Tuesday, September 29, 2015

The Spectrum of Social Enterprises

Social enterprise has always puzzled me for a number reasons. The primary reason is that there is no set definition for social enterprise, or at least not a standard definition that I have heard. To be considered as a social enterprise, the organization must be founded for the purpose of helping those who are not as well off -- this was my initial thought. Recently the term social enterprise has become a little murkier for me.

I can't confidently put my prior constraints on this when companies like Ikea are making strides to improve living conditions of refugees. Ikea has allocated time and resources to creating shelters for refugees that can be broken-down and moved. Not only are they accommodating displaced refugees, but they are striving to meet a sustainability standard by powering the homes using solar power. Ikea is a for-profit organization, one of the largest in the world. But what they are doing has strong positive social implications.

The typical spectrum tends to range from the conventional nonprofits to the conventional business, with social enterprise in the middle. Ikea falls on the side of conventional business, but what cannot be seen is the social impact they are having. There is no clear cut definition for these large companies. Because of this, creating a spectrum is important, but the knowledge gained about an organization from it is limited. Many companies do charity work, or form "social enterprises" within their existing structure for the positive branding or tax breaks. Although it helps those less fortunate, the decisions are made from a business viewpoint. I want to raise this question: do the intentions of a company matter, if the work they are doing is positively helping those who truly need it?

1 comment:

  1. This post brought to my mind one of our first readings: "All entrepreneurship is social". (http://ssir.org/articles/entry/all_entrepreneurship_is_social). Personally, I wouldn't care. After all, if an enterprise is actually addressing needs that can significantly improve people's life for an affordable price, it doesn't really matter if their main motivation is making profit. Furthermore, this would catch the attention of another entrepreneurs who would be interested on investing on the same field, and having more companies focused on the BoP is nothing but good.

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