strategic concepts that drive the business models of...
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Strategic concepts that drive the business models
of social enterprises
Eva Balan-Vnuk
Submitted in requirement for the degree of Bachelor of Management (Honours)
at the University of South Australia.
School of Management
Division of Business
University of South Australia
Submitted: November 2009
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Abstract
Social enterprises, as outcomes of social entrepreneurship, deliver important social services
not provided by government or traditional not-for-profit organisations. They are
distinguished from not-for profit organisations by their adoption of trading activities, or
business models, to fund their primary social mission. This raises an apparently
unanswered empirical question of what these business models are, and what potential
business models might be applied to these organisations. However, the definitions of a
business model and its components presented in the literature are contradictory. As an
organisation’s business model is presumed to be driven by its strategy, this study seeks to
make explicit the strategic concepts that drive an organisation’s business model. In this
context, the research question is “what are the strategic concepts that drive the business
models of social enterprises?”.
A mixed method research approach was taken because it allows for generalisation and a
deeper understanding of social enterprises and their business models. Seventy-five social
enterprises in Australia were systematically selected from a list of 4258 not-for-profit
organisations using a definition of social enterprises derived from the literature.
Information about the trading activities, understood to be a manifestation of the business
model of each social enterprise, was taken from publicly available annual and financial
reports. Social enterprises with similar trading activities were linked together, and, using a
social network analysis software program, a concept map was generated.
Through a combination of analysis and interpretation, five distinct clusters of social
enterprises were identified from the concept map. Based on the similarity of the business
models represented in each cluster, the five strategic concepts were named: ‘safety nest’
(5% of cases), ‘expertise meets social needs’ (40%), ‘personal independence coaching’
(31%), ‘experience the cause’ (5%), and ‘wealth re-distribution’ (19%). This study
proposes that the business models of social enterprises in Australia are driven by at least
one of these five strategic concepts. Social enterprise strategists can use these five
strategic concepts to evaluate existing business models, and develop ideas for new business
models. This is a novel application of the concept mapping method.
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Statement
I declare that this thesis does not incorporate without acknowledgment any material
previously submitted for a degree or diploma in any University and that to the best of my
knowledge it does not contain any materials previously published or written by another
person except where due reference is made in the text.
All the original data collected for this thesis are available for further inspection by
contacting the researcher through the School of Management at the University of South
Australia.
Eva Balan-Vnuk
November 2009
Word length information
This Honours thesis complies with the maximum word count of 18,000 words, excluding
appendices and references.
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Table of Contents
Abstract .............................................................................................................................. 2
Statement ........................................................................................................................... 3
Word length information ................................................................................................... 3
Table of Contents ................................................................................................................. 4
Chapter 1: Introduction ...................................................................................................... 6
The research problem ......................................................................................................... 6
The research question ........................................................................................................ 7
Research method used ....................................................................................................... 7
Findings and their implications .......................................................................................... 7
Definitions of key terms .................................................................................................... 9
Flow of this thesis ............................................................................................................ 10
Chapter 2: Social Enterprises ........................................................................................... 11
The ‘third sector’ and social enterprises .......................................................................... 11
Distinction between social enterprises and not-for-profit organisations ......................... 12
Social service organisations as social enterprises ............................................................ 14
Sustainability and social enterprises ................................................................................ 15
Socially responsible corporations .................................................................................... 16
Social enterprise and social entrepreneurship .................................................................. 17
Conclusion ....................................................................................................................... 18
Chapter 3: Business Models .............................................................................................. 21
Different perspectives in the literature ............................................................................. 21
Research approach analogy ............................................................................................. 23
Business models and strategy .......................................................................................... 24
Business models and sustainability .................................................................................. 26
Conclusion ....................................................................................................................... 27
Chapter 4: Strategic Concepts .......................................................................................... 28
Philosophical basis ........................................................................................................... 28
Concepts and strategic thinking ....................................................................................... 29
