Special Role of Social Enterprises - Term Paper Example

Social Enterprise Social Enterprise Executive Summary Social enterprises are enterprises whose private activities are carried out for the benefit of the general public. Such enterprises are founded on specific objectives of fostering economic development, addressing unemployment issues and facilitating social inclusion. Among the roles of social enterprises includes job creation training and management of social facilities. These enterprises are faced with numerous difficulties such as managerial difficulties such as managerial problems and fewer financial sources. Among the recommendation for future growth of social enterprises includes hiring of specialized staffs in managerial position and diversify their capital source. Social enterprises have significantly transformed service delivery to the general public. Introduction Social enterprises are emerging types of enterprises whose private activities are conducted wholly to serve the public interest. They are formed with entrepreneurial strategy but their sole purpose is not profit maximization. Social enterprises serves special role in the community and such roles includes attaining specific economic and social goals with the capacity to solve creatively certain social exclusion and unemployment problems. Social enterprises have specific characteristics relating to its structure, legal requirement, ownership and management (Bornstein and Davis, 2010, p. 125). They are non-profit making organization where any profit accrued from its operations is ploughed back to benefits specific target groups. The enterprises also have a distinctive legal framework that ensures that the properties of the enterprise are not in one individual’s hand but are managed collectively for the benefit of the target area or group. The social enterprises also takespecific structural forms that ensure equity to all members. The right to contribution of members is not based on the capital ownership unlike the profit making organizations. Social enterprise is operated under mutual co-operation with other organization in the sector within which it operates (Franz, Hochgerner, and Howaldt, 2012, p.86). Types of Enterprises and Their Roles in the Society Several types of enterprises exist. The various categories of social enterprises are based on the social obligation that underlies their foundation. Among the enterprise categorized based on their roles includes; Community business which are member based and nonprofit making organizations formed to enhance the social responsibilities of corporates. Community businesses have a mandate and objectives of ensuring balance of work and life, social inclusions among other concerns of the public interest. Community businesses provides member companies with an interaction platform where they acquire due inspiration and strategize together as a unit. These businesses also extend their services beyond its members to the entire business community. Its service to the entire business community is accomplished via various strategies such as holding seminars, carrying out research among other activities (Kickul & Bacq, 2012, p.156). Worker co-operative business is also a form of social enterprise. In this enterprise, the workers double up as the business owners. Every worker has equal right to claim the ownership of the enterprise. The managers of the business are democratically elected by all members and are considered workers of the enterprise (Lane, 2015, p. 143). The workers co-operative enterprise ensures social inclusion and equal rights to its members Consumer co-operatives are social enterprises owned and operated by consumers in a democratic manner. As with other social enterprises, consumer co-operatives are formed with specific objective of fostering its members’ interest. These enterprises are not profit oriented and conducts their independent of the state influence. Consumer co-operatives are of diverse types covering micro-finance, insurance, and health care among other fields (Lane, 2015, p. 64). Agriculture co-operatives are social enterprises where farmers pool their resource to enhance agricultural practice and profitability within a given area. These co-operatives can be categorized as agricultural service cooperatives where farmers pool their resources with an objective of advancing particular services such as transportation and storage of their agricultural produce. On the contrary, agricultural production enhances provision of important farm inputs such as machinery, fertilizers among other commodities required in the production process. Members of the agricultural cooperatives are entitled to equal rights and the key objective of such cooperation is not profit maximization (Lynch and Walls, 2009, p. 132). Development trusts are community owned and operated enterprises aimed at environmental, economic and social regeneration. The development trust has no defined managerial structure andits operations are not profit oriented. Some of the activities carried out by such enterprises include; managing recreational centers and playing yards, research on renewable energy sources and other such activities of the community benefits. Development trust is popular in the United Kingdom and is managed and operated in the full interest of the public (Lynch and Walls, 2009, p. 145). Community foundations are enterprises formed for charity work. These foundations focus on particular area and addresses specific issues that a region experiences. Most community foundations work with individual, society and companies to address issues affecting particular regions. The foundations are well developed in the United Kingdom and other regions of the world (Great Britain, 2007, p.75). Several other types of social enterprises occur which include; friendly society, mutual society, housing society, immediate labor market projects, and credit unions among others. All these social enterprises are based on the service to its members who enjoys equal rights and ownership (Gidron and Hasenfeld, 2012, p. 87). Roles of the Social Enterprises Depending on the objectives for their formation, social enterprises serve diverse roles in the society. As mentioned earlier, the social enterprises are based on different market sectors such as agriculture, finance and insurance and their roles are determined by the interest of members. Some of the significant roles of the social enterprise include (Lyons, 2013, p.102). Developers of local properties Social enterprises are in charge of developing various local properties that benefit the general public. Some of the local properties developed by these enterprises includes include training grounds, recreational centers and housing facilities. The type of properties developed is intended to meet the demand of the members and serve the greater public interest (Gunn & Durkin, 2010, p.77). Running Job Creation Schemes Social enterprises have successfully created several formal and informal employment opportunities. The major objective of social enterprise is realizing long term solution to the unemployment