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Understanding Social Enterprises: Business Models and Principles, Lecture notes of Business Ethics

An in-depth analysis of social enterprises, their business models, and principles. It covers various social business models such as entrepreneur support, market intermediary, cooperative model, and service subsidization. The document also discusses the principles that motivate social enterprises, including their focus on solving social issues, no dividends for investors, and profit retention. It highlights the importance of gender and environmental sensitivity, fair treatment of employees, and the various types of social enterprises.

Typology: Lecture notes

2022/2023

Uploaded on 04/22/2024

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Lesson 10: Social Enterprises
Profit organizations
- focus is to sell products and perform sevices so
that in return they will be able to generate profit
Social enterprise
- a business model with the objective of
solving social issues and problems while
providing goods and services
- profit is not a priority
- basic nature of existence is to solve social
issues by providing goods and services
- primary purpose is to provide a solution,
support, or help with regard to existing social
problems or social issues
- focus is to solve social issues in the society
while generating profit so that in return they will
be able to finance organizations, provide support
to particular issues or services, and provide or
perform their operations when it comes to their
selected organizations, or to provide help and
support to particular social issue or problem that
they would like to solve in the society
- in return, they will be able to finance the
services, support, and other operations that theu
would like to have in order for them to achieve
their mission and vision
- profit is important to proceed to their
services/operations
- they have to have income so that in return
income or profit generated could be use to
perfeom their social cause in the society
- social cause: action or operation to perform in
the society
Social business models
- a framework that fulfills the mission and
maintains the financial stability of the
enterprise
- framework: plans, outlines, exact operation,
actions that we do
- we have to know how do we generate profit so
that in return profit generated will be used for
other purposes, especially if we are a social
enterprise
Kim Alter's 9 Social Business Models
1. Entrepreneur Support
- aims to provide support services to
entrepreneurs
- training, consultation, financial help, seminar
- happynoy?
2. Market intermediary
- guide struggling entrepreneurs to gain
markets to sell their products
- if u r a reseller, ur model is already market
intermediary
- helping particular communities in selling or
entering the market when it comes to selling
theur products in the industry
3. Employment Model
- help clients look for jobs and provide
training respectively
- job hunt, online platform, it will notify u on the
available jobs in the industry where in u r
qualified
- target support are the people who are highly
discriminated, handicapped, not qualified for a
particular position
- deaf, blind
4. Fee-for-service
- charge clients with a certain fee for services
- online consultation, museum
5. Low-income client
- charge fees but concentrate on low income
customers
- customer that are on a budget
- dr. Laxamana, eye specialist, the patients are
the ppl who ar eon a low income budget, voice
out in the public that his clients are financially
challenged
6. Cooperative model
- charge membership fees and provide
services to members
- membership will entail u to certain benefits
- services that r given to all the members of the
cooperative
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Lesson 10: Social Enterprises

Profit organizations

  • focus is to sell products and perform sevices so that in return they will be able to generate profit

Social enterprise

**- a business model with the objective of solving social issues and problems while providing goods and services

  • profit is not a priority**
  • basic nature of existence is to solve social issues by providing goods and services
  • primary purpose is to provide a solution, support, or help with regard to existing social problems or social issues
  • focus is to solve social issues in the society while generating profit so that in return they will be able to finance organizations, provide support to particular issues or services, and provide or perform their operations when it comes to their selected organizations, or to provide help and support to particular social issue or problem that they would like to solve in the society
  • in return, they will be able to finance the services, support, and other operations that theu would like to have in order for them to achieve their mission and vision
  • profit is important to proceed to their services/operations
  • they have to have income so that in return income or profit generated could be use to perfeom their social cause in the society
  • social cause: action or operation to perform in the society

Social business models

- a framework that fulfills the mission and maintains the financial stability of the enterprise

  • framework: plans, outlines, exact operation, actions that we do
  • we have to know how do we generate profit so that in return profit generated will be used for other purposes, especially if we are a social enterprise