Concepts as purpose or intent .......................................................................................... 30
Alternative approaches to strategic concepts ................................................................... 31
Concept identification through concept mapping ............................................................ 33
Conclusion ....................................................................................................................... 33
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Chapter 5: Research Methodology and Method ............................................................. 35
Concept mapping as a research method ........................................................................... 35
Documents as a data source ............................................................................................. 37
Identifying generalisations ............................................................................................... 38
Research method details .................................................................................................. 39
1. Decide on the selection criteria for social enterprises for this study ........................ 39
2. Select the sampling frame and method ..................................................................... 40
3. Collect information on trading activities .................................................................. 41
4. Link similar social enterprises to each other ............................................................ 42
5. Enter data into UCINET 6.0 ..................................................................................... 43
6. Generate the concept map using UCINET 6.0 ......................................................... 44
7. Name the clusters ..................................................................................................... 44
Conclusion ....................................................................................................................... 45
Chapter 6: Findings and Discussion................................................................................. 46
Interpreting the concept map ........................................................................................... 47
Validation using Girvan-Newman analysis ..................................................................... 49
Findings ........................................................................................................................... 52
Examples of social enterprises in each cluster ................................................................. 54
Cluster 1: ‘Safety nest’ ................................................................................................. 54
Cluster 2: ‘Expertise meets social needs’ ..................................................................... 54
Cluster 3: ‘Personal independence coaching’............................................................... 55
Cluster 4: ‘Experience the cause’ ................................................................................. 56
Cluster 5: ‘Wealth re-distribution’ ............................................................................... 56
Conclusion ....................................................................................................................... 57
Chapter 7: Conclusion and Recommendations ............................................................... 58
The five strategic concepts identified in this study .......................................................... 58
Contribution to the literature ............................................................................................ 59
Recommendations to social enterprise strategists............................................................ 60
Implications for further research ...................................................................................... 62
Appendix 1 .......................................................................................................................... 64
Appendix 2 .......................................................................................................................... 66
References ........................................................................................................................... 79
Chapter 1: Introduction
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Chapter 1: Introduction
The research problem
Social enterprises, a tangible outcome of social entrepreneurship (Mair & Marti 2006),
deliver social services in a manner that governments and traditional not-for-profits do not
(Borzaga & Defourny 2004; Haugh 2007). Activities that generate revenue from paying
customers are essential to social enterprises (Shaw & Carter 2007). This revenue reduces
dependence on government and donor support and allows them to achieve financial
sustainability. While these activities are predominantly referred to in the social
entrepreneurship literature as trading activities, they are also referred to as business models
(Mair & Marti 2006; Zahra et al 2009), a term more commonly used in the management
and business literature. A business model is generally understood to be a description of
how a trading organisation generates and sustains its revenue stream (Stewart & Zhao
2000). While social entrepreneurship literature calls for more insight into this area (Certo
& Miller 2008), little empirical research has been conducted into the business models of
social enterprises.
This lack of empirical research may in part be due to the confusion in the literature
regarding the term business model and its components (Osterwalder et al 2005; Shafer et al
2005). Rather than focusing on the business model, this research instead identifies the
strategy that drives an organisation’s choice of business model (Hindle 2009). This
approach provides a means of examining business models at a higher, and possibly more
useful, level of abstraction, by identifying both the implicit and explicit strategic concepts
(Metcalfe 2008) driving them. The approach is similar to clarifying an organisation’s
conceptual metaphors (Morgan 1986) or its underlying assumptions (Mason & Mitroff
1981). Typically, social enterprises report their trading activities, but neither their business
models, nor their strategies. For this reason, trading activities are examined as a
manifestation of the business model (Amit & Zott 2000).
Chapter 1: Introduction
7
Analogous to the structure of a marketing plan (McDonald 1989), this study’s approach
can be compared to identifying a firm’s corporate mission (substituted by strategic
concept) that drives its marketing growth and competitive strategies (business model) by
examining its marketing activities (trading activities), where the marketing activities are a
concrete manifestation of the marketing growth and competitive strategies.
The research question
In this context, the research question is:
“What are the strategic concepts that drive the business models of social
enterprises?”
