Ahead of Social Enterprise Day 2018, Dr Anthony Samuel told us about some of the challenges faced by companies on a mission to balance commercial and social value.
I recently completed a piece of work on Social Enterprises operating in The South Wales Valleys with Gareth White from the University of South Wales and Paul Jones and Rebecca Fisher from the International Centre for Transformational Entrepreneurship at Coventry University.
We spoke to owners and managers across the region in an effort to try and understand some of the ways in which social enterprises are prevented from flourishing in areas of economic and social deprivation.
Trading for Good
We were intrigued by the findings of a Social Enterprise UK report on small and medium-sized social enterprises which found that 27% of small social enterprises are based in the top 20% most deprived areas of the UK.
They also found that small to medium size social enterprises (41%) in particular are more likely to align their mission with improving a particular community.
It occurred to us that these figures might suggest that the challenges faced by social enterprises while operating in these disadvantaged eco-systems might be more acute.
The mid-80s saw the enforced closure of the Welsh coal mining industry and over 30 years on the region still faces considerable economic and social challenges.
To quote a 2017 study by Social Business Wales, “Social Businesses are often found in areas of social deprivation, supporting communities, offering jobs and training and often providing services that the public and private sector would struggle to maintain.
“They make an important contribution to the drive to fight poverty in Wales.”
In this climate, then it is perhaps unsurprising that we found access to financial support and the development of sustainable income streams was of paramount concern to social enterprises across the region.
In addition to financial challenges, we found three more areas of concern that social enterprise owners and managers have:
- Effective management of the ‘dual mission’
Developing a balanced approach to commercial and social activity can be difficult and many social enterprises can drift into becoming too commercial or too social in their operations, both of which result in negative consequences.
- Getting and retaining ‘the right’ committed trustee and board members
Many members are volunteers lacking time and expertise specific to the social or commercial needs of the enterprise.
- Measuring and communicating their ‘social value’
While financial performance is easy to report, social enterprises must also demonstrate their social value. This can often be hard to capture, expensive to track and difficult to communicate to stakeholders. In Wales, for example, 39% fail to measure their social impact.
Start-up, flourish and grow
Based on the interviews we conducted, our findings are likely to be representative of socially and economically similar areas of the UK. While the relative influence of the tensions that affect social enterprises in less impoverished areas may differ somewhat, prior literature and the study findings indicate that these are perennial issues that require focused attention.
By ranking them in order of significance, our study might be used to better inform policymakers and supporting bodies’ strategies, decision-making and resource allocation when seeking to support social enterprises in disadvantaged communities to start-up, flourish and grow.
The impetus is also on us as teachers and researchers to inspire the next generation, so that the longevity of social enterprises is ensured. Our membership with Social Enterprise UK plays a big part in this enhancing research and work placement opportunities for our staff and students.
Our future leaders
Next Tuesday 20 November 2018, they’ll be delivering a lecture on social enterprises to all Cardiff Business School undergraduate students.
Social Enterprise UK will also help us formulate a strategy to develop placements among their network of partner organisations so that our students can complement their learning with first-hand experience of work at a social enterprise.
This type of awareness raising among our future leaders is vital if they are to understand the unique challenges of alternative business models that have social and environmental missions.
Dr Anthony Samuel is a lecturer in Marketing Systems and Dynamics at Cardiff Business School.
Dr Gareth White is a Reader in Operations and Information Management at the Faculty of Business and Society, University of South Wales.
Paul Jones is a Professor of Entrepreneurship and Deputy Director of International Centre for Transformational Entrepreneurship at Coventry University.
Rebecca Fisher is a Research Assistant at the International Centre for Transformational Entrepreneurship at Coventry University.
Social Enterprise Day is an opportunity for social enterprises to share the good work they’re doing and the difference they’re making in their communities and beyond. The celebratory day was coined by Social Enterprise UK who are once more using the #WhoKnew campaign to help highlight diversity in the sector.