Social Entrepreneurship

- Doing business with the goal of giving back to the community

- Making a positive impact to the community
- Prioritizes the well-being of the community while still being able to generate income that can
sustain the business.
- The process of creating value by establishing a venture which could be profit, non-profit,
non-governmental organization, or even a public institution.
- Accentuates on finding solutions to deeply rooted social problems that causes human misery
(Margolis and Walsh, 2003)
- The emphasis can be directly targeted to social value creation or indirectly through the
creation of economic value that later translates into social value or environmental value.
Social Entrepreneurs:
- People with the vision of a social change in an innovative manner with available scarce
resources
- Change-agents for social issues
- They are emission-oriented with a vision to make sustainable change that creates social value.
- Are innovative, and in their relentless pursuit of change, apply creative ideas. As
entrepreneurs, they are risk-taker but at the same time cautious with their financial approach.
- Engaged in making a difference in the social sector through a series of institutional practices.
Catalysts of Social Entrepreneurship:
- Rising living standards, more people with better education, and increased awareness which is
brought by better access to information, individuals, and society have started to pay more
attention to social challenges.
- Increasing number of empathetic people with more ability to contribute to society and the
environment.
- Apparent inability of the social agencies of governments to take care of expanding social
problems due to the lack of adequate funding, ineffective management, and unaligned
objectives.
- More people with business acumen and management knowledge are figuring out hat many
social challenges should be better served with commercial practices and by applying business
strategies and methods.

Socia Enterprise
- A business with primarily social objectives whose surpluses are principally reinvested for that
purpose in the business or in the community, rather than being driven by the need to
maximize profit for shareholders and owners. (DTI, 2002, p7)
- The creation of a social value that is produced in collaboration with people and organizations
from the civil society who are engaged in social innovation that usually implies an economic
activity (Hulgard, 2008, p4)
4 elements: DOUBLE BOTTOM LINE IMPERATIVES (Defourny and Nyssens, 2008)
1. A continuous activity producing goods and/or selling services.
 2. A high degree of autonomy
3. A significant level of economic risks
4. A minimum amount of paid work

Social Entrepreneurship Dimensions

1. Limited profit distribution
2. It explicitly aims to benefit society.
3. It is an initiative launched by a group of citizens.
4. Decision-making power is not based on capital ownership.
5. Participatory nature, which involves various parties affected by the activity.

SOCIAL ENTREPRENEURSHIP
 A social enterprise that trades for a social purpose.
 Sometimes described as ‘not for profit’ as any profit/surplus generated is used to further the social
objectives of the business.
 The only difference between commercial and social entrepreneurship: attribution of the
bottom line.

Traditional Business – one bottom line

Social Enterprise – up to 4 bottom lines:
1. Social: improving the quality of life, access to services, and so on for communities
2. Environmental: minimizing the enterprise’s own negative impacts, making improvements
3. Economic: increasing employment rates, income levels, business start-ups, etc.
4. Financial: generating income and profits to be invested in the other bottom lines

3 Characteristics of Social Entrepreneurship

1. Social entrepreneurship meets needs unmet by commercial markets and, usually, the government
2. Social entrepreneurship is motivated by social benefit
3. Successful social entrepreneurship usually works with, not against, markets

Other definitions of Social Entrepreneurship

 SocEnts have social and/or environmental objectives
 SocEnts are businesses looking for financial independence
 SocEnts cannot be the subsidiary oof a public sector body
 SocEnts are driven by values – both in their mission and business practices

 Opportunities for social entrepreneurs look like threats and tragedies to others
The Process of Social Entrepreneurship
1. Find an opportunity
2. Develop a business concept
3. Figure out what success means and how to measure it
4. Acquire the right resources
5. Launch and grow
6. Attain goals

Myths about SocEnt:

1. Social Entrepreneurs are anti-business
2. The difference between commercial and social entrepreneurship is greed
3. Social entrepreneurs are nonprofit managers
4. Social entrepreneurs are born, not made
5. Social entrepreneurs are misfits
6. Social entrepreneurs usually fail
7. Social entrepreneurs love risk

Forces that may start a SocEnt:

Internal:
1. Entrepreneurial personality traits
2. Preparation to exploit
a. Education
b. Experience
External:
1. Availability of financial and nonfinancial resources
2. Environmental Factors
a. Social climate conducive to social entrepreneurship
b. Political climate that facilitates social innovation
3. Perturbation of the environment
a. Political change
b. Cultural change
c. Economic change

