1. Chapter 3 Social Enterprise Management

2. Objectives To identify key skills for social enterprise management To study appropriate business model option for social enterprise To derive learning for social enterprise Social Entrepreneurship Chapter 3: Social Enterprise Management

3. Introduction The distinguishing characteristic of social enterprises is that their sole goal is not ‘Profit Maximization’. Social enterprises often engage themselves in goods and service sectors which are either ignored or not sufficiently catered by for profit organizations. Social enterprise requires hard work, flexibility and entrepreneur needs to wear many hats. The traditional approach for managing industries, may not work and a special deliberation is required on management of social enterprises. Social Entrepreneurship Chapter 3: Social Enterprise Management

4. Key Skills for Social Enterprise Management People Management Marketing Know How Fund Management Empowerment Social Entrepreneurship Chapter 3: Social Enterprise Management

5. Business Model for Social Enterprise 1.Profit Generator Model 2.Trade-off Model 3.Lock-step Model Social Entrepreneurship Chapter 3: Social Enterprise Management

6. Profit- Generator Model The trading activity itself is primarily seeking a financial return only. As such, it is deemed to have no direct social impact. Social investment in Model One involves two ‘bets’ – (i) The business will in fact make a profit; and (ii) The profit generated is then effectively used to achieve social impact. The financial risk of the investment is disconnected from the likelihood of achieving social impact. Examples of Model One include - For-profit businesses with CSR programmes - Charitable foundations investing their endowments in mainstream financial markets. Social Entrepreneurship Chapter 3: Social Enterprise Management

7. Trade- off Model In this model, the trading activity itself does have direct social impact, but a balance has to be struck between generating financial returns and creating social impact. The firm could increase its social impact by decreasing financial returns, or vice versa. In other words, there is a tradeoff. Examples include: Fair trade businesses Microfinance institutions Firms that employ the disabled, ex-offenders or other disadvantaged people Social Entrepreneurship Chapter 3: Social Enterprise Management

8. Lock-step Model Model Three – ‘Lock-step’ In this model, not only does the trading activity itself have direct social impact, but that social impact increases or decreases in lock- step and in parallel with financial returns. Model Three type firms are scarce, and it may be that outside of their discrete activity, there is a trade-off taking place, e.g. the visual impact of wind farms on rural areas. Such organisations clearly operate in competitive markets – both with other Model Three firms and with substitution products, e.g. with a wind farm, coal-powered electricity generation. Social Entrepreneurship Chapter 3: Social Enterprise Management

9. Learning for Social Enterprise Framework There is therefore a need for better-targeted and widely available training in social enterprise management. A new professional qualification in social enterprise management, which recognises the specific skills needed, would raise the profile of the sector and thus improve labour market transparency and job quality There are skills issues specifically related to the field of personal care. Professional standards are needed to guarantee service levels to clients, to provide accountability to funders, and to offer stable career paths to workers. Transnationally accepted professional qualifications also promote cross- border labour mobility.. Social Entrepreneurship Chapter 3: Social Enterprise Management

10. Summary Management of social enterprise is complex. The traditional approach for managing industries, may not work and a special deliberation is required on management of social enterprises. Key skills for management of social enterprise include people management, marketing know-how, fund management and empowerment. There are three business models to choose from. A new professional qualification in social enterprise management, which recognizes the specific skills needed, would raise the profile of the sector and thus improve labour market transparency and job quality Social Entrepreneurship Chapter 3: Social Enterprise Management