Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
Social enterprise
According to Price (2008, pp 1), “social enterprises are businesses with primary social objectives whose surpluses are principally reinvested for that purpose in business or in the community, rather that being driven by the need to maximize profit for shareholders and owners.”
Social enterprise is mainly associated with non-profit organizations, mainly privately owned, which sell goods and services with an aim of yielding a return on investments, with the accumulated profits being ploughed back into the business or they are directed to social purposes.
The profits of these organizations are not maximized to benefit the shareholders. In addition, social enterprises may be developed with an aim of fulfilling needs that are rare, such as providing employment to the less fortunate communities and the disadvantaged individuals. Such groups of people include the disabled, low education candidates, and ex-offenders, among others.
These social enterprises also operate in the less attractive locations for other businesses; such places include locations with low level of education, rural areas, and social housing areas among others.
Social enterprise activities mainly revolve around the developing of countries, and they include recycling, renewable energy, and fair trade. Social enterprise mainly aims at the social challenges of poverty, unemployment, disablement, and underdevelopment, which may occur in some locations and communities; they address such challenges via aid and social work (Kerlin, 2009, pp xiii).
Just like other businesses, social enterprises compete in the market, but the difference comes in where profits made are reinvested in social activities. Social enterprises are also viewed as a response that is innovative and is directed into funding socio activities by the non-profit organization (Nyssens, et al, 2006, pp 4).
According to Kerlin (2006, pp 249), social enterprises are characterized by the continuity of producing goods and services, the aim to benefit the community, low amount paid in terms of work, the initiative to take up risks, and the limitation of profit distribution.
Kerlin (2009, pp 6) further explains these characteristics; first, the continuity of producing and selling of goods and services, with the social enterprises being known for their productivity of goods and services. Secondary, high degree of autonomy involves their creation by a group on individuals who govern these enterprises and they are not controlled by the government; hence, they make their own decision.
Thirdly, the important level of economic risk allows their employees to determine their financial stability by how well they secure sufficient resources. In addition, the minimum amount of work that is paid shows that most of their workers are volunteering while only a small portion of them are fully employed.
Their aim to benefit the community entails serving of specific people in a community and promoting social responsibility.
Moreover, these enterprises represent an initiative formed by a group of people with the same aims and objectives, while the decision-making process involves voting, thus incorporating all ideas of the stakeholders. Lastly, the limited issue of profit distribution requires that profits be distributed on limited basis with the aim of minimizing profit maximization motive.
The impact of social enterprises on the society
Despite social enterprises playing a major role in the employment of the less-advantaged groups, in some countries like the United Kingdom, it lacks full control of this factor. According to survey, only 2% of the United Kingdom population is employed by the social enterprises. However, this could be due to the fact that the social enterprises pay less as compared to the public sectors.
Nevertheless, these enterprises contribute greatly to the marginalized communities and groups of people (Teasdale, 2010 pp. 95). Teasdale (2010, pp 101) further explains that social enterprises can be of various purposes including providing a social space for the marginalized groups of people such that they are able to develop bonds with others who have a similar situation as theirs.
An example of supported housing enterprise is in the United Kingdom whereby the enterprise accommodated those who suffered from bipolar, as one of the victim shared that he feels much safer at the center other than in the community as he is always harassed and he had no close friends.
When he compares his life in the supported housing enterprise, where he is able to make friends and bond, he feels much safer since there are people with similar situation as his who love and understand him. Hence, this enterprise is a perfect example of a social enterprise from the marginalized groups of people.
Individuals are excluded from activities in the community but are included socially in a group. For instance, a person who has relied on the state’s benefit for some time and then he is finally excluded from such benefits, but within a community enterprise, he is not excluded and was involved even in decision making. Such a person will feel less isolated in the community enterprise as compared to his country.
These enterprises have an aim of creating a paying employment, this is evidence in the case of community times a social enterprise in the United Kingdom that provided employment with a salary to the management team of the organization. Social enterprises involve hierarchy decision-making, tending to fill in, in terms of goods and services, where the state has failed.
Therefore, it is evident that a social enterprise is business aimed at changing the society for the common good. An evident case is that of China, where, despite the social entrepreneurs investing in two projects, they never aimed at profit maximizing, but rather, on strategies that focused on the community (Gunn and Durkin, 2010, pp67).
Social enterprises mainly focus on social responsibility; this is evident when they take up the role of rehabilitating offenders, in which they change the lives of such people for the benefit of the society, since the rate of crime will reduce.