Social-entrepreneurial orientation
1. Community awareness and social concern
2. Entrepreneurial orientation
a. Innate characteristics
b. Education and experience
 c. Innovativeness
d. Achievement orientation
e. Independence
f. Sense of control over identity
g. Low risk aversion
h. Tolerance for ambiguity

Basic Characteristics of a Social Entrepreneur

1. Leadership - Social entrepreneurs identify problems and take action against unjust social issues. They
address social circumstances that exclude or marginalize a portion of humanity. Instead of complaining,
they take the lead and search for alternative solutions.
2. Optimism - These people follow a vision for change and are convinced that they will achieve their
aims, even when many other people doubt them. They have a strong sense of self-efficacy and a belief
that they have the control to change their circumstances.
3. Grit - This is a combination of perseverance, passion, and hard work – it is the drive to push forward,
learn every day, and proceed in your business. Social entrepreneurs are not likely to be satisfied with
finding a solution. Instead, they aim for a positive change beyond the pure business model.
4. Resilience in the face of adversities, obstacles, challenges, and failures - When things get difficult,
they take responsibility and search for gaps of opportunity. Many obstacles can get in the way of social
entrepreneurs: financial resources, budgeting, lack of donations, and inadequate organizational structures,
to name a few. But each of these challenges provides an opportunity to deal with adversity.
- Opportunity gaps
5. Creativity and innovation - For social entrepreneurs, the intuition to find a business opportunity is not
enough; they must also develop creative solutions to address social problems. This is often done by
thinking outside the box. Developing new business ideas and rearranging processes leads to value
creation for both, the enterprise, and the constituents.
6. Empathy - These people can motivate other people through creating narratives, communicating shared
goals, and involving others through participation. Social entrepreneurs must be effective public speakers.
For inspiration to take root, they must be able to effectively communicate their vision.
7. Emotional and social intelligence - Social entrepreneurs need excellent skills in connecting (with)
people and building networks. Without strong ties, they will not succeed in creating leverage and scale for
their business ideas.

COOPERATIVE and SOCIAL ENTREPRENEURSHIP

- Members of cooperatives are owners
- Board of Directors are members
- The cooperative structure is the ideal ‘corporate’ structure to realize social objectives
o Ownership
o Management
o Allocation of the bottom line
Grameen – Danon Foods
- Based in Bangladesh
- Grameen Bank – Prof. Muhammad Yunus
- Dahone Foods – France
Objectives:
1. To bring health through nutrition at very affordable price for all Bangladeshi children
2. To improve living conditions of the poorest of the community by involving them in all stages of
the business model (supply, production, sales), creating jobs and improving local competencies
3. To preserve non-renewable resources as much as possible
4. To be profitable to ensure economic sustainability
Main Challenges for the Future:
1. Money
2. Competition
3. Demonstrating effectiveness
4. Technology
5. Trust
6. Human resources
7. Public-sector relations
Main Opportunities for the Future:
1. Demographic shifts
2. New philanthropy
3. Heightened awareness of sector
4. Increased social welfare spending through sector
a. Entitlement expansion
b. Welfare reform

DICHOTOMIC APPROACH – ang simplest explanation nito is that dalawa ang yung kino-consider
niyang factors, hence the ‘di-’ na prefix, which means ‘two’. Ang dalawang factors na kino-consider niya
lang is the social and commercial aspect of the social enterprise.
1. Social Objective Priority : social > commercial
2. Social-Business Balance : social = commercial
3. Exclusive Social Objective : social only

ENTREPRENEURSHIP APPROACH
This approach considers the element of social entrepreneurship when defining social enterprises.
“Solving social problems by entrepreneurial means”
Social Entrepreneurship – an innovative organizing process to identify and find opportunities to solve
social problems and create social values.
The application of entrepreneurship in solving social problems created the concept of social
entrepreneurship.

In addition to the social and commercial elements, research holds that connotations of social
entrepreneurship include:
• Innovation
• Opportunity identification
• Problem-solving ability
• Resource utilization ability
• Risk-taking
As well as other measures to prevent social missions from drifting;
• Governance structure
• Profit distribution models
• Identity recognition