Climate Smart Business - Case Study Example

Entrepreneurship Name Institution Professor Course Date Introduction Social entrepreneurship represents a novel form of organisation that reflects a time of social change. It entails the practice of integrating opportunities, resourcefulness and innovation to address environmental and social challenges. Social entrepreneurship creates social value through innovation with a high degree of economic significance and participant orientation. Social entrepreneurs accomplish sustainable, systemic and large-scale social change via novel invention and a meticulous application of known strategies and technologies. Focusing on Climate Smart Business Inc, this essay evaluates the contribution of social entrepreneurship. The essay also highlights the differences in entrepreneurship and social entrepreneurship besides underscoring the differences between the business planning models used in social enterprises and profit-based enterprises. Climate Smart Business Inc is a social enterprise based in British Columbia Climate (Smart Business Inc, 2017). The enterprise was established in 2007 with the aim of helping medium-sized enterprises to track and reduce greenhouse gas emissions. The enterprise does not only help SMEs to lower their greenhouse gas emissions, but also develop a resilient economy and reinforce their businesses. With the acknowledgement that SMEs are the engines of local economies, Climate Smart believes that the innovative sector can take a crucial role in addressing climate change and help the world in attaining a low-carbon future. The social enterprise works with over thirty host partners and involves over eight-hundred businesses in profitably reducing and tracking their carbon emissions. The enterprise focuses on attaining an impressive eleven percent reduction in emissions. It works with diverse sectors of the economy and believes that businesses must be engaged in finding improved and less carbon-intensive ways to produce and distribute commodities in order to address climate change adequately. Social entrepreneurship takes place when a person or a group of persons clearly aim to create social value. A social entrepreneur creates social value through exploiting opportunities, tolerating risks and employing innovation. Creation of social value is the procedure involved in entrepreneurial action where the value is created and remains present in the social outcome. For instance, an organisation such as Climate Smart is a social enterprise that allows firms to lower their greenhouse gas emissions, build a resilient economy and strengthen their businesses. It is worth noting that a social enterprise does not focus on monetary profit but rather on creating social value. Climate Smart creates social value by helping firms to lower their greenhouse gas emissions. The reduction in emission of greenhouse gases benefits people and the environment. Through the work of Climate Smart social enterprise, that includes training business organisations and provision of software tools that tract and reduce their greenhouse gas emissions, the society gets to enjoy a clean environment. Apparently, the measure of success for social entrepreneurs is not how much profit they make, but the extent to which they create social value. Apparently, the success of organisations such as the Climate Smart is not based on how much profit they firm, but on how to achieve a low-carbon future. According Lundstrom, Zhou, Friedrichs & Sundin (2013), social entrepreneurship is the creation of sustainable socio-economic institutions, relationships, practices, organisations and structures that sustain and yield social benefits. Social entrepreneurs act as change agents in the social sector through adopting a mission to develop and sustain social value. For instance, Climate Smart acts a change agent for climate change. The social value attached to Climate Smart is the reduced emission of greenhouse gases and attainment of a carbon-free future. For social enterprise unlike entrepreneurship, social improvement is critical and takes priority over generation of profits. Instead of going for quick fix, social entrepreneurship centres on way of creating lasting improvements. The Climate Smart social enterprise focuses on creating lasting solutions to environmental damage. Social entrepreneurs look for innovative means to ensure that they have access to the required resources and funding. More so, social entrepreneurs are skilled in exploring resource options from pure philanthropy. These entrepreneurs display a heightened sense of accountability to those they serve and for the upshots created. They seek to provide real social improvement. Social entrepreneurship and entrepreneurship are different based on their organisational culture, knowledge, skills and attitudes. With respect to economic entrepreneurship, personal skills and knowledge is a major strength while in social entrepreneurship, collective experience and wisdom are the major strength. The focus on a social enterprise is on long-term capacity while a profit-based enterprise focuses on monitory and financial benefits. More so, the ideas of a social enterprise are limited to the mission while a profit-based enterprise has no limit to scope of ideas. Profit is an end in itself in an economic enterprise while in a social enterprise profit is a means to a social purpose. The profit earned in a social enterprise is put into serving people while the profit earned in an economic enterprise is reinvested for further profit. People who fund social enterprises look to invest in people with demonstrated ability to create change. The factors that matter most are strategic, innovative, financial and managerial abilities. Social entrepreneurs are proponents of social change with their characters, capabilities and leadership abilities always under scrutiny. Social entrepreneurs must demonstrate good leadership. The leadership