Social Enterprise - Essay Example

Social Enterprise Report Table of Contents Table of Contents 2 Introduction 3 Responsible Business 3 Social Enterprise – A Vivid Review 4 Role of Government – Social Enterprises 6 Conclusion 7 References 8 Introduction ’Social Enterprise’ can include the organization and individuals who are of high motivation and have come forward to solve the various economic and social turbulences, which may result in benefit of the society from a general perspective, by using a number of strategies and methods related to business (Elkington & Hartigan, 2008; pp. 155-158). This report intends to discuss the various aspects under ’Responsible Business’ with an emphasis on a social enterprise. Influence of social enterprises approaches to business will also be elaborately discussed in the report. Moreover, the role of government as an enabler/ influencer or barrier to responsible business based approaches will also be comprehended. The recent development in business world has a Third Sector included which may be terms as the Non–Government Organization or Non–profit organization. This sector generally intends to have a focus on two aspects, namely; the co–operatives and the charity. Responsible Business The individuals who come forward to resolve the various kinds of turbulence, be it, economic, political or even social that has a direct bearing with the society, evolve solutions to overcome the turbulence. The solutions achieved are the outcomes of implementation of various new resources and/or combining the available resources. Also the funding mechanisms in use are mobilized in order to increase the scalability, sustainability and quality of the social enterprise. There has been a sustainable increase in the interest thus involving a large number of governments, business organizations, non–profit businesses and even universities across the globe (Austin & et. al., 2006). In general, an economy is known to have three sectors namely; the public sector, the private sector which highly competes with the state owned enterprises and the third sector pertinent to the enterprises are established by individuals voluntarily with the intensions of chasing the community, social and charitable goals. It is prevalent that the three edged sector of an economy tends to impose a restriction on these third sector organizations that happen to infringe the set definition. The co–operative enterprises coming under the purview of social enterprise tend to cross the margin that distinguishes the voluntary and private sectors (Austin & et. al., 2006). The enterprises in form of co–operatives and ‘mutual help’ following the commercial principles were the way to the emergence of ‘Third Sector’ as an innovative term. There is a value related to the social face that encompasses this Third Sector, is the concern for the management principles that the modern public and private sector follows and which has contributed to the exclusion of under–privileged and vulnerable individuals, socially (Austin & et. al., 2006). The various changes in public sector rendered to a faster growth and identification of the Third Sector. It was in the later period of 1990s that Rory Ridley-Duff, director at Computercraft Ltd., by taking little part in the discussion ignited the spirit of establishing an all new support agency for business. In this discussion, the table was surrounded by trading corporations who were in support of the new venture (Ridley-Duff & Barton, 2009). These corporations were mostly the representatives of the training and enterprise councils of public sector. The parties involved in the meeting were in search of a name that could cover the objective held by the new support agency. Finally, they started off by deciding the name as ‘Social Enterprise London’. Distinctively, Poptel and Computercraft, a phone and an IT Co–operatives respectively came up to the support of organizational know–how and the political aspect. Other than these, the Training and Enterprise Councils (TECs) of public sector and ICOM, one of the co–operatives enabled Social Enterprise London with the assets and the funding part required for a proper establishment of an enterprise (Ridly-Duff, 2008). Though it is difficult to affirm Social Enterprise London to be the first organization to spread the concept of ‘social enterprise’ across the United Kingdom but its role in making the public aware of the concept can be guaranteed. Social Enterprise – A Vivid Review An entrepreneurship involving the societal aspects is in general terms defined as “entrepreneurial activity with an embedded social purpose” (Austin & et. al., 2006). The evolution of this new concept in now–a–days has gained importance as an economic phenomena. There are many striking innovations involved in social entrepreneurship by many of the developing countries and is also has involvement of new business models addressing the human needs at the basic level. These include the various provisions including deploying a proper and well–framed sanitation system in and around the rural areas, another provision enabling the low cost surgeries of cataract to curb blindness (Elkington & Hartigan, 2008, pp. 123-187). The developed countries also have paid heed towards the concept and thus it is recognized as a vibrant phenomenon in these countries too. To depict an example, the fact based on a survey conducted by Global Entrepreneurship Monitor in the year 2005 says that about 1.2 million individuals at the UK are social