Economics Essay – Social Enterprise Business

Social Enterprise Business

Exploring the Social Enterprise Potential for Sustainability in the UK

Abstract

Social enterprise is a dynamic and sustainable business model of choice which is able to bring social, economic and environmental benefits to the UK. It operates across all sectors of the economy, serving individuals in the private, public and third sectors. Through out this research will identify the increase levels of understanding of the role and value of Social Enterprise, given that a lack of understanding of the role and value of social enterprises was cited as a major barrier to the acceleration of the use of the business model. The purpose of this research will identify the key barriers faced by Social Enterprise and explore how these barriers have/could potentially be overcome to achieve sustainability. There is also a need to recognise that some social enterprise activity will need an element of finance through public funds, particularly because they are operating in areas of market failure or a non-commercial market such as providing services to vulnerable people, including supported employment in many cases. This paper is intended to create an environment which will lead to opportunities for social enterprise to grow successfully in the future.

Table of Contents

1. Introduction

   1. A Brief Overview of Social Enterprise

   2. Purpose of Study

   3. Structure of the Report

2. Literature Review

   1. Roots of Social Enterprise

   2. General Discussion on Social Enterprise

   3. Discussion Relevant to Sustainability of Social Enterprise

   4. Policy Reform and good Governance

3. Background Information about Social Enterprise

   1. Social Enterprise in The UK

   2. Positive Aspects of Social Enterprise

   3. Barriers of Social Enterprise

   4. Sources of Fund

4. Methodology

   1. Research Design

   2. Research Approach

   3. Sampling

   4. Data Collection

5. Research Finding and Implementation

6. Conclusion

References

Appendix:

Appendix 1: List of Key Informants

Appendix 2: List of Social Enterprise Studied

Appendix 3: Questionnaire

Appendix 4: Summery of Interview Transcripts

List of Tables:

Organizational Profile

List of Figures:

Production of Social Enterprise

Sustainable Social Enterprise

Financial Sustainability

Beneficiaries of social enterprise

List of Acronyms

CDFI Community Development Financial Institutions

DTI Department of Trade and Industry

GEM Global Entrepreneurship Monitor

ICT Information and Communication Technology

NCVO National Council for Voluntary Organization

OECD Organisation for Economic Co-operation and Development

RISE Regional Infrastructure for Social Enterprise

SEL Social Enterprise London

SETL Social Economy Task force for London

SME Small and Medium Enterprise

Chapter 1: Introduction

A brief overview of social enterprise is introduced in the first chapter. Then, the purpose of the study will be next discussed which will end with a specific research question. In the end of this chapter the contribution of this research and limitation of the study are also presented.

6. 1. A Brief Overview of Social Enterprise

Social enterprises are organisations that supply goods and services as part of the social economy sector; this group constitutes a collection of organisations that exist between the traditionally private and public sectors and has a stronger relationship with the Community and Non-profit sector. This sector has a key role to play in achieving many of its goals, including overcoming social injustice and exclusion

The common definition most often used by social enterprise organisations themselves,

emphasises three common characteristics:

Enterprise oriented – they are directly involved in the production of goods and the provision of services to a market. They seek to be viable trading concerns, making a surplus from trading.

Social aims – they have explicit social aims such as job creation, training and provision of local services. They are accountable to their members and the wider community for their social, environmental and economic impact.

Social ownership – they are autonomous organisations with a governance and ownership structures based on participation by stakeholder groups (users or clients, and local community groups etc.) or by trustees. Profits are distributed as profit sharing to stakeholders or used for the benefit of the community.

Social enterprises are becoming a recognised part of the local and national economy in the UK, and the organisations operating in this sector are aware that becoming sustainable businesses is the path to independence both financially and in mission. However, social enterprises, in common with many small businesses, find growth difficult, and this could impact negatively on their sustainability. These should be supported and encouraged to grow both as a sector and as individual organizations so that these will become more sustainable organizations.

6. 2. Purpose of the Study

My paper has been developed to explore how the term social enterprise has acquired meaning in England and to illustrate how practitioners, policymakers and academics influence each other in the development of new sustainable ideas, given that a lack of understanding of the role and significance of social enterprises was cited as a major barrier to the acceleration of the use of this business model.

These challenges come in many forms. Some are the same as those affecting any other business including access to business support and finance, a lack of affordable premises and finding skilled staff. However, social enterprises also face one huge barrier that seriously affects their ability to assume a position within the market. That barrier is a lack of understanding of how social enterprises work and of their potential value. This lack of understanding exists across the public, private and voluntary and community sectors. The confusion and conflict about what the model could or should be for results all too often in misrepresentation and exaggeration of its potential, fragmentation in the provision of support and real and perceived barriers to accessing contracts and mainstream funding opportunities.

