Social business– Value (f)or money?: A discussion about methods to evaluate enterprises on the border between the private sector, the public sector and civil society.
Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
In this thesis, different ways to evaluate social business are compared and discussed.The relatively new concept “social business” is used to describe a private sector enterprise, the purpose of which is not primarily to maximise profit but to achieve a social mission. However, in doing so, it needs to be sustainable in financial terms, and this means that sufficient profitability is a necessary condition. (Environmental sustainability is another important prerequisite, which is not discussed in depth here).Assessing the success of a social business, it is therefore necessary to evaluate both the social impact and the financial viability. This means, on one hand, using appropriate evaluation methods that have mainly been developed for the public sector and the civil society. Such methods are based on unequal power relations requiring accountability – a concept not normally used in the private sector, where funding is based on a voluntary exchange of money for goods or services. On the other hand, not all traditional methods for assessing performance in a private sector company are suitable for determining financial sustainability in a social business. Nevertheless, existing methods should be used where appropriate.Among the findings are:- the importance of the local context and particular features, which makes comparisons between different social businesses difficult, and which necessitates adaptions of assessment methods- that several financial indicators, used for for-profit business, may also be useful for social business (especially those related to revenue trends and liquidity). However such indicators are based on accounting (history) rather than a forward-looking analysis of the business environment, and may not be fully comparable.- that the main purpose of impact evaluation is the need to improve operations, but also to enhance legitimacy among stake-holders and – to some extent – regulators and prospective investors. Stake-holder involvement is therefore normally an advantage.- that methods that build on monetising outcomes and impacts (for example Social Return on Investment) are normally less appropriate than models that use non-monetary forms for publishing evaluation results, eg. anecdotal analyses- that with the exception of evaluations done by the academia to increase knowledge, available resources will normally not be sufficient to carry out fully fledged external evaluations using methods to establish a counterfactual situation.The development of social business also challenges traditional economic assumptions of the profit maximising individual through introducing such concepts as solidarity, social capital and citizenship. The fact that in several ways, social business crosses the borderline between on one hand the private sector and on the other hand public sector and civil society makes it necessary for representatives from many different academic fields to cooperate closely in future research: economics, business administration, political and social scientists etc.
Place, publisher, year, edition, pages
2012. , 45 p.
Social business, impact assessment, financial sustainability, monetised indicators, anecdotal analyses
IdentifiersURN: urn:nbn:se:uu:diva-177108OAI: oai:DiVA.org:uu-177108DiVA: diva2:539559
Subject / course
2011-12-15, A204, Enomicum, Uppsala, 08:00 (Swedish)
UppsokSocial and Behavioural Science, Law
Forslund, Anders, Professor
Ohlsson, Henry, Professor