University of Vaasa - Vaasan yliopisto

Social Enterprise as a Middle Way Between Two Extremes
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Based on what we can say that the Social Enterprise represents a hybrid form
composed of the traditional non-profit and for-profit organizations. The social
enterprise retains the purpose to do good, but their vision, organization, and
processes are quite different from those of non-profits. They strive to achieve goals
that meld social, environmental, and financial objectives. That combination is
referred to the triple bottom line (Pitta, D.A. and Kucher, H., 2009). Thus, social
enterprises are profit-making businesses set up to tackle a social or environmental
need. Unlike the traditional non-profits, social enterprises embrace business
processes and are governed by managerial principles. For instance, marketing is a
key process and social enterprises grasp its importance. Beyond many commercial
businesses would consider themselves to have social objectives, but social
enterprises are distinctive because their social purpose is central to their operation.
These are traditional goals of profit seeking organizations and drive their direction
and activities. In contrast, non-profits and governments seek to maximize social
benefits. Figure 1 details the traditional organizations and points the way toward the
development of a new kind of firm: for-benefit organizations. These organizations
are driven by a social purpose, they are economically self-sustaining and seek to be
socially, ethically, and environmentally responsible. For-benefits occupy the fourth
sector in Figure 1. Social enterprises are prime examples of for-benefit organizations
(Pitta, D.A. and Kucher, H., 2009).
Alter (2004) presents a framework towards typologies of social entrepreneurship.
She argues that any attempts to typify enterprises into different categories should
take account broader dimensions including organisational settings, operational
strategies, legal attributes, funding mechanism and clients groups served. To this
scope, Alter (2004) proposes typologies of social entrepreneurship ranging from
corporate social model to pure social ventures along a continuum based on missionprofit
scale (Figure 2).