Introduction

In the journal “Successful social entrepreneurial business models in the context of developing economics” (Mair & Schoen, 2007) we learn that the generally stated that social entrepreneurial organizations have gained in awareness and interest among researchers for more innovative, cost-effective, and sustainable ways to address social problems- whereby typically led by inspired individuals known as “social entrepreneurs” – have attracted increasing attention.

Mair & Schoen (2007) argue that there are lots of research conducted in recent years on social entrepreneurs and their initiatives. However, previous research has not examined how social entrepreneurs in setting up self-sustained organizations, actually combine social and economic value creation.

Theoretical Background

Mair & Schoen (2007), 2007 argued that social value means different things to different people. For the purpose this article Mair & Schoen (2007) define a social venture as an initiative that addresses social needs and/or catalyzes social transformation.

Methodology

Mair & Schoen (2007) aims in this article are to identifying features and common pattern across the business models of successful social entrepreneurial organizations. Given the limited thrust of knowledge on social entrepreneurship by deliberately opted for an explorative research approach.

Mair & Schoen (2007) choose the cases base on the few criteria: First, the social entrepreneurial organization, second the cases had to reflect diverse regional realities and finally, priority was given to organizations, which had been previously described documented for additional date gathering via interviews.

Three success stories: identifying common features

Grameen Bank : Muhammad Yunus a very well known social entrepreneur that set up GB as after observing the desperate situation of rural woman in Bangladesh

Sekem: Ibrahim Abouleish, on returning to his native Egypt in 1977, found a county in miserable economic conditions

MCC: Jose Maria Arizmendiarreita inspired a cooperative moment in the economically-depressed, industrial town of Mondragon in the Basque Country following the Spanish civil wall

Mair & Schoen (2007) focused the analysis revealed that the organizations share communalities in their approaches towards:

  • The creations of value networks;
  • The procurement of strategic resources; and
  • The management of the customer interface.

Composition and structure of value networks

Mair & Schoen (2007) explained that the notion of value networks has gained in awareness within academic research and have been analyzed in various ways.

Learning points and conclusion

Mair & Schoen (2007) aims in this article was to identify common features of an organization that were able to develop from social ventures into self-sustained organizations creating social and economic value, by their finding suggested:

  • That successful social entrepreneurial organization do not just position themselves at a specific point in an industry value chain but proactively create their own value
  • That the three organizations ensure their resources strategies were integral parts of their business models
  • That the analyzed companies employed a special approach to transfer value to the groups they targeted

Finally, Johanna Mair and Olver Schoen, 2007 also offer interesting insights for existing for-profit multi-business companies to rethink their business models and stimulate managers to think beyond pure economic value creation.

Reference

Mair, J. & Schoen, O. (2007) Successful Social Entrepreneurial Business Models in the Context of Developing Economies, International Journal of Emerging Markets, Vol. 2, No.1 pp. 54-68.