Chapter 15 - Social entrepreneurship. Chapter 15 looks at social entrepreneurship. Today, many students are looking at business ideas that may not only earn a profit, but also address a social concern. | SOCIAL ENTREPRENEURSHIP Chapter 15 1 “Self-interest, rightly understood” -Alexis de Tocqueville Classical entrepreneurs seek financial gain Social entrepreneurs start with a social mission 2 Social entrepreneurship is rising Opportunities created through increased emphasis on social purpose & sustainability ‘Wicked problems” with complex solutions and multiple stakeholders are increasing New organizations must consider a wider variety of goals/outcomes. TRENDS 3 Social Entrepreneurship is defined by processes & people Process-based definitions focus on actions: Social value creation Opportunity recognition Opportunity exploitation Resource mobilization Entrepreneur-centric definitions focus on people who: Find innovative solutions to society’s problems Are society’s change agents Exhibit a heightened sense of accountability DEFINITION 4 There are 4 main types of social ventures Traditional Social Consequence Enterprising Non-profits Social Purpose Hybrid Social Mission Economic Impact Economic Social TYPES 5 Traditional ventures seek economic outcomes Mission and outcomes are economic Social outcomes are byproducts As noted, however, the absence of negative social outcomes is rapidly becoming a ‘hygiene factor’ among consumers. Traditional 6 Social Consequence balance profits & mission Economic mission which is often subservient to social goals. Society first, profits always Social Purpose 7 Social purpose start with a social mission Seeks a profitable means of addressing a social issue Profits are a requirement to achieving social outcomes Profits first, society always Social Consequence 8 Enterprising nonprofits re-invest income into the cause Driven by social mission Retained earnings become working capital, not profits. Doesn’t rely on donations Society first, cash flow always Enterprising Non-profits 9 Hybrids pursue social and economic goals equally The internet/media increases customer awareness of global operations Customers are demanding companies consider social issues Supply chains are under particularly scrutiny Hybrid venture perform a careful balancing act Becoming certified as a B Corporation is one way to signal commitment to the market. Hybrid 10 Choose a venture type suited for your resources & strategy Each type has unique requirements It is useful to imagine outcomes in all 4 cases Venture type impacts the Timmons Model () Shifting types is possible, but not simple Consider assumptions critical to determining the best venture type & confirm/deny these rapidly TYPES 11 Measuring impact is critical Social problems are complex Reducing consequences may not solve the problem Solutions are multi-pronged Measures must related objectives and tied to activities Consider defining objectives in terms of a Triple Bottom Line (TBL) Economic Environmental Social 12 MEASURES Recap Until government & business meet social needs, there will be demand for social entrepreneurs Many have created systemic change Imitative and innovative entrepreneurs can be equally rewarded 13
