MGT3960 Entrepreneurship Management Fall 2015

There are many reasons as to why social entrepreneurs do what they do. In this modern age, everyone is exposed through global media about the major challenges that the under developed countries face and also people that are underprivileged in the developed world. Some of these challenges are global warming, pollution, epidemics, chronic diseases, famine and others. These are the reasons social entrepreneurs do what they do.

The Green or cleantech ventures should be classified as social enterprises is because that they are still concerned about making the world a better place. The only difference is that they will be making a profit. If they reinvest the profit back into the company is totally up to them.

Some of the negative effects of being a social venture for nonprofit are growth and management challenges, hard to sustain and finally hard to acquire investments from investors.

Stakeholders view social ventures more differently is because it is not where you start a company and the goal is to make profits. The company must stick with the aligned goal it started with. Many of social ventures fail due to the fact that the derail from the goal they started with and the people that volunteers and donates stop. Without these, the social venture would fall apart.

Some of the growth challenges social venture face are growing too fast, where instead of being a social venture, ends up being like any other business. When hiring employees for social ventures, they are usually more followers than employees. These people actually care for the cause and would work way harder than a regular employee that just gets paid by the hour. Additionally, when the venture grows, communication tends to fall through the cracks.

1. What is the primary driver of the social entrepreneur?

The social entrepreneur is mainly drove by the aim of making the world a better place, providing services or solutions that will help to reach their purpose.

2. Should green or cleantech ventures be classified as social enterprises? If so, why?

I believe that Green or Cleantech ventures should be classified as social enterprises due to their aim to make the world environmentally cleaner at the same time taking advantage of it and making profits.

3. What are some of the negatives of forming the social venture as a nonprofit?

About the negatives aspects of forming the social venture as a nonprofit, I would like to highlight the difficulties at the time of setting up the venture, such as time consuming, expensive costs, legal aspects and taxes.

4. Why do stakeholders view the social venture differently from a traditional venture?

In my opinion this has to do with the point that social venture, gives the venture an added value since the main purpose it is not just making money but at the same time changing any issue to make the world better. This makes the stakeholder have another point of view for this kind of business that are socially involved with the environment.

5. What are some of the growth challenges of a social venture?

I think probably one of the important challenges is the employees, because they are the base of the venture, and there is no doubt that to reach the social purposes of the venture, you need employees aligned with the idea and with a strong commitment to make it work.

Another challenge I can find is at the time of fund raising, where you need to convince investor not only that your business plan works but also about your social idea, how is it going to make the world better or how is it going to convincethe rest of the people.

6. Differences between Social Entrepreneurship and CSR & Philonthropy

The first difference I can find is that CSR doesn’t need to be innovative as we learned a couple weeks ago that is one of the aspects of Entrepreneurship. The second one would be their respective purposes. In social entrepreneurship, the social mission has primacy and profits are means to reach this mission. it should, thus, be at least partly reinvested in the project rather than mainly appropriated by the shareholders. In corporations, however responsible, profit maximization remains the ultimate goal and is directed towards shareholder value appropriation.

Primary driver of the social entrepreneur is to build a better society. Global media brings everything in front of us including all the major challenges that human beings are facing. We try to be part of the solution for issues such as underprivileged in the developed world, global warming, energy demands, wealth gaps, famine, pollution and so on. These issues drive us to become a social entrepreneur.

Green and clean tech should be considered as part of social entrepreneur movement. They are aiming for solving major issues such as pollution, global warming and resource conservation. These echoes with the primary driver of the social entrepreneur.

There are a few negatives about being a nonprofit.

1. Lack of sustainability
2. Lack of initiative
3. Lack of growth opportunity

Stakeholders view the social venture differently from a traditional venture because markets do not work as well for social entrepreneurs. It is hard to value social entrepreneur since it is driven by the impact of the mission rather than by wealth creation.

There are also some major challenges for a social venture to grow,

1. How to retain employees
2. How to value their efforts
3. How to stay on track with their initial mission plan

On the other hand, we can also see challenges and opportunities existed at the same time. Social ventures have opportunities that traditional ventures don’t have such as people who believe in the social mission of the venture tend to be willing to pay a higher price for products and services, employees who believe in the social mission will be more willing to work over time and put in extra effort.