Marketing bán hàng - Chapter 12: Definition

Copyright 2015 Jack M. Kaplan & Anthony C. WarrenSpecial Topic 1Patterns of Entrepreneurship Management5th Edition, Chapter 7Social EntrepreneurshipChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenPresentation OutlineDefinitions of Social EntrepreneurshipComparison with Business EntrepreneurshipIssues - Non-profit or not? - Taxation - Growth - Wealth Creation - Stakeholder Motivations Business Models with Examples - Pure - Hybrid - Dual-mission - CooperativeInverse Commons and Social Media with ExamplesChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenDefinitionsBroad Definition according to William Drayton, 1972:“Social entrepreneurs are individuals with innovative solutions to society's most pressing social problems”Narrower Definition used in this course“Social entrepreneurs use market-oriented entrepreneurial approaches to address social issues”The second definition does not imply necessarily solving “BIG” problems, and therefore can be more locally applied.Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2012 Jack M. Kaplan & Anthony C. WarrenLimitations-1Social Entrepreneurship is often associated with “green” or so-called “sustainable” initiatives addressing large societal challenges such as global warming, social inequality, pollution and preservation of natural resourcesSolving these complex problems often requires large long-term investments – major changes in human behavior are needed and challenges must be attacked in multiple ways at many levelsThe initial wave of venture investments tackling these problems has already passed its peakSocial entrepreneurs are learning to tackle smaller problems which can still have an eventual impact on larger challenges.Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenLimitations - 2Social entrepreneurship ventures have many of the attributes of business venturesThey share many of the organizational aspects and are driven by founders having an “entrepreneurial mind-set”They should be differentiated from:Charities such as the Red CrossBenevolent Trusts such as the Bill and Melinda Gates FoundationNon-Governmental Organizations (NGO’s) such as Greenpeace , Doctor’s without Borders, etc.Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2012 Jack M. Kaplan & Anthony C. WarrenThe main aim of a social entrepreneurship venture is to create benefits to societyMany social ventures are operated as “non-profit” entitiesHowever there is no fundamental reason why a social venture should not be profitableProfits can be kept within the venture to expand its influence But profits can also be used to benefit investors, employees, founders or donated to other social venturesProfit or Non-Profit?Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenTaxation TreatmentIn the US there are no less than 32 different tax treatments for non-profit enterprisesThe most common code group is 501(c) If you choose to be a not-for-profit entity then you must seek good tax advice and make sure that you follow the code exactlyA not-for-profit entity does not imply that it is tax-freeTax exemption is for charities and foundationsElecting for tax exemption removes possible incentives for owners, investors and employees.Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenComparison Between Business and Social VenturesChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsAtttibuteBusinessSocialFocusWealth CreationSocial BenefitMarket ForcesHighly DependentPartly DependentMarket and Financial DisciplineVery StrongWeakFundingBootstrapping, investors and loansBootstrapping, donations, rarely investors, volunteersEmployee MotivationWages, stock optionsJob satisfactionValue QuantificationMarket determinationUsually impossible to measureCopyright 2015 Jack M. Kaplan & Anthony C. WarrenStakeholder IssuesCulture often emotionally charged – the “do-good above all else” atmosphereExternal stakeholders such as donors, beneficiaries, tax authorities and volunteers watch the venture carefully to check on mission fulfillmentInternal stakeholders will bring their own, often passionate values into the organization. Hiring, training, incentives and feedback must be emphasized Regular and clear communications to ALL stakeholders is demanded from leaders at all times.Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenGrowth ChallengesChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsEmployees join for more than monetary benefit. As the venture grows, they may feel betrayed if the organization becomes more bureaucratic and they feel “just an employee”In this case, employees who may have been working for below market wages may now demand increasesVolunteers may be less likely to contribute to a larger organizationSources of external funding for growth may be limited and continually seeking donors can undermine the effectiveness of the organizationThe “Pure” Business ModelCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsFocused entirely on a social missionOrganized as a not-for-profit entityMust rely on bootstrapping, volunteering, government grants and donors for financingStructure may limit impact potentialPROSCONSClear Focus on Social MissionComplicated tax and corporate governance issuesLimited conflict of interest issues Inability for founders to participate financiallyCan get foundation grantsDifficult to sustain over timeClear Message to constituentsInability to attract equity investmentsEasy to attract volunteers and donorsDifficult to attract top talentAll revenues used to build the enterpriseLow or zero tax liabilityExample of a “Pure” Social EnterpriseCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsMission focused on helping poor family farmers globallyBranding certifies that farmers are earning a fair wage and work in safe conditionsConcerned customers will pay a premium for being socially concernedEducates consumers and distributorsFunds community improvement projects in poor farming areasCopyright 2015Jack M. Kaplan & Anthony C. WarrenThe “Hybrid” Business ModelChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsCombination of non-profit and for-profit entitiesCan fulfill dual missions – social good and wealth creationFlexibility allows funding from investorsFounders and employees can enjoy financial benefits Ability to attract top talent at market rates.PROSCONSProvide social benefits AND wealth creationComplicated tax and corporate governance issuesNon-profit remains tax-exempt Need for separate and non-conflicting boardsNon-profit can get foundation grantsAll intra-group transactions must be at market rates and at “arms’ length”For-profit can attract external capitalAmbiguous and untested taxation legislationFor-profit can make tax-deductible donations to non-profitHigh accounting and legal fees.For profit can hire highly paid talentCopyright 2015 Jack M. Kaplan & Anthony C. WarrenExample of a “Hybrid” Social EnterpriseNot-for-Profit FirstChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsInstitute of Heartmath started out as a non-profit for wellness managementRelied on donations, research grants, and volunteeringAfter seven years founders formed a for-profit to sell products and provide other services, and to attract investors.