Business Models of Social Enterprises: Insight into Key Components and Value Creation

Abstract

The increasing pressure on people to do something for society, in combination with the need for financial turnover in order to survive, is seen as one of the dominant factors for the rise of social enterprises. However, there is still debate on how social enterprises create social value in addition to economic value and how this is reflected in the business model. In this case study research, we investigate how the key components of the business model of social enterprises contribute to the creation of social and economic value. The cases in this research create social and economic value through the mutually interacting operation of key components and their sub-components. This interacting effect focuses on the one hand on the alignment of the internal architecture, market and financial management with the mission. The mission statement serves as a guiding principle. Furthermore, realizing the highest possible profit is not a goal in itself for social entrepreneurs. Generating profit serves the continuity of the company and the realization of social value. We also found that social enterprises can be configured as either market hybrids, blending hybrids, bridging hybrids or coupling hybrids.

Sustainable Hybrid Business Model of Benefit Corporation: The Case of an Italian Film Production Company

“…To date, several studies on the SHBM have applied general knowledge of the phenomenon to social enterprises [12,[67][68][69][70][71][72]. In contrast, prior literature has paid less attention to SHBM applied to benefit corporations [1,11,21].…”

“…Interviews lasted between 45 min and 90 min and were recorded with consent. The advantage of personal interviews is that there is no delay between question and answer, so the answer is more spontaneous [71].…”