SE Summary with Case Studies PDF

Summary Introduction : Hoc1 SE’s experience financial challenges just like any other firm → however they tend to experience more than ‘traditional’ entrepreneurs → to understand that we need to understand the characteristics of an SE Why do...

Summary Introduction : Hoc1 SE’s experience financial challenges just like any other firm → however they tend to experience more than ‘traditional’ entrepreneurs → to understand that we need to understand the characteristics of an SE Why do we have SE’s / relevance: A fundamental characteristic of SE’s is their ambition to resolve complex social & environmental issues → as we know the world has 17 pressing challenges right now as per the Sustainable Development Goals ( SDG) SE’s have a clear focus on resolving these complex social & environmental issues combined with passion creativity & dedication A SE firm focuses on creating social impact but still generates profit to sustain its operations & fund its social change initiatives → some researchers believe that through SE market failures or gvt gaps can be solved What even is a SE: they work towards social transformation & inclusive growth in subsistence by addressing various societal challenges & improving well-being of disadvantages communities → each initiative has its unique approach & focus , but they all share the goal of positively impacting the lives of those they serve Summary 1  Social entrepreneurs focus on improving or transforming existing systems to address social problems, often by enhancing or reforming what's already in place. They act as "change agents," addressing root causes rather than solely disrupting industries. Traditional entrepreneurs, on the other hand, often engage in "creative destruction," introducing new products or services that may render existing ones obsolete, driving innovation through disruption rather than system improvement. → ‘change agents’ : from “ The Meaning of Social Entrepreneurship ( Dees,2001) article. How is the definition of an SE different to that of a ‘traditional’ entrepreneur ?: Entrepreneurs in general : have a mindset that sees the possibilities rather than the problems created by change mobilize the resources of others to achieve their entrepreneurial objectives ‘Innovators who drive the ‘creative destruction’ process of capitalism’ - Joseph Schumpeter ( 20th century) → focus on increasing productivity ‘The entrepreneur always searches for change , responses to it & exploits it as an opportunity’ = Peter Drucker How SE is different: 4 Key factors : How the individual characteristics of SE’s differ from traditional: opportunity recognition combine resources inspirational leadership Summary 2  tend to focus on individuals identifies as successful How and SE’s operating sector differs: bridging profit & service goals activities that enhance social wealth how the processes and resources differ: the tax structure changes → depending on for profit aim for social wealth creation / not economic wealth how the primary mission & outcome differs: creating social value by providing solutions to social problems economic value may be a byproduct ( but not main objective → however SE needs to ensure it is financially healthy , to survive) SE as a concept → means different things to different people : 3 main concepts 1. One group of researchers refers to SE as not-for-profit initiatives in search of alternative funding strategies or management schemes to create social value 2. A second group of researchers understands it as the socially responsible practice of commercial businesses engaged in cross-sector partnerships 3. A third group views SE as a means to alleviate social problems and catalyze social transformation The Entrepreneurial process of SE = the steps, activities, and decisions involved in recognizing opportunities, mobilizing resources, and creating value—whether financial or social. Can analyze this process on 3 steps : Individual Characteristics that an SE has: One of the central characteristics of SE’s is the prosocial personality and emotions associated with a prosocial personality , such as empathy , sympathy , and compassion ( Penner & Finkelstein,1998) opportunity identification & exploitation resource mobilization an innovative approach in delivering the social mission Summary 3  Organizational Level of Analysis:= analyzes how social enterprises as organizations function, manage internal processes, and balance their dual mission—earning profit while solving social issues (called hybridity). = combination of the traditional profit & non-profit organizations → SE’s hybrid organizations need to combine competence related to the social & environmental challenges they pursue with business competences → can lead to tension that should be addressed Institutional level of analysis = how external systems and institutions influence SEs. social transformation needs to happen in concert with social institutions & norms to bring about social change Philanthropists , Church & state have a long tradition for creating non-profit organizations to cope with issues such as poverty , education , housing & healthcare → are either brought under a legal structure or take place informally , without a legal structure the predominant financial logic is to work with donations , grants without autonomous funding from commercial activities Civil society initiatives & NGO’s is another inspiration for SE’s → civil society initiatives have resulted in numerous NGO’s → aiming at protecting specific human or environmental rights or at developing activities with cultural , religious … value financially mainly rely on subsidies , grants & donations for the financing of their activities Summary 4  Social economy is one that combines business activities & social goals → main focus is to achieve community development , solidarity & inclusiveness of disadvantages people in our societies the majority of these organizations have well developed commercial activities and use them as a vehicle to achieve certain social goals → ex. develop commerical activities that provide employment to disadvantaged groups movement also relies on subsidies Base of the pyramid refers to the most vulnerable on our planets ( below poverty line) their small-scale business activities are instrumental for bringing the individual entrepreneurs and their families out of extreme poverty → provide these people with equitable prices for their products BOP entrepreneurs rely on the sales of their products & services , as well as on the support of International NGO’s , for further development of their activities Social innovation where SE’s develop comprehensive business models to realize long-lasting systemic social impact SE’s in this category have a well-developed business model → financial autonomy