Chapter 11: Social Entrepreneurship

BPME1013/2020_Shahrina Othman
Learning Objectives
At the end of this chapter, students will be able to:

1. Define social entrepreneurship, social enterprise

and social entrepreneur and understand the
concept of active citizens.
2. Understand the role of social entrepreneur.
3. Understand the scope of social enterprise.
4. Explain the background of social development
goals.
5. Discuss the social entrepreneurship process.
6. Understanding the social return of investment.
 There are 2 million social economy enterprises in Europe, representing 10% of
all businesses in the EU. More than 11 million people – about 6% of the EU’s
employees – work for social economy enterprises. They have different legal
forms and various objectives ranging from agriculture and banking to provision of
employment and sheltered workshops.

Social economy enterprises contribute to the EU’s employment, social cohesion,

regional and rural development, environmental protection, consumer protection,
agricultural, third countries development, and social security policies.

Malaysia launches Social Outcome Fund (RM3m (£537,000)) to grow its social
economy (Adam Pillsbury, 9th May 2017).

In 2016, Malaysia was home to only 200 recognized social enterprises compared with
over 12,000 in Thailand, but Malaysia’s prime minister Najib Razak launched a National
Social Enterprise Blueprint that aims to support the sector to grow to 1,000 social
enterprises by 2018.
Definitions
Social Entrepreneurship
refers to the process of
identifying opportunities,
stimulating innovations, and
exploiting and allocating
resources, is adopted by
individuals and organizations
through social enterprises to
address social needs,
create social value, and
achieve sustainable social
benefits in communities or
wider regions.
Wu, Y.J., Wu, T., & Sharpe, J.A. (2020)
Social Entrepreneur
are actors who exhibit
innovative, efficient, and risk-
taking behaviours to identify
opportunities, create new
ventures, adopt business
processes, and use scarce
resources to become and
remain sustainable in their
efforts to deliver social value.
Social Enterprise
organizations for profit, non-
profit, or hybrid serve as
vehicles for social
engagement aiming to create
and sustain social value by
conducting a set of activities,
which are intended to exploit
resources and business and
innovative approaches.
The Role of Social Entrepreneur

1. To address or alleviate a social

problem with an innovative
business approach.
2. To take advantage of critical
resources.
3. To bring together people from
diverse backgrounds who can work
together to create a solution.
4. To develop relationships for social
transformation and lead them to
share the credit with other actors.
5. To sustain the achievement of a
social mission above or in parity
with financial success.
Types of Social Entrepreneurs
 The Scope of Social Enterprise
• As in the definition of social enterprises, social business models are
diverse and contemplate several aspects, among which are the
problems to be addressed, the context in which they wish to be carried
out, and the profile of the social entrepreneur. These aspects define not
only the wealth generation scheme, but also the relationship that exists
between the generation of social and economic value, and the scheme
that the entrepreneur and the company will use to achieve the desired
impact.
• Regardless of the type of social enterprise, all of them comply with at
least two characteristics. The first is that they offer a good or service
that must satisfy a market need, which traditionally competes with other
similar products that may or may not come from social enterprises.
Second, regardless of the good or service, the model must contemplate
the generation of enough wealth to maintain the operation of the
organization and deliver the social value proposition to the beneficiary,
community, or group.
 Social Business Model for
Social Enterprise
• Social enterprises also benefit a larger community;
therefore , the business model includes additional
elements, that visualizes the way in which the
social enterprise generates a social value in an
excluded population or that has been violated in
some of its rights and generates a flow of profits
guaranteeing its operation and increasing the
impact it generates on society.
• The social business canvas model is one of the
approach use to visualize business model. The
model focuses on placing on canvas all the
elements that make up a business model: value
proposition, customer segment, channels,
relationships, keyactivities, keyresources,
partners, revenues, and costs.
Social Business Canvas Model
 Social Development for Sustainable Development