Kim Alter's 9 Social Business Models

**1. Entrepreneur Support

  • aims to provide support services to entrepreneurs**
  • training, consultation, financial help, seminar
  • happynoy? **2. Market intermediary
  • guide struggling entrepreneurs to gain markets to sell their products**
  • if u r a reseller, ur model is already market intermediary
  • helping particular communities in selling or entering the market when it comes to selling theur products in the industry **3. Employment Model
  • help clients look for jobs and provide training respectively**
  • job hunt, online platform, it will notify u on the available jobs in the industry where in u r qualified
  • target support are the people who are highly discriminated, handicapped, not qualified for a particular position
  • deaf, blind **4. Fee-for-service
  • charge clients with a certain fee for services**
  • online consultation, museum **5. Low-income client
  • charge fees but concentrate on low income customers**
  • customer that are on a budget
  • dr. Laxamana, eye specialist, the patients are the ppl who ar eon a low income budget, voice out in the public that his clients are financially challenged **6. Cooperative model
  • charge membership fees and provide services to members**
  • membership will entail u to certain benefits
  • services that r given to all the members of the cooperative
  • training on how to become more competent
  • it also serves as a credit union, request for loans, request for certain benefits and other benefits entitled of u **7. Market linkage model
  • facilitate the producer-customer relationship**
  • lazada, shopee, zalora, platforms that serve as brokers
  • act as brokers, ppl who are in the middle, ppl who serve as a channel between the producer and the customer so that they will be able to engage their selves in to the business **8. Service subsidization
  • sell products and services to subsidize social service**
  • provide financial help or support to certain services
  • profit generated will be used to subsidize social services
  • outreach activities, sole proprietor business **9. Organizational support
  • sell products and services to fund an organization who runs a particular program**
  • somehow similar to service subsidization
  • the profit generated from the product or service will be used to subsidize particular programs or other organizations
  • other organizations to support and fund based on the products and services that i have performed

Note: the following models could be integrated

  • social enterprises could shift from one model to another base on their need and operations. It is dependent on the mission that they would like to achieve in the social enterprise
  • could be changed from time to time dependent on the cause that u r going to perform in the society

Methods of income generation

**1. Fee for service

  • charge fees to cliens/customers for service**
    • once a client requests for a service, consultation, training, u r to charge them for that particular fee for service so that in return u will be able to generate profit 2. Products - commission-based income generation
    • sell products so that in return profit generated will be used for ur social enterprise 3. Membership dues - operate through collection of membership fees
    • clients who are willing and interested to be members of ur organization 4. Tangible assets - generate income through rentals to non profit organizations
    • something that can be used, seen
    • assets that u own, something that should be visible to the eyes of the ppl/ other customers
    • rentals, car, free space, house available for leasing
    • can be used by clients or customers
    • social enterprise who are trying to generate additional profit or income 5. Intangible assets - leverage intangible assets like reputation, relationships, or brand
    • assets that r not seen by the human eye
    • reputation, image that u have as a social enterprise
    • if u request support from existing businesses, from that support or funding, help, we r to include their brand on our posters
    • at times we need to be funded by the other organizations bc these organizations r already established in the society
    • the brand itself is already a reputation that u will be bringing just by wearing a particular shirt with a brand on it
    • u r allowing other ppl to make use of ur brand to bring with them ur reputation in the society so that in return u r helping them leverage their image in the society

Lesson 11: social enterprises

Principles of social enterprise

**1. Motivated by a cause

  • do not aim for profit; solve a problem/issue**
  • we have to look for existing problems in the community into the society in the economy wherein our existence could provide a solution to it because the first principle is probably one of the most important of all we cannot exist unless there is an issue that we would like to solve **2. Financial and economic sustainability in the long term
  • financially stable program**
  • financially and economically sustainable; our social enterprise has to exist because problems arise from time to time and the gravity of problems differ from the one generation to another **3. No dividend for investors
  • no increase on investments**
  • when we say dividends somehow these are return of investments additional financial returns that we could give to our investors for giving us help and support in our organization
  • we have to make sure that those investments that they give to us are willingly given to us by the investors **4. Profit generated remain
  • profits stay at the enterprise**
  • one of the many ways of for or one of the many ways for social enterprises to at least proceed with their purpose proceed with their service is through the financial capability that they have in order for their programs and activities to push through so that means if we are just wasting our money for some activities that are not even relevant to our program to our own enterprise that means we just have to make sure that profit generated will stick to our own organization **5. Sensitive to gender and environment issues
  • no discrimination; eco-friendly products and services**
  • when we are making use of eco-friendly products as much as possible the pricing is

