms’ innovation activities. Our positioning is aligned with a business ethics perspective, according to which busi- nesses strive to meet both business goals and social needs through their innovation activities. To capture this thinking, we introduce the term innovation including social intent. * Marina Candi marina@ru.is Monia Melia monia.melia@unicz.it Maria Colurcio mariacolurcio@unicz.it 1 Center for Research on Innovation and Entrepreneurship, Reykjavik University, Menntavegur 1, 101 Reykjavík, Iceland 2 University of Catanzaro “Magna Graecia”, Viale Europa, Località Germaneto, Catanzaro, Italy