Research method used
Concept mapping (Alexander 1964) is a mixed method approach (Mingers 2001)
combining qualitative and quantitative research. Seventy-five local, national, and
international social enterprises in Australia were selected from a publicly available list of
charitable and not-for-profit organisations using systematic sampling. Selection criteria
included the percentage of revenue generated through trading activities (excluding
government contracts), and non-distribution of profit to shareholders (Bull & Crompton
2006; Hart & Haughton 2007). Information regarding the trading activities of each social
enterprise was taken from publicly available annual and financial reports. Social
enterprises considered to have the most similar trading activities were linked together, for
example the trading activities of the Bedford Group were interpreted as being similar to
those of House With No Steps and Minda Incorporated. This linking process was applied
to all cases in the sample. The links between social enterprises were analysed using the
social network analysis software program, UCINET 6.0 (Borgatti et al 2002), and the
Girvan-Newman subgroup analysis (Girvan & Newman 2002) to generate a concept map.
Findings and their implications
Five strategic concepts were identified, with each being associated with a distinct cluster of
social enterprises. The five strategic concepts were named following a careful review of
the trading activities represented in each cluster, and are presented in Figure 1.
Chapter 1: Introduction
8
Figure 1 The five strategic concepts revealed by the concept map
Each node, numbered from 1 to 75 on the concept map, represents a social enterprise in
this study. For example, the Bedford Group, case 37, is located in Cluster 3, along with
House With No Steps (case 60), and Minda Incorporated (case 64).
These five strategic concepts provide a starting point to understand the business models of
social enterprises. This empirical research contributes to the literature by proposing a
theoretical generalisation that the business models of social enterprises are driven by one
of more of the five strategic concepts. An additional contribution of this research is to
provide an approach for examining the financial sustainability of social enterprises without
being distracted by the confusion surrounding business models and their interpretation.
This research enables strategists to use the five strategic concepts to develop business
model ideas at a level of abstraction that encourages creativity, thus enabling existing
social enterprises to become financially viable. For example, the Salvation Army’s
retailing of second-hand household items, suggests a business model driven by the
strategic concept of ‘wealth re-distribution’. By providing affordable accommodation, the
YMCA’s business model can be described as being driven by the concept of ‘safety nest’.
Chapter 1: Introduction
9
These strategic concepts can also be used to facilitate the development of new, sustainable
social enterprises. By combining the concepts of ‘safety nest’ and ‘expertise meets social
needs’, a social enterprise may develop new trading activities, such as the creation of a
park bench that, for a small fee paid by the user, transforms into a secure sleeping pod at
night. This new and creative use of the concept mapping method does not appear to have
been previously reported in the literature.
Definitions of key terms
Definitions of key terms used in this thesis are summarised below in Table 1.
Table 1 Definitions used in this thesis
Term Definition used in this thesis
Social enterprises Social enterprises “use trading activities to achieve social goals and
financial self-sufficiency” (Shaw & Carter 2007, p. 421), may not
distribute profits to shareholders or individual stakeholders (Bull &
Crompton 2006; Hart & Haughton 2007), and are not run by
government (Leadbeater 1997; Lyons 2001).
Social enterprises are discussed in Chapter 2.
Business models The business model describes how a trading organisation generates
and sustains its revenue stream (Stewart & Zhao 2000).
Business models are discussed in Chapter 3.
Strategic concepts Concepts inform our logic or understanding of whatever object,
event or phenomenon we are thinking about, and guide our actions
(Ormerod 2006), and are a label that help us interpret or understand
something (Schon 1963).
Strategy is described as a pattern in a stream of decisions
(Mintzberg & Waters 1985).
Strategic concepts allow social enterprise strategists to explicitly
think about and label what is driving their business model.
Strategic concepts are discussed in Chapter 4.
Concept mapping Concept mapping (Alexander 1964) is a mixed methods approach
(Mingers 2001) where qualitative judgment and quantitative
analysis are integrated to create a visual network or map from
which concepts and ideas can emerge (Trochim & Kane 2007).
Concept mapping is discussed in Chapter 5.
