NUEVA ECIJA UNIVERSITY OF SCIENCE AND TECHNOLOGY

GABALDON CAMPUS, Gabaldon, Nueva Ecija, Philippines

2021
CORE COURSE 10
Social Entrepreneurship

Compiled by:
NIÑA RICA S. LEGASPI

NEUST Property: NOT FOR SALE AND

REPRODUCTION
CORE COURSE 10 (SOCIAL ENTREPRENEURSHIP)
 SOCIAL ENTREPRENEURSHIP

COURSE OVERVIEW

Course Description:

Principles of social entrepreneurship and the social aspect of establishing microenterprise.

Class: 3.0 hours lecture every week

Credit: 3 units

Pre-requisite: None

Course Requirement:

Attendance 10%
Recitation/Activities 15%
Quizzes 25%
Term Examination 25%
Project/Case Study/Business
25%
Plan
TOTAL 100%

Course Objectives:

After completing the course, the learner should be able to:

1. Discuss and understand concept of farming as a business and the entrepreneurial

roles of farmers
2. Identify factors related to the choice of business enterprise and social
entrepreneurship
3. Familiarize with the steps and processes in establishing an enterprise
4. Prepare a business plan, case study, and feasibility study related to social
entrepreneurship
5. Validate concept on agricultural and social entrepreneurship through interaction
with entrepreneurs
6. Acquisition of a working knowledge of the concepts, opportunities and challenges
of social entrepreneurship
7. Demonstration of the role of social entrepreneurship in creating innovative
responses to critical social needs (e.g., hunger, poverty, inner city education, global
warming, etc.).
8. Engagement in a collaborative learning process to develop a better understanding
of the context and domain of social entrepreneurship.
9. Personal and professional preparation for meaningful employment by reflecting
on the issues of social entrepreneurship
 CHAPTER I INTODUCTORY CONCEPTS

SOCIAL ENTREPRENEURSHIP

Social entrepreneurship has become a fashionable construct in recent years. Often

evidenced by success stories across the world in diverse fields (health, education, finance,
culture, etc.), the concept has become increasingly evident in commercial markets,
academic discourses and policy making. Besides transforming extant markets, social
entrepreneurship has also been instrumental in creating new markets and market niches,
with initiatives such as fair trade and microfinance. The latter field has regularly been
cited as a flagship of social entrepreneurship, especially since the Nobel Peace Prize was
awarded to the Grameen Bank and its founder Mohammad Yunus.

Establishing an agreed definition of social entrepreneurship has not proved to be

an easy task. The main difficulty is that social entrepreneurship is a contextual and
contingent set of activities, subject to interpretive analysis and measurement. This is
unusual in the field of entrepreneurship, but less so in areas of the social sciences more
concerned with societal issues. The literature on the subject uses three different terms
which, at first sight, might seem linked in a very simple way: “social entrepreneurship”
is the dynamic process through which specific types of individuals deserving the name
of “social entrepreneurs” create and develop organizations that may be defined as “social
enterprises” (Defourny & Nyssens 2008b; Mair & Marti 2006). However, the use of one
term or the other is often linked to a different focus and/or understanding of the
phenomenon depending on context and perspective. In this chapter, “social
entrepreneurship” will be used to designate a broader range of socially innovative
initiatives in a spectrum from for-profit to voluntary organizations. “Social enterprises”
are a subset of such activities in which commercial models are used as the vehicle by
which social objects are achieved.

According to Mort et al. (2003: 76), social entrepreneurship is “a multidimensional

construct involving the expression of entrepreneurially virtuous behaviour to achieve the
social mission, a coherent unity of purpose and action in the face of moral complexity,
the ability to recognise social value-creating opportunities and key decision-making
characteristics of innovativeness, proactiveness and risk-taking”. Mair and Marti (2004:3)
view social entrepreneurship as “a process consisting of the innovative use and
combination of resources to explore and exploit opportunities that aims at catalysing
social change by catering to basic human needs in a sustainable manner”. Austin et al.
(2006b: 2) define social entrepreneurship as an “innovative, social value creating activity
that can occur within or across the non-profit, business, or government sectors”. Finally,
Zahra et al. (2009: 5) suggest that social entrepreneurship encompasses “activities and
processes undertaken to discover, define, and exploit opportunities in order to enhance
social wealth by creating new ventures or managing existing organizations in an
innovative manner”.

