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G12

Accountancy, Business and

Management

Business Ethics and Social

Responsibility
QUARTER 4: WEEK 5

Capsulized Self-Learning
Empowerment Toolkit

Schools Division Office of Zamboanga City

Region IX, Zamboanga Peninsula
Zamboanga City

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Prepared by: Shellame R. Mabalo/ Teacher II
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CapSLET
BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY
Subject & ABM
QUARTER 4 WEEK 5 DAY
Grade Level ESR-12 dd/mm/yyyy
The importance of doing business beyond profit motivation. Introduction to
the notion of SOCIAL ENTERPRISE (meeting a given social objective or
CONTENT
resolving a real social problem while making ends meet) for poverty
alleviation.
LEARNING Explain the importance of establishing and sustaining business
COMPETENCY enterprises as a source of job opportunities and financial freedom.
ABM_ESR12-IVm-p-4.1

IMPORTANT: Do not write on this material. Write your answers on the Learner’s Activity and
Assessment Sheets provided separately.

KNOW AND UNDERSTAND

CONTENT STANDARD:
The importance of doing business beyond profit motivation. Introduction to the notion of
SOCIAL ENTERPRISE (meeting a given social objective or resolving a real social problem while
making ends meet) for poverty alleviation.

CHECKPOINT: How does business enterprises help solve social problems?

A social enterprise does not only concern itself with bottom-line profits but more of a business with
a heart. Social enterprise advances a mission to also advocate and advance social changes in society
by providing solutions to social problems outside of the government and the business sectors. In
short, social entrepreneurs aim to change the world and make a difference.

Social – comes from the Latin word socialis, which means, “an associate, ally, or, companion.” It
suggests organization of people who belong in interdependent groups that live and work together
cooperatively in a community or society.

Entrepreneur – someone who innovates by creating an offering to the market and takes risks in
order to grow the business.

Entrepreneurship – promoting production innovation by seizing opportunities to provide a new

product or implement a new production method, and then organizing the needed production
inputs and assuming financial risks.

Social Entrepreneurship – an approach by individuals, groups, or entrepreneurs, in which they

change, reform, revolutionize or develop, fund and implement solutions to social, cultural, or
environmental issues by seeking to create systemic changes and sustainable improvements.

The above definition combines an emphasis on discipline and accountability with the notions of
value creation, innovation and change agents, pursuit of opportunity, and resourcefulness.

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Various Means that Social Entrepreneurs Play as Change Agents

 Adopting a mission to create and sustain social value (not just private value) – The mission
of social entrepreneurs is to provide solutions to challenges faced by society, which can range from
poverty, to illiteracy, to environmental sustainability. Making profits and providing for what the
market needs are means to a social end, not the end in itself like how usual business enterprises
see things. They look for long-term social return-on-investment (ROI) rather than just being
concerned with business ROI. For example:
Dos, a social entrepreneur, observed that most of the mothers in Sitio Pantano, San Roque
are idle all day and do nothing but gamble, gossip, grumble and get minimal things done at home.
They are financially dependent on their husbands whose jobs are also unstable. Due to this
observation, Dos provided them livelihood by means of weaving durable rugs for household use out
of overstock cloths and indigenous fabrics. The livelihood did not only help the mothers earn money
on their own and use their idle time productively, but it also provided quality rugs to customers. The
customers, on the other hand, felt they are not just buying a product but are also helping alleviate
poverty for some families in Sitio Pantano.

 Recognizing and relentlessly pursuing new opportunities to serve the mission – social
entrepreneurs see the opportunities, not just the problems. For example:
Traffic has been one of the worst problems of Metro Manila, and a lot of strategies have
been done to try to address it. Thirdy, a social entrepreneur, recognized this problem and came up
with a mobile up where in commuters can book a taxi via carpooling. This saves the commuters
money since they only need to pay a portion of the transportation cost. This also helps decongest
the streets since only one car will be used for several passengers. Finally, this helps the taxi driver
earn more.

 Engaging in a process of continuous innovation, adaptation and learning – Innovation does

not have to mean creating something new. It can simply involve applying existing idea in a new way
or situation. Just like the example on the weaving of durable rugs, the women need not invent
weaving scrap cloths. The innovation may be in the craftsmanship applied to the weaving
techniques and the design and quality of products that may be offered to local and international
market. For example:
Going back to Thirdy’s mobile app for commuters, he also found out that one of the main
issues of the drivers is what to do during off-peak hours when there are very few
commuters/passengers availing of the service. Based on Thirdy’s team conduct of survey and
focused group discussion, there was also a need to deliver documents, gifts and other items from
one person to the other. As such, he innovated the mobile app and included a delivery service for
documents and other items for a fee.

 Acting boldly without being limited by resources currently in hand – Social entrepreneurs
use resources efficiently and they do not let limited resources keep them from pursuing their goals.
They have a clear vision of what they want to achieve; and they work hard, take risks, and develop
strategies in order to achieve their goals. For example:
Recalling the example of Dos who helped the mothers in Sitio Pantano to create quality rugs,
it was apparent that despite the lack of resources, he still made use of materials available on hand
such as overstock cloths and indigenous fabrics. He acted boldly without being limited by the
resources currently in hand.

