Social Enterprises: Mission and Strategies

Social enterprises are mission driven organisations which apply market-based strategies to
achieve a social purpose. The movement includes both non-profits that use business models to
pursue their mission and for-profits whose primary purposes are social. Their aim to
accomplish targets that are social and/or environmental as well as financial is often referred to
as the triple bottom line. Investment in social enterprises is often now referred to as blended
value investment. Many commercial businesses would consider themselves to have social
objectives, but social enterprises are distinctive because their social or environmental purpose
remains central to their operation.
Organisations tend to be called social enterprises based on:
1.
2.
3.
4.

Serving vulnerable populations (economic, social, cultural, etc.);

Sourcing from sustainable sources or vulnerable populations;
Increasing sustainability or decreasing wastes (lean enterprises); and
Generally contributing to community welfare.

This ranges from training and community development organisations and associations (and
cooperatives) to youth support organisations and more traditional businesses with a double or
triple bottom line.
In India, a social enterprise may be a non-profit Non-governmental organization (NGO), often
registered as a Society under Indian Societies Registration Act, 1860, a Trust registered under
various Indian State Trust Acts or a Section 25 Company registered under Indian Companies Act,
1956 (Pearce, 1993) who raise funds through some services (often fund raising events and
community activities) and occasionally products.

Child Rights and You and Youth United, are such examples of social enterprise, who raise funds
through their services, fund raising activities (organizing events, donations and grants) or
sometimes products; to further their social and environmental goals. In the agriculture sector,
International Development Enterprises has helped pull millions of small farmers out of poverty
in India. Another area of social enterprise in India and the developing world is bottom of the
pyramid (BOP) (Wyler, 2009) businesses which was identified and analyzed by CK Prahalad in
Fortune at the Base of the Pyramid. Also, India has around 1-2 million NGOs, including
number of religious organisations, religious trust, like Temples, Mosque and Gurudwara
associations etc., who are not deemed as social enterprises.

Defining Social Entrepreneurship

Many associate social entrepreneurship exclusively with not-for-profit organisations starting
from profit or earned-income ventures. Others use it to describe anyone who starts a not-forprofit organization. Still others use it to refer to business owners who integrate social
responsibility into their operations. The following definition combines an emphasis on discipline
and accountability with the notions of value creation taken from Say, innovation and change
agents from Schumpeter, pursuit of opportunity from Drucker, and resourcefulness from
Stevenson. In brief, this definition can be stated as follows. Social entrepreneurs play the role of
change agents in the social sector, by:

Adopting a mission to create and sustain social value (not just private value),
Recognizing and relentlessly pursuing new opportunities to serve that mission,
Engaging in a process of continuous innovation, adaptation, and learning,
Acting boldly without being limited by resources currently in hand, and
Exhibiting a heightened sense of accountability to the constituencies served and for the
outcomes created.

This is clearly an idealized definition. Social sector leaders will exemplify these characteristics
in different ways and to different degrees. The closer a person gets to satisfying all these
conditions, the more that person fits the model of a social entrepreneur. Those who are more
innovative in their work and who create more significant improvements will naturally be seen as
more entrepreneurial. The truly Schumpeterian social entrepreneur will significantly reform or
revolutionize their industries.

Characteristics of Social Entrepreneurship

Social entrepreneurship overcomes the gap between the business and the public sectors, as it is
connected to the non-profit or the third sector, as well as to the concept of the social
economy, with emphasis on objectives to serve communities and society rather than generating
a companys profit. The main characteristics of social entrepreneurship, outlined in diverse
theoretical resources, are:

Explicitly formulated mission to create and sustain social value and to benefit the

communities;
High degree of economic risk and autonomy in activities related to producing goods

and/or selling services;

Pursuit of new opportunities and exploration of hidden resources to serve that mission;
Quest for sustainable models, based on well elaborated feasibility study;
Ongoing engagement in innovation, adaptation and learning;
Decision-making power not based on capital ownership;
Participatory and collaborative nature involving various stakeholders;
Limited distribution of profit and minimum amount of paid work;
Change opportunities lying in the hands of every individual.