actually cheap it's actually budget friendly so that means we are making use of our resources so that in return we could be able to at least generate enough profit without being liable on certain costs of production

  • there are societal issues that exist here in the philippines that are gender specific it might be troublesome for the male for the female for the lgbtq community or for the other members of the society and there are issues in the environment that we have to at least be mindful of when it comes to providing solution to it
  • so that means as much as possible if we are to provide a solution to an existing problem we have to identify that these cause of concerns these problems are sensitive to particular gender including the economy the environment or certain communities or organizations **6. Employees are treated fairly
  • fair wages and benefits and better working conditions**
  • most of the social enterprises exist based on no employment purpose. when i see no employment purpose their members are members because of voluntary purpose or voluntary reasons that means my existence as a social enterprise at times i do not depend on employment rather i depend on the same people who have the same cause that i would like to serve in the society **7. Joy in every task
  • work for a cause**
  • whatever we do whether we are paid or not whether we are struggling or not so long as we are performing our mission in the social enterprise that means we are working for a particular course we are working for a particular mission and that means we are taught here on the last principle which is we are putting so much joy in every task that we do

Types of social enterprise

**1. Community enterprises

  • serve particular communities
  • example: taclob** - environmentally friendly and weather-resistant backpacks
  • i am a social enterprise i have particular societies communities or groups to support
  • you exist because your existence is to help other communities specifically your partner communities

**2. Social firms

  • help people renew their support networks and assist them in finding jobs
  • example: freelance blend** - fbp 161: empowering pwds through digital skills training
  • organization or a group, program
  • act as your mediocres your brokers the people in the middle who will help you manage your concerns but who will serve as your as the people whom you can consult and these are the people who can assist you under certain concerns **3. Cooperatives
  • formed, organized and controlled by members
  • example: ACDI multipurpose cooperative**
  • there are perks there are benefits that will be enjoyed once you are a member **4. Credit unions
  • provide savings and loan facilities to the inhabitants of the community
  • example: banks** : metrobank, rcbc, landbank, citibank, bdo, union bank, bpi, allied bank, ucpb, pnb, dbp, china bank **5. Community development finance institutions
  • provide loans and other investment facilities for small businesses and startup social enterprises
  • example: banks** : metrobank, rcbc, landbank, citibank, bdo, union bank, bpi, allied bank, ucpb, pnb, dbp, china bank **6. Development trust
  • seek to build a community through the management of property like housing
  • example: seed/seed your future, pagibig**
  • it focuses on housing anything that requires development anything that requires buildings or infrastructures **7. Public sector spin-outs
  • deliver basic services previously provided by the government** - example: e-government
    • these are the social enterprises that are partly owned by the government at the same time these are partner networks partner enterprises or partner organization of the government so that in return other than the government itself giving services to the people there are other enterprises or organizations that could help them better their services
    • there are a lot of documents there are a lot of applications that we can already settle not in the government itself rather on other ways or means 8. Trading arms of charities - formed to assist the parent organization in social services - examples: rags2riches (mother organization), gk enchanted farm, hapinoy, human nature
    • these are already their subsidiaries these are subsidiaries that will have r2r to at least better their services and better their programs in aiming to solve a particular cause of concern in the society 9. Fair trade organization - ensure that small producers get fair price - example: grassroots
    • usually these are from the peasants or the farmers or the people in remote areas. these are social enterprises that help the low-income people or the other people in the market to at least sell their products in the market