Social business models by Dr Alessandro Giudici

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Social Business Models
“Do the Reverse”
Dr Alessandro Giudici – Lecturer in Strategy
e-mail: alessandro.giudici.2@city.ac.uk
Cass’ CENTIVE Research Centre:
http://www.cass.city.ac.uk/research-and-
faculty/centres/centive/business-models
#centive
@cassbusiness
@giudicialex
“What kind of world is this? Should we leave everything to the decisions of the
profit-maximizers so that their benefits is what decides the world?
Or there is something else to bring in? That’s the basic question.”
Commonwealth Club, 2008
www.youtube.com/watch?v=_mbEsSQZ5yw
“Everything we have done is the reverse of conventional.
They go to the city; we go to the village. They go to men; we go to women.
They say people should come to the bank; we say the bank should go to the people.
They say you need to be job seekers; we say you need to be job creators.
Everything has to be done in the opposite if we are to save ourselves.
Everything has to be done in the reverse way.”
2016 World Economic Forum
http://www.huffingtonpost.com/ashoka/muhammad-yunus-how-to-cha_b_9057968.html
Muhammad Yunus
2006 Nobel Peace Prize

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www.e4impact.org
www.impacthub.net
Foster sustainable development through
impact entrepreneurship
“We believe a better world evolves through the
combined accomplishments of creative, committed, and
compassionate individuals focused on a common
purpose.”
www.ashoka.org
SO… WHAT IS
A SOCIAL BUSINESS?
Some Examples

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DO YOU KNOW THEM?
cooperative
all profits donated
WHAT ABOUT?

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WHAT ABOUT?
The Wikimedia Foundation, Inc. is a
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to encouraging the growth, development and
distribution of free, multilingual, educational
content, and to providing the full content of
these wiki-based projects to the public free
of charge.
DEFINITION OF SOCIAL BUSINESS
(Yunus, Moingeon & Lehmann-Ortega, 2010)
• A Social Business is a self-sustaining company that sells goods or
services and repays its owners’ investments, but whose primary
purpose is to serve society and improve the lot of the poor.

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Profit People
Planet
BearableViable
Sustainable
Equitable
PURPOSE
THE QUADRUPLE BOTTOM LINE
• At the roots of any economic activity there is a moral choice about whether the
predominant focus of the organization is about value creation or value appropriation.
• “The decision to start a social venture is often motivated by an individual’s ethical and
moral perceptions (Kickul and Lyons 2012; Miller et al. 2012; Smith, Kistruck & Cannatelli,
2012).
WHAT IS THE HIGHER PURPOSE?
www.consciouscapitalism.org

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STRATEGY
=
VALUE
CREATION
(for customers/
beneficiaries)
VALUE
APPROPRIATION
(uniqueness/
differentiation)
TOUGH CHOICES
(trade-offs)
(SOCIAL) BUSINESS MODELS & STRATEGY
PURPOSE
www.businessmodelzoo.com
EXAMPLES www.tengry.co.uk
Nancy Johnston

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EXAMPLES www.social-bite.co.uk
EXAMPLES www.zaacoal.com
Sulley Amin Abubakar

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EXAMPLES www.bisaworld.com
Daniel D. Tuackly
THE RISKS OF MISSION DRIFT
• Although it might be possible to temporarily develop win-win scenarios and combine
goals, conflicts will inevitably arise when trade-offs between value creation and
appropriation surface – generally after a certain growth threshold – unless
appropriate governance mechanisms are in place to counter-balance them.
• Any perceived shift or ambiguity may lead to a loss of legitimacy among
stakeholders.

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A TYPOLOGY OF SOCIAL BUSINESS MODELS
(Santos, Pache & Birkholz, 2015)
BUILDING SOCIAL BUSINESS MODELS
(Yunus et al., 2010)
• Yunus et al. (2010) identify five lessons in building social business models from the
experience of Grameen Bank:
• Similarities with conventional business model innovation
1. Challenging conventional wisdom and basic assumptions
2. Finding complementary partners
3. Undertaking a continuous experimentation process
• Specificities of social business models
4. Favouring social profit-oriented shareholders
5. Clearly specifying the social profit objective

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USEFUL RESOURCES
• UK Government (www.gov.uk/government/publications/community-interest-
companies-business-activities)
• Impact Hub (www.impacthub.net)
• UnLtd (unltd.org.uk)
o https://unltd.org.uk/wp-
content/uploads/2012/11/Creating_Social_Enterprises_v1_0FINAL020909.pdf
• Social Enterprise UK (www.socialenterprise.org.uk)
• School for Social Entrepreneurs (www.the-sse.org)
o www.the-sse.org/about-school-for-social-entrepreneurs/glossary
• Ashoka UK (uk.ashoka.org)
• The Guardian
o www.theguardian.com/us/sustainable-business
o www.theguardian.com/sustainable-business/social-enterprise-blog
• Big Society Capital (www.bigsocietycapital.com)
• Social Investment Business (www.sibgroup.org.uk)
• Royal Bank of Scotland
o http://www.inspiringenterprise.rbs.com/inspiring-social
• ClearlySo (www.clearlyso.com)
o www.clearlyso.com/what-is-a-social-enterprise-2
USEFUL RESOURCES

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KEY REFERENCES
• MacMillan, I.C., Thompson, J.D. 2013. The Social Entrepreneur’s Playbook. Wharton
Digital Press: Philadelphia, PA.
• Santos, F. M. 2012. A positive theory of social entrepreneurship. Journal of Business
Ethics, 111(3): 335-351.
• Santos, F., Pache, A., Birkholz, C. 2015. Making hybrids work: Aligning business models
and organizational design for social enterprises. California Management Review, 57(3): 36-
58.
• Yunus, M., Moingeon, B. & Lehmann-Ortega, L. 2010. Building Social Business Models:
Lessons from the Grameen Experience. Long Range Planning, 43: 308-325.
THANK YOU!
Q&A