So my dissertation will identify the key barriers faced by Social Enterprise and explore how these barriers have/could potentially be overcome in order to achieve sustainability. It examines critical incidents that have shaped the meaning of social enterprise in England and reflects on these incidents to draw conclusions about the future sustainable development of social enterprise practice. Through out this paper I will also examine the potential conditions for the growth of social enterprise through a set of outline scenarios. The aim is to inform both policy-making and the wider debate about social enterprise: what its potential might be and how that potential can be realised in different settings. So my research question is:

To explore how the social enterprise is potential for sustainability in the UK

1.3 Structure of the Report:

This research is divided into five chapters: the first chapter is an introduction with purpose and limitation of the study. In the second chapter, literature based review of definitions of social enterprise, roots of social enterprise, discussion relevant to the sustainability of social enterprise, the nature of their contribution and their sponsors and sources of funding. The third summarises the background information of social enterprise in the UK and the fourth and fifth chapter contain the methodology and the summary of the main findings of the study with implications for policy.

Chapter 2: Literature Review

This chapter will give an overview of literature and models that are related to the research problem presented in the previous chapter. This chapter will introduce the roots and concepts of social enterprise in order to give a clear idea about the research area.

2.1 Roots of social enterprise

Scott specified (2006, p50) mentioned The roots of social enterprises and community enterprise overall can be found in the mutual, self help and co-operative sector which goes back, in the UK, at least to the Fenwick Weavers in Ayrshire 1769 and Dr William King of Brighton in the 1820s with earlier antecedents. Within the development of this movement there has always been an important strand which has focused on the local community-based nature of these organisations and also on the economic development of poorer communities including the need to maintain paid work. For example between the two world wars, local community activists such as Harry Cowley campaigned for housing and work for returning service people and support for small local businesses. He organised marches to demand public works ‘job creation’ programmes from the local council for unemployed people with some success.

2.3 General Discussion on Social Enterprise

Social Enterprises combine the need to be successful businesses with social aims. This is a competitive business, owned and trading for a social purpose. They seek to succeed as businesses by establishing a market share and making a profit and emphasise the long-term benefits for employees, consumers and the community.

Today’s completive business world defining social enterprise is a challenging task, according to OECD (1999, p.10) there is no universal, commonly accepted definition of Social Enterprise. However, the OECD (1999, p.10) has defined social enterprise as:

any private activity conducted in the public interest, organised

with an entrepreneurial strategy but whose main purpose is not the

maximisation of profit but the accomplishment of certain economic

and social goals, and which has a capacity of bringing innovative

solutions to the problems of social exclusion and unemployment.

Bob Doherty and John Thompson mentioned in the journal ‘The diverse world of social enterprise stories'( 2006, p.362) that social enterprises are organizations which are seeking business solutions to social crisis. These are needed to be differentiated from other socially-oriented organizations. These also need to take initiatives that can promote to communities but which are not wanting or seeking to be businesses. In this esteem these latter organizations remain dependent on endowments and donations rather than build up true paying customers.

According to DTI report ‘A Progress Report on Social Enterprise: A Strategy for Success’ (2003, p.6), social enterprise is such a business which reinvests its surpluses in the business or in the community rather than increases profit for shareholders or owners.

Peter Drucker argues that social entrepreneurs …change the performance capacity of society (Gendron, 1996, p. 37) while Henton et al. (1997: p.1) speak of ‘civic entrepreneurs’ as …a new generation of leaders who forge new, powerfully productive linkages at the intersection of business, government, education and community .

Ali B. Somers (2005, p.46) stated Social enterprise emphasise creating social and/or environmental value at all stages of their production process, as an intrinsic part of their identity. Following Figure: 1 describes the production process of social enterprise.

_Inputs

Production Process

Outputs: Goods and Services

Labour Employee/ Client

Raw Materials: from Environmental Sources

Goods and services sold to market: Economic Profit, Social Profit and Environmental Profit

Economic Profit flows back to Social Enterprise and Ethical Investors

Social and Environmental profit flow to Community

Indicates environmental and social motives affect production

Figure: 1 Production of Social Enterprise

Source: Somers, A.B., 2005. Shaping the balanced scorecard for use in UK social enterprises. Social Enterprise Journal, 1(1), p.46

Laville and Nyssens (2001: p 325) argue that while the origins of social enterprises are based in reciprocity and thus form part of the third system, their strength is based in their ability to tap into all three economic principles and systems. They are different from private enterprise-not only maximization of profit to benefit owners- they do develop market activities and generate profits. They are also different from the public sector in that they are independent from direct control by public authorities. But they benefit to a greater or lesser extent from public subsidy. Thus they mobilize market relations to sell services or goods, and can use redistributive relations by utilizing government funding to finance their services. Their long-term sustainability depends on their ability to ‘continuously hybridise the three poles of the economy so as to serve the project’.