from business activities is important , but they can still use the same funding sources mentioned in the other types ( e.g. subsidies) Common Exam Question: How is this different from social entrepreneurship ? is it applicable or not to a social entrepreneur? Similarities and differences? social → innovators , who go through a creative process instead of destruction , you repurpose , change things in a positive transformative way ( should not solve a problem by destroying it ) they focus on shareholders to help them social entr. works well with CSR → social entr. can go to businesses already established Social entrepreneurs focus on improving or transforming existing systems to address social problems, often by enhancing or reforming what's already in place. They act as "change agents," addressing root causes rather than solely disrupting industries. Traditional entrepreneurs, on the other hand, often engage in "creative destruction," introducing new products or services that may render existing ones obsolete, driving innovation through disruption rather than system improvement. → ‘change agents’ : from “ The Meaning of Social Entrepreneurship ( Dees,2001) article. HOC2: BUSINESS MODELS SE’s have more complex business models than conventional businesses → that is because : need to focus on customers & beneficiaries need to work with employees & volunteers ( not same method of motivation) Summary 5  work with own resources + resources offered by others ( less control) various income streams legal structures can differ + make funding challenging combination of social & economic goals Business model = the overall logic of the activities of any organization → includes : Planning of overall logic of organizational activities communicating tool of organization activities to various stakeholders explains how value is generated for a variety of stakeholders identifies and validates business opportunities used as a strategic entrepreneurial tool Value of business model: Osterwalder's View: A business model helps visualize, communicate, and improve the understanding of how an organization creates and captures value. → “helps to capture , visualize , understand and communicate [and to] improve measuring, observing and comparing the overall logic of a social enterprise Margetta’s View: Business models focus attention on how all parts of a system work together. Recipes to economically sustainable ventures : three critical steps that guide a business, especially a social enterprise, to ensure it can sustain itself financially while fulfilling its social or economic mission value identification: recognizing the core social or economic problem that the business aims to solve value delivery: effectively implementing the solution value capture: Establishing a sustainable revenue model that allows the business to generate income, covering its operational costs while continuing to meet its mission. exam question : what is the link between a business model and value identification , delivery & capture ? Value Identification: Defines the unique value the business offers to customers, forming the basis of its value proposition. Value Delivery: Describes how the business operationalizes its processes, channels, and partnerships to effectively deliver the identified value to customers. Value Capture: Explains how the business monetizes its value proposition, detailing the revenue model and financial sustainability strategies. Together, these components create a comprehensive business model that ensures a business can meet customer needs, deliver products or services efficiently, and generate profits for long-term success. Traditional Business Model Canvas Summary 6  Sustainable business model A sustainable business model focuses on how an organization ‘captures economic value while maintaining or regenerating natural , social and economic capital beyond its organizational boundaries”-Schaltegger Key questions to analyze in a SE what are the key activities of the enterprise what are the key resources key partners to help achieve activities value proposition for beneficiaries/customers who are the diff types of beneficiaries and customers distribution channels to reach beneficiaries and customers relationship between beneficiaries and customers revenue streams social & environmental impact What makes a sustainable business model more difficult than a ‘traditional’ business model: Has to deal with multiple value creation due to intrinsic drivers Summary 7  need to have visionary leadership basic logic transparent TBL measurement The triple bottom line refers to a business model that prioritizes people, planet, and profit, aiming to create positive social and environmental impact while maintaining financial sustainability. strategic choice value network multistakeholder demands cooperatively organizing can sometimes have different customers and beneficiaries ( = makes it more complex) has both employees and volunteers ( diff ways of motivation) owned & ‘borrowed’ resources various income streams ( depending on legal forms) hybrid goals and logics ( What is a mission drift !: going away from original mission something non-explicitly mentioned in the business model canvas → can split actives & resources( on model) to include about & monitor What are the 9 fundamental business models of SE ( business model typology) Entrepreneur support model : 1. the social enterprise organizes sales to individuals or organizations to find a market for their products Market intermediary model : 1. the SE provides consulting services to individuals or organizations in order to help them to find a market for their products Employment model : 1. the SE provides employment & training to the disadvantages people that they want to help Fee-For-Service Model : the SE develops services & charges those whom they want to help Low-income client as market model : similar to the above model → but focused on poor communities Cooperative model : SE develops services for its target groups , who at the same time are co-operators members of same community will often set up organization together - Coop = cooperative model Market Linkage Model : SE develops information services that help others to design products or services useful for disadvantaged communities Summary 8  Service subsidization model : the SE sells products and services on the market & uses the funds to subsidize its social activities Organizational support model : SE develops the same products or services , which it sells to the general market but gives for free to their target groups Business models of SEs can pivot over the lifecycle of their venture → can use one type of business model during one stage and adapt another later on → ( a combination of the mentioned business models above is also possible) The 4 