Chapter 1: Introduction
10
Flow of this thesis
Figure 2 Flow of this thesis
Chapter 4: Strategic Concepts
Chapter 5: Research Methodology and Method
Chapter 6: Findings and Discussion
Chapter 7: Conclusion and Recommendations
• What are social enterprises?
• The ‘third sector’ and social enterprises
• Distinction between social enterprise and not-for-profit organisations
• Revenue generation and sustainability
• Relationship to entrepreneurship
• What is a business model?
• Different perspectives in the literature
• Relationship to strategy
• Business models and sustainability
• What are strategic concepts?
• Philosophical basis
• Concepts inform strategic thinking
• Concepts convey intent rather than goals
• Discussion of other approaches
• Concept mapping as a mixed method approach
• Documents as the data source
• Identifying generalisations
• Research method used and data collection
• Five clusters identified
• Five strategic concepts explained
• Examples of social enterprises whose business models are driven by each strategic concept
• Contribution to the literature
• Practical application of strategic concepts for social enterprise strategists
• Implications for further research
• Research problem and question
• Research method and findings
• Definitions of key terms
• Flow of this thesis
Chapter 1: Introduction
Chapter 2: Social Enterprises
Chapter 3: Business Models
Chapter 2: Social Enterprises
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Chapter 2: Social Enterprises
The provision of goods and services in exchange for income is predominantly an attribute
of private enterprise. This chapter argues that social enterprises adopt business models to
provide social value and services traditionally associated with the role of government,
charities or benevolent societies. Social enterprises are part of the ‘third sector’ and are
distinguished from not-for-profit organisations and other ‘third sector’ organisations, as
well as organisations that demonstrate corporate social responsibility. While social
enterprises have been explored through social entrepreneurship literature, these terms are
not synonymous. This study will not comment on the ideological rights or wrongs of this
enterprise approach to organising social services but will rather explore the strategic
concepts that inform their business models. The term ‘business model’ will be discussed
in detail in Chapter 3, and is generally applied to for-profit enterprises. Social enterprise
literature tends to use the term ‘trading activities’ instead.
The ‘third sector’ and social enterprises
The economy comprises of three sectors: the public or government sector, the private
sector, and the social economy or ‘third sector’ (Haugh 2005). Shaw and Carter (2007)
describe the ‘third sector’ as including organisations such as charities, voluntary
organisations, churches, educational institutions, not-for-profit and community
organisations, as well as social enterprises. This ‘third sector’ is “neither publicly nor
privately controlled” (Haugh 2005, p. 2). While the form, structure and activities of these
organisations differ, they all seek to address unmet social needs. According to Lyons
(2001), organisations in the ‘third sector’, including social enterprises, promote social
change, defend traditional values and demonstrate people’s ability to work together
“without being required to by government or being lured by the hope of [personal]
enrichment” (p. 217).
Chapter 2: Social Enterprises
12
Social enterprises are becoming increasingly important to countries’ economies (Borzaga
& Defourny 2004; Haugh 2007), as these organisations deliver social services in a manner
that governments and private benefactors are not able or willing to provide. The public
sector has become overstretched, and at the same time charity and not-for-profit
organisations are increasingly unable to meet society’s changing needs (Mulgan & Landry
1995; Leadbeater 1997; Shaw & Carter 2007). While 18th century entrepreneur Robert
Owen is cited as establishing one of the first documented social enterprises (Shaw & Carter
2007), unmet socio-economic needs have encouraged an increasing number of social
enterprises to emerge globally since the late 1990s (Mulgan & Landry 1995; Emerson &
Twersky 1996; Shaw & Carter 2007). Social enterprises have been established in the UK
(Thompson et al 2000), the United States of America (Dees 1998a), Australia (Lyons
2001), and European Union (Borzaga & Defourny 2004).
Distinction between social enterprises and not-for-profit organisations
Social enterprises are different to other organisation in the ‘third sector’ due to their
adoption of trading activities (Haugh 2005). Shaw and Carter (2007) elaborate and
describe the unique attribute of the social enterprise as being organised as a trading
enterprise, but with the intent to provide social services and value.