entrepreneurs (Harding, 2006). A social enterprise is vividly associated with a range of problems in the society that are generally ignored in the normal flow of business activities. The normal business activities are primarily profit driven and in recent times follow the concept of Corporate Social Responsibility (CSR) but only as a part of the business. The Non-Governmental Organizations (NGOs) that are referred as social enterprises render focus on various societal illnesses such as orphanage, old–age homes, and AIDS Campaigns among other such evils. They are usually seen to continuously try and smear the social wounds that a nation or its economy bears but does not comprise adequate policy implementation to control them (Ridly-Duff, 2008). On the aspect of aligning and applying the principles of business with social enterprises, it provides a number of positive attributes to the whole scenario. These positive attributes are inclusive of an ability to spot opportunities, desire of creating jobs, profit orientation, risk–taking, innovation and most importantly high levels of economic impact. In addition to these, applying the academic disciples in formation of social entrepreneurship paves another path in development of business skills that are necessary for a person to transform into a business entrepreneur. Clearly, social entrepreneurship is taken up with a vision of performing acts that are distinctly directed at social mission, and this is where it differs from a normal business entrepreneurship. A social enterprise unlike a general business enterprise is ethically, morally and socially driven. There are a few of these enterprises who are also environmentally driven and are in the process of rapid growth all across the globe. This Third Sector of economy aims to attempt for promotion of its causes outside the private and the public sectors, in order to pursue moral/social goals. These enterprises are highly autonomous and are much relaxed in terms of following rules and regulations defined by government. These enterprises at their core of existence have social interests over profit interests (Ridly-Duff, 2008). There are various sub–sectors under this Third Sector namely, arts, health, education, religion, politics, culture, leisure, environment, sport, history, heritage, human right, food and drink among others. Also under this sector, there exist two types of organization, namely; charity and cooperatives (Ridly-Duff, 2008). Charities are a set of act focusing on goodwill from one person to another. Charities at instances may owe to certain kinds of income but they significantly exist for their expenditure to meet the social causes. The UK has in effect Charitable Uses Act 1601 to facilitate the charitable enterprises that fall under the category of the Third Sector of economy. This law primarily regulates the way donated funds are used by the enterprise (UnLtd, 2009). There is a Charities Act 2011, which came to existence on the 14th of March of the year 2012. It was passed to replace majority of the Charities Acts of 1992, 1993 along with 2006, and also all the Recreational Charities Act 1958 (Charity Commission, 2012). The Charities Act 2011 has enlisted thirteen descriptions of purposes of charity and their benefits to public. The descriptions are given below: To prevent poverty To help in promotion of education To help in promotion of religion To save life and promote health Promotion of development of citizenship or community The promotion of culture, arts, science or heritage The promotion of amateur sport The promotion of human rights, conflict resolution or religious or ethnic harmony or equality as well as diversity The promotion of protection or development to environment To provide relief to the people in need for the reason of financial turbulence, disability, ill–health, young age or other such instances Promoting animal welfare Promote the competence of the armed forces of Crown or the police, rescue and fire services or even the ambulance services Source: (Crown, 2012) A very famous project of the UK may be quoted as an example of social enterprise. The Eden Project is limited company by virtue of guarantee, which is completely owned by Eden Trust. They claim to attract the tourists as well as run a social enterprise and also charity (Eden Project, n.d.). Co–operatives stand on the basis of solidarity and democracy. Among its key features these enterprises have their members participating in the policy making and decision taking. The members bear equivalent voting rights in case of selecting the Board of Directors. These members also have a democratic control over the capital for developing of their co–operative, facilitating other actions on approval of the members. FC United of Manchester in the UK is a co–operative ownership fan possessed football club. This enterprise has a number of projects under taken in order to keep the young aged disaffected people occupied (Porter, 2011). Role of Government – Social Enterprises The local government strategically aims at regenerating the economy along with its development in the form of public service delivery and various related transformations. The government of the UK seems to believe that the social enterprises in existence bridge the gap between the set social objectives and the government thus helping in better implementations of the objectives (The Guardian, 2012). The government mechanisms set rules and regulates the activities of the social enterprises in a direction