different types of hybrid → the most difficult to manage/easiest financial models & Typology description mission drift risk structure sustainability practices close to pure commercial market hybrid ( board members- BOP initiatives models → your very low easy easiest) market discipline for basic services customer is your beneficiary high risk ( but additional client is still the hard - additional business & social microfinance blending hybrid intervention needs same as the actions expertise initiatives beneficiary) moderate - integrates clients focus groups and integrated bridging hybrid intermediate automatic and beneficiaries advisory boards business model spillover moderate - most complex creating separate WISE with dual coupling hybrid very high contingent business model legal entities chain services spillover Summary 9  In hybrid businesses, aligning profit-generating activities with impact-generating activities is essential. Value spillovers can be automatic (naturally occurring) or contingent (requiring additional interventions). A key challenge is the overlap between clients (those who pay) and beneficiaries (those who benefit); when these groups don’t align, it weakens market discipline and reduces feedback, which can hinder innovation. → because the people paying are not the same ones benefitting What is a lean structure Lean Philosophy: Emphasizes efficiency and low costs, enhancing flexibility but may strain small teams Limit non-essential costs and overhead for impact. Strengthening SE Models: Utilize traditional models (Seanor & Meaton, 2007). Identify business model types (Alter, 2007). Benchmark against competitors. Embrace criticism for improvement. Align growth strategies with the business model (Saebi et al., 2019). Ensure mission consistency (Grassl, 2012). Continuously iterate the business model for clarity in pitches. Recognize that business models evolve over time. Three Tools used to analyze business models of SE Triple Layered Business Model Canvas A framework to analyze a business model through three interconnected layers: economic, environmental, and social. Layers: Economic Layer: Start with the traditional economic aspects, focusing on revenue streams and cost structures. Summary 10  Environmental Layer: Assess the impact of products/services, including usage, end-of-life considerations, and distribution influences (e.g., the environmental effects of delivery services). Social Layer: Evaluate how the business impacts society, including social value creation and community engagement. Trends Utilize various sources, including trend watchers, marketing officers, designers, and news outlets, to identify and analyze trends affecting the business. Conduct a PESTEL Analysis (Political, Economic, Social, Technological, Environmental, Legal) to evaluate external factors impacting the organization. Summary 11  Systems thinking Consider all aspects of the business environment, including stakeholder analysis to identify owners, employees, competitors, and suppliers. Look at ALL STAKEHOLDERS → Analyze competitive advantage, distinguishing between direct competitors (offering the same solutions) and indirect competitors (providing alternative solutions). Understanding these can lead to valuable insights for benchmarking and improving the business model. exam question : what is the link between a business model and value identification , delivery & capture ? 1. Value Identification: Defines the unique value the business offers to customers, forming the basis of its value proposition. 2. Value Delivery: Describes how the business operationalizes its processes, channels, and partnerships to effectively deliver the identified value to customers. 3. Value Capture: Explains how the business monetizes its value proposition, detailing the revenue model and financial sustainability strategies. Together, these components create a comprehensive business model that ensures a business can meet customer needs, deliver products or services efficiently, and generate profits for long-term success. HOC3: Access to Funding & Impact Measurement The most important primary need in terms of resources and direct support is → Funding which tends to be a challenge → due to the complexity of business models = struggle to attract and obtain investments and capital providers , should not rely on one type of income source ( need to diversify) To strength and improve an SE’s business model , the most important aspect is → impact measurement difficult to establish & determine performance indicators → hard because most of the impact measurement tools use a qualitative rather than a quantitative approach = quantifying impact is complex Financial Life cycle Summary 12  Financial challenges of SE’s access to funding need to understand the process and needs of the main actors in this market have a variety of funding actors and logics → which fits your business model best need to have a solid financial background ( either internally or externally) complexity of the BM understand complexity of: customers vs beneficiaries employees vs volunteers + limited access to skilled consultant resources income : recurrent sales vs. ad-hoc income and donations legal structure : NGO vs. limited liability with social mission balance between social & economic objective → Mission drift predominant focus on social impact Idealism in Social Enterprises: Many social enterprises avoid focusing on money, limiting access to funding opportunities. Funding Paradox: Balancing financial success with social impact is crucial, as funding is granted not just for ideas but for proven execution. Efficiency and Effectiveness: Achieving financial independence through efficient practices helps channel resources toward social goals. Balancing Values: Social and economic values must be aligned to sustain impact and growth. In order to be able to communicate with your stockholders and not only look at social impact : Need to have the three-pillar focus: Summary 13  objectives in each pillar needs to be done in a SMART ( specific , measurable,…) way need to be able to engage your stakeholders→ make them part of the solution , not just inform them Through what are brand , image and identity interconnected Brand , image , and identity are interconnected and essential components of effective communication. To build a strong and positive reputation , its crucial to ensure that these elements are aligned , consistent , and authentic. Successful communication strategies involve managing these aspects carefully to convey the desired message to the audience and build trust and loyalty. Successful communication is centered around: Identity ( internal audience) it is the internal representation of a brand how firm perceives themselves and wants to be perceived → the DNA of the brand → who we are , what we do , why we do it for SE’s these include the attributes not only of the social problem being tackled but also for the communities in which they operate identity is always associated with the positioning of a SE among other social enterprises and other organizations identity is expresses in the : branding elements| messaging | values | overall culture of the organization Important it should align with the brand’s image and be authentic to maintain trust and credibility Image ( external audience) Image refers to the way an organization or individual is perceived by the public. The perception of our image depends on the projected identity and through the market, society, between their competitors and the environment. Shaped through advertising, Summary 14  public relations, customer experiences, social media interactions. Refers the construct of attributes, characteristics, and values that organizations consolidate through their work and supporters vision, mission and tasks (Gray and Balmer, 1998). It is important to manage these touch-points carefully to ensure a positive and consistent image Brand ( external audience) A brand is more than just a logo or a name. It encompasses the entire set of perceptions and associations that people have with a product, service, organization, or individual. It's the emotional and psychological connection with your firm ( ex. Mcdonald’s M sign) A brand consists of various elements Logo, Color scheme, Tagline, Mission statement, Quality of products or services. Important to be consistent and cohesive to communicate a clear message to the audience Reputation ( external audience) Reputation is basically perceived as the message that audiences receive; both image and reputation are construct owned by the public , something located in the receiver within the overall communication process. Reflects the recognition of SE’s identity, traits, behavior's, actions, etc., during crucial moments that identify the actions of the venture. Key aspects of building the communication strategy for SE’s Summary 15  start by understanding your stakeholders → then use the 3 communication pillars each with their own key aspects to consider → operationalize it ! → For a successful communication strategy : Need to look back at your business model at : your activities value proposition customers beneficiaries social impact How to tailor your SE’s narrative to different stakeholders each stakeholder = different message/narrative Personal narrative ( entrepreneur-focuses) To : customers , investors , media Social-good narrative ( social problem focused) To : volunteers , communities , governments Business ( business-focused) To : investors , customers,… → regardless of stakeholder → same bottom line = convincing stakeholders of your adequate and competent personnel and business plan/approach the way communicate with all should reflect identity → message should be built on : consistency clarity transparency to build your reputation Summary 16  Aspects of a good SE communication strategy every plan is unique → context , issues and stakeholders are different in all situations consistency across channels content includes the values , social mission and desired transformation as the main message SE’s can utilize an emotionally loaded message of hope and change communication is important but also need to listen to others ( ex. if investor gives advice to adapt your strategy further or that current strategy is too risky) a good communication strategy can lead to identifying potential funding opportunities and partners , and thus formulating the strategy to access such funding source(s) Including KPIs to main message ( more successful when use specific KPI’s with more data and numbers ) → keep main message according to target audiences pitching : less is more/develop your pitching line and practice it SE’s need to balance all key management elements that can maintain and sustain not only their businesses but a good reputation related to their social and environmental impact What is crucial to convince partners to collaborate with you as a SE reputation , ( bottom line of a SE = social mission → = need social impact assessment : process of research , planning and managing social change or consequences ( everything has consequences) → need to know what they are , measure them & report it Social impact assessment & Theory of change ( ToC) What is a social impact assessment: is a process of research , planning & managing social change or consequences ( positive & negative , intended & unintended) arising from policies , plans , development and projects helps SE’s to present their achievements & it is also useful to present the evolution of those achievements of the years → this requires keeping track record of objectives , activities , partnerships and results Consists of (1) theory of change & (2) social impact value chain - both derive from the vision and mission: Summary 17  describes the intended social impact of the venture becomes the heart of the venture’s strategy encompasses venture’s mission and values outlines short and long-term intended outcomes , the means for achieving them & a description of what success will look like dynamic = may change over time Step 1 : theory of change it helps to present achievements , and keep track of the evolution those achievements ( track record of objectives , activities , partnerships and results) a theory of change helps with various indicators such as : goals : clear specification of social & environmental goals ( specify the short & long term) rationale : explain why these goals are important activities : identify activities that can lead you to the achievement of the above-mentioned goals stakeholders : identify relevant stakeholders , essential for the achievement of the above- mentioned goals KPI : identify key performance indicators that help you to monitor the activities and outcomes related to the goals Summary 18  The main message with the theory of change for SEs is that they need to measure and evaluate their activities in order to realize the social imapct Step 2 : impact value chain!! Every definition of impact needs to distinguish : The resources used (input) can include the human, financial, and organizational resources needed so the action/program/venture can meet its goals. Summary 19  The activities (concrete actions implemented by the action/program/venture; e.g. produce, provide, deliver, etc.). The measurable quantity of goods/services produced (output). A direct result of the activities done. The results in the direct beneficiaries (outcome); -these are the specific changes to the direct participants in the action/program/venture. Short-term outcomes 1-3 years; long-term outcomes 4-6 years. The changes generated in the indirect