According to Myers and Stocks (2010 pp 267), “the social economy encompasses a range of non-profit and social enterprise organizations that put people before profits, by solving social needs rather than amassing financial profits.” This statement makes it clear that social enterprises sacrifice their private aims and objectives and focus on social needs of the communities.
According to newstatesman (2002, pp ii), social enterprises are seen as organizations that are neither answerable to the government nor have an aim of profit maximization.
This article further explains that the social enterprises are mainly concerned with quality of life of the common people, which involves health, conducive environment, and opportunities for a better education among others. This is summarized by newstatesman (2002, pp. vii) by stating that, “social enterprises are hybrids mixing social values and goals with commercial practices.”
This is evident as they prove to be unconstitutional, as their main driving force are social goals, which include provision of education, support to the incapable families and childcare support; however, to attain such goals, they have to participate and compete in the market through selling their goods and services.
An example can be extracted from the furniture resource centre located in Liverpool, which has a workforce of one hundred and fifty repairing and selling furniture. This business not only sells its products, but it creates a common good to the society by providing employment.
The main aim why the social enterprises make profits is to attain independence and avoid relying on government for support. They therefore focus on communities and customers who have been shunned away by the government.
According to Munoz (2010 pp 59), Tommy Hutchinson made an impact on the society and on social entrepreneurs when he implemented an online social network company named i-genius which operates in over 90 countries.
The network is involved in collaboration of social entrepreneurs and non-governmental organizations; this way, the social enterprises can make international impacts through this website. Using internet, social enterprise is deemed to grow, as the internet creates social collaboration.
According to Leadbeater (2007), the social entrepreneurs had no name ten years ago, but today they are recognized due to their effort to accommodate the written off and laid-off people from schools and workplaces. He further explains that this sector has provided over 40milion employment opportunities and 200 million volunteers worldwide.
For instance, in the United Kingdom, the government created a legal entity, which is the community interest company aimed at incorporating those enterprises that direct their profits to social activities. Social Corporation’s main role is to enhance social entrepreneurship, which entails smoothening the way for employment of the deprived groups and promote training and education (Thomas, 2004, pp 251).
It is evident that a social enterprise consists of corporate social responsibility in its operations, in which social responsibility is the commitment of an organization to improve the well-being of a deprived community via business and social practices; such practices may range from health care to education (Kotler and Lee, 2005, pp 3).
Organizations are expected to impact the society and the communities positively with their activities that are directed towards the welfare of the society and further assume responsibility (Sims, 2003 43).
Therefore, corporate social responsibility entitles one to being a steward of the society’s needs; therefore, it is clear that the social enterprises engage fully in social responsibility unlike other organization who engage partially to the community’s responsibilities.
According to Munoz (2010, pp 30), social enterprises are striving to reach out to the international communities; this is evident in regard to the green work organization which has aided countries like Sudan, Ghana and Sierra Leone among others.
This has left a positive effect worldwide and promoted social responsibility. Social entrepreneurship arise from social enterprise; its main aim being the provision of solutions and aid to social problems facing the society (OECD, 2010 pp 188).
Major achievements of social enterprises
According to Kerlin (2009 pp 76), social enterprises in South Asia have been a major aid to the Asian poverty problem which affects approximately 50% of the Asian population. The corrupt government rarely focuses on eradicating poverty; rather, it enhances unequal distribution of resources.
However, social enterprises have focused on poverty eradication and creating jobs in Asia. One example of such an enterprise is the La Frutera Corporation whose operation involves a banana plantation and work with an aim of improving the quality of lives in the Philippines.
The Maireang farmer’s group involves the poor and landless farmers in Thailand and engages them in the processing of rubber, hence increasing the farmers’ income. According to Yunus (2007 pp, 3), poverty around the world is usually uneven, such that, some communities suffer more than others do.
Relying on the government can be frustrating sometimes; this is because it is slow in acting, hence leading to the emergence of non-profit organizations mainly concerned with the welfare of the needy and desperate. However, theses charitable organizations rely on donations and if the donations cease, they are incapable of assisting the needy.
The author adds that in countries like Bangladesh, where social needs are on high demand, when there are no sufficient donors, some social needs are not catered for at all.
According to Kerlin (2007, pp 77), some of the social enterprise like the entrepreneurs school of Asia promotes entrepreneurial education in which students are molded into becoming social entrepreneurs who focus on profit in business, as well as social impact to the needy communities. The mirror foundation in Thailand enhances education to the remote areas.