Not-for-profit organisations exist to fulfil independent public needs through community
owned services or programs that would otherwise be unmet through government services,
forming part of the ‘third sector’ (Lyons 2001). The defining characteristics of not-for-
profit organisations, as outlined by Considine (2003), are to promote a social (non-
monetary) value and not distribute profits to shareholders. Not-for-profit organisations
include charities, foundations, trusts, cooperatives, volunteer and grass roots organisations
(Lyons 2001). Typically these organisations are funded by a combination of grants,
donations, member and user fees (DiMaggio & Anheier 1990).
Emerson and Twersky (1996) argue that social enterprises are different to traditional not-
for-profit organisations because social enterprises pursue both not-for-profit (mission) and
for-profit (money) objectives and call this the “double bottom line” that a social enterprise
must balance. Ridley-Duff (2008) supports this description by stating that organisations
pursuing “twin goals of social and capital building” move toward a “social enterprise
orientation” (p. 306). Social enterprises are different because they adopt “corporate
Chapter 2: Social Enterprises
13
planning and business design tools and concepts”, practices not generally applied in the
not-for-profit sector, and focus on “bottom-line earned revenue and return on investment”
(Dart 2004, p. 415).
Four key characteristics distinguish social enterprises from not-for-profit organizations
(Alter, K 2007):
• “The earned income activity has been strategically established to create social and
or/economic value for the organization;
• A long term vision has been created for the trading activity, and it is managed as
an ongoing interest;
• A business plan sets targets for growth and revenue; and
• Qualified staff with relevant business or industry experience manage income
generating activities, rather than social mission staff who have different skills” (p.
17)
Social enterprises assign appropriately qualified staff to manage trading activities (Austin
et al 2006; Bull & Crompton 2006; Alter, K 2007). In contrast, not-for-profit
organizations may undertake some earned income activities but not necessarily have the
appropriate structure or resources in place to manage the activities as an ongoing and
critical operation. The prime focus of senior management in not-for-profit organisations is
not on earned income but on getting donations and grants.
With the exception of independently wealthy organisations such as the Bill and Melinda
Gates Foundation (2009), a key issue faced by not-for-profit organisations, is the financial
sustainability of their organisation. Heavy dependence on grants, donations and
sponsorships in difficult economic conditions in developed economies may erode or
decrease income of not-for-profit organisations (Shaw & Carter 2007). Table 2 on the
following page compares key characteristics of social enterprises and traditional not-for-
profit organisations.
Chapter 2: Social Enterprises
14
Table 2 Comparison of social enterprises and not-for-profit organisations
Characteristic Social enterprises Not-for-profit organisations
Purpose Fulfils a social mission and
generates earned income
(Emerson & Twersky 1996)
Fulfils a social mission
(Considine 2003)
Source of funding Earned income through
trading activities, plus grants,
donations or sponsorships
(Bull & Crompton 2006)
Grants, donations,
sponsorships, member or user
fees (DiMaggio & Anheier
1990)
Staff with business
experience manage the
trading activities
Highly desirable (Bull &
Crompton 2006; Alter, K
2007)
Not a high priority (Bull &
Crompton 2006; Alter, K
2007)
Senior management’s
focus on trading activities
High (Shaw & Carter 2007) Medium to low (Dart 2004)
Distribution of profits to
shareholders or individual
stakeholders
While some for-profit social
enterprises exist (Dees
1998a), this study focuses on
social enterprises that do not
distribute profits.
Prohibited due to the legal
status and structure of these
organisations (Considine
2003)
Social service organisations as social enterprises
Social enterprises provide services or programs to those who are in need or cannot pay for
such services (Mair & Marti 2006; Certo & Miller 2008). Leadbeater (1997) describes
social enterprises as a form of privatisation of social services by caring, autonomous
individuals or groups who find a creative way to provide such services.