beneficiaries and in the population (impact) are the societal changes that happen over time as a result of the action/program/venture. Stakeholder engagement important to benchmark the social and financial performance & hence other SE’s and all kinds of direct or indirect competitors become an important stakeholder in the impact measurement process as well a good ToC process is transparent and systematic ( Maas & Grieco , 2017) Summary 20  the process of stakeholder engagement needs to be embedded in the overall impact measurement process tangible results are an essential element to be verified as part of the theory of change it is important to start associating with competitors , events , incubators or network organization → helpful to gain legitimacy, to get training or simply to get noticed by relevant peers and supportive networks The classical types of stakeholders , how can you classify any group or individual who can affect or is affected by the achievement of an organization’s purpose = stakeholder → any person with interest in firm Primary stakeholders without whose continuing participation the corporation cannot survive as going concern (shareholders and investors, employees, customers, suppliers, government and providers of infrastructure and markets) Secondary Stakeholders Influence(d) or affect(ed) (by) the corporation … but are not essential for its survival (media, interest groups) (Clarkson, 1995, pp 106-107) Exam Question:can ask on exam what are the diff ways to start communicating to stakeholders = imp to learn this slide ( diff kind of stakeholders need diff kind of narratives → what stakeholder would you focus on first , how would you make selections) Summary 21  fringe stakeholders → can be an incredible source for innovation ( they see things differently because they are not involved ) → in that sense can still be important Primary and Secondary Stakeholders: Primary Stakeholders: These are individuals or groups that are directly affected by the actions and decisions of the organization. They often have a significant influence on the organization's success and are closely involved in its operations. Examples include customers, employees, and investors. Secondary Stakeholders: These are individuals or groups that are indirectly affected by the organization's actions and decisions. They may have less influence and involvement compared to primary stakeholders. Examples include government agencies, the media, and the general public. Internal and External Stakeholders: Internal Stakeholders: These are individuals or groups within the organization, such as employees, managers, and shareholders. External Stakeholders: These are individuals or groups outside the organization, such as customers, suppliers, regulatory agencies, and community organizations. Core and Periphery Stakeholders: Core Stakeholders: These are the most essential stakeholders for an organization, often closely linked to its core activities and mission. They have a high level of influence and interest in the organization's success. Periphery Stakeholders: These stakeholders have less direct influence and may be less essential to the organization's core operations. They might have a lower level of interest or involvement. Salience Model This model combines attributes of stakeholders, such as power, legitimacy, and urgency, to determine their level of salience. Stakeholders are classified into one of the following categories: Influence-Interest Matrix This matrix categorizes stakeholders based on their level of influence and their level of interest in the organization's activities. Stakeholders can be classified as : high influence/high interest, Summary 22  high influence/low interest, low influence/high interest, low influence/low interest. Characteristics of a good impact measure should be translating social impact message into very concrete numbers General tips to improve communication strategies The focus of a social entrepreneurial communication strategy should be centralized on two aspects. On the one hand , an authentic story. On the other hand , a valid set of KPI’s Building blocks needed to help a SE get the right kind of funding : business models , ecosystems , social measurement of impact , communications Summary 23  Exam question : Which are the growth capacities and limitations for social entrepreneurial business models?when ask give a summarized response regarding the challenges and the strategies and type of business models Exam Questions: get a SE asks for advice at incubation centre want to develop business idea already tested out with family & friends , what kind of questions are you going to ask to start the financial life cycle of the SE ? → what sources ? HOC4: Building an Ecosystem Supporting SE’s What are the main challenges social entrepreneurs face? How could you categorize them? Primary needs in terms of resources and direct support Strengthening and improvement of business models funds scaling social impact attracting and managing human resources impact measurement professional management acquiring legitimacy networking mission drift Relevance of Ecosystems Ecosystem thinking is a powerful tool to engage various stakeholders in supporting SE’s goals , amplifying their visibility , mobilizing the necessary resources needed to bring their business to the next step What is an ‘ecosystem’ Business Ecosystem Companies collaborate and compete to support innovations, meet customer needs, and evolve with new products. (Moore, 1993) Entrepreneurship Ecosystem (EE) Combines leadership, culture, capital, and support (e.g., NGOs, infrastructure, advisors) to help entrepreneurs thrive. (Iseberg, 2010) Social Entrepreneurship Ecosystem (SE EE) A network of interdependent actors (civil society, government, financial institutions) that work together to solve social problems and create social value (e.g., through tax incentives and risk reduction). (de Bruin et al., 2022) an economic community of interacting actors that al affect each other through their activities considering all relevant actors beyond the boundaries of a single industry What is the Entrepreneurial Dimension in Ecosystems? (Germain et al., 2022) Why is it overlooked? Summary 24  System-oriented research often ignores the role of entrepreneurship in economic development. (Acs et al., 2017) What makes it unique? Focus on identifying and exploiting business opportunities. (Autio et al., 2018) What is its potential? Supports sustainable societal development. (Volkmann et al., 2019) The different domains of the Entrepreneurship ecosystem How SE’s and Entrepreneurial ecosystems can create a greater social impact Interaction effects of Sub-ecosystems Summary 25  Different authors have different definitions for an ecosystem , what do we learn from these definitions