2.4 Discussion Relevant to the Sustainability of Social Enterprise

There has been an unprecedented wave of growth in Social Entrepreneurship globally over the last ten years (Bornstein 2004, pp.3-6). For Example, as part of the 2004 Global Entrepreneurship Monitor (GEM) report a survey was conducted of social entrepreneurship activity in the UK; these data suggested that new ‘social’ start-ups are emerging at a faster ate than more conventional, commercial ventures (Harding and Cowling, 2004, p.5)

There are three sides to sustainability in business activity: environment, economy and community. When aiming for sustainable practice all three factors must be given equal consideration from a local through to a global level.

Environment – Ensuring that business engages in the proper and careful use of finite resources and the management of waste so as to minimize the negative and maximize the positive impact of human activity.

Economy – Ensuring that business is financially viable, engages in good employment practice and is of benefit to the economy as a whole.

Community – Ensuring that business is overall of benefit to communities, their culture & heritage and does not endanger them.

Sustainability

Social Capital

Environmental Capital

Economic Capital

Value and Integrity

Figure2: Sustainable Social Enterprise

Schulyer (1998: p.3) describes social entrepreneurs as …individuals who have a vision for social change and who have the financial resources to support their ideas….who exhibit all the skills of successful business people as well as a powerful desire for social change

Greater flexibility in the use of public resources to respond to innovative community proposals, and venture investments from foundations and the private sector could be used to stimulate innovation in areas thought to be too risky for government as the sole investor. As Catford (1998, p. 96) argues that …social entrepreneurs…will only flourish if they are supported by the right environment, which will be created largely by governments together with the private sector.

2.5 Financial Sustainability

Social Enterprise seeks surplus generation in order to achieve financial sustainability. The need to financial sustainability is fundamental to social enterprises. Emphasizing financial sustainability in addition to profit distribution becomes a way to account for all activities the organization engages in, including advocacy and in support of bono work. Sacrificing one cause and effect chain for another can have significant implications for both the quality of work and social enterprise’s financial sustainability. Whilst many may rely on combination of grant and trading income, ultimately, if an organisation is not financially sustainable, it cannot deliver its social and environmental impact.

Profit Distribution

(Increase Income)

Increase Revenue

Use Resource Efficiently

Trading Revenue

Non Trading Revenue

Manage Cost

Track Advocacy

Financial: Promote Sustainability of organization

Social: Increase value to target community

Fig3. shows how the profit of social organisation is distributed to the organization itself and community.

Figure 3: Financial Sustainability

Source: Somers, A.B., 2005. Shaping the balanced scorecard for use in UK social enterprises. Social Enterprise Journal, 1(1), p.50

Prioritising financial sustainability Social enterprises seek surplus generation in order to achieve financial sustainability. Learning from the work of the OS&G, the component of profit distribution was added so that social enterprise managers could track the objectives that added resources versus those that used them, in order to balance the competing drivers (See Exhibit 6). Emphasizing financial sustainability in addition to profit distribution becomes a way to account for all activities the organisation engages in, including advocacy and pro bono work. Sacrificing one cause and effect chain for another can have significant implications for both the quality of work and the social enterprise’s financial sustainability.

The need to achieve financial sustainability is fundamental to social enterprises. Whilst many may rely on a combination of grant and trading income, ultimately, if an organisation is not financially sustainable, it cannot deliver its social and environmental impact. In existing performance evaluation tools, financial systems record trading activities that earn income, and qualitative systems are used to collect user feedback and measure social impact. The SEBC model provides a method for integrating both outcomes.

2.6 Policy Reform and Good Governance

DTI report ‘ A Progress Report on Social Enterprise: A Strategy for Success‘ (2003, p.6) describes the three key goals for government as creating an enabling environment, making social enterprises better businesses and establishing the value of social enterprise.

The danger in not supporting social entrepreneurship is obvious to Reis (1999: p. 4) who calls for systematic intervention to accelerate and improve philanthropic efforts. Without this he argues that substantial numbers of potential donors and social entrepreneurs could be …discouraged, turned-off, and lost from philanthropy and social change work.

