Social enterprises are businesses driven
INTRODUCTION
Social enterprises are businesses driven by a social or
environmental mission (social enterprise coalition). They are
businesses
primarily set out for social purpose. Whose principal objective is to
reinvest their surpluses mainly for social purpose in the business or
community rather than maximise profit for shareholders and owners (The
Cabinet Office. Office of the third sector). Commercial enterprises are
business organisations that are set up mainly for profit. Their main
objective is to maximise profit for their shareholders and owners. It
could
be Mobil unlimited or publicly owned companies like commercial banks or
limited liability companies. Social enterprise transcends traditional
non-profit sector and applies to health, environment, education and
social
welfare. It also applies to economic development or job creation
programmes
(Virtue Ventures, 2007). An example is Southampton social council that
is
geared towards providing quality education for the children in its
community. It is also involved in providing quality water for its
citizens
free from sodium, lead and impurities. It is also very proficient in
its
waste disposal by maintaining a clean environment. In order to achieve
this, it organises a programme called “enviro_champs “where university
staff and their students are involved. University of Southampton and
Southampton Solent University are involved in this programme.
Differences
and Similarities between Social Enterprise and Commercial Enterprise
Social
enterprises are different from a standard charity because they use a
businesslike approach to tackling social problems instead of relying on
grants (Virtue Ventures, 2007). Social enterprise are designed to meet
social needs and also to achieve commercial viability similar to the
private sector (Virtue Ventures, 2007).Business plans and other
research
tools can be utilised to design social enterprise policy by analysing
an
organisation’s internal factors such as core competences, weaknesses
and
needs of its clients and external factors such as legal and regulatory
environments, markets, demand and access to capital. Therefore social
enterprise operational models are geared towards market realities,
organisational capabilities and social needs (Virtue Ventures, 2007).
The
Environment Centre (tCE) which is an arm of energy saving trust. Its
aim is
to encourage and educate people about the benefit of sustainable
alternative energy. The objective of tCE is to educate the people about
the
havoc caused by using fossil fuel for generating energy, and the
pollution
caused by the emission of carbon dioxide and other toxic gases. This is
achieved by helping people to apply for grant from government. In doing
this people are encouraged to use solar energy, wind turbines, bio
fuels
and hydro energy to generate electricity for their homes. Grants are
also
given for home insulation. This is purely a social service and not for
profit (The Environment Centre, 2008). tCE obtain funding from European
Union. Social enterprises raise standards for ethical business and
corporate social responsibilities (Social Enterprise East Midlands).
Social
enterprise plays a larger role in delivering public services like
provision
of leisure services, recycling services health and social care for
council(Cabinet Office: Office of the Third Sector) . Unlike social
enterprise that are not for profit organisation. Commercial enterprises
are
not mainly into provision of public services; the few that are in these
areas are very expensive, because they are principally for profit
maximisation. Commercial enterprises raise their capital from
individuals
and stock markets while social enterprise raise their capital from non
governmental organisations. Social enterprise can also benefit funds
from
the same sources as commercial enterprises. The only difference is in
the
range of finances available which may differ depending on the function
and
form of social enterprise. It could be in the form of grant, debt,
equity,
social venture capital or philanthropy capital (Anglia Ruskin
University,
2009). Business enterprises and social enterprises read from different
bottom line, one purely financial while the other takes into account
the
social benefits derived from the enterprises operation. With these
differences, they also share some similarities as follows, they are
both
ambitious, they both have the ability to look for resources in most
remote
places, they are creative in their solution to problems, and they also
build something out of nothing (School for Social Entrepreneurs). The
enterprise act 2002 which relates to competition law and the
legislation
for the protection of consumers (Enterprise Act Publication, 2002). The
fair trade act 2003 all are legal laws regulating both commercial
enterprise and social enterprise. Both commercial and social
enterprises
need to be legally registered according to the law of United Kingdom or
anywhere in the world where they operate before they can start
operations