the support function of ecosystems relies on the contributions of multiple interconnected actors the interactions of ecosystem actors is organized by different activities and exchanges , allowing the mobilization of multiple resources , knowledge's and capabilities (Audretsch & Belitski, 2017; Hechavarria & Ingram, 2015) we argue that these interactions of actors and their support activities can benefit SEs to address the different challenges , both in achieving their social mission as well as to consolidate their business activities the need for support in the case of SEs varies according to their context , nature of the problem being addressed and the institutions surrounding them (Roundy, 2017) What are the elements of Ecosystems ( Adner , 2017) activities : which specify the discrete actions to be undertaken for the value proposition to materialize actors : which are the entities that take the activities → a single actor may make multiple operations , conversely , various actors may undertake a single action positions : which specify where - in the flow of activities - across the system actors are located and characterize who hands off to whom links : which define transfers across actors , the content of these transfers can vary material , information , influence , funds Summary 26  What are the main challenges in an ecosystem 1. Communication & Collaboration What is fragmentation? Numerous stakeholders operate independently, leading to isolation within the ecosystem. How does information asymmetry impact the ecosystem? Gaps in information hinder decision-making and partnerships. Why is trust important? Trust is essential for effective collaboration among participants. How long does it take to develop an ecosystem? It’s a long-term effort requiring patience and sustained effort. 2. Cultural and Social Factors How does risk aversion impact ecosystems? Cultures with strong aversion to risk discourage entrepreneurship. What role does an entrepreneurial mindset play? Cultures focused on traditional careers and stable jobs may limit entrepreneurial thinking. Why are role models important? Successful entrepreneurs inspire and motivate aspiring entrepreneurs. 3. Resource Availability and Allocation What is talent scarcity? Difficulty in attracting and retaining top talent. How does support and funding availability impact ecosystems? Lack of supporting services and funding limits ecosystem growth. Why are entrepreneurial ideas important? Both the quality and quantity of innovative ideas drive the ecosystem’s success. strategies and initiatives to overcome these challenges Networking Host events (e.g., conferences, meetups) to connect stakeholders. Create online platforms for sharing resources and advice. Build partnerships between governments, universities, and private organizations. Education and Mentoring Promote entrepreneurship education to reduce stigma and foster innovation. Connect experienced entrepreneurs with aspiring ones through mentorship programs. Policies and Incentives Offer tax breaks, grants, and subsidies to support entrepreneurship. Summary 27  Attract talent and investors through targeted programs and incentives. SEs should engage widely across ecosystems for visibility. The interplay between different components that contribute to its growth → the characteristics of a community that supports entrepreneurial activities Being systematic: The community focuses on the entire environment in which entrepreneurs operate. Emphasizing networking: The community encourages networking among key players within the environment. Thinking and active action: Everyone in the system is engaged in both thought and action. Providing infrastructure: The community offers financial, human, physical, and social capital to support entrepreneurs. Establishing an Ecosystem Ecosystems result from intelligence evolution (Isenberg, 2010). Social Entrepreneurs (SEs) enable ecosystems through their social motivation, opportunity identification, need for capital access, and interactions with multiple stakeholders (Lumpkin et al., 2013). Ecosystem establishment varies due to historical (genetic), institutional, and environmental (epigenetic) factors, as well as different organizational forms (phenotypes). The lifecycle of ecosystems includes stages of birth, expansion, leadership, and self-renewal. Summary 28  How can a SE become an Entrepreneurship Ecosystem champion get to know your fellow entrepreneurs tap into networks make a useful connection with partners across universities exchange your view with the government put multinational and other companies in your radar align with the local culture and festivities of your city search for networking opportunities online engage with financial institutions create an impact effort matrix How to have a thriving entrepreneurial ecosystem Summary 29  Quick Summary : ecosystems are powerful networks around SEs that can facilitate access to different resources , including access to funding , thanking to the variety of actors , their specialization , and their interconnectedness ecosystems are dynamic structures → they take different forms and include several actors , depending on the expected ecosystem actor they are unique and therefore SE’s, depending on their mission and objectives , should be able to identify the relevant players and the support needed around these networks ecosystems provide access to different levels of support from institutions and organizations → the interaction with fellow entrepreneurs is key to understanding the ecosystem dynamics & main actors , sharing knowledge with peers can be extremely valuable experience as well ecosystems offer several possibilities for SE’s to grow their impact → interaction is key to being able to design your ecosystem strategy , depending on your specific needs of support → it is key to prioritize ecosystem opportunities and to select those that have the most impact on your social enterprise Building Sustainable Partnerships - Scaling Previous Exam Question : how can you describe the role of social enterprise in society? what are their contributions , functions and limitations? should include the different forms and types that exist , not all are non-profit , not all have customers and beneficiaries as the same common theme of SE = solving social problems → in a positive way so that the problem does not exist anymore in the long term → this is a process of ‘scaling’ What is scaling scaling is the process of expanding or adapting an organizations output to better match the magnitude of the social need or problem being tackled Why scale the purpose of scaling is to grow social impact to match the magnitude of the need of problem a social venture seeks to address high impact SE’s and philanthropists are expected to use venture capital models that focus on maximizing social return on investments ( SROI) the emerging paradigm is to expand the bottom line ( social impact , positive environment impact , and/or profits) What are scaling strategies in social entrepreneurship, and how is social impact relevant? Relevance of social impact: Summary 30  Focuses on the size, depth, and reach of social impact, assessing how many people are helped and in what manner. What are the types of growth strategies in social entrepreneurship? 