crisis. The structural organization of social enterprises is such that the employees double up as business owners. Most jobs created are low income jobs leading to the criticism of the social enterprises (Kickul and Bacq, 2012, p.106). Running Tourist and Heritage Centers Locally Some social enterprises are concerned with the management of local heritage and tourist centers to the interest of the general public. Most of the heritages are communally owned and are entrusted to the social enterprise management. Due to their nonprofit motives, such heritages and tourist centers remains accessible to the general public and serves as source of income to those specific areas (Doherty and Thompson, 2006, p. 48). Provision of Services to Community Enterprises and Community Organizations Such services provided by the social enterprises to the community enterprises and organizations may include organizing seminars, provision of training in their area of specialization and provision of financial aid. Through such initiatives, the social enterprise contributes to the general affairs of the public (Renz, 2010, p.123). Other roles of the social enterprises are operation of the local services that the commercial investors cannot operate provision of low interest loans to the public and devising and managing various training programs aimed at developing the local community (Ridley-Duff & Bull, 2011, p.95). Generally, social enterprises carry out their roles in line with the issues affecting its members to the sole benefit of the public. These enterprises operate above the profits maximization motives and development of public affairs (Social Enterprise Alliance, 2010, p.87). Changing Role of Social Enterprise Social enterprise has exhibited landmark advance in their roles to the society. In order to adapt to dynamic variables in the economy, there is need for the social funds to adapt relevant strategies that can facilitate service delivery to the general public. Some of the changing roles of the social enterprise include. Generation of New Funds for the Social Sector The government has considerably reduced the financing to the social sector overtime. Social enterprise has improved financing to the social sector to cover up for the deficit caused by low government financing. Many social enterprises are venturing in economic sectors such as recreation, training and such ventures. The current social enterprise has developed news ways of addressing the emerging social trends (Torres-Coronas & Vidal-Blasco, 2013, p.104). Difficulties Facing Social Enterprises Social enterprises operate under same economic conditions as the small and medium commercial enterprises. However, due to the legal and organization structure, they face numerous economic challenges. Some of the common challenges faced are;(Dagnino, 2012, p.126). Management Difficulties Most social enterprises lack qualified and competent management team. The enterprise tends not to employ external management in the managerial role but engages its workers as the manager. As other businesses, social enterprise requires core autonomic and expertise management team with relevant managerial skills. Most of these enterprises facing three distinct categories of problems; namely; business planning, volunteerand staff recruitment and training practices (Price, 2009, p.56). In regards to business planning, social enterprises lacks long term economic development strategies and exit programs for their activities.Similar to small businesses, social enterprise require long term economic goal to facilitate their growth and dynamism in the market. Social enterprise also faces difficulty in hiring qualified staff (Gidron & Hasenfeld, 2012, p.75). Since these enterprises are not profit oriented, hiring skilled and experienced staff may not be economically feasible. As a result, most of the recruited staffs are non-skilled or semi-skilled personnel. The staff may therefore limit the potential and effectiveness of the social enterprise. They also experience difficulties in adopted external training. Training is vital in activities such as driving and caring for the old but in most cases carrying out and facilitating such trainings are hindered. Poorly skilled labor may result as a consequence (Bornstein & Davis, 2010, p.124). Premise Premise location influence business success. For social enterprises, there is limited finance to acquire business location at suitable localities with potential customers. Mostly the premises are in secondary localities with fewer passers-by that ultimately results into a business failure. Social enterprises also face strict legal regulations from the government. There is a bureaucratic procedures devised to oversee the operation of these enterprises that lead to pressure on their management (Renz, 2010, p.86). Other problems affecting social enterprises include; marketing where most social enterprises tend not to market their services and products because there is low business performance. Also, social enter premises face difficulty in financial support. Most of the lending institution rarely trade with social enterprises giving them a narrow financial base. The enterprises mostly rely on grants and members’ contribution which limit their operations (Top of Form Fitzhugh and Stevenson, 2015, p.127) Conclusion Social enterprises have significantly fostered growth and development of the third economy. These enterprises have ensured protection of the general public interest and conservation of environmental resources. Some of the roles performed overtime include management of local and tourist heritage, training and development of recreational facilities. Social enterprise also faces difficulties such as poor premise location and management problems. Generally, social enterprises are of significance to the welfare of the public (Kerlin, 2009, p.89). Recommendation on Social Enterprise Development in Future From the past and current circumstances surrounding the operations and growth of the social enterprises, several recommendations can be drawn for the future development. Some of the recommendations are; Due to managerial problems, the enterprises should consider hiring a qualified and skilled management. This will enhance their growth and development in addition improved performance. Also, the business should consider diversifying their financial base to empower their developmental programs. Among the possible strategies for soliciting finance may include engaging a wider member’s base and maximizing profitable activities. Bibliography Top of Form Bottom of Form Bottom of Form Bottom of Form Top of Form Top of Form Bottom of FormBottom of FormTop of Form Top of Form Top of Form Bottom of FormBottom of FormTop of Form Top of Form Bottom of Form Top of Form Top of Form Top of Form Top of Form Bottom of Form Top of Form Bottom of FormBottom of Form Top of Form Bottom of Form Bottom of Form Bottom of Form Top of Form Bottom of Form Bornstein, D., & Davis, S. (2010). Social entrepreneurship: what everyone needs to know. New York: Oxford University Press. 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