Building Blocks of Social Entrepreneurship

Sociality, Innovation, and Market Orientation…

The first dimension, “sociality”, refers to the social and environmental focus of
social entrepreneurship. Such a focus may be identified through the creation of public
goods and positive externalities. Six fields or domains are natural settings for social
entrepreneurship initiatives: (1) welfare and health services (such as the Aravind eye
hospitals in India); (2) education and training (such as the Committee to Democratize
Information Technology in Brazil); (3) economic development (such as work integration
social enterprises, or WISEs, in Europe); (4) disaster relief and international4 aid (such as
Keystone’s innovative “Farmer Voice” project); (5) social justice and political change
(including race and gender empowerment, such as SEWA, the Self-Employed Women’s
Association in Pakistan); (6) and environmental planning and management (such as the
Marine Stewardship Council).

Second, innovation is interesting to note that its approach in social

entrepreneurship has much in common with models found in commercial
entrepreneurship. For example, in some cases, Schumpeter’s idea of “creative
destruction” processes that change systems and realign markets around new economic
equilibriums can also be found in social entrepreneurship initiatives, either through
incremental changes at the micro-level or through disruptive interventions at the systems
level.

Third, market orientation is manifest in a variety of ways in social entrepreneurship,

most obviously in the for-profit social enterprise form, which operates in commercial
markets and generates profits to reinvest in their social mission (Alter 2006). Defourny
(2001) and other authors from the EMES network suggest that social enterprises, unlike
traditional NGOs and nonprofits, have a continuous production of goods and/or services
and take economic risks – bankruptcy is always a possible outcome. A minimum amount
of paid work, i.e., a workforce not only composed of volunteers, is also suggested as an
element differentiating social enterprise. Nicholls and Cho (2006) identify other features
that extend the market orientation dimension, notably a clear focus on continual
performance improvement and metrics, increased accountability, and a relentless focus
on achieving their mission that permeates the entire organizational culture.

Definition of a Social Enterprise

Currently, there is no official definition of a social enterprise in the Philippines.

However, Dr. Marie Lisa M. Dacanay, the founder of ISEA and a core member of
developing the social enterprise legislation bill, has coined a new term: a Social Enterprise
with the Poor as the Primary Stakeholder (SEPPS). According to Dacadnay, a SEPPS is
defined as:

“a social-mission driven wealth creating organization that has a double or triple

bottom line (social, financial, environmental), explicitly has as a principle
objective poverty reduction/alleviation or improving the quality of life of specific
segments of the poor, and has a distributive enterprise philosophy.”

Examples of Social Enterprises

An overview of the leading social enterprises in the Philippines that were selected
based on the following three criteria; an organization that (a) serves the mission to solve
a social issue in the country, (b) has established a sustainable business model28, and (c)
is recognized by domestic opinion leaders to be innovative and potentially leading to
larger systematic change.

Table 1: Examples of social enterprises in the Philippines

Year
Legal
Name establish Description Website
Format
ed
A high-end bag producer that
Private sources its materials through http://www.akaba.co
Akaba 2013
company cooperatives in order to /
enhance farmers’ income.
 An art, crafts and fabric
http://www.anthillfa
company, that sets up
Private bricgallery.com/dow
Anthill 2010 businesses by providing
company n_for_maintenance.ph
communities with ownership
p
and above market prices
A coffee processing and trading
Coffee for
company that pays above-
Peace/ Private http://www.coffeefor
2007 market and guaranteed prices
Peace company peace.com/
to producers. Its NGO arm
Builders
trains farmers.
Good
A social enterprise engaged in
Food Private http://www.goodfoo
2011 community-shared agriculture
Communi company dcommunity.com/
selling organic food boxes.
ty
A shoes-from-scraps producer
Habi Private http://www.habifoot
2012 that aims to improve income
Footwear company wear.com/
for women producers.
A company that manages a
franchise of small stores (sari
Private
Hapinoy 2007 sari) that helps shop owners http://hapinoy.com/
company
serve as a depot and
distributor.
A natural cosmetics producer,
Human Private which employs people from http://humanheartna
2008
Nature company poor communities. Sold around ture.com
16 million products as of 2014.
An ecotourism operator that
Private pays high fees and guaranteed http://route63travel
Route 63 2012
company payment to community s.com/
suppliers.

