Abstract
The increasing pressure on people to do something for society, in combination with the need for financial turnover in order to survive, is seen as one of the dominant factors for the rise of social enterprises. However, there is still debate on how social enterprises create social value in addition to economic value and how this is reflected in the business model. In this case study research, we investigate how the key components of the business model of social enterprises contribute to the creation of social and economic value. The cases in this research create social and economic value through the mutually interacting operation of key components and their sub-components. This interacting effect focuses on the one hand on the alignment of the internal architecture, market and financial management with the mission. The mission statement serves as a guiding principle. Furthermore, realizing the highest possible profit is not a goal in itself for social entrepreneurs. Generating profit serves the continuity of the company and the realization of social value. We also found that social enterprises can be configured as either market hybrids, blending hybrids, bridging hybrids or coupling hybrids.
Highlights
Generating profit serves the continuity of the company and the realization of social value
The research question is : “How do key components of the business model of social enterprises contribute to the creation of social and economic value?”
The first two propositions involve the key components of a business model of social enterprises
Summary
Generating profit serves the continuity of the company and the realization of social value. We face complex challenges such as the depletion of natural resources, the negative effects of environmental degradation, the fact that billions of citizens still live in poverty and that there are huge disparities in opportunity, wealth and power [1]. Given this context, business model innovation is increasingly recognized as a means of achieving greater social and environmental sustainability [2,3]. How can sustainable business models function and create social and environmental value without focusing on generating profit [5]?. Compared to a non-profit organization, a social enterprise can make a profit, but primarily pursues a social goal [19]
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