Brown, H and Murphy, E (2003: p.57) mentioned on Bank of England report that Social enterprises, like all businesses, need access to a range of financial products appropriate to their activity and stage of development A HM Treasury report on Enterprise and Social Exclusion (1999, p 108) came to the conclusion, arguing that social enterprise was less understood and rarely promoted in a consistent way by the existing infrastructure for business support.

Thompson et al. (2000: p. 328) describe …people who realize where there is an opportunity to satisfy some unmet need that the state welfare system will not or cannot meet, and who gather together the necessary resources (generally people, often volunteers, money and premises) and use these to ‘make a difference’.

It is more useful to consider and develop social enterprise capabilities rather than skills and capacity building. The fact that social enterprises need to combine commercial objectives with social mission as well as internal governance, means that a capabilities approach is more comprehensive. This is a useful way of recognising factors additional to individual skills that inter-play to determine the effectiveness and impact of a specific enterprise. It also moves away from limited considerations of a key person or group within the organisation, and their specific skills, towards a more holistic view of what the organisation is capable of doing, irrespective of the location of particular skills.

Catford (1998, p.97) who articulates the issues and one possible solution most eloquently: Traditional welfare-state approaches are in decline globally, and in response new ways of creating healthy and sustainable communities are required. This challenges our social, economic and political systems to respond with new, creative and effective environments that support and reward change. From the evidence available, current examples of social entrepreneurship offer exciting new ways of realizing the potential of individuals and communities…into the 21^st century.

Academic writing about modern social entrepreneurship skills is relatively limited, compared to mainstream business or charities. The concept of ‘social enterprise’ has been rapidly emerging in the private, public and non-profit sectors over the last few years. Currently, the non-profit sector is facing increasing demands for improved effectiveness and sustainability in light of diminishing funding from traditional sources and increased competition for these scarce resources. At the same time, the increasing concentration of wealth in the private sector is promoting calls for increased corporate social responsibility and more proactive responses to complex social problems, while governments at all levels are struggling with multiple demands on public funds.

Chapter 3: Background Information of Social Enterprise

This chapter will give the idea about the social enterprise in the UK along with the impact, barriers and sources of fund in these organizations.

6. 1. Social Enterprise in the UK

The UK government has been at the front position of enabling and encouraging the increase of social enterprises as part of both welfare services delivery and community regeneration at the policy level. The impacts and influence of public, private, and citizen are empirically proven and exhibit that these conventional sectors of society are playing a part in re-evaluating the value creation opportunities offered by market (or quasi-market) mechanisms.

• According to the DTI research, there are at least 55,000 social enterprises in the UK, and combined turnover of 27billion per year. These social enterprises account for 5% of all businesses with employees these contribute to GDP is estimated to be 8.4 billion

• Cabinet Office mentioned on their website that in 2004/05 the UK’s charity sector had a total income of about 27.6 billion which was increased over 800 million from the previous year. This represents about 2% of the UK’s GDP. The number of registered charities rose from around 120,000 in 1995 to more than 164,000 in 2005, and there are also hundreds of thousands of small community groups.

• The data obtained from the Cabinet Office website in social sector showed that in the year 2003/04, 56% of third sector organisations reported an increase in activity in the previous year, and 67% of them expected activity to grow in the next three years.

6. 2. Positive aspects of Social Enterprise:

Social enterprise is a varied activity and can include a range of organisations working on different scales and at different levels of trading. Some work at community level, while others work nationally. They can work in public services or commercial markets. They often work in the most disadvantaged areas and work with the most disadvantaged groups. Some organisations work only as a social enterprise while in other organisations social enterprise is often a part of their activity. This most commonly applies in a voluntary organisation or a housing association. It works in a number of key priority areas for the UK economy- these include:

• • employment and training;

  • childcare and health.

  • adult care services;

  • recycling;

  • renewable energy;

  • transport;

  • financial inclusion;

  • community regeneration; and

  • rural development.

According to Bob Doherty and John Thompson (The diverse world of social enterprise stories, p.362) the common characteristics for a Social Enterprise are:

• They have a social rationale and yields and surpluses are not shared out to shareholders. Reinvested profit can be used to provide training and development opportunities for staff.

• They use assets and capital to generate community benefit. This can make sure resources give value for money where a public-sector contract is needed for the activity. This includes working with much marginalised groups, where the enterprise activity helps reduce the amount of public funding needed. Through encouraging social entrepreneurship in communities, levels of public subsidy and grant dependency can be reduced.