that would help it to be worth for the society. The government of a nation facilitates the reach of the enterprise in many ways encouraging the noble cause of serving the society (The Guardian, 2012). The UK government defines social enterprises as the business bodies having social objectives, where the surplus of the business is seen to be reinvested in the business itself with a motive of curbing the social turbulence. In the way of development of social enterprises, hindrances have been always a problem. A particular problem of poor understanding of the social enterprises by people outside the sector, absence of a proper regulatory framework that suits the nature of the enterprise and also financing these enterprises have always been a problem in running of these enterprises. The UK government has come forward with strategies to curb these pitfalls. This includes strengthening of the enterprises by financial assistance and positive promotion. The financial assistance is provided by developing various Community Development Finance Institutions and by financing the other external enterprises so that they could in turn train and support these social enterprises. In the UK, according to the statistics provided, there were around 55000 social enterprises as of the year 2006. It is contributory segment in the UK economy as it generated £27 billion in terms of turnover. These enterprises also accumulated around £8 billion, around 1% of the annual Gross Domestic product (GDP) of the UK. Social enterprises have been observed to be one of the main creators of jobs in the UK thus facilitating the government in eradicating the problem of unemployment. Thus, these facts depict that the UK government has worked as an enabler/influencer for the development of social enterprises which has helped their progress (Li & Wong, 2007). Conclusion The social enterprises have given birth to a third sector in an economy. This makes way for a different kind of culture beyond the economy led by the state and the market. Social enterprise as a concept varies from county to country. A social enterprise is primarily driven by social objectives and non-profit–making objectives. This makes the enterprise socially viable. The various odds of a society can be better fought by the social enterprises. They act as helping mechanism assisting the government to take heed and control the social odds with special emphasis through these enterprises. Social enterprises are of two types namely; charities and co–operatives. Charity type of social enterprises highlights the purpose of social mission on one hand whereas the co–operatives kind of social enterprises is those which aim to socialize and make the workplace democratic. The UK government has framed policy towards strengthening of social enterprises by incorporating the culture of social enterprise. It is also recognized that social enterprises have become a key constituent of an economy due to its ability of generating jobs along with facilitating stability and development of communities. References Austin, J. & et. al., 2006. Social and Commercial Entrepreneurship: Same, Different or Both? Entrepreneurship: Theory and Practice, Vol. 30, Iss. 1, pp. 1-22. Charity Commission, 2012. About the Charities Act 2011. Home. [Online] Available at: http://www.charity-commission.gov.uk/About_us/Regulation/charbill.aspx [Accessed December 31, 2012]. Crown, 2012. Charities Act 2011. Content. [Online] Available at: http://www.legislation.gov.uk/ukpga/2011/25 [Accessed December 31, 2012]. Elkington, J. & Hartigan, P., 2008. The Power of Unreasonable People: How Social Entrepreneurs Create Market and Change the World. Harvard Business Press. Eden Project, No Date. The Eden Trust. Our Structure. [Online] Available at: http://www.edenproject.com/whats-it-all-about/behind-the-scenes/about-us/our-structure [Accessed December 31, 2012]. Harding, R., 2006. Social Entrepreneurship Monitor. GEM. [Online] Available at: http://socialinnovationexchange.org/sites/default/files/event/attachments/Gem_Soc_Ent_web.pdf [Accessed December 31, 2012]. Li, S. & Wong, T., 2007. Social Enterprise Policies of the United Kingdom, Spain and Hong Kong. Executive Summary. [Online] Available at: http://www.legco.gov.hk/yr07-08/english/sec/library/0708rp03-e.pdf [Accessed December 31, 2012]. Porter, C., 2011. Cultures of Resistance and Compliance: Football Fandom and Political Engagement in Manchester. Department of Sociology. [Online] Available at: http://www.fc-utd.co.uk/documents/CPorter%20PhD%20Thesis.pdf [Accessed December 31, 2012]. Ridly-Duff, R., 2008. Understanding Social Enterprise: Theory and Practice. News. [Online] Available at: http://www.senscot.net/view_news.php?viewid=7304 [Accessed December 31, 2012]. Ridley-Duff, R. & Barton, S., 2009. Is Social Marketing Particularly Relevant to Social Enterprises? Social Enterprise - A Short History. [Online] Available at: http://www.shu.ac.uk/_assets/pdf/ciod-RRD-SB-pub-social-marketing-paper.pdf [Accessed December 31, 2012]. The Guardian, 2012. The Growing Role of Social Enterprise In Local Government. Home. [Online] Available at: http://socialenterprise.guardian.co.uk/social-enterprise-network/2012/nov/09/growing-role-social-enteprrise-local-government [Accessed December 31, 2012]. UnLtd, 2009. Creating Social Enterprises. Why Is Social Enterprise Important? [Online] Available at: http://unltd.org.uk/wp-content/uploads/2012/11/Creating_Social_Enterprises_v1_0FINAL020909.pdf [Accessed December 31, 2012]. Read More