ENTREPRENEURSHIP: WHAT DOES IT MEAN?

The words entrepreneur, intrapreneur and entrepreneurship have acquired

special significance in the context of economic growth in a rapidly changing socio-
economic and socio-economic climates, particularly in industry both in developed and
developing countries. The experience in the industrialized countries like the United
States of

America, Germany, Japan and the United Kingdom are authoritatively cited in
support of this claim. An in-depth study of the subject thus becomes not only relevant
but also necessary. Entrepreneurial development is a complex phenomenon. Productive
activity undertaken by him and constant endeavor to sustain and improve it are the
outward expression of this process of development of his personality. Such process is
crystallization of social milieu from which he comes, family imbibes, make-up of his
mind, personal attitudes, caste system, educational level parental occupation, and so on.

An entrepreneur is one of the important segments of economic-growth. Basically

he is a person responsible for setting up a business or an enterprise. In fact, he is one who
has the initiative skill for innovation and who looks for high achievements. He is a
catalytic agent of change and works for the good of people. He puts-up new green
projects that creates wealth open up many employment opportunities and leads to the
growth of other sectors.

How can I decide if I have the needed entrepreneurship?

You can assess your business skills by evaluating past jobs, volunteer work, positions
in organizations, and personal traits. Consider your experiences and qualifications under
each of the following headings.

1. Organization and planning: setting and attaining goals, managing time

commitments, and keeping work schedules.
2. Handling money: determining budgets, securing loans, raising funds, keeping
financial records, and completing income tax forms.
3. Selling ideas and products: determining sales quotas and projections; presenting
projects for committees, organizations and/or administrative groups; direct selling
to customers or clientele; handling criticism and rejection.
4. Management: experience in managing all or part of a small business or an agency;
serving as director or major officer of an organization.
5. Working with people: mediating or arbitrating between people with opposing
views when the situation requires; organizing and planning large public events;
assuming officer or executive secretary positions in an organization, and/or
handling complaints for an organization or company; getting along well with most
people.
6. Ability to take risks: taking moderate, calculated risks in varied situations
(situations where the chance of winning was not so small as to be a “gamble” or
so large as to be a “sure thing” situations where there was a reasonable and
challenging chance of success).
 7. Willingness to lead and to work alone: being self-disciplined; handling situations
which were ambiguous and full of uncertainty as to the job requirements; working
calmly and efficiently in the midst of an emergency or crisis.
8. Personality traits: taking the initiative in situations requiring it; accepting and
accomplishing more than your share of the work; willingness to work hard even
if the financial rewards are slow in coming; establishing high standards of
performance and raising them once they are met.
9. Knowledge of products and/or skills in the service offered by your business or in
producing your product: willingness to do self-study, research, and planning to
improve business operations.

Do I need all these skills?

Not all of these experiences are necessary for every business. Few, if any, persons
who start a business are experts at everything. You must be able to assess your strengths
and weaknesses before deciding whether you can take time to learn what you need to
know, or can afford to hire staff or consultants. Expertise is more important in some
businesses than in others. Only you can assess whether you have the right expertise to
succeed.

How can I assess my skills for entrepreneurship?

Make a list of your work experiences, hobbies, interests, and acquired skills. You
are preparing your own “resume” so be careful not to exaggerate or deceive yourself
about things on this list. Be honest and objective. After completing the list, it should be
fairly evident what you can bring to your new business and where your interests lie. Keep
this inventory available and use it when selecting the type of business you will launch.

What kind of Enterprises should I start?

What are the kinds of businesses you might consider starting? Make a list of ones
you could consider, eliminating only those that are obviously not for you. Rule out ones
that require talents and skills you did not list when you prepared your “resume” and
ones in which you have no interest. You may have an original idea for a business that no
one has considered or for a product that doesn’t exist. Try not to limit your thinking only
to this new business or product. To do this you must gather information. Evaluate your
idea against other possibilities.
What are some possible sources of information?

You might try one or more of the following sources for information:

 Telephone yellow pages can indicate what is and is not available in your area.
 Public libraries have a number of business directories, including the Thomas
 Register.
 Entrepreneurial magazines often have articles about new business ideas that have
 Potential.
 Ask friends, co-workers, neighbors, and relatives if they have product or service
needs that is not currently being met.

