The Importance Of Social Entrepreneurship

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People are often confused between social entrepreneurship and other forms of organizations such as non-governmental organizations or traditional for-profit organizations. Social enterprise is best described as an organisation which picks up an opportunity to provide a solution to a social problem to generate societal advantages, but with slight desire of producing the benefits needed by traditional for-profit companies (Wolk, 2007). Social entrepreneurships may take the form of a non-profit, business, or even government initiative. Unlike NGOs which rely primarily on charitable contributions of public funding, social entrepreneurship creates social programs to become self-sustaining and reduces the dependant on donor funds (Chhabra, 2015). …show more content…

Social entrepreneurship relies heavily on the desire of people to help correct social issues. This desire can be examined using management theory such as the Maslow’s Hierarchy of Needs. The Maslow’s Hierarchy of Needs is a theory in psychology that examines the needs of people across five (5) levels; physiological, safety, belonging, esteem, and self-actualisation (Taormina, & Gao, 2013). Today, as the basic needs of more people are fulfilled, the desire for people to pursue accomplishment through self-actualisation grows. This can be seen through increase in volunteerism and philanthropic causes in a bid to help create a world in which every person could pursue happiness, peace and …show more content…

Nevertheless, social entrepreneurs today will need to apply modern business models to generate more income to maximise social impact. For example, instead of relying on donations alone, social entrepreneurs will need to adopt a long term, self-sustaining approach towards generating income to fund its social initiatives. To maintain attraction of capital and draw the attentions of potential volunteers, social enterprises will need to manage the needs of all stakeholders, not only that of the donors. This is in line with the Stakeholder’s Theory by Edward Freeman, where he argued that many other parties are involved in an organisation and that their needs must be equally addressed. One important stakeholder in social enterprises is the volunteers. Equally important is for social enterprises today to strike a balance in managing income generation and executing social initiatives. Similar to for-profit organisations, social enterprises will need to manage product and service delivery, stakeholder communications, regulatory compliance and many other complex business

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