Academic journal article Journal of Legal, Ethical and Regulatory Issues

Managing Social Enterprises in the Philippines: Challenges and Strategies

Academic journal article Journal of Legal, Ethical and Regulatory Issues

Managing Social Enterprises in the Philippines: Challenges and Strategies

Article excerpt

INTRODUCTION

Managers of for-profit social enterprises, just like their counterparts in traditional profitoriented firms, must adopt and implement appropriate business strategies to keep their operations viable. In addition, they must deal with the complexity of creating both financial and social value. According to Dees and Anderson (2002), for-profit social enterprises must face market pressures that could lead to compromising social value. They must likewise face social and political pressures that could lead to compromising financial performance.

For this study, we attempted to answer the following questions: (1) What are the challenges faced by select Philippine social enterprises in their attempt to generate both financial and social value? (2) What strategies do these social enterprises utilize to achieve both their financial and social bottom lines? How do they implement them? Taking our cue from Dees and Anderson (2002), we attempted to validate the following propositions:

Proposition 1: Philippine social enterprises experience tension in their attempts to jointly achieve financial and social objectives, and are likely to comprise one bottom line over another

Proposition 2: Social enterprises that utilize Dees and Anderson's proposed strategies better manage challenges associated with having dual objectives.

BRIEF REVIEW OF RELATED LITERATURE

Heeding the Call for Social Responsibility

Our idea about what purpose business serves in society has evolved substantially over the years. While there are still those who subscribe to Friedman's (1970) contention that "the business of business is business", there has been increasing support for the notion that business must fulfil an increasingly active role in addressing social problems. This idea is built along the lines of Carroll's (1991) articulation of the different responsibilities of business (economic, legal, ethical, and philanthropic), which has since been labelled variously by scholars and practitioners as corporate social responsibility, corporate citizenship, corporate governance, and corporate sustainability. More recent conceptualizations of social responsibility that have gained prominence in the business literature are 'creating shared value' (Porter & Kramer, 2006, 2011), which encouraged big businesses to rethink how they can simultaneously create financial and social value; and CSR 2.0 or transformative CSR (Visser, 2010, 2011), which calls for businesses to embed CSR in their business models by adopting a systems perspective.

Businesses are driven to be more socially responsible for a variety of reasons. Some engage in corporate social initiatives to promote advocacies or to address issues important to their company's target stakeholders (Taran & Betts, 2015). Others engage in corporate social initiatives as a way to enhance their competitive contexts (Habaradas, 2013; Porter & Kramer, 2002). Others still see the need to embed ethics and governance in their company's management systems to meet global expectations (Obay, 2009).

For some businesses, though, addressing social problems is their primary goal, and keeping themselves profitable is essential to sustain their operations. These are what we now know as social enterprises (Dees & Anderson, 2006; Martin & Osberg, 2007; Yunus, 2007; 2010; Yunus, Moingeon, & Lehmann-Ortega, 2010).

Conceptualizations of Social Enterprise

Social enterprises refer "to the rapidly growing number of organizations that have created models for efficiently catering to basic human needs that existing markets and institutions have failed to satisfy" (Seelos & Mair, 2005, p.1). In other words, their primary business goal is to create social value. For a social enterprise to be sustained, it must combine the four elements of innovation, entrepreneurship, social value, and financial stability (Seelos & Mair, 2005). …

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