Social Entrepreneurship & Sustainability: MS 205

Course Overview

• This is a class on social entrepreneurship and sustainability, Course Code: MS 205, Semester II

Course Objective

• The course aims to sensitize students on the concepts and practices of social entrepreneurship
• It also seeks to enable students to ideate, work on intent clarity, and discover and prepare a basic business plan
• A goal is to understand and apply tools such as value proposition design and business model canvas
• It is geared at understanding effective presentations to develop social entrepreneurship
• Awareness of investment opportunities for start-ups, in India and abroad, are covered
• The course creates future students and professionals who understanding socially relevant businesses
• Possessing the zeal to start sustainable businesses for sustainable development is an objective

Course Modules

• Lectures are paired with case studies and field work

• Introduction: covers concept of social enterprise and system thinking for social innovation, the time alloted is 2 lecture hours and 4 field work hours

• Design Thinking: three lenses of innovation with the framework and tools, involves 4 lecture hours and 6 field work hours

• Characterizing the Social Problem: defines social problems and social entrepreneurship's response to critical needs, includes with 2 lecture hours and 6 field work hours

• Choosing the Business Model: involves innovation planning with feasibility and stakeholder analysis, includes 2 lecture hours and 6 field work hours

• Assessing the impact for Social Innovation: includes accountability with partnerships and community engagement, the allotment is 4 lecture hours and 4 field work hours

• Financial Planning: covers budgeting and planning for social ventures, with 2 lecture hours and 6 field work hours

• Total contact time is 16 lecture hours, 32 field work hours, 48 hours in all

Learning Outcomes

• Students will understand how to conceptualize sustainable social enterprises
• All students will be able to analyze the means to make these sustainable
• Select students will be able to create a social business venture
• Learners will know various opportunities for funding

Enterprises/Businesses

• Businesses transforms resources (inputs) into products/services (outputs)
• Firms function as primary production units in a market economy
• They combine and organize resources to produce goods and/or services for sale
• The firms transform resources into goods and services that people want
• Households and firms interact in product (output) and input (factor) markets
• Goods and services for household use get bartered in product or output markets, where firms supply and households demand

Firm Objectives

• A firm's goal aims to maximize current or otherwise short-term profits
• Sometimes firms sacrifice short-term profits with the aim of increasing future or long-term profits
• As short-term and long-term goals hold importance, the theory of the firm now postulates to maximize the wealth or value of the firm

Forms of Firms

• Proprietorships (firms owned by one individual)
• Partnerships (firms owned by two or more individuals)
• Corporations (owned by stakeholders)

Firm Types

• Private sector firms
• Public sector firms
• Joint sector firms
• Firms are also classified by number of owners: proprietorship, partnership, corporations
• Some firms provide service to specified groups: universities, libraries, hospitals, museums, churches, voluntary organizations, cooperatives, unions, professional societies

Social Problems

• Any condition or behavior with negative consequences for large numbers of people
• It is recognized as a condition/behavior needing prioritized attention
• It contains both objective and subjective components
• Objective component implies a condition/behavior with negative consequences for many people as proven through evidence

Objective Components

• It includes that the subjective component of the definition is predicated on having a perception that a condition or behavior has to be considered as a social problem
• This component lies at the heart of the social constructionist view
• Many types of negative conditions and behaviors exist but only those considered sufficiently negative become a social problem
• Some do not receive the consideration and thus don't become a social problem
• Only if citizens, policymakers, or other parties bring attention, can it be considered a social problem

Sociological Perspective

• Any social condition that is perceived to be harmful for more than just a few people
• A problem which is triggered or influenced by the social condition that is harmful for more than a few people
• The harmful nature of the social problem is universal, it exist all over the world wherever it is happening (suicide, human trafficking, poverty etc)
• A social problem can be a matter of personal perceptions

Characteristics of Social Problems

• Situations having injurious consequences for society, are caused by pathological social conditions
• Mostly are deviations from the ideal
• Social problems have some common origin
• Mostly social or political in origin
• Considered to be interconnected
• Affect all sections of society
• The responsibility for social problems is social, which requires a collective approach for their solution
• Occurs in all societies

