Social Entrepreneurship -

Social entrepreneurship is all about recognizing the social problems and achieving a social
change by employing entrepreneurial principles, processes and operations. It is all about
making a research to completely define a particular social problem and then organizing, creating
and managing a social venture to attain the desired change. The change may or may not include a
thorough elimination of a social problem. It may be a lifetime process focusing on the
improvement of the existing circumstances.

A social entrepreneur is a person who pursues novel applications that have the potential to solve
community-based problems. These individuals are willing to take on the risk and effort to create
positive changes in society through their initiatives. Social entrepreneurs may believe that this
practice is a way to connect you to your life's purpose, help others find theirs, and make a
difference in the world.

Types of Social Entrepreneurship -

 There are various types of social entrepreneurship. Here we’ll look into four types of social
entrepreneurship:
 1. Community Social Entrepreneur: Community social entrepreneurs are small-scale change
makers. A community social entrepreneur can be young individual teaching underprivileged kids
in a town, a group of college students running sanitation and plantation drives in a city or one or
more organizations working for social good.

Community social entrepreneurs work in specific geographies and communities but for a wide
variety of causes. From hygiene and sanitation to employment and food distribution services and
from plantation and environment safety to providing employment to deserving ones, they do it
all.
These types of social entrepreneurs are the ones who bring about instant change and strive for
more.

2. Non-Profit Social Entrepreneur: These social entrepreneurs believe in reinvesting profits.

So, along with the initial cost, they put their profits into the cause.
For instance, if the initial project was to educate kids from underprivileged backgrounds and they
received more funds than required to facilitate the initiative, they will utilize the surplus to
educate women and expand their portfolio.
People who have a business-oriented mindset prefer this type of social entrepreneurship. Not just
that, but companies and organizations chose non-profit social entrepreneurship to utilize their
social goodwill for the cause.

3. Transformational Social Entrepreneur: These entrepreneurs focus on establishing a

business that can solve a purpose that government initiatives and other businesses can’t.
Transformational social entrepreneurship is more like running an organization where you hire
skilled people, think of newer ways to stay relevant in the market, follow the guidelines issued
by governments and do everything that an enterprise does.
The larger picture for transformational social entrepreneurs includes a collaborative set-up of
multiple businesses serving society collectively and individually.
Some examples of transformational social entrepreneurship are CRY (Child Rights and You),
Goonj and JusTea.

4. Global Social Entrepreneur: Global social entrepreneurs think on a larger scale and focus on
changes required at the global level. They put social responsibility above profits.
They usually collaborate with organizations working on similar causes in specific
regions/countries. One of the most relevant examples of this type of social entrepreneurship is
the Make A Wish Foundation. Headquartered in Phoenix, Arizona, it actively works in around
50 countries, fulfilling the wishes of critically ill children.

Business models for social enterprises –

1. Product Model

Product model is definitely the easiest category to understand. Organizations using a product
model sell (or rent) standardized products/services to a customer segment, getting paid in
return. Those customers might be individuals (B2C) or other businesses (B2B): still, the logic
doesn’t change.
2. Solution Model

To a certain extent, a Solution model might look similar to the previous model we discussed,
even though it radically differs from it. As a matter of fact, the company still sells directly to the
end customers. However, it does it by offering tailored products/services, instead of
standardized ones.

3. Matchmaking Model

In a matchmaking model, the firm typically connects complementary groups: customers and
sellers. In other words, it helps matching demand and supply. When adopting this model, the
value provided by the firm is therefore transactional.

Facilitating such matches is not always easy. As a matter of fact, the company has to create a
physical or digital platform (namely, the “marketplace“) and to make sure that both segments
meet there at the same time. Then, it usually capitalizes on the value created by charging a fee on
each transaction.

4. Multi-sided Model

Last but not least: the multi-sided model. In a multi-sided model, the enterprise provides diverse
value propositions (products, services, solutions) to different segments. Even though the value
created for one target is different from the other one, one of the two sides usually receives
additional benefits from the other group’s transactions.

Multi-sided model can take various forms in social entrepreneurship.

ISO 26000 : 2010 -
ISO 26000:2010 provides guidance rather than requirements, so it cannot be certified to unlike
some other well-known ISO standards. Instead, it helps clarify what social responsibility is, helps
businesses and organizations translate principles into effective actions and shares best practices
relating to social responsibility, globally. It is aimed at all types of organizations regardless of their
activity, size or location.
The standard was launched in 2010 following five years of negotiations between many different
stakeholders across the world. Representatives from government, NGOs, industry, consumer groups
and labour organizations around the world were involved in its development, which means it
represents an international consensus.

Support for implementing ISO 26000 -

ISO 26000 was developed by a working group of about 500 experts. At the publication of this
standard, the working group was disbanded.

Document(s) to support the implementation of ISO 26000:

 Communication Protocol – Describes appropriate wordings organizations can use to

communicate about their use of ISO 26000 
 ISO 26000 basic training materials in the form of
a PowerPoint and training protocol guidance.
 Documents that link ISO 26000 with the OECD Guidelines for Multinational Enterprises
and the United Nations 2030 Agenda (Sustainable Development Goals)

Challenges faced by Social Enterprises –

Lack of funding  support

Funding is by far the biggest challenge for the social enterprises. Literature identified that most
social enterprises failed to secure start-up capital. Given that most of the social entrepreneurs are
individual entities, it is therefore difficult to accumulate enough funds at the beginning. Over
time some ventures flourish but a vast majority of the ventures struggle to maintain its existence
and sustainability due to capital or ongoing sources of income. The traditional support
mechanisms, such as – bank or financial institutions that foster the development of social
enterprises is quite scarce as compared to commercial enterprises. This is quite evident in most
of the countries as the extant literature suggests and apparent from the discussion with the
participants.
Ability to scale-up 

Social enterprises primarily spring up from the social inequity or the market failure when the
traditional systems are not enough to meet the needs. The primary problem-involving majority of
the social enterprises is that, it lacks the ability to scale-up the enterprise to the next level. Most
of the time it starts with immense enthusiasm or a social outlook to address any specific problem.
However, the lack of support and structured polices affect the social enterprise to scale it up to
the next level.

Duality of mission

Social entrepreneurs aspire to create social value by addressing various social problems existing
in the societies. This aspiration, however, is not deviant from economic objective as it can also
aim to earn profit through the innovative business model. The traditional conceptualisation
however, associates the social enterprises largely with the notion of philanthropy or non-profit
venture. The duality of this identity has remained a big problem for social enterprises. Some
social entrepreneurs earn money through their ventures considering this as a more ethical way to
do business, some do this with the mission to create a social impact and some try to create social
value and develop a sustainable business model. Thus, it is apparent that the identity of social
enterprises has become more ambiguous due to the diverse identity.

Lack of proper business strategy

Another major challenge that most social enterprises face is the lack of proper business strategy
leading to non-competitive products. Given the focus largely remains on social needs that to
some extent impede the development of the actual product or service offered by the social
enterprise. This also hinders the development of a proper business strategy to compete in the
market as many of the social enterprises compete with commercial enterprises.