passion is a major element in gaining people’s trust. A leader in social entrepreneurship must combine a passion for social mission. For instance, Climate Smart has a group of committed leaders with a passion to create social change. The team of leaders brings their experience and passion in environmental issues. The leaders are innovative and are able to scale up innovative business-centred programs with environmental and economic impact. Their passion is directed to benefiting the society and not the investors. Climate Smart’s leadership focuses on serving basic, long standing requirement more efficiently through innovative approaches of reducing climate. As a result, the context of social enterprise differs from profit-based enterprises because of the way they interact with their mission statement. Evidently, a social enterprise such as Climate Smart has social objectives whose surplus are reinvested for the purpose of social change as opposed to being driven by the need to maximise profits for owners and shareholders. Social enterprises borrow legal forms from all societal sectors including civil, public and private sectors. The enterprises present hybrid structures established to address specific situations. Similar to for-profit enterprises, social enterprises require effective planning and models. The social enterprise business model must evolve over time to adapt to the changing social and environmental mission needs. The establishment of the business model must consider the external and internal fit in order to deliver the best-fit-contextual business model. Social entrepreneurs must consider replication of business model for early and rapid growth of innovation especially when the enterprises expand into different locations. A good business model ensures effective decisions with regard to strategic and operational activities. Similar to an economic enterprise, a social enterprise should have good business planning to attract investors, identify risks, measure environmental or social outcomes, develop alliance and determine feasibility. The mission of the enterprise should be well articulated and necessary resources, revenues and costs projected. Specific actions to attain objectives and goals should be outlined and target of planning, measuring and improving performance established. Unlike a business plan of a for-profit enterprise, social enterprise business plan does not project profits Social entrepreneurship organisations and for-profit organisations differ in the business manners. According to Muncherji and Dhar (2009), social entrepreneurship emerges as an innovative approach for addressing complex social needs. Social enterprises focus on changing the performance capacity of society. The enterprises help in solving social problems and accomplishing social outcomes. Social enterprises as opposed to economic enterprises pay increased attention to market forces without losing sight of their underlying mission. These enterprises collect the necessary resources needed to fulfil their social mission and utilise them to make a difference in society. The enterprises focus on solving issues facing society through developing and implementing initiative that produce measurable results. Unlike for-profit enterprises, a viable business model for a social enterprise has environmental or social goals as the DNA of the business. The social mission as opposed to economic benefits is the core of a social enterprise business model. The funding models of most social enterprises include grants and funds from social investors while for-profit enterprises depend on secured finance from commercial banks. Scores of social enterprises begin by depending on grants and them move into more sophisticated funding models that include commercial funding when longer-term plans require funding. For instance, Climate Smart has a financial model that does not solely rely on grants or donations. The enterprise has a funding model that allows for recurring cash flows that makes both the social and organisational impacts more sustainable. For-profit social enterprises capitalize on financial incentives and their linked benefits that include accessing upfront and growth capital and financial independence. On the contrary, non-profit social enterprises hunt down grants and donations in lieu of providing a prospect for investor to make a return while for-profit model allows greater prospect to raise funds necessary to attain organisational outcomes. Private equity, traditional bank loans and venture capital are available sources of capital for profit-based enterprises. Conclusion Social entrepreneurship is a contemporary organisational form that is characterised by societal change. Social enterprises such as the Climate Smart Business Inc have evolved due to major societal challenges. Social entrepreneurship contributes greatly to social change as they focus on creating social value. Social enterprises and economic enterprises have dissimilar but closely linked business model. The funding models for not-for profit social enterprise include donations, grants and unsecured loans from banks while for-profit-based enterprise receive funding from venture capital, traditional banks and private equity. Drawing from the role of Climate Smart Business Inc, it is evident that social entrepreneurship creates social value through engaging in a procedure of constant adaptation, learning and innovation References Climate Smart Business Inc.(2017). Retrieved from https://climatesmartbusiness.com/ Loosemore, M., & Higgon, D.(2015). Social enterprise in the construction industry: Building better communities. UK: Routledge. Lundstrom, A., Zhou, C., Friedrichs, Y., & Sundin, E.(2013). Social entrepreneurship: Leveraging economic, political and cultural dimensions. UK: Springer Science & Business Media. Muncherji, N.,& Dhar, U.(2009). Partners in success: Strategic Hr and entrepreneurship. India: Excel Books India. Read More