• Members or employees can also take part in decision making. Citizenship participation and volunteering are encouraged within the local community.

• The social enterprise model could create new forms of entrepreneurship and employment within a community. The enterprise is responsible to both its members and a wider society.

• Social enterprise can offer goods and services to its customers in a flexible and innovative way. It can focus on their needs to deliver better public services. Often this is in areas where the market has failed or the areas where the private sector does not want to go.

• The potential of a profits and revenue stream could liberate organisations from the tyranny of fundraising and grant applications.

• Organisations could flourish effectively and creatively under this model

• There is either a double or triple-bottom line concept. The assumption is that the most effective social enterprises exhibit healthy financial and social returns rather than high profits in one and lower profits in the other.

Social enterprise makes an important contribution to the social, economic and environmental development of Scotland.?? This can be summarised as follows.

Fig 4: Beneficiaries of Social Enterprise

Source:

6. 3. Barriers of social enterprise

According to UK Government and various literatures review shows that there are mainly four significant barriers to accessing appropriate business support and finance for social enterprises throughout the region.

1. Cultural barriers between those setting up social enterprises and mainstream business advisors.
2. Lack of clarity about where to access business support at the local level, largely due to the huge diversity of routes into starting up social enterprises.

3. Limited numbers of accredited technical specialists in key business advice areas where social enterprises require specialist support, for example on legal structure, potential investors or taxation.

4. Limited sources of affordable equity and loan finance of all sizes.

All of these barriers inhibit the use of available business support by social enterprise. Many of the issues are cultural, but there are also skills issues, with mainstream business advice agencies not being adequately equipped to address more technical aspects of social enterprise business development. Specialists do exist within the region but many of them are funded through short-term grant finance. This enables the free provision of services but a lack of long-term sustainability for the advice services themselves.

Access to finance is not the only factor that restricting the development of the sector. Bank of England (2003, p.10), took the survey of Social enter 32% of social enterprises mentioned the problems in obtaining external finance and 25% problems in getting grants as major barriers to expanding their trading activities. However, other problems are lack of qualified staff (14%); lack of appropriate premises (16%); and lack of cash flow (10%)

Low cited in his journal according to the source of DTI …often have boards of directors or trustees who come from a voluntary sector rather than a business background. This can lead to a lack of business focus and prevent social enterprise from truly reaching their potential (2006, p.381)

To grow and develop social enterprise in UK, we must tackle a range of challenges and issues which have been highlighted by the research and consultation carried out to develop this strategy. Tackling these challenges, which are summarised into five key areas in this chapter, will be a major part of this strategy:

• Use of the social enterprise business model.

• Business opportunities.

• Finance and investment.

• Business support for social enterprise.

• Raising the profile and demonstrating value.

The Progress Report on Social Enterprise: A Strategy for Success (2003, p.68) concludes that there is little hard evidence to demonstrate the impact and added value of social enterprise. The report points out that one of the reasons for the lack of statistical evidence is that social enterprises create a range of social and environmental impacts, beyond their financial return (the ‘double’ or the ‘triple’ bottom line) that are hard to measure (even by the social enterprises themselves). Limited information on their social and environmental, as well as financial, impact also means that policy makers, business support providers and finance providers find it difficult to assess the value of targeting social enterprises or of including them in their activities.

6. 4. Sources of Finance

The key factor in an enterprise’s development is access to appropriate sources of finance. Social enterprises are more likely than SMEs to have been rejected for finance, although the majority of those rejected by one lender appear subsequently to be successful with another. In addition, a large minority of social enterprises perceive access to external finance as a major barrier to expansion, including some of those that have successfully accessed finance in the past. While there is no one, clear reason to account for the higher rejection rates among social enterprises than SMEs, this report explores possible contributory factors, which include: lack of available security and personal financial stake; use of organisational structures and grant funding streams with which lenders may be unfamiliar, and which may result in lengthy arrangement times; some elements of credit and behavioural scoring; reputational risk to the lender; and low levels of investment readiness among some social enterprises.

Most interestingly, 16% of the SMEs interviewed said that there were no barriers to expanding their trading activities, compared with just 1% of social enterprises. Clearly, initiatives to improve social enterprises’ access to finance would have to be accompanied by efforts to address the other difficulties encountered by social enterprises.

[http://www.bankofengland.co.uk/publications/financeforsmallfirms/financing_social_enterprise_report.pdf]

Impetus Trust is a UK venture philanthropy organisation providing long term financing of charities’ infrastructure, hands-on management support and capacity building delivered through projects run by volunteer associates.