Social Enterprises

• Social enterprises tackle social problems & challenges
• Social enterprises improve communities, people's life chances, or the environment
• They make their money from sale of goods/services on the open market
• Reinvest all profits back into the business or the local community
• So when they profit its for the society or it is shared by everyone in the society

Defining Social Enterprises

• A business with primarily social objectives, whose surpluses are principally reinvested for the business or in the community
• A social enterprise is not necessarily driven by the need to maximize profit for shareholders and owners
• A social enterprise applies commercial strategies to maximize both the financial and social well being of the society
• They are businesses who use entrepreneurial spirit and strategy for the benefit of society
• The European Commission adds that it avoids merely making profit for themselves or their shareholders,
• Its an innovative organization that prioritizes the creation of social value and operate through enterprise-based models

Characteristics of Social Enterprises

• Its a business-like and innovative approach to mission of delivering community based services (Pomerantz, 2003)
• That business has social objectives whose surpluses are principally reinvested for that purpose (Doherty, Haugh and Lyon are credited)
• Two major objectives: achieving social/environmental outcome, and maximizing the revenue
• A social entrepreneur is one with innovative solutions to the most pressing social issues

Social Enterprises: A three-part Definition

• Exists at the heart of the social economy
• Trade in the market for a specified social purpose
• Their social mission is at its core
• There is an explicit social aim which drives the organization/business
• It aims to derive a significant part of their income (>50%) from commercial activities
• They are governed by community accountability via trustee management

Aspects of Social Enterprises

• Three sectors interact: third (voluntary), private, and public

Social Enterprise Management

• The clarity of social value has high importance
• Clear attention is needed for the organization alignment
• Clarity of organizational boundries

Key Differences Between Social and Business Enterprises

• Value creation and value capture are considered different
• Leveraging positive externalities versus filling gaps is another
• Sustainable solutions versus advantages has to be thought of
• Empowerment versus control between social and business

More Differences Between Social and Business Enterprises

• Social enterprises are measured at societal or system level AND focus on ability to create value by solving societal problems
• Business enterprises are measured at organizational level AND focus on willingness to pay of clients to maximize captured value
• Correcting market and government failures is more important than achieving sustainable advantage over rivals
• Individual organizations are less important than the effectiveness of the overall system compared to "getting own organization to control large part of the value chain"
• Empower stakeholders instead of making them dependent on the organization
• "Others-regard" assumption versus an assumption of self-interest

Social Enterprises (Why They Develop)

• Develop from unmet demand of social need, government failure, market failure and contract failure.
• A need develops for earned income with budget cuts
• Opportunities arise from the external environment when there is technological change and globalization
• Creates social value - support during economic downturn is delivered
• It can impact employment and innovation

Social Enterprise

• Includes cooperatives, trusts, community owned companies, community interest businesses, employee-owned businesses, credit unions, and some labour market companies
• These are approaches with possible hybrid versions

Differentiating factors of a Social Enterprises

• It relies on a vision/mission statement
• Strives to provide solutions such as help for women, create transportation for everyone everywhere, brands that add good nutrition for people everywhere

How to build a social Enterprise

• Begin to by gaining investments and be ready to scale-up because costs sometimes are higher
• Have a vision/mission statement that is broad
• One must understand what social enterprise they want to design, and what problem needs solving
• Look to develop a business plan and measure the social impact in the finance of the design with your research
• To organize a team, you should have administrative employees, board members, and business partners
• Be passionate, have fun, and engage
• Get help from experts, there are many that aren't alone and engage in networking
• Reflect

Entrepreneurship Stages

• These include: Opportunity Recognition, Goal Attainment, Scale and Sustain, Launch, Resource Requirements and Concept Development

Systems Thinking

• Is whole-system approach, a dynamic view of a problem with patterns, linkages and interactions
• It provides a language for describing and understanding, forces & interrelationships to shape the behavior of systems
• Used to change systems more effectively and to be more in tune with natural processes of natural and economic world
• These processes help people see things that have happened as a system
• One sees parts of the system as described in events in the news
• When digging deeper, people find structure to reoccurring events, revealing possible mental models

System Thinking for Social Problems

• Systems are composed by inter connected parts
• Structure defines its behavior, which is often an emergent phenomenon
• Feedback loops control function, but complex behavior might not necessarily result in behavior with direct connections

