Social entrepreneurship involves entrepreneurial activities aimed at mitigating or solving social problems, characterized by the following main attributes: social impact, which is targeting at the solution/mitigation of social problems, sustainable, positive and measurable social results; innovation that is the application of new, unique approaches to increase social impact; self-sufficiency and financial stability which means the ability of social enterprises to address social problems up until this it is necessary and at the expense of revenues from its own activities; entrepreneurial approach which presupposes the ability of a social entrepreneur to see the failures of the market to find opportunities to accumulate the resources to develop new solutions that provide long-term positive impact on society as a whole (Haughton, 2008). Based on the definition, the social entrepreneur should be effective and useful.
There are three models of social enterprises. In the essay we are going to discuss each of them. Thus, Model one: presupposes participating in trading activities, which have no direct social impact or profit, and then transfer some or all of that profit to another activity that has a direct social impact that is named as ‘profit generator model’. Model two consists in participation in trading activities that are not directly of social impact, but it manages the tradeoff between producing financial returns and social consequences. Such a model is called ‘trade-off model’. Model three means participating in commercial activities, which not only have direct social impact, but also create a financial returns in direct correlation to the social implications created this model is called ‘lock-step’ model (Murphy & Coombes, 2009). One of these models presupposes creation of a profit business to drive social initiatives. By the way, the framework of the three models is not aimed to be prescriptive. Some economists, no doubts, will disagree with such an analysis, while others will develop thinking, then, with examples from their own experience.
What is the ethics of the entrepreneurial model? This question is one which is of big importance. Doing any business, one should still remember that except benefits another thing exists. This thing is human factor. If an entrepreneur is intended to run a business to drive social initiatives, he / she should, firstly, pose an aim. Who / What and why is he / going to help? What kind of help will it be? Moreover, he / she is supposed to remember about the main reason – not to harm with the help (Alvord, 2004). Seeking the global problems, i.e. green forests problems etc. and their solutions the entrepreneurs should choose between help, or charity, and financial benefit he / she could receive from the business activities. In addition, one should distinguish business priorities and social responsibilities. All these factors lead to the global understanding of ethics of entrepreneurship within a country and outside. Methodologically, to start receiving benefits and to enrich oneself and a country where the company acts and to drive social initiatives is considered to be a versatile and difficult problem because of a wide range of obstacles, which include, for instance, laws and economical conditions of the country itself.
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