Chapter 4: Methodology

This chapter will present detailed idea about the research were conducted. This includes the research design, , sample selection methods and data collection methods. At the end of this methodology part validity and reliability issues will be discussed to follow the quality standards of the research.

4.1 Research Design

The present study endeavoured to explore the sustainability of social enterprise for the development of the UK. Exploratory research is selected as research design as little information exists about the social enterprise of the UK. The aim of exploratory research is mainly to gain enough information before doing more thorough research. We basically start by gathering as much information about the object as possible and with a vague impression of what we should study (Cooper & Schindler, 2003, p.21).

Exploratory studies are a valuable means of finding out what is happening, to seek new insight, to ask questions and to assess phenomena in a new light. It is particularly useful if researcher wish to clarify the understanding of a problem. According to Saunders. et.al. there are three principle ways of conducting exploratory research: a search of the literature, talking to experts in the subject, conducting focus group interviews (2003, p.360)

Qualitative interviews would be best in achieving and addressing the questions that I am looking forward to address in this research project. The project requires data that is both rich and varied as I am to extract the opinions and insight about practices, insights and expectations of leaders and beneficiaries in the social sector. By adopting this methodology, I will extract this data without limiting the responses of the respondents; I am mostly interested in their innate insights, opinions and organisational beliefs.

In cases of sensitive subject matter and complex decision-making processes, individual in-depth interviews provide a far more effective tool and create an environment where participants would be likely to speak more openly and frankly (Anastas, 1988, p.19).

Several other advantages of one-to-one in-depth interviewing include the encouragement of personal thought, respondent attentiveness to questions, and the offering the ability of the interviewer to sense non-verbal feedback (Sokolow, 1985, p.28).

This alternative form of case based research consists of recording the experiences of a number of participants by way of one-to-one interviews. This results in the collection of rich, in-depth and informative data. In-depth interviews are regarded as an effective alternative to observing a case study in action as they provide a method that permits direct observation of the people involved in the process and the ability to listen to what those people have to say (Taylor and Bogdan, 1998). It is rather difficult to analyse data obtained through interviews, especially when there is more qualitative data in response to open-ended questions.

4.2 Sampling

The basic idea of sampling is that by selecting some of the elements in a population, researcher may draw conclusions about the entire population. There are several compelling reasons for sampling, including: lower cost, greater accuracy of result, greater speed of data collection and availability of population selection (Cooper & Schindler, 2003, p.44).

The sample would be randomly selected nationally from Social Enterprise and are actively fund raising. This is to allow some comparison and a fairer analysis of the data as organisations of the same size are most likely to follow related trends and are also affected by the same factors. Due to the complexity of the sector, the samples would be drawn from the wider UK region; this is to widen the organisation from which to select the qualifying sample.

4.3 Data Collection

The major form of data collection was the semi-structured interview with senior managers, policy officer and research & development officer of the 7 selected Social enterprises operating in the UK. The interviews were designed to gain an understanding of Social Enterprises potential sustainability issues and further research needed to achieve sustainability. Therefore, interview procedures needed semi-structured interview process which is relatively informal; relaxed discussion based around a predetermined topic. The process of a semi-structured interview involves the interviewer presenting the context of the study and its objectives to the interviewee or interview group. The set of questions are prepared but open, allowing the interviewees to express opinions through discussion. Questions are generally simple, with a logical sequence to help the discussion flow. Interview questions were tested prior to interviews. Semi-structured interview was highlighted by Beth L. Leech (2002, p.665) as ……one that can provide detail, depth and insider’s perspective, while at the same time allowing hypothesis testing and the quantitative analysis of interview responses.

For collecting secondary data participant social Enterprise’s annual report, various books, websites, newspapers, annual reports, monthly reviews and significant articles were chosen. Also for collection of primary data in-depth interviews with a range of designated professional, related to this field, were taken. The interviews would be tape recorded for ease of storage and transcribing. I contacted with Business Links and DTI to obtain the list of social enterprise operating in the UK.

4.4 Validity

Validity is concerned with whether the findings are really about what they appear to be about (Saunders et. al., 2003, p. 109). Validity defined as the extent to which data collection method or methods accurately measure what they were intended to measure. Cooper & Schindler (2003, p.71) believe that validity refers to the extent to which a test measures what we actually wish to measure. There are two major forms: external and internal validity. The external validity of research findings refers to the data’s ability to be generalized across persons, settings, and times. Internal validity is the ability of a research instrument to measure what is purposed to measure.