Challenges faced by the social enterprises
According to Kerlin (2006, pp 259), social enterprises face challenges just like other organizations and businesses. For instance, in the United States, social enterprises challenges have been identified that include, “exclusion of specific groups, the weakening of civil society and lack of government involvement” (Kerlin, 2006, pp 259).
The author further explains that social enterprises may be leading to the rising rate of exclusion of the marginalized groups.
For instance, in the United States, members of the enterprise are required to pay a certain fee, however, some of the poor beneficiaries cannot afford to pay, hence being excluded from receiving any benefits. Secondly, some of the social enterprises generate a lot of profits, thus they concentrate more on their clients rather that on the social responsibility for the communities.
Thirdly, social enterprises are seen as a potential risk to the civil society in that, these organizations might abandon some programs such as the volunteer programs due to the demand in other practices. These enterprises may also stop relying on donations and volunteers, hence diminishing the aims of promoting social capital.
According to Kerlin (2006, pp259), Western Europe faces the challenge of limited number of services that are supported by the enterprises as compared to the United States, hence, these social enterprises end up being underutilized. According to Leadbeater (2007), many social entrepreneurs run small firms hence limiting the spread of such schemes. Some lack managerial skills, which are relevant in the growth of an organization.
According to Ducci et al (2002 pp 79), social enterprises faced a number of challenges in France, among them being the incapability of creating an organization with many stakeholders, the difficulty in engaging in economic activities for the social enterprises, and the impossibility of the social enterprise to acquire capital.
According to Marks and Hunter (N.d, pp 7), social firms aimed at reaching out to the needy such as education and health care face a range of queries when it comes to their stability, continuity and their sustainability due to the uncertainties that face them.
When a non-profit organization seeks to establish itself, it is faced by a major challenge of distraction from the charitable objective, such that the organization may end up operating like a normal business by loosing focus of its main mission, which is charity (Crutchfield and Grant, 2008, pp 74).
The Social economy in relation to social enterprise
Social economy is referred to as a part of the economy that is not public or private; it consists of non-profitable organizations inclusive of volunteers whose activities are aimed at a community benefit, for instance, for the deprived groups in the society.
The social economy mainly consists of three sub-sectors; the voluntary sector which consists of organizations that govern themselves and do not rely on the government, operate without a profit maximization motive and involve in volunteer work mostly. Such organizations may include charities.
The second sector is the community sector in which these organizations depend on voluntary and do not pay for these efforts, as they are small support groups. Third is the social enterprise sector that involves businesses whose objectives are to support the community and not on maximizing profits for its shareholders (Social Economy, 2011).
In Northern Ireland, the social economy employs approximately 48,000 workers, while in the European Union, a total of 10 million people are employed. This sector can be differentiated from other sectors through its non-profit aim, the low wages and the voluntary services, its involvement with the community and its reinvestment in profits as opposed to sharing it out to the stakeholders.
Nevertheless, the social sector outweighs other organizations through the following advantages;
- they are normally situated near their customers, and hence respond fast to their clients needs.
- They have the capability of reaching out to the deprived groups in the society.
- Due to their charitable work, they attract many charitable organization and volunteers who come to their aid in terms of money and labor.
- Since their existence, they have contributed to social capital in the country (Social Economy, 2011).
The main aim of the social economy enterprises is to provide a quality life to individuals and the economy at large; hence, they aim at promoting mutuality, equal opportunities, worth employment opportunities, co-operation, and social benefits to the communities among others.
In addition, these social economy enterprises operate under the influence of social aims, which vary from training, job creation, and provision of services among others.
Secondly, they are involved in the production of goods and services in the competing market, hence benefiting the communities through the acquired profits. Therefore, social economy consists of the charitable sector, non-profit sector, and the voluntary sector (Uluorta, 2009, pp14).
Critics associated with social enterprises
According to newstatesman (2002, pp iii), “social enterprises are seen as a government device to open avenues for local authorities to contract out services such a childcare, leisure and transport.”
However, social enterprises are a savior to many as they take up the “left overs” from the government, such as, the laid off employees, neglected citizens and the marginalized communities, thus remodeling them to being better off. According to Leadbeater (2007), social entrepreneurship is seen as a fake idea and that has developed to its capability to adapt and due to its ambiguous nature.