St Vincent de Paul Society’s “Vinnies Centres” (2009b), for example, provide a market for
those with a low income to purchase second hand furniture, clothing and household goods
at an affordable price. The profits generated are used to provide resources and support
those unable to pay, for example by providing food for disadvantaged families (St Vincent
de Paul Society 2009a). Traditionally, these services would be provided as part of the role
of government, often as vouchers. Our Community Pty Ltd provides goods and services,
such as training, books and insurance to support the running of community groups and
schools, using any profits to further support the running of those communities (Our
Community Pty Ltd 2009). By setting up as social enterprises, these organisations feel
they can respond more effectively than government service providers. Governments seem
to agree, so encourage the development of these enterprises, particularly in the UK (Shaw
& Carter 2007).
Chapter 2: Social Enterprises
15
Dart (2004) and Austin et al (2006) suggest no for-profit market for the services outlined
above would normally exist. Private groups may be better positioned than governments to
provide such services due to their motivation and organisation efficiencies, especially if the
enterprise is run by those with first-hand experience of the social issue, who are not
answerable to shareholders and can maintain a flexible organisational structure (Leadbeater
1997).
It is therefore possible to imagine any social service as a potential social enterprise. The
traditional approach to address the needs of the disabled is to have public servants develop
services using resources available to governments such as taxation and legislation. As an
alternative approach, Bedford Group, established in 1945, provides supported employment
opportunities to South Australians with physical or intellectual disabilities. Services
including furniture manufacturing, cleaning services, and catering, are provided to
businesses on a commercial basis (Bedford Group 2009). Bedford Group’s mission is to
help disabled people lead active and meaningful lives (2009), and profits generated from
its trading activities are reinvested to fulfil this mission.
Sustainability and social enterprises
Trading, that is the “continuous activity producing goods and/or selling services” (Borzaga
& Defourny 2004, p. 16) to paying clients, is considered essential for survival. For this
study the presence of revenue generation through trading activity will be considered
integral to a social enterprise, as described both by scholars (Emerson & Twersky 1996;
Dart 2004; Bull & Crompton 2006) and practitioners (Boschee 1998; Alter, SK 2006).
To aid effective revenue generation, Certo and Miller (2008) suggest identifying the
business models of these enterprises as an area for further research. Organisations such as
the Grameen Bank and The Institute for One World Health have developed business
models to support their social benefit objectives (Mair & Marti 2006). Zahra et al (2009)
state that sustaining social ventures, or enterprises, requires “the use of business models”
(p. 527).
Traditional not-for-profit or social-purpose organisations may face significant risks when
balancing “double bottom line” objectives (Emerson & Twersky 1996). Dees (1998a)
posits that in the best case, pursuing trading-related revenue can be challenging due to the
existing operational and cultural orientation of the not-for-profit organisation; and in the
worst case, organisational focus on trading activities may compromise the organisation’s
Chapter 2: Social Enterprises
16
social mission. According to Foster and Bradach (2005), not-for-profit organisations may
fail to generate profits from trading activities due to conflicting objectives and lack of
business experience or perspective. To help avoid such negative outcomes, Foster and
Bradach (2005) propose a set of mission-led questions to help not-for-profit organisations
evaluate whether trading activities should be pursued. Chell (2007) believes this lesson is
equally applicable to social enterprises and agrees that while the risks outlined by Dees
(1998a) and Foster and Bradach (2005) exist, many social enterprises successfully combine
economic and social objectives. Bedford Group and St Vincent de Paul Society are two
such examples. This concern reinforces the recommendation that the trading activities of
social enterprises be managed by qualified staff with the relevant experience (Austin et al
2006; Alter, K 2007).
Foster and Bradach (2005) require that the trading activity fits in with and is acceptable to
the social enterprise’s core mission, so as to minimize cultural and operational conflict.
For example, St Vincent de Paul Society’s ‘Vinnies Centres’ (2009b), selling cheap second
hand clothes and household goods, are a logical fit with their mission to help displaced or
disadvantaged families. It would not be appropriate for St Vincent de Paul to sell alcohol
or cigarettes, even though these may possibly generate more revenue than ‘Vinnies
Centres’.
Socially responsible corporations
Organisations that demonstrate corporate social responsibility are not social enterprises
(Zahra et al 2