officially and legally. Commercial enterprise compete in the market
place
in order to maximise profit and also for the share of the market which
is
geared towards growth while social enterprise only compete to make
profit
in order to improve their services for their environment and their
community. Companies like Primark competes in the market place with
organisations like Matalan, Georges, Marks and Spencer’s for the share
of
the market. Their main purpose is to maximise profit and for growth in
order to be the market leader. They employ business tools and models to
gain competitive advantage and to achieve sustainable leading edge. In
recent time social enterprise is becoming an integral of commercial
enterprise. Commercial enterprises are moving towards philanthropic
activities (Porter and Kramer, 2002). They form sister companies which
are
basically not for profit organisations. These not for profit
organisations
aim is to give something back to the community where they operate. This
is
popularly known as corporate social responsibilities. It could be in
the
health sector by subsidising health bills of the people in the area
where
they operate. Some organisations focus on a particular area like heart
diseases or cancer patients or leukaemia patients. While some are into
recreation of the environment. An example is Primark which embarked on
beautifying parks around Southampton (Primark Stores Ltd, 2009).Primark
supports community projects across the UK and Ireland (Primark Stores
Ltd,
2009). All these are in an attempt to gain competitive advantage.
Philanthropy is used as a form of public relations or advertising. It
is
sometimes used to promote companies image or brand, through rigorous
marketing or high profile sponsorship (Porter and Kramer, 2002). True
strategic giving addresses both social and economic goals
simultaneously
unlike cause related marketing. They target areas of competitive
context,
where the company and society both benefit this is because the firm
brings
unique asset and expertise (Porter and Kramer, 2002). Organisations
uses
their philanthropic posture to enhance competitive advantage by
aligning
social and economic goals thereby bringing improvement in a company’s
long
term business prospects. This gives rise to sustainable competitive
advantage (Porter and Kramer, 2002). By addressing corporate social
responsibility a company is not only giving back to the society but
also
leveraging its capabilities and relationship in support of charitable
organisations. An example is Marks and Spencer start programme that
gives
opportunity for work experience to a range of people including the
young
unemployed, the disabled, the homeless. Parents returning to work. Also
for
students who are the first in their families are encouraged to aim for
higher education (Marks and Spencer CSR). Companies do not operate in
isolation from the society around them. Their ability to compete
depends on
the circumstances of the location where they exist. Improving education
is
seen as a social issue. The educational level of the local work force
greatly affects a company’s potential competitiveness. The more a
company
is involved in corporate social responsibility the better it is
positioned
for economic benefits. Apple is a company that is positioned as an
innovative organisation; therefore it develops its professionalism in
its
work place by developing and training its work force (Apple, 2009).
Also by
giving them sound health packages and housing benefits. This is because
investment in the work force is paramount to productivity combined with
finance and materials. This gives Apple a sustainable competitive
advantage
in the market against its competitors. Conclusion In conclusion the
long
run of social and economic goals are not conflicting, instead they are
integrally connected. Competitiveness in recent time depends on how
organisations can combine labour, capital and natural resources to
produce
high quality goods and services. Productivity depends on having workers
who
are educated, safe, healthy, decently housed and motivated by sense of
opportunity (Porter and Kramer, 2002). My placement in Southampton city
council as a volunteer has thought me a lot of important things I need
to
know about active community group. Basically what I have gained is not
much
because I’m still doing a research, on how to know what the community
wants
from the council, which I believe it will be completed soon. Also, I
went
for a Conference in Birmingham about community engagement, which was
unbelievable, meeting up with different regions and met the Chief
Executive,CDF.Nevertheless it was a tremendous meeting which they talk
about several programms like Business case for community engagement,
Working with the third sector and Take part etc.It was an excellent
conference because everybody had to introduce themselves and their
position
in city council from different county.I would gain more idea from city
council because I might stay with them till end of January 2010.
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