Boundaries of Social Entrepreneurship

In defining social entrepreneurship, it is also important to establish boundaries and provide

examples of activities that may be highly meritorious but do not fit our definition. Failing to
identify boundaries would leave the term social entrepreneurship so wide open as to be
essentially meaningless. There are two primarily forms of socially valuable activity that we
believe need to be distinguished from social entrepreneurship.
The first type of social venture is social service provision. In this type, a courageous and
committed individual identifies an unfortunate stable equilibrium. These types of social service
ventures never break out of their limited frame: Their impact remains constrained, their service
area stays confined to a local population, and their scope is determined by whatever resources
they are able to attract. These ventures are inherently vulnerable, which may mean disruption or
loss of service to the populations they serve. Millions of such organisations exist around the
world well intended, noble in purpose, and frequently exemplary in execution but they
should not be confused with social entrepreneurship.
A second class of social venture is social activism. In this type, the motivator of the activity is the
same - an unfortunate and stable equilibrium. And several aspects of the actors characteristics
are the same inspiration, creativity, and fortitude. What is different is the nature of the actors
action orientation. Instead of taking direct action, as the social entrepreneur would, the social
activist attempts to create change through indirect action, by influencing others governments,
NGOs, consumers, workers, etc. to take action. Social activists may or may not create ventures
or organisations to advance the changes they seek. Successful activism can yield substantial
improvements to existing systems and even result in a new equilibrium, but the strategic nature
of the action is distinct in its emphasis on influence rather than on direct action.

Motivations Building for Social Entrepreneurship

Understanding the adoption of social entrepreneurship by non-profit oganisations is important
for several reasons. First, social entrepreneurship while successful for some organisations has the
potential to be equally damaging for other organisations. It is significant to know what conditions
and motivations of non-profit organisations lead to successful entrepreneurial ventures. Second,
present public policy needs to evolve with the conditions of the sector. Third, institutional actors
can better understand their roles in the process of emerging social entrepreneurship ventures.
Educating organisations and institutional actors can create an environment that encourages social
entrepreneurship appropriately instead of as a panacea for the entire sector.
The framework developed in this social entrepreneurship is built upon the literature foundations
of non-profit organizational research and organizational theory research. Nonprofit
organizational research is segmented into two areas, general nonprofit theory and social
entrepreneurship theory. General nonprofit theory has forth various propositions to explain the
rationale for why there is a nonprofit sector. One theory is that nonprofits provide services that
are left unfilled by for profits due to lack of profit motive (Hansmann, 1987; DiMaggio &
Anheier 1990). Another theory is that nonprofits provide collective goods, enabling government
to minimize its intervention into enterprise (DiMaggio & Anheier 1990; Bryce, 2000). And still
others site personality inclinations based on individuals who seek altruism, or religious purpose
in their lives (DiMaggio & Anheier 1990). These theoretical theses collectively illustrate that
organisations in the nonprofit sector operate under different environmental conditions than for
profit and government sector organisations.

On the contrary, social entrepreneurship literature provides less theoretical research, taking a
more pragmatic research direction. Pragmatic literature geared at practicing managers discusses
social entrepreneurship from the perspective of financial management, and strategic planning
(Brinckerhoff, 1996; Dees, Emerson, & Economy, 2001; McLaughlin, 1998). The general
concept is that by diversifying revenue streams, employing financial management tools, and
tapping unused resources charitable organisations can buffer themselves from economic decline
and be more prepared to take advantage of fleeting opportunities (Brinckerhoff, 1996; Dees,
Emerson, & Economy, 2001; McLaughlin, 1998).

Profitable Sectors of Social Entrepreneurship

Education: Sector with a track record of profit: The Education sector has shown a marked degree
of financial stability and growth potential. There are two key elements. First, the sector
represents the highest number of profit-making enterprises among others, and also has one of the
lowest numbers of loss-making entities. Second, the observation says that there is a good growth
potential; as education enterprises are breaking even which means the number of profit-making
enterprises in this sector could increase in the coming years.
Health: Sector with large growth potential: Although the sector currently produces a very small
number of profit-making entities, it has the lowest percentage of loss-making enterprises. Most
importantly, the health sector has the largest segment of break-even businesses. If/when these
enterprises begin to turn a profit, the health sector could sustain a multitude of successful, profitmaking enterprises.
Rural Development: Sector to watch out for future growth: Despite the fact that the largest
number of social enterprises are in this field, it is the biggest loss-making sector at the moment.

However, Rural Development demonstrated the largest revenue increases last year, so there could
be more surprises in store.
Our country does not have a homogeneous people, so the impact largely remains optional. With
the current economic climate, it is very likely that social needs will increase and, frequently, the
number of people committed to addressing them will increase. Definition of social
entrepreneurship has changed over time. From corporate philanthropy to non-profit and now ofsustainability, Social Entrepreneurship has evolved and will keep evolving with time and
changes of the world.