Numbers of different steps were taken to ensure the validity of the study:

Data was collected from the reliable sources, from respondents who are more experienced senior management position within Social Enterprise;

Survey question were made based on literature review and frame of reference to ensure the validity of the result;

Questionnaire has been pre-tested by the responded before starting the survey. Questionnaire was tested by at least ten persons;

Data has been collected through two weeks, within this short period of time no major event has been changed with the related topic.

4.5 Reliability:

Numbers of different steps were taken to ensure the reliability of the study:

• Questionnaire was divided into three parts in order that responders could concentrate more on each question;

• The theories [tumi questionnaire er jonno koita theory follow korso??] that have been selected for the study was clearly described and research question has been formulated based on the previous theory. Data has been collected based on the frame of reference that was drawn from the discussed theories. The objective is to make sure that if another investigator will follow the same procedures and used the same questionnaires objects, the same conclusions would be made.

Chapter 5: Data Analysis and Implementing the Recommendations

This chapter brings the analysed data according to the survey question which tries to implement the remedial action to solve the problem and finally it highlight the further research to fill in gaps in our understanding on this research paper.

5.1 Data Analysis

The semi-structured interview was analysed by applying qualitative data analysis techniques such as Strauss’s grounded theory, a scheme which attempts to ground all concepts and analysis in the data themselves (Strauss, 1987, p.5) and ‘contingent methods to capture the richness of context-dependant sites and situations’ (Baxter and Eyles, 1997, p.505). Grounded theory as a qualitative research approach provides with strategies to build theories in areas previously unexplored or under explored. This approach was first expressed by Glaser & Strauss in 1967. Glaser and Strauss (1967, p.1) mentioned We believe that the discovery of theory from data -which we call grounded theory-, is a major task confronting sociology today, for, as we shall try to show, such a theory fits empirical situations, and is understandable to sociologists and layman alike. Most important, it works-provide us with relevant predictions, explanations, interpretations and applications. This method provides structure and direction to theresearcher. This is an approach for developing theory that is grounded in data systematically gathered and analyzed (Corbin & Strauss, 1990, p.3).

5.2 Summary outline of the seven organisational case studies

The seven organisations randomly selected for the main focus of this research provide a good example of the breadth and scale of social enterprise activity. Together they directly employed about 220 people, and their sub-projects provided employment for approximately another 200. Their total annual turnover was over 7m, and their income came from a number of sources including trading, service contracts from local authorities, central government and its agencies, European and UK regeneration funds, grants from charitable foundations, loans from commercial banks and from other public and charitable finance providers.

The organisations took a variety of legal forms, including registered charity, company limited by guarantee, and industrial and provident society (workers’ co-operative). Between them they provided services for the unemployed, the homeless, young people, children with special needs, ex-offenders, prisoners, artists, refugees as well as members of their local communities: they aimed to alleviate poverty, ameliorate unemployment, provide employment, reduce homelessness, educate excluded school pupils, house refugees, rehabilitate offenders, aid those with disabilities and to engage marginalised groups in creative arts. In all these activities they were aiming at varying degrees of financial sustainability and independence.

One of the very significant question was what are the sustainable development plans.

Mr. X of Company Y highlighted that there has been a lot of talk about scale and the assumption that you have to start small and have to grow. What you also need to think about is how you transform organisations that are already at scale to a different form in line with the ethics of social enterprise. You take people out of the private sector, take shareholding away and create another form. There is something different required in the culture and the mindset of this thing called social enterprise, and to say, Well, the private sector knows about management and efficiency, is a myth. With 25 years of experience in the private sector, I can tell you it is not necessarily efficient or effective. The same applies to the voluntary and charity sectors, which are appallingly managed, in my experience. It is all very well to talk about mentoring, but just because they are from the voluntary or charity sector doesn’t mean that they can bring something of importance.

However, Mr. X of Company Y also mentioned that the approach risks missing smaller, emerging social enterprises which make up a more significant proportion of the enterprise population than for ‘mainstream’ businesses. It also relies on a sample survey approach for qualitative aspects, which needs to be carefully targeted if it is to be representative. The response rates from surveys used in this approach can be poor, interviews with key social enterprise stakeholders including representatives of local government, infrastructure agencies covering finance, training and other support at local and regional levels, other social enterprises relevant to the case-studies, funders and independent consultants.

Whilst mentioning about access to finance more than half the case study enterprises secured soft loans and/or some form of grant in their early years, typically from specialist support institutions. Although several had obtained start-up loans from commercial banks, more typically a combination of status and collateral issues had restricted access to finance from this source.