 Exhibiting heightened accountability to the constituencies served and for the outcomes
created – Social entrepreneurs take steps to ensure that they are creating social value. They seek
to provide real social improvements, and they work hard to be able to do what they set themselves
to achieve. For example:

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Prepared by: Shellame R. Mabalo/ Teacher II
DPLMHS Stand-Alone Senior High School
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Going back to the example of Dos, he wants to see positive change and transformation
among the mothers in Sitio Pantano. This vision fuelled his passion to help these mothers and to
make sure that their standard of living become better. He did not just want to create profit; he
wanted to see a social problem solved.
SAQ1: Define social entrepreneurship and discuss its key emphasis .
Models of the Social Entrepreneurship Process

Social entrepreneurship is about a process that involves the interaction of the individual
entrepreneur, the enterprise itself, and the context in which the entrepreneur and the social
enterprise operate. Below are some models of social entrepreneurship that will further help
explain the process:

Timmons Model of the Entrepreneurship Process

According to the Timmons Model of entrepreneurship process, the three key components of a
successful business venture, which are opportunity, resources and team must maintain a balance
to prevent the “seesaw” from collapsing and eventually bringing failure to the venture.

Figure 1. The Jeffrey Timmons Model of the Entrepreneurship Process

This model shows that entrepreneurship is opportunity-driven or that the market shapes the
opportunity. The entrepreneur needs to be able to create value for the consumers at the right price
in order for the opportunity to become viable. Once the opportunity is deemed viable, the
entrepreneur forms a team. The size of the team is based on the size and nature of the opportunity.
A good team is a requirement for the venture to succeed. Finally, identifying the resources is also
important so that the enterprise can create a competitive advantage for its products. The resources
likewise need to match the requirements of the opportunity. All the three elements must
complement each other and must maintain balance. As the opportunity grows, the team and the
resources must also grow to maintain the balance. Any imbalance in the element may lead the
“seesaw” to collapse and the venture to fail.

While the model shows the basic requirements for setting up an enterprise, it leaves out the
context in which the entrepreneurial activities take place, which can help identify the “social” part
of the social enterprise.

The PCDO Framework

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The PCDO framework has four key components which are people, context, deal and opportunity.
People represent the human resources needed to successfully run the enterprise. This is similar to
the “team” concept in the Timmons Model of entrepreneurship process but people also include
investors in the enterprise. Context includes the elements in the environment where the
entrepreneurship takes place. It includes factors that are beyond the control of the management,
such as political, demographic, cultural and economic factors. Deal includes transactions involved
in determining how and to whom benefits of the entrepreneurial activity are dispersed. It is the
substance of the bargain that defines who gives what, who gets what and when those deliveries
and receipts will take place. Lastly, the opportunity creates an avenue for the enterprise to offer
something of value to the market. It is the essence of the framework.

Figure 2. The PCDO (people, context, deal and opportunity) Framework

This framework and Timmons model are for commercial enterprises but elements such as
opportunities and people are also utilized by social enterprises. However, deals may not clearly
describe the complex processes and negotiations within a social enterprise.

The CASE Model

The CASE model presents the process of creating a social opportunity: first step involves generating
promising ideas while the second step features the development of promising ideas into attractive
opportunities.

Social Operating Environment

Needs

Social
Impact
Theory
Promising Social
Opportunity
Ideas Impact

Operating Resource
model Strategy

Social
Assets

Step 1: Step 2:
Generating Developing promising Ideas into attractive
promising ideas opportunities

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Figure 3. The CASE Model

In the first step, the opportunities in the community are generated based on social needs and social
assets. The opportunity needs to be viable as a business and as a strategy for creating an impact
on social transformation. The second part which covers the social impact theory should include the
working hypothesis on the social outputs, outcomes and impacts that are achievable when the
opportunity is actively pursued. For example, if a social entrepreneur identifies an opportunity in
the market by offering quality designer bags made of woven cloth in order to alleviate poverty in
the families of the weavers, the enterprise will have to identify how many weavers can be
employed and how many bags they can make (output), what kind of products they can produce
(outcome), and, how this opportunity will change the lives of the weavers’ families (social impact).

In short, the CASE model takes a promising idea to take advantage of an opportunity to create
social impact.

The Social Entrepreneurship Framework

This is a modification of the PCDO framework which identifies three elements – opportunity,
people and capital. Opportunity and people represent exactly the same variables discussed in the
PCDO framework but finance providers or investors are no longer part of the people; instead, they
fall under capital. This framework captures the synergy of the three elements in order to fulfil the
social value proposition (SVP) as shown in the Venn diagram on Figure 4. The SVP is the heart of
the social entrepreneurship process where the three elements overlap in the Venn diagram and is
the reason why target beneficiaries of the social enterprise choose that company’s products over
its competitors. The factors around the diagram (regulatory, socio-cultural, demographics, etc.) are
the environmental factors that can affect the activities of the social enterprise. This framework,
however, leaves the idea-generation stage present in the CASE model.