1. Scaling Up: Expanding activities or operations to reach more people. Increases market share through innovative solutions. Emphasizes operational growth of the business model. 2. Franchising: Used when resources are limited for independent expansion. Involves a third party replicating the franchisor's business model and name. A subtype of scaling across, relying on partnerships and network creation. 3. Scaling Across: Sharing social innovation with external partners. Establishing networks of joint ventures and affiliations. Includes informal approaches like openly sharing knowledge. 4. Other Strategies: Scaling down: Reducing services to focus on fewer issues. Scaling deep: Improving quality and efficiency (capacity building). Scaling out: Addressing a new social problem using existing experience and networks. Diversification: Expanding geographically or diversifying services. What are the key methods of organizational growth in a SE? 1. Dissemination: Definition: Making services and intellectual property widely available for use. Advantages: Cost-effective, quick adoption, maximizes mission accomplishment, fosters relationships with social sector players. Disadvantages: Limited quality control, potential loss of intellectual property rights. 2. Branching: Definition: Growth through establishing multiple offices beyond headquarters. Advantages: Maximizes control over operations. Disadvantages: Resource-intensive, requiring additional facilities, staff, and management. 3. Affiliation: Definition: Growth via loosely connected, locally managed offices. Advantages: Cost-effective due to local self-sufficiency, balances central guidance with local autonomy. 4. Social Franchising: Summary 31  Definition: A hybrid of branching and affiliation, involving a parent venture (franchisor) and affiliated ventures (franchisees). Advantages: Faster scaling at lower costs, retains control over quality and brand identity. How do dissemination, branching, affiliation, and social franchising align with scaling strategies? 1. Dissemination: Fits under Scaling Across: Involves sharing social innovations and knowledge with external partners. Dissemination focuses on spreading services and intellectual property widely, aligning with the goal of sharing and collaboration in scaling across. 2. Branching: Aligns with Scaling Up: Involves creating multiple offices or locations to directly increase activities and operations, aiming to reach more people and grow market share. 3. Affiliation: Fits under Scaling Across: Establishes a network of loosely connected, locally managed offices. This strategy emphasizes relationships and networking, consistent with the principles of scaling across. 4. Social Franchising: Part of Both Scaling Up and Scaling Across: Scaling Up: Replicates the business model to expand operational reach. Scaling Across: Builds networks and partnerships, blending elements of branching and affiliation to combine operational growth with collaborative networks. How do dissemination, branching, affiliation, and social franchising contribute to scaling strategies in social entrepreneurship? 1. Dissemination (Scaling Across): Definition: Making services and intellectual property widely available for use. Advantages: Cost-effective, quick adoption, maximizes mission accomplishment, fosters relationships with social sector players. Disadvantages: Limited quality control, potential loss of intellectual property rights. 2. Branching (Scaling Up): Definition: Growth through establishing multiple offices beyond headquarters. Advantages: Maximizes operational control. Disadvantages: Resource-intensive, requiring additional facilities, staff, and management. 3. Affiliation (Scaling Across): Definition: Growth via loosely connected, locally managed offices. Advantages: Cost-effective due to local self-sufficiency, balances central guidance with local autonomy. 4. Social Franchising (Scaling Up and Scaling Across): Definition: A hybrid approach with a parent venture (franchisor) and affiliated ventures (franchisees). Advantages: Enables faster scaling at lower costs, retains quality control and brand identity. Summary 32  Practice Scenarios → good practice for exam Scenario A ‘tested model’ = your business model works ‘rapid growth’ and ‘maintain bran integrity’ and keep control if said ‘successful’ would assume that cost is not a problem and go for branching answer would be : you don’t have all the information to make that choice , could go for franchising if cost is the problem, if have enough of money can go for branching In exam : Give your arguments , with assuming x,y,z with the information we have → but don’t just say will go for branching because it is very quick without taking into account all areas such as the expense as it was not explicitly mentioned that money is not a problem for the enterprise Scenario B needs to be cost effictive want to reach as many people as possible don’t have time to hold their hand = go for dissemenation Scenario C affiliation , because don’t have more info about how much want to control things Scenario D = branching What challenges does an SE face when deciding to scale? inertia based resistance → the staff and board of the social venture do not see the urgency for growth the venture lacks the necessary human resources and skill sets to support growth threat based resistance → internal culture feels growth detract from its mission lack of strong and visionary sustainability leaders , or champions , driving the cultural and structural changes venture’s board of directors does not support entrepreneur’s vision for growth the cause and effect between social and economic value creation activities and intended social and economic results are ambiguous and seem disconnected Summary 33  the stakeholder community does not support the entrepreneur’s impetus for change there is a lack system’s perspective or theoretical outlooks on societal changes the venture cannot demonstrate measurable success in achieving its mission a lack of systematic consideration of a wide set of stakeholders who have a stake and responsibility in the value creation system How do social enterprises manage objectives and growth effectively? 1. What is the main challenge in managing social enterprises? SEs must balance social and commercial objectives, requiring careful management at both individual and team levels. 