Using Systems Thinking

• Acknowledge the problem in the past: find related structure, understand who needs action, how, and when
• By integrating richness to solve the simplicity of required action, people are more comfortable

Employing Systems Perspective

• Includes by building shared understanding of what's known and not known
• Creating a desire to work together
• To ask questions to build insight and flexibility
• By building goals, indicators, and experiments

Identification of Opportunities

• New products/services can benefit society
• Entrepreneurs can earn profit
• To achieve success, and one must create a solution AND give customers incentives

Two Major Philosophical Viewpoints of Opportunity:

• Is is the ability to innovate as a means to problem solve and improve customer and the company. Entrepreneurs are often successful
• Creation and discovery

Discovery View

• Assumes opportunity exists
• Skill and fortune aid discovery
• Caused by the imperfection of the market, and revealed by exogenous shocks

Creation View

• Opportunities enacted socially
• Enactment results from process
• With actions from the entrepreneur

How Social Entrepreneurship Differs

• In addition to context and stakeholders, social entrepreneurs consider the focus
• Education, work, life, social networks, awareness, and systemic ideation are driving factors

2-Phase Approach to Social Entrepreneurship:

• Asses pattern recogniton and social needs
• Opportunity is also a major factor that brings in added value to social value

What Social Entrepreneurs Should Acknowledge:

• Focus on assessment and education
• Focus on skill development and infrastructure
• Focus to have investments and technology

Design thinking

• Design thinking is the methodology used to solve complex problems.

Design Thinking Includes:

• Systemic reasoning
• Intuition
• Customer centricity
• Positivity
• Constructive thinking
• Experiential learning
• Innovation
• Brand differentiation

Design Thinking Lenses

• Feasibility
• Desirability
• Viability

Circular Approach

• Inspiration: an opportunity to solve motivation

• Ideation: develop ideas

• Implementation: what needs to be accomplished.

• A design thinker must be balanced, empathic an optimisic

Stages of Inspiration

• Human centric
• Should follow a framework for progression and measure
• Traditional and research insight
• Can have conventional research
• Be an observer

Innovation

1. Research Synthesis is a needed skill (Linus Pauling was a scientist)
2. Must not believe the 'good/status Quo'
3. Must be open minded to other Ideas
4. Must be willing implement these ideas
5. Understand their ideation is T-shaped, with skills make tangible contributions, are beyond their own benefits
6. One must be the generate ideas, and be prepared to use them visually.

Implementation

• The best ideas are concrete and turn into action
• Through Prototype, ideas refined
• Communication is key

Dunne and Martin’s

Design Process Approach

1. Solve Issues
2. The mental process
3. With abudctive logic, and testing
4. Must Generalize and focus.

• Collaboration is the key and human focus

Conditions To Succeed

• Systems
• Solving complex social challenges
• Requires decision making
• Must have deadlines

Stanford’s Design

Approach

• Categorizes the phases: Solution & Problems
• Requires empathy
• A point of view
• Iterate quickly

SAP’s Design Process

Requires

• Customer
• Management skills
• Communication

Requires

• Creativity
• Multi skills
• Perspective
• Time management

Foundations

• Solves solutions vs problems
• Requires Convergence

Methodologies

• Needs Innovation
• Requires Human interaction

Design Thinking

• Empathize
• Requires critical thought
• Requires constant evolution and thought.

Major Social Problems:

• Poverty
• Unemployment
• Population explosion
• Communalism and communal violence
• Caste/Tribe & Class warfare
• Child abuse
• Domestic violence

Social Research Methods:

• Research question
• Review prior research studies

Social Research

• Exploratory study
• Descriptive study
• Experimental/ Applied work

Proposition

• 70% of services do not achieve success
• Buy in, from the customer
• Must engage in the product

Design and Communication

• Find a brand
• Have statistical backing

One must ask

• What for it can be used?

Social View

• Help assess benfits
• Are you offering value with your team

Key Elements

• Relevance
• Quantifiable information
• Is it different.

Framework for Value:

1. Acknowledge
2. Focus
3. Focus
4. Compete
5. Outperform
6. Is it replicable?