• The creation of sustainable development

goals (SDGs) modifies the paradigm of the
division of activities about the generation of
social value, visualizing all sectors relevant
in achieving the goals that each one of
them integrates.
• This systemic vision provides a framework
for the development of social innovations
by different sectors of society, as well as https://www.un.org/development/desa/dspd/2030agenda-sdgs.html

the opportunity to generate alliances that

satisfy the capacity of society to meet their
own long-term needs.
Websites:
• UN Sustainable Development Goals
https://sustainabledevelopment.un.org/
• The Post-2015 Business Engagement Architecture
https://www.globalreporting.org/information/policy/Pa
ges/Business-Engagement-Architecture.aspx

Videos:
• UN Sustainable Development Goals
https://www.youtube.com/watch?v=0XTBYMfZyr
• How social enterprises can help us meet the SDGs
https://www.youtube.com/watch?v=gj1ABEjkuVM
• Ways to Unleash the Power of the SDGs for Social
Innovators
https://www.youtube.com/watch?v=1uZzfCFIN0o
• The SDGs and Business
https://www.youtube.com/watch?v=ivm191V50KE
Social Entrepreneurship Process
 The 5 stages at Grameen Bank
http://www.grameen.com/

This Photo by Unknown Author

is licensed under CC BY-SA-NC
The 5 stages at Kamonohashi Project
http://www.kamonohashi-project.net/english/
• SROI is an organizational method of accounting for value creation,
primarily social or environmental value. SROI enables organizations
to measure how much change is being created by tracking relevant
social, environmental, and economic outcomes.

• SROI forecast analysis is implemented before the program or activity

itself has been implemented. It is used as a predictive tool to
determine the amount of social value that might be created given the
outcomes sought.

• SROI evaluative analysis is implemented after a program or activity

has already had time to affect change. In other words, there are
already outcomes to be measured.
The 7 SROI Principles

1. Involve stakeholders
2. Understand what changes
3. Value the things that matter
4. Only include what is material
5. Do not over-claim
6. Be transparent
7. Verify the results
Social Return of Investment Methodology
• Stage 1: Establishing scope and identifying key stakeholders - Frame
the limits of your analysis well. This demands clear understanding and
identification of the stakeholders involved, as well as their roles throughout
the process.

• Stage 2: Mapping outcomes - Focus on visualizing how change is

created or will be created. Generally, this is done by creating a “Theory of
Change” model, demonstrating the interrelationship of inputs, outputs and
outcomes for the activity or activities to be analysed.
 Social Return of Investment Methodology

• Stage 3: Evidencing outcomes and giving them value - Identify

the
outcome indicators which will be used as change metrics and determining
the duration of those outcomes (are they long-lasting? short-term?). It also
demands collecting those data and assigning values to the outcomes.
• Stage 4: Establishing impact - Impact must be attributed to the activity
executed -- in other words the organization must demonstrate that
the
change that occurred (looking at the outcomes evidence) would not have
resulted anyway (without the activity or program).
• Stage 5: Calculating the SROI - A stage which requires unique
SROI
analysis expertise, at this point an organization determines the ratio which
communicates how much value is generated per investment unit (e.g. per
dollar).
• Stage 6: Reporting, using, and embedding - Stakeholders need to
be
informed about the results of the analysis. That way, they can
Conclusion
• Social enterprises aim to develop social and
economic value simultaneously. Social
enterprises must generate strategies, tactics, and
operational models that allow the generation of
this double value, affecting the understanding and
definition of their business model.
• The business model of a social enterprise must
consider not only the proposal, creation, delivery,
and capture of social and economic value but
also the integration of social and economic value.
• The SDGs increase the capacity of the social
entrepreneurs that make up society to act from
different sectors and in different ways around a
common agenda, which is the main characteristic
pursued by social innovations and the way in
which they achieve the transformation of society
sustainably.
Conclusion …
• Social entrepreneurship as a process
that catalyzes social change and
addresses important social needs in a
way that is not dominated by direct
financial benefits for the
entrepreneurs.
• The SROI framework helps measure
change in ways that are relevant to
the people or organizations that
experience or contribute to it.