2. What mechanisms and processes support this balance? Communications: Aligns individuals on shared goals through effective recruitment and discussions. Essential for synchronizing social and commercial objectives. Fit of Values: Aligns internal and external stakeholders' values. Partnerships based on shared values create mutually beneficial relationships and resource support. Partnerships: Extend the SE’s communications reach and boost credibility. Aid in balancing social and commercial objectives. Reinforce SE values through tangible outcomes. Agile Teams: Encourage open discussions on objectives, procedures, and responsibilities. Reduce power distances, fostering collaboration and focus. 3. What are the iterative management processes for social enterprises? Alignment: Ensuring objectives, values, and activities align across stakeholders. Reflection: Continuously assessing and adjusting strategies to maintain balance and effectiveness. What is the need for sustainable societies, and how can it be addressed? Goal: Achieve a climate-neutral Europe by 2050 under the European Green Deal. Innovation strategies focus on efficient resource use, waste reduction, and ecological and social sustainability. Transformation requires shifting from traditional linear models to systematic innovations. Collaboration between businesses, governments, and civil society is crucial for sustainable practices. What are sustainable partnerships, and how do they function? Definition of Partnerships: Summary 34  Partnerships are collaborative processes involving autonomous actions, shared information, and flexible decision-making guided by functional rules and norms. What do sustainable partnerships focus on? Addressing social and environmental challenges. Pursuing long-term goals for meaningful impact. Involving all relevant stakeholders to ensure successful social transformation (Eiselein et al., 2023). What is the role of vision in sustainable partnerships (SPs)? Shared Mindset: Essential for aligning stakeholders toward long-term goals. Stewardship Philosophy: Emphasizes social and empathetic motivations, fostering collectivism and reliability in stakeholder relationships. Motivational Drivers: Encourages stakeholders to transcend organizational boundaries, focusing on ethical and business imperatives for sustainability. Circular Principles: Combines circular economy (CO) and scaling strategies to maximize resource efficiency. What is the role of stakeholders in SPs? Integration: Includes various helices to form effective partnerships. Role Determination: Identifies and defines each stakeholder's unique role within the partnership. Partner Activities: Specifies collaboration and contributions tailored to stakeholders’ strengths and capabilities. Partner Capacities: Harnesses collective resources, expertise, and potential for sustainable outcomes. What is the process for developing SPs? Procedural Phases/Stages: Follows systematic steps like initiation, implementation, and stabilization. Management Instruments: Utilizes tools and technologies for performance tracking, decision-making facilitation, and effective administration. Governance Methods: Employs strategies for inclusive governance, stakeholder engagement, resource allocation, and innovative solutions. What are the 9 fostering principles of SP’s? Trust: Establishes a foundation of mutual respect and confidence, encouraging openness and collaboration. Recognition of Contributions: Acknowledges the efforts of all stakeholders, promoting equality and managing power dynamics. Complementarity: Leverages the unique strengths of each stakeholder, fostering collaborative relationships. Transparency: Ensures open communication, builds trust, and prevents misunderstandings. Equality: Treats all stakeholders fairly, ensuring every voice is valued and heard. Inclusivity: Involves all relevant stakeholders in decision-making, enhancing effectiveness with diverse perspectives. Summary 35  Pragmatism: Focuses on practical, achievable goals and tangible results, ensuring the partnership remains grounded. Flexibility: Adapts to changing circumstances, ensuring the partnership can navigate dynamic challenges. Collegiality and Systems Thinking: Promotes cooperation and understanding the interconnectedness of actions within the partnership and the broader system. What are the different dynamics in SP’s 1. Fostering Principles and Culture: Promote trust, equality, transparency, and collaboration. Recognize stakeholders' contributions. Encourage open communication and fair dialogue. Involve all stakeholders in decision-making. Focus on systemic thinking and collective value creation. Continuously monitor and evaluate progress. 2. Collective Vision: Create a shared vision and common goals for all stakeholders. Emphasize stewardship philosophy and scaling principles. 3. Stakeholder Expectations: Align stakeholder expectations, roles, and contributions. Develop a clear policy framework for roles and responsibilities. 4. Ecosystem Constellation: Define clear roles and responsibilities. Maintain flexibility in roles. Link roles to resources (knowledge, materials, money) for support. 5. Partnership Oversight: Use procedural phases, management tools, and governance methods. Initiate co-creative collaboration processes. Employ ICT tools for managing partnerships and decisions. Develop governance methods for effective collaboration. 6. Scalability and Replicability: Ensure the partnership can scale and replicate successful models. Summary 36  Exam Q : mini case , which type of strategy would be the most suitable for the SE: depends on the resources that SE has how much control you want to have → brand reputation etc… how urgent it is for you to scale → maybe if partners & investors are pushing to scale , other times might be better to not scale how difficult is it to replicate or scale up your operations model Summary 37  All Cases HOC 1 Examples: HOC2 Case Study: Mobile School /Streetwize capable kids but without opportunity to go to school → what if we bring school to them ? HOC 3 !! Goods to give ( Case study ) : in book → a good case to analyze All Cases 1  2 major social problems → goods to give came up with idea of combining these social problems to solve each the stories impact is clear , because they used numbers to describe their achievements → they made the 3 pillars very clear → these KPI’s need to be their for any pitch as an SE ( helps to tell your story clearly ) They have a broad network of support : founding partners pro - bono partners project partners All Cases 2  product partners Diversicom ( Case Study) Their statement is very clear → what they want to achieve and for who ( your how , what and why are clear ) All Cases 3