What are some strategies for making a decision?

After considering business ideas on your list, narrow down the possibilities. To
complete the selection process, talk with people in the same or a similar business who are
located outside of the area where you are considering locating your business. Let them
know that you would value their advice. Usually they will be flattered and willing to
share their experience and advice. Another strategy involves checking success and failure
reports. You can find this type of information at most public libraries. Ask for
professional advice. There are four professionals you should get to know early in your
business planning: an attorney, accountant, marketing consultant, and banker. Share
your plans with them. They may point out factors you hadn’t yet considered. Share your
thoughts with your family, friends, and associates. They may come up with
considerations that may discourage you from one idea, or they may offer real
encouragement for pursuing another idea. Having the support and involvement of those
close to you can be an added benefit. Make the final decision yourself. If you can answer,
“yes” to all four of the following questions, you are ready to make a commitment:

1. Does the business satisfy most of my wants and desires? (Business selection
criteria)
2. Do I have, or can I develop (or hire), the attributes and capabilities that are
required for success in this business?
3. Is the current condition and outlook for this type of business favorable?
4. Am I, and is my family, willing to accept the risks that will accompany my starting
the proposed business?
 5. If the answer to question four is “no,” you might want to consider your proposed
business ownership more carefully before proceeding. If you can answer, “yes” to
two of the first three, you may need to rely on your instincts. Remember, there is
probably no perfect business. You will undoubtedly be making compromises no
matter what you choose.

Entrepreneur

The entrepreneur as a person brings in overall change through, innovation- for the
maximum social good. Human values remain sacred and inspire him to serve society. He
has firm belief in social betterment and he carries out this responsibility with conviction.
In this process, he accelerates personal, economic as well as human- development.

The entrepreneur is a visionary and an integrated man with outstanding

leadership qualities. With a desire to excel, he gives top priority to Research and
Development. . He always works for the well-being of the society. More importantly
entrepreneurial activities encompass all fields / sectors and foster a spirit of enterprise for
the welfare of mankind.

Urges of an Entrepreneur

An urge to exercise powers over things and objects persists among all human
beings. The urge may vary in degree from person to person. This urge is an intrinsic
quality of an entrepreneur. Sociologists consider him as a sensitive energizer in the
modernization of societies.

The entrepreneur is a critical factor in the socio-economic change. He is the key

person who envisages new opportunities, new techniques, new lines of production, new
products and coordinates all other activities. The true entrepreneur is one who is
endowed with more than average capacities in the task of organizing and coordinating
the various other factors of production. He should be a pioneer, a captain of industry.
The supply of such entrepreneurship is however quite limited and enterprise in general
consists of several grades of organizational skill and capability. The more efficient
entrepreneurs receive a surplus reward over and above the managerial wages and this
sum constitutes true profit ascribable to superior talent.

New Concept of Entrepreneur

 The term “entrepreneur” has been defined as one who detects and evaluates a new
situation in his environment and directs the making of such adjustments in the economic
systems, as he deems necessary. He conceives of an industrial enterprise for the purpose,
displays considerable initiative, grit and determination in bringing his project to fruition,
and in this process, performs one or more of the following:

1. Perceives opportunities for profitable investments

2. Explores the prospects of starting such a manufacturing enterprise
3. Obtains necessary industrial licenses
4. Arranges initial capital
5. Provides personal guarantees to the financial institutions
6. Promises to meet the shortfalls in the capital; and Co
7. Supplies technical know-how.

Entrepreneurship may be defined in various ways, but the four key elements involved in
it are:

1. Innovation
2. Risk-taking
3. Vision, and
4. Organizing skill.

All the four elements are inter-related and form a continuous process in business.
Entrepreneurial vision encompasses the relentless pursuit for operational excellence,
innovative technology and being responsive to the needs of the market place.

Importance of an Entrepreneur

The Entrepreneur is one of the most important inputs in the economic

development of a country or of regions within the country. Entrepreneurial competence
makes all the difference in the rate of economic growth. In India, State and private
entrepreneurship co-exist. The small-scale industrial sector and business are left
completely to private entrepreneurs. It is in this context that an increasingly important
role has been assigned to the identification and promotion of entrepreneurs for this
sector.

