BUSINESS ETHICS – THURSDAY CLASS

Members:

1. Phùng Nguyễn Phương Thảo - BABAWE18502

2. Lê Thị Minh Thư – BABAWE18286
3. Nguyễn Thị Như Quỳnh – BABAWE18395
4. Nguyễn Lê Hoàng Long - BAFNIU18223
5. Võ An Khang - BABAWE18508

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TOPIC

The Transformation from Traditional Nonprofit Organizations to Social

Enterprises:

An Institutional Entrepreneurship Perspective

CONTENT:

1. INTRODUCTION.
2. FINDINGS.
3. DISCUSSION.
4. CONCLUSION.

1.INTRODUCTION:

In the modern era, the dependence on funding from organizations and the
government causes many difficulties and great impacts on Traditional nonprofit
organizations (NPOs) and they are facing an increasingly competitive business
environment. From the data and information of ( Laforest 2013) (Hillier 2018),
between 2010/2011 and 2015/2016 joint revenue fell by at least £2.8 billion in real
terms and More than 168,000 social organizations were registered in English and
Wales in 2017, the highest level in almost a decade(Hillier 2018). A new NPO
appears, which is more entrepreneurial, market-oriented business-like often
emerges from these complex activities. This form is described by scholars as
"social enterprises (SEs)". We define a SE as a form of NPO that makes use of
productive activities to generate commercial revenue in support of its social
mission.

Objectives of the organization:

- SEs focus on creating social value, which is in line with NPOs being social
mission-driven organizations.

- Unlike NPOs, SEs have a big difference: focus on generating increasing from
commercial activities while NPOs rely on private donations and government
funding.

How SEs are transformed from traditional NPOs by incorporating

commercial processes within social organizations?

- The transformation processes begin by traditional NPOs engaging the

commercial revenue strategy: building commercial revenue-generating
mechanisms and establishing business partnerships with for-profit organizations.

- The transformation processes lead to the creation of a professionalized

organizational form to respond to the changing environment: institutional
entrepreneurs focus their attention on constructing business-like working processes
and supporting structures within traditional NPOs, and developing capacity for
managing business-like operations.

- Advocating business-oriented strategic direction and maintaining social

organization.

2. FINDINGS:

* Engaging commercial revenue strategies:

- Prior research →The introduction of new practices to exploit fresh opportunities

→The engagement.

- In the corporation of commercial processes with NPOs →Commercial revenue

strategies.

- 2 types of institutional work:

+ Building commercial revenue-generating mechanism

 • Introduce new profit-seeking business practices.

• Engaging in the act of developing a revenue model for existing

products/services offering.
→Engaging both mechanisms →Earn income.

=> However, many traditional NPOs →Develop revenue models by offering goods
and services relating to their charitable practices →Business opportunities.

+ Establishing a business partnership with for-profit organizations.

• Establishing cross-sector alliances between NPOs with for-profit

organizations →NPOs become more capable of organizing and executing
commercial practices.

• Forming and maintaining cross-sector alliances relationship →Opportunities

to generate revenue from collaborating with for-profit organizations.

* Creating A Professinalized Organizational Form:

- Introduce a new practice to obtain commercial income →New organizational

structures and operating procedures →Professionalized Organizational Form.

- 2 types of institutional work:

+ First type: constructing business-like working processes and supporting

structure.

+ Second type: developing capacity for managing business-like operations.

⇒Organizational move of demanding that staff be accountable for their actions and
performance.

* Legitimating Socio-commercial Business Model:

- “Socio-commercial business model”: an operational logic that accommodates

commercial processes within social organizations.

- The essence of organizational transformation is repurposing the use of resources

supplied by the organizations’ stakeholder groups →Establishing legitimacy for
organizational transformation.
- 2 types of institutional work:

+ Advocating the business-oriented strategic directions.

+ Maintaining social organization status.

=>To create a more professional organizational form.

3. DISCUSSION:

* Theoretical Contributions:

The study's research question is how SEs are first and foremost converted from
traditional NPOs through the inclusion of commercial processes within social
organizations?

- They conducted 64 field interviews with institutional contractors from SEs based
in Great Britain to answer that question. We found that three areas of institutional
work include a change from the traditional NPO to SE: (1) commercial revenue
policy, (2) professional organizational form, and (3 ) social-commercial business
model legitimization. We make four significant contributions to the production of
our arguments.

- This study extends existing institutional literature into the SE by showing that
different areas of institutional work are necessary for institutional entrepreneurs to
integrate business practices within social organizations in order to transform
traditional NPOs into SEs. The findings indicate that organizational change starts
with commercial sales approaches to collect additional funds to support the social
goals of the organizations.

- As both activities can not be successfully enforced by the existing organizational

model of the conventional NPOs, institutional entrepreneurs are creating
professionalized organizational models to boost the competitiveness of the
organizations in implementing company revenue strategies.

- Within the socio-commercial context of legal SEs, institutional entrepreneurs

perform two types of institutional study. They are promoting, on the one side, SOs'
strategic path to stakeholders in order to explain the justification for taking the
commercial revenue strategy. They aim to maintain the status of social
organisations, on the other hand, in order to overcome the stakeholders' resistance
to change.

- Second, with a few exceptions, recent SE development studies ignored the

tendency for traditional NPOs to integrate commercial processes and transform
them into SEs. Most researchers concentrate on understanding how SE seeks to
meet the demands of double commercial and social goals following the
establishment of SEs.

- Their results show that institutional enterprises need to be formed to engage in a

number of individual practices in order to incorporate business processes within
social organizations. The formation of SEs is therefore complex. Thus, they
provide an overview of the emergence of SEs from traditional NPOs from our
findings.

- The third contribution concerns the methodology of science. It is clear that most
students studying SEs prefer to use a case or a small number of case studies as
their primary method of analysis. While this methodological approach helps
scholars to gain understanding from the properly contextualized experiences of
those people concerned with the development and activity of SEs in particular, it
also restricts the conclusions that t Our work integrates experiences of institutional
entrepreneurs from many SE sectors and offers a deeper insight into the essence of
this phenomenon.

- Finally, their research contributes to the debate in the area of social

entrepreneurship on business ethics. Specializing in the field of revenue
production, productivity, and training are frequently overemphasized by
researchers. However, this strategy would inevitably divert the focus of the SE
from social tasks. Scholars challenge the ethical position of SEs in that they might
be less attentive to their beneficiaries by concentrating on providers of services
( e.g. clients)...In the process of transformation into SEs, this sort of ethical
concern is particularly important to conventional NPOs. In comparison to other
types of SE that are either for profit or for philanthropic reasons, the goal is to
accomplish their social mission at the center of the conventional NPO.
- This can indirectly explain why some corporate entrepreneurs refuse to regard
their organizations as SEs, despite the fact that their organization's revenue model
fits the SE definition.

* Management Implications:

This research has a valuable effect on managers in traditional NPOs who want to
collect capital from commercial sources

- Three fields in institutional work have been established that allow managers to
incorporate business processes into conventional NPOs

- Six different types (in three separate spheres) of institutional work and practices
that have been established which support each type of institutional job. Therefore,
our research offers managers of conventional NPOs practical guidance about how
their businesses can implement trade processes.

4.CONCLUSION:

- Transformation # change.

- Each transformation model is essential to solve problems as well as optimize

activities to benefit.

- There is no perfect professional organizational form that can suit every

organization.

=> Make sure that your transformation is practical and rational.