Business Ethics and

Social Responsibility

Ahdrian P. Senden, LPT

Opening Prayer

Almighty Father, we praise and thank you

for the opportunity to learn today from our
facilitator and from one another. Help us to
focus our hearts and minds on what we are
about to learn in this subject.
Inspire us by your Holy Spirit so that we may
understand the lessons and see its practical
application in our everyday activities.

Guide us by your eternal light as we

discover more truths about the world
around us. We ask this through the
intercession of St. Thomas Aquinas, Amen.
The Social Enterprise Business
Model

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Social Enterprise
Defined as business model with the objective of solving social issues
and problems, while providing goods and services.

Driven by a cause or purpose as well as the need to address an issue or

problem

Profit is not the first priority.

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Principles of Social Enterprise

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Motivated by a cause
A social enterprise does not aim to maximize profit but rather solve or
overcome certain social issues

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Financial and Economic sustainability in the long run

The enterprise has to ensure that it can attain financial stability in the
long term to sustain its worthwhile projects

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No dividend for investors

Investors expect a return only on the actual amount they have put in

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Profits generated remain

When investments are returned to the investors, whatever profits

generated remain in the company for expansion or improvement of
operations

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Sensitive to gender and environmental issues

Social enterprise operates ethically by ensuring no gender

discrimination and providing eco-friendly products and services

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Employees are treated fairly

Workforce is well-taken care of through fair wages and benefits and

better working conditions

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Joy in every task

Strives to work for a cause and does it with pleasure

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Social Business Models

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Entrepreneur support model

Provides support services to entrepreneurs who would like to embark

on their own endeavours

Support services like consulting, training and other technical services

are provided to help clients grow in their business

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Market Intermediary Model

Guides those struggling to gain markets to sell their products

Example: Assistance to small farmers in selling their agricultural

products

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Employment Model

Help clients look for jobs and provide them with training for these
jobs.

Target recipients are the disabled, homeless, ex-convicts, and others

who have difficulty finding employment

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Fee-for-service Model

Most common business model

They charge clients with a certain fee for services rendered like
hospitals, schools, and museums

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Low-Income Client Model

Social enterprises charge fees but they concentrate on low-income

customers

Hospitals that cater to low-income earners

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Cooperative Model

Very popular business model

The cooperative charges a membership fee and provides a number of

services to members, who also run its operations

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Market Linkage Model

Connects their clients to markets where they can sell their products

Acts as a broker to help small producer access a bigger market

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Service Subsidization Model

Using this model sells products and services and use the proceeds to
subsidize their social services

Example: law firm may provide free law services out of the revenue
generated from its regular law practice

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Organization Support Model

Social enterprise sells products and services and the revenue

generated is used to fund an organization which runs the program that
the social enterprise supports

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Social Entrepreneurs

Can use a combination of nine business models to reach more people

who can benefit from their social services

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Methods of Income Generation

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Fee-for-service

Social enterprises charge for fees to clients for services rendered such
as museums, clinics, and microfinance services

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Products

Sells products and earn income through mark up or commission from

reselling of products

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Services

Skills or expertise can be offered in exchange for a fee

Example: Mental health clinics, daycare services

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Membership dues

Membership fees in exchange for newsletters, discounts, insurance or

trainings

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Tangible Assets

Generate income by renting or leasing their idle offices or vehicles to

non-profit organizations

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Intangible Assets

Income is generated by leveraging intangible assets like reputation, or

brand

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Investment

Income can be taken from interests on saving deposits, bonds, etc.

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Types of Social Enterprises

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Community Enterprises

Serve particular communities. Usually, there are community

representatives who comprise the board of directors of the social
enterprise

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Social Firms

Help people renew their support networks and assist them in finding
jobs

Particularly those who experienced trauma and mental health

problems

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Cooperatives

Formed, organized, and controlled by the members themselves who

contribute or invest capital for the benefit of the members

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Credit Unions

Financial institutions that assist by providing savings and loan facilities

to the inhabitants of the community

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Community Development Finance Institutions

Provide loans and other investment facilities for small businesses and
start up social enterprises

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Development Trusts

Seek to build a community through the management of property like

housing

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Public sector spin-outs

Deliver basic services previously provided by the public sector

organizations

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Trading arms of charities

Formed to assist the parent organization in social services

Example: Human Nature, First Harvest under the parent organization,

Gawad Kalinga

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Fair Trade organizations

Ensure that small producers like farmers get a fair price for their
produce

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