The need for a broad-based entrepreneurial class in India arises from the need to
speed up the process of activating the factors of production, leading to a higher rate of
economic growth, dispersal of economic activities, development of backward and tribal
areas, creation of employment opportunities, improvement in the standard of living of
the weaker sections of the society and involvement of all sections of the society in the
process of growth.

Several factors go into the making of an entrepreneur. Individuals who initiate,

establish, maintain and expand new enterprises constitute the entrepreneurial class. The
social-political and economic conditions, the availability of industrial technology and
know-how, state of art and culture of business and trading, existence of markets for
products and services and the incentives and facilities available for starting an industry
or business, all have a bearing on the growth of entrepreneurship. A conducive
environment is created through the policies and interest of the government in economic
and industrial development.

Entrepreneurial Behaviors

 Grasping opportunity
 Taking initiative
 Solving problems creatively
 Managing autonomously
 Taking responsibility for, and ownership of things
 Seeing things through
 Networking effectively to manage interdependence
 Putting things together creatively
 Using judgment to take calculated risk.

Entrepreneurial Attributes

 Achievement orientation and ambition

 Self-confidence and self esteem
 Perseverance
 High internal locus of control (autonomy)
 Action orientation
 Preference for learning by doing
 Hard-working
 Determination
 Creativity
Entrepreneurial Skills

 Creative problem-solving
 Persuading
 Negotiating
 Selling
 Proposing
 Holistically managing business/projects/situations
 Strategic thinking
 Initiative decision-making under certainty
 Networking

FARMING AS A BUSINESS

Farming has for long been perceived as a tradition or a way of life in some
societies. On the one hand, such a perception still has an inherent business aspect to it
because there is a practice of exchange of goods and services in the form of bartering
where no actual monetary value or a profit is attached to the goods, but a transaction to
serve the immediate needs or sustain the livelihood of a farmer.

For example, a goat can be exchanged for a bag of maize meal. In contemporary
business transactions, goods and services are exchanged for money, and a “gain” in the
form of a profit is expected. On that, a goat is now sold for money and in turn, the money
is used to buy a bag of maize. This is a business practice based on the principles of
investment and return.

Agriculture continues to change especially in terms of markets and technologies,

thus, influencing farm business operations to respond accordingly. This is where
business mindsets and principles are applied to make the best use of the factors of
production: land, labor, capital and entrepreneurship.

A farmer is an entrepreneur (business person) with abilities and efforts to manage

and control land, labor and capital such that they all complement his/her business vision.
The land is the primary farm resource on which production takes place; it includes plants,
water and soil, amongst others. The labor is the workforce or farmworkers, and the
capital represents farm assets such as buildings, machinery, tractors, etc., including
money.
 Record-keeping is a farm management guiding tool that enables a farmer to
evaluate the performance of the whole farm business and how each enterprise (e.g. cattle,
goat, sheep, and crop) is contributing to the overall progress of the farm. A farmer can
monitor and determine whether the farm activities are going according to his/her plans.

Records allow a farmer to plan and budget based on own real data. Thus, future
financial decisions are always guided and made based on the real information of the farm.
On the other hand, a clear and useful farm record-keeping system can create an
opportunity for a farmer to receive support services such as finance and advice.

Farming is a business because farmers invest in the land, labor and capital, and
market their products in monetary value, and expect an optimal income. Good farm
business is one that does not compromise the productive potential of the land, the labour
is skilled and motivated, and capital investment is sufficient and appropriate. A good
business decision should be made from records and not memory.

Characteristics that differentiates from industrial, manufacturing and social enterprise

ROLE OF FARMERS AS ENTREPRENEURS

Managerial Role of Farmer Entrepreneurs

Management is getting things done through people. It is both a science and art of
mobilizing resources to accomplish the firm's goals and objectives. Like other
businessmen, the agricultural entrepreneur, who in most cases is also the manager, must
fully understand and practice the basic functions of management as applied to different
operational facets of the enterprise.

Functions of Management

A. Planning – is looking in advance what to do, how to do it when to do it, and who
will do it? It involves setting goals and objectives of the film, designing ways or strategies
to achieve them, and allotting budget to accomplish them Other important concerns of
enterprise planning include preparation of production, marketing, human resource and
financial management plans of the firm Each component of the overall plan has its
respective time horizon which may be classified as either short term, medium or long
term in nature.

