Monetizing Social Value Creation – A Business Model Approach

Abstract

AbstractThe creation of social value through entrepreneurial ventures occurs in various dimensions, which are often difficult to compare. From an economic standpoint, however, value creation requires resources and activities that lead to expenditures. The sustainability of social ventures, therefore, depends on how these expenditures are financed. We develop a general framework in which business models of diverse social ventures can be analyzed and categorized. Using a gallery of real-life case studies, we illustrate that social business models can be characterized and ordered by the degree to which they monetize social value creation and the level of generated market revenues in excess of expenditures. Our analysis reveals a positive correlation between the monetization of social value creation and financial output, and it shows that relatively simple changes in the business model can have a significant impact on monetization and market performance. Our framework thus yields several strategic implications for business modeling.