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenExample of a “Hybrid” Social EnterpriseNot-for-Profit First (contd.)Chapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsQuantum Intech Inc. commercializes products and services developed by the HeartMath InstituteThis is a for-profit entity which pays taxes and has a “arms-length relationship” with the InstituteFounders, employees and investors can benefit financially from the value createdCopyright 2015 Jack M. Kaplan & Anthony C. WarrenExample of a “Hybrid” Social EnterpriseFor-Profit FirstChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsSea Tow International formed as a for-profit boat-rescue serviceExpanded globally using a franchising modelSea Tow Institute formed later as a non-profit entityThe Institute provides education to boaters, and donates safety equipmentCopyright 2015 Jack M. Kaplan & Anthony C. WarrenThe “Dual-Mission” Business ModelChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsA single for profit entity that balances a strong social mission within a value building structureFulfills dual missions – social good and wealth creationFlexibility allows all types of funding including equity investorsFounders and employees can enjoy financial benefits Ability to attract top talent at market rates.PROSCONSProvide social benefits AND wealth creationDifficult to maintain social mission over timeSimple governance and tax structure Potential conflict of interests between founders and investorsAble to attract external capitalSources of investment more limited than a pure business mission enterpriseFounders can benefit financiallyExit strategies for investors limitedCan attract talentCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsExample “Dual-Mission” ModelFounded as a research entity to study epidemiology of asthmaInitially funded with federal research grantsDeveloped products and services that can be sold profitably.Changed Name to Propeller HealthCopyright 2015Jack M. Kaplan & Anthony C. WarrenThe “Cooperative” Business ModelChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsA group of individual entities agree to cooperate based on the following values:Voluntary and Open MembershipDemocratic Member ControlEconomic Participation of all MembersAutonomy and Independence of MembersEducation, Training and Information shared among MembersCooperation among CooperativesConcern for CommunityCooperatives can benefit from economies of scaleCooperatives are usually locally based, but not always. PROSCONSProvide clearly defined social benefitsOften limited to local rather than global impactLow or zero tax payments Governance issues may be complexMay get foundation grantsNeeds trust between cooperative membersEasier to sustain over long timeProfit distributions can be contentiousBuilds communities and trustNeeds a clear leader to start the cooperativeMembers can extract profitsDeciding payments to management executivesCopyright 2012 Jack M. Kaplan & Anthony C. WarrenCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsExample: Regional “Cooperative” ModelThe Eno Energy Cooperative, Karelia, FinlandA cooperative between three local authorities to produce district heating for residents using wood-chips Wood chips are harvested from local forests, ash is used for fertilizationWithout the scale of a cooperative the capital could not be raised to build the system.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsExample: National “Cooperative” ModelStarted by social entrepreneurs wishing to provide hard to find outdoor gearNow a major on-line and retail store chainChose a cooperative model in which customers become members and receive end-of-year profit distributions. Funded by membership fees. This term describes a community in which every time a member contributes to the resources of the community, value is provided to every member As the number of members grow, an individual contribution has an ever- increasing impact and thereby accelerates community growth The internet has greatly expanded the ability to expand inverse commons In the context of social entrepreneurship, contributions are made voluntarily Motivations for contributing to the common good include: Personal philosophy Altruism Bricolage, the pure joy of creating Peer Recognition Fame Well-known examples are Wikipedia, Linux Operating System, and YouTube uploads Capturing the power of the inverse commons can rapidly expand a social enterpriseCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsThe Inverse CommonsCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsExample-the Use of the Inverse Commons A non-profit venture whose mission is to alleviate poverty by connecting $25 “micro-lenders” to entrepreneurs in under-developed regions needing just a small amount of capital to bootstrap their business Kiva relies on volunteers in the field and at headquarters to that every dollar loaned goes to directly to those in need Kiva reached a “tipping-point” mid-2007 and are now growing rapidly The internet provided the mechanism for rapid growth The more they grow, and show that these loans make a difference AND are repaid, the more lenders are attracted to this social ventureCopyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsKiva’s Rapid GrowthData on Nov 20th, 2011(updated daily) Tipping PointTotal value of all loans made to date$629,922,025Number of lenders to date$1,230,612  Number of loans funded to date790,938  Number of countries with field partners79Total number of field partners285Current repayment rate98.81%Average loaned per lender$418.68    Amount lent per week (2011)$4.3 millionAverage time between loans being made (2011)4 secondsNumber of loans per week (2011)11,405Copyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsSocial Media ToolsThe growth of social networks provides entrepreneurs ways to grow ventures rapidlyThis is particularly true for social ventures where you can tap into the motivations of inverse commons contributors and volunteers Here are some that you join – there will certainly be moreCopyright 2015 Jack M. Kaplan & Anthony C. WarrenAnd don’t forget the BlogosphereChapter 12DefinitionScopeIssuesSocial MediaBusiness ModelsInverse CommonsMap of the global interconnected BlogosphereSource : Wikipedia