Recommendations
Social enterprises that are successful should aim at promoting productivity and competition in the operating environment. They should also be able to create wealth socially and promote co-operation and cohesiveness in the community. Social enterprise should work towards developing a new way of operating in terms of delivering of goods and services.
Nevertheless, social entrepreneurs should ensure that their enterprise is leaving a positive impact on the community by enhancing their mode of living. A social enterprise should be aimed at developing the potential of the deprived groups, either by providing employment to them or training them into managing their own businesses.
In addition, an effective social enterprise should be competitive in order to enable its survival in the market by attracting several customers. Finally, social enterprises should enhance delivery of public services by collaborating with the government in areas such as health sector, recycling, adoption, and transportation among others; therefore, social entrepreneurship should be promoted in all countries.
Conclusion
Social enterprises are key players to social responsibility worldwide; therefore, this sector should be supported by the government with no strings attached. This way, they can continue enjoying their independence and at the same time have enough funds to support the less fortunate in society. Social enterprises lead to social entrepreneurship, which aims at providing innovative solutions to unsolved problems in a society.
Hence, it is more concerned in alleviating problems other than maximizing profits. Therefore, with social entrepreneurship in place, deprived communities and marginalized groups are well catered for and have a place to call home.
The social enterprise topic seems like a narrow subject, but it has really challenged me due to its depth and content, hence leaving me thirsting for more knowledge. It is however, an important discussion with a variety of references and during my assignment, I have learnt also on matters that seemed confusing at first.
Having acquired this sufficient knowledge, I am in a better position to tackle and understand any matters related to social enterprises.
References
Crutchfield, L. and Grant, H. (2008). Forces for good: the six practices of high-impact nonprofits. NJ: John Wiley and Sons Publishers.
Ducci, G. et al. (2002). The social enterprise in Europe. International journal of mental health, Vol. 31 Issue 3, p76, 16p. Web.
Gunn, R. and Durkin, C. (2010). Social Entrepreneurship: A Skills Approach. NY: The Policy Press Publisher.
Kerlin, J. (2006). Social Enterprise in the United States and Europe: Understanding and Learning from the Differences. Voluntas: International Journal of Voluntary & Nonprofit Organizations, Vol. 17, Issue 3, p246-263. Web.
Kerlin, J. (2009). Social Enterprise: A Global Comparison. Civil Society: Historical and Contemporary Perspectives. NY: UPNE Publishers.
Kotler, P. and Lee, N. (2005). Corporate social responsibility: doing the most good for your company and your cause. NJ: John Wiley and Sons Publisher.
Leadbeater, C. (2007). Mainstreaming of the mavericks; the social entrepreneurship movement has come of age, writes Charles Leadbeater. What now? Web.
Marks, L. and Hunter, D. Social enterprises and the NHS: changing patterns of ownership and accountability. Web.
Munoz, M. (2010). International Social Entrepreneurship: Pathways to Personal and Corporate Impact. NY: Business Expert Press Publishers.
Myers, J. and Stocks, J. (2010). Fostering the Common Good: The Portrayal of the Social Economy in Secondary Business and Economics Textbooks. Journal of social studies research, Vol 34, issue 2. University of Pittsburgh. Web.
Newstatesman. (2002). social enterprise. Web.
Nyssens, M. et al. (2006). Social Enterprise At the crossroads of market, public policies and civil society. London: Taylor & Francis publishers. Web.
OECD. (2010). OECD Studies on SMEs and Entrepreneurship SMEs, Entrepreneurship and Innovation. Paris: OECD Publishing.
Price, M. (2008). Social enterprise: what it is and why it matters. Wales: Fflan Publishers.
Sims, R. (2003). Ethics and corporate social responsibility: why giants fall. CT: Greenwood Publishing Group.
Social Economy. (2011). Business for community benefits. Web.
Teasdale, S. (2010). How Can Social Enterprise Address Disadvantage? Evidence from an Inner City Community. Journal of non-profit & public sector marketing, Vol. 22, Issue 2, pp. 89-107. Taylor & Francis publishers. Web.
Thomas, A. (2004). The Rise of Social Cooperatives in Italy. International journal of voluntary and non-profit organization, Vol. 15, Issue 3. Web.
Uluorta, H. (2009). The social economy: working alternatives in a globalizing era. Volume 17 of rethinking globalizations. London: Taylor & Francis Publisher.
Yunus, M. (2007). Creating a world without poverty. Social business and the future of capitalism. NY: Public affairs publisher united states.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.