Social business

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Social business, Entrepreneurship, Social Entrepreneurship

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Social business

  1. 1. Page 1 Social Entrepreneurship
  2. 2. Page 2 Why?......bcoz India is already one of the biggest players…. • http://www.openaction.org/aylluinitiative/#
  3. 3. Page 3 • Muhammed Yunus - Social Business.mp4
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  7. 7. Page 7 What Is Entrepreneurship? Process of creating value by bringing together a unique package of resources to exploit an opportunity
  8. 8. Page 8 Defining „social entrepreneur‟ – Development change agent working in the market as an arena – Innovative, opportunity-seeking, resourceful person, group or institution – Leads creation of enterprises, enterprise systems or enterprise development programs demonstrating positive development impact
  9. 9. Page 9 The New Buzzword: Social Entrepreneurship So, is social entrepreneurship basically entrepreneurship regardless of the context? Or is “social entrepreneurship” something truly different?
  10. 10. Page 10 What Is Social Entrepreneurship? Nonprofits making money
  11. 11. Page 11 What Is Social Entrepreneurship? Nonprofits making money For-profits doing things to show they are not evil
  12. 12. Page 12 What Is Social Entrepreneurship? Nonprofits making money For-profits doing things to show they are not evil Process of creating value by bringing together a unique package of resources to exploit an opportunity, in pursuit of high social returns
  13. 13. Page 13 The only big difference between commercial and social entrepreneurship: Denomination of the returns Social and commercial entrepreneurship have most of the same characteristics
  14. 14. Page 14 Do Social Entrepreneurs “look” like Any Other Entrepreneur Social concern, but also: Innovativeness Achievement orientation Independence Sense of control over destiny Low aversion to risk Tolerance for ambiguity
  15. 15. Page 15 Traits of a successful social entrepreneur • Willingness to self connect • Willingness to share credit • Willingness to break free of established structures • Willingness to cross disciplinary boundaries • Willingness to work quietly • Strong ethical impetus
  16. 16. Page 16 The Main Difference: The Measurement Problem • What is bottomline? Economic profit? Or something more? • How do we count it? • What is “social return on investment” for venture philanthropists? • Can we compare investments?
  17. 17. Page 17 Focusing on Social Impact Social entrepreneurs are driven by a social mission, implying that: Success is defined by creating the intended social impact, not simply by Economic value creation for owners, managers, and employees, or Consumption value for customers Success in achieving this impact is both Hard to measure in timely, reliable, cost- effective ways, and Open to dispute due to value differences
  18. 18. Page 18 • Social Entrepreneurs_ Pioneering Social Change.mp4
  19. 19. Page 19 So why does social entrepreneurship matter?
  20. 20. Page 20 What Solutions do we have Today • Government – alone is not the answer – Inefficiencies, slow, bureaucratic, prone to corruption…. • Nonprofit Orgs. – inadequate – dependent on donations (uncertain, demand far exceeds supply) – “compassion fatigue” – Raising money takes time and energy, which can be spent planning growth/expansion • Multilateral Institutions (World Bank…) - ineffective – Conservative, slow, under-funded, unreliable – Success is measured by a) GDP (might not be helping poor) b) Volume of loans negotiated (not measuring impact) – Exclusively work with the government • Corporate Social Responsibility – still evolving – “as long as it can be done without sacrificing PROFITS”
  21. 21. Page 21 New kind of Business Social Business Enterprise – Creating business models revolving around low-cost products and services to resolve social problems – Social business is for „more-than- profit’ as it combine revenue generating business with a social- value-generating structure – Have 2 characteristic • Unlimited potential for scalability • Limited capital requirement
  22. 22. Page 22 How can you do business and serve social goals? Why is profit-making not conflicting with social objectives? Profits - – Promotes R&D, innovation, new technologies – Increases efficiency – Enables penetration to new geographical areas and serve deeper layers of low-income people – Helps recover costs and pay back investors, thus encourages investments PMBs (profit max. businesses) vs. SBs (social businesses) How they are same yet different – Employ workers, create goods & services for consumers – Must recover full costs – Profits are important – YET objective is to create social benefit and not limited to personal gains Can there be a HYBRID i.e. 60% PMB and 40% SB??
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  25. 25. Page 25 Social Entrepreneurship Is a National Priority • Continued prosperity requires private solutions to social problems and unmet needs • Social ventures • Private support for these venture
  26. 26. Page 26 Contrast with Business Businesses also create social impacts, both positive and negative, typically – As unintended side-effects that – Play a relatively minor role in organizational decision making Their social benefits result from an “invisible hand,” not by design Success is commonly defined in terms of private value creation (usually profit) Market discipline helps to reinforce private value creation
  27. 27. Page 27 Limits of Market Discipline Social sector customer and capital markets are less effective at ensuring intended social impact as:  Intended beneficiaries frequently do not pay full cost  Payers cannot easily assess the social impact or the efficiency of operations  Comparisons across organizations are inherently problematic  Rewards to resource providers are not reliably correlated with performance
  28. 28. Page 28 Thus, Social Entrepreneurs . . . Adopt a mission to create sustained positive social impact Relentlessly pursue opportunities to serve this mission Continuously innovate, adapt, and learn Act boldly, not constrained by resources currently in hand, and Exercise self accountability for cost- effectively serving the social mission
  29. 29. Page 29 Growing Need for MBA Skills Used wisely business skills can:  Create more sustained impact  Shift philanthropic resources to more appropriate uses  Leverage those resources  Improve financial strength and capacity of social sector organizations  Enhance efficiency and effectiveness
  30. 30. Page 30 MBAs Can Add Value, but…. It is crucial to  Respect the work of those in your field  Be sensitive to the limits of markets and business methods  Manage potential risks and challenges  Prepare for resistance and skepticism  Learn your chosen field well  Consider blended /hybrid solutions  Follow your passion!
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  32. 32. Page 32 • TAPMI Leadership Lecture 2011 - Harish Hande.mp4

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