Lesson 1. Types of social business and social business strategies
A social business is one type of social enterprise, as we can see in the following table:
Table 1: Sources of literature and associated ideal types of social enterprise (Teasdale 2009 )
|Source of literature||Key sorces||Defining principles||Examples of social enterprise||Ideal tupe|
|The Co-operative movement||Spear et al. 2001; Borzaga and Defourny 2021a; Nyssens 2006||Collective decision making and common ownsership.
|Worker Cooperatives||Community business|
|Community development||Williams and Windebank 2001; Evans 2007||Bottom up response to social problems.
Collective decision making process involving local community
|The voluntary sector||Pharoah et al 2004; Amin et al. 2002||Social Enterprise as income generation to help pursue social mission.
|Voluntary organisations contracted to deliver state services.
|Social business||Westall, 2001; Department for Trade and Industry 2002||Economically viable businesses with a clear social purpose.
Hierarchical decision making process.
|The Big Issue||Social business|
A social business is a traditional business but with a social goal where all the metrics can be applied as in any other business, for example, using a model based on a hierarchical decision-making process centred on the individual manager or CEO. It can be a for-profit or not-for-profit business, and classified as one of the following types of organisations:
– Trading enterprises
– Financial institutions
– Community Organizations
– Non-Governmental Organizations (NGOs) and Charities
There are six main strategies according to studies which can be used to develop a business model:
- Factors related to the product or service; How do we create value?
- Market factors: Who do we create value for?
- Internal capability factors: What is our source of competence?
- Competitive strategy factors: How do we competitively position ourselves?
- Economic factors: How can we make money?
- Personal/Investor factors: What about our time, scope, and size ambitions?