B. Organizing – is the identification, grouping, and assigning of activities to an

individual, department, division, or branch of the firm. The output of organizing
normally includes the firm's organizational structure and the corresponding job
description (duties and responsibilities) and job specification qualification requirements)
for each employee position.

C. Staffing – is the process of recruiting, screening, hiring, and placement of

personnel within the firm. Aside from choosing and placing the right person in the right
position, staffing is also involved in designing the employee compensation package and
fringe benefits, as well as formulating employee movement and promotion schemes of
the firm.

D. Directing – is the art of lending motivating and communicating with subordinates

for them to fully contribute to the attainment of the firm's goals and objectives. Selecting
and implementing the most suited style of leadership and appropriate employee
motivation scheme is the ultimate motive of directing Aside from these, the manager
should effectively communicate with his subordinates (either written or oral) in order for
them to fully understand their respective roles and functions, their incentives and
rewards, the company's rules and regulations, policies, procedures, and other related
notices or memoranda so they can be properly guided on what and what not to do
towards the accomplishment of the organizational goals and objectives An agricultural
entrepreneur, to be an effective manager, must therefore learn how to properly send the
right message to his subordinates and assess feedbacks to determine whether the message
sent is properly complied with Since the communication process involves the sender,
message, channel and the receiver, it is therefore the role of the manager to make the
overall communication process as effective as possible to prevent any miscommunication
among his employees.

E. Controlling – is the process of comparing the actual versus the expected activities
and accomplishments of the firm. It involves the determination of deviations from the
original plan and setting corrective mechanisms to address them. Planning and
controlling are inseparable functions of management. They are considered the "Siamese
twin" of management since the effectiveness of any plan can be achieved only if proper
control is practiced by the management the other hand, controlling can be done only if
there is a plan (“what should be happening”) so the current situation ("what is actually
happening") can be compared. The plan itself serves as benchmark to determine if they
are any deviations from the expectation. Since the deviation from the expectation is a
"problem", management should, therefore, find ways to correct or control them so as not
to create another problem.

F. Problem Solving and Decision Making – In any problem solving and decision-
making endeavor, it is always practical to start analyzing the current business situation
using the case facts on hand. From this, the manager can examine the chronology of facts
and events that can help him understand how and why the problem scenario of the firm
happened. As a business analyst, the manager must list down all issues and concerns that
bother hum and from which, he conducts problem analysis and make necessary actions
to address them. Problem Analysis is the process of determining the deviations between
"what is actually happening" versus "what is supposed to happen" It starts with the
process of scrutinizing the body of information to have an in-depth understanding of
what is going on. As a general rule, the manager should be able to distinguish between a
"problem" and the "cause". While a problem is always a deviation between a specific
"should and a specific actual", a cause, on the other hand, is an event or combination of
events that for all practical purposes, exactly produces all the facts in the specific
description of the problem. The cause of a problem is always a "change that has taken
place through some distinctive feature, mechanism, or condition producing a new or
unwanted effect. The most likely cause of a problem is the one that exactly explains all
the facts in the specification of the problem. Decision-making is the process of setting
alternative courses of action and selecting the best choice to address the problem. A
decision is always a choice among various ways of getting a particular thing done or end
accomplished at the least cost and with the least disadvantage. In addressing the current
problem of a firm, a manager can make three types of possible decisions, namely: (1)
interim action, (2) adaptive action, and (3) corrective action. Interim action is a stopgap
action made by the management while still searching for the cause of the problem (i.e.
slowing down production). Adaptive action, on the other hand, is also temporary
decisions or remedies adopted by the management once the cause of the problem is
already known (i.e. putting sealant on leaking pipes). The most effective decision to
address the problem is called, corrective action, since its main intention is to eliminate
the cause of the problem (i.e. replacement of leaking pipes). Decision-making does not
stop, however, by simply taking actions to address the present problems of the firm. An
agribusiness manager, to be rational, must also anticipate what might go wrong if a
decision is implemented. The anticipated deviation between "what ought to happen" vs
"what could go wrong" once a decision is made is called potential problem; hence setting
fallback mechanisms is still a decision-making function of a manager. The fallback
solution should be both preventive and contingent in nature. While preventive action
aims to prevent the occurrence of a potential problem, contingent action on the other
hand aims to minimize its effects if it does happen.