Figure 4. The Social Entrepreneurship Framework

The Social Entrepreneurship Process Model

This model is a combination of the CASE model and the social entrepreneurship framework. In this
model, the social entrepreneurship process takes place in two stages and starts with the idea
creation similar to the first step in the CASE model. Ideas are generated based on the
entrepreneur’s motivation, the identified social need that has to be addressed, and the current
capacity of the society to fulfill the need. The entrepreneur’s motivation is influenced by individual
background, experience and history. In stage two, which is called mission achievement, the
“Unido, Junto avanza con el EduKalidad Cree, junto junto puede!”
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DPLMHS Stand-Alone Senior High School
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elements of opportunities, people and resources once again are identified in Venn diagram (see
Figure 5). At the heart of the diagram where the three elements converge, is the fulfillment of the
mission or purpose of the social venture.

Figure 5. The Social Entrepreneurship Process Model

SAQ2: What are the various models of the social entrepreneurship process?

BE ABLE TO DO
Explain the importance of establishing and sustaining business enterprise as sources of job opportunities
and financial freedom.

Let’s Practice!
Activity 1
Directions: Reflect upon by answering the questions below. Write your answer on a separate sheet.

1. How do you think commercial/business and social enterprises differ from one another?
What are their similarities, if any?
2. Why is opportunity an important element in all the models for social entrepreneurship
process?
3. Which model do you think best fits the social entrepreneurship process? Why?
4. Do you think it is enough for a social enterprise to have a social mission, or does it also need
to produce a good product for the market to succeed? Explain.
5. Enumerate and explain briefly the different means by which social entrepreneurs can play
the role of change agents in society.

REMEMBER
Key Points

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Prepared by: Shellame R. Mabalo/ Teacher II
DPLMHS Stand-Alone Senior High School
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 Social Entrepreneurship is an approach by individuals, groups, or entrepreneurs, in which they

change, reform, revolutionize or develop, fund and implement solutions to social, cultural, or
environmental issues by seeking to create systemic changes and sustainable improvements.
 Social entrepreneurs are regarded as change agents as they always make a difference – change,
reform, or revolutionize – to create solutions in the social sector. They seek to create systematic
changes and sustainable improvements.
 Social entrepreneurship combines discipline and accountability and ensures that it adopts the
following: a mission to create and sustain social value; recognizes and relentlessly pursues new
opportunities to serve the mission; engages in a process of continuous innovation, adaptation
and learning; acts boldly without being limited by resources currently in hand; and, exhibits
heightened accountability to the constituencies served and for the outcomes created.
 There are several existing models that can be used in modelling the social entrepreneurship
process, among which are the Timmons Model of entrepreneurship process, the PCDO
Framework, the CASE Model, the Social Entrepreneurship Framework, and, the Social
Entrepreneurship Process Model.

TRY
Let’s see how much have you learned today!

A. TRUE OR FALSE
Directions: Tell whether if the statement is True or False. Write your answer on separate
sheet.
_________ 1. Innovation always means creating something new.
_________ 2. Social comes from the Greek word socialis, meaning, companion.
_________ 3. In the PCDO framework of the social entrepreneurship process, PCDO stands for
people, content, deal and opportunity.
_________ 4. All models for social entrepreneurship process consider opportunity as a key
element.
_________ 5. For social entrepreneurs, making profits and providing for what the market needs is
just a means to attain solutions to societal challenges or sustaining social value.

B. MULTIPLE CHOICE
Directions: Write the correct letter for the answers to the statements on a separate sheet of
paper.

_________ 1. It refers to creating something new or simply applying existing ideas in a new way.
A. innovation C. opportunity
B. social value D. mission

_________ 2. The seesaw model for social entrepreneurship process refers to

A. CASE model C. PCDO framework
B. Timmons model D. social entrepreneurship framework

_________ 3. The heart of the social entrepreneurship process where the people, opportunity and
capital overlap.
A. Social Entrepreneurship framework C. Timmons model
B. CASE model D. Social value proposition

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Prepared by: Shellame R. Mabalo/ Teacher II
DPLMHS Stand-Alone Senior High School
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_________ 4. The following are the various means that social entrepreneurs play as change agents,
except;
A. Relentlessly pursuing new opportunities to achieve mission
B. Adopting a mission to create and sustain social value
C. Boldly acts without being limited by resources
D. Giving more importance to meeting customer needs

_________ 5. Social entrepreneurs are described as follows, except;

A. aim to change the world
B. make a difference by providing solutions to challenges faced by community
C. focused on return-of-investment of the business
D. sees not just the problem but also the opportunities

Jonalyn C Baquillas, Business Ethics and Social Responsibility, Makati City, Diwa Learning
REFERENCES
Systems, Inc., 2017, p55-75
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Prepared by: Shellame R. Mabalo/ Teacher II
DPLMHS Stand-Alone Senior High School
 9

“Unido, Junto avanza con el EduKalidad Cree, junto junto puede!”

Prepared by: Shellame R. Mabalo/ Teacher II
DPLMHS Stand-Alone Senior High School