Mr. X of Company Y argued that in the past, a company’s traditional community investment profile centred on charitable giving or grant giving, but that has now changed. Companies want to make meaningful partnerships and are searching for partners that match their values, and are more entrepreneurial. Social enterprise is more than ownership, more than just a social aid. It is about a mindset that isn’t restricted to the third sector.

The business size of my sample of social enterprises was established using the number of years the social enterprise has been established; its annual income; number of employees, and, number of volunteers. This profile represented in Table 1 indicates that the pilot [pilot er kotha age kothao mention kora hoi nai] included a diverse range of established, traditional social businesses and younger social enterprises. The diversity of income ratio to the number of employees and volunteers to the number of years these businesses have been operating is also representative of a range of low asset base businesses and some more successful enterprises. Drawing on discussions within key networks suggests this is a true reflection of organisational diversity of the social enterprise sector in the region.

[Morshed all company ki MR. X amd Y die mention korba??????]

Mr. X of Company Y suggested the problem was, and still is, the lack of a viable business plan. And that plan – though this, too, may be controversial – has to be better than that of an ordinary business.

Mr. X of Company Y mentioned his idea would be for a National Lottery Venture Capital fund, where money is invested in those businesses or social ventures that either give exceptional returns or dramatically reduce the need for state provision. We have to beware of people jumping on the and ensure we really do get viable businesses. Finally, I think there is a difference between social enterprise and social responsibility. They are both needed, but the former does not exist to build shareholder value.

Table1: Organisation Profile

There has been a lot of talk about scale and the assumption that you have to start small and have to grow. What you also need to think about is how you transform organisations that are already at scale to a different form in line with the ethics of social enterprise. You take people out of the private sector, take shareholding away and create another form. There is something different required in the culture and the mindset of this thing called social enterprise, and to say, Well, the private sector knows about management and efficiency, is a myth. With 25 years of experience in the private sector, I can tell you it is not necessarily efficient or effective. The same applies to the voluntary and charity sectors, which are appallingly managed, in my experience. It is all very well to talk about mentoring, but just because they are from the voluntary or charity sector doesn’t mean that they can bring something of importance.

[ei paragraph ta kemon jeno khapchara type… ki ki theory ekhane mention korse..]Both techniques [which technique] involve the qualification of some cases or data and the total rejection of data or cases that are seen to be deviant or non-conforming. I believe we should not be subjectively selecting the data to use or reject in its entirety. I also believe that all data is important and such practices would lead to conducting research that is merely to confirm what we want or what. It illuminates the way people view and interact with their society, perceptions and relationships. This project entails an understanding of people perceptions, beliefs and organisational behaviour. As such I want to analyse the data that I generate in its entirety as I seek for themes, patterns, relationships and effects. I am interested in the very deviant observations or cases as these will strengthen my findings and save as test mechanism for theory that develops or contradictions to previous theory.

The Council drives forward, manages and improves its performance on its established priorities through a systematic and rigorous approach – the key stages are: Priorities Measures and targets Implementation Evaluation and review. For the Sustainable Development Plan each stage in this cycle can be summarised as follows:

6. 2. Remedial action to solve the problem

Awareness and skills

It was highlighted during this research that awareness-raising and encouraging behaviour change amongst staff is key to Social Enterprise being seen as an ‘exemplar’ on sustainable development. My questioner survey shows encouraging increases in the number of people in Social Enterprise who understand sustainable development and how to apply it in their jobs. But the results particularly for the questions on senior management – still fall well short of expectation for a department with sustainable development at its core.

Some of the issues and support needs faced by social enterprises are shared with private sector firms of similar size and sector characteristics, such as in marketing, financial management and the use of ICT, whilst others are affected by the distinctive characteristics of this type of enterprise.

Social enterprises also have support needs that are distinctive from small privately owned firms, associated with their ownership and decision making structures. They face all the

regulatory issues that affect other small firms (e.g. working time, minimum wage legislation), as well as additional ones that are associated with their status, such as legal issues associated with specific forms of incorporation.

At the level of the sector as a whole, there is a need to increase public awareness of the existence of social enterprises and the services and benefits which they can provide to clients, to achieve better understanding by public bodies and banks of what social enterprises are about, to improve networking between support organisations, to expand the number of specially trained advisers and to improve access to finance, both for start-up and for subsequent development. There is also a need for more purpose built premises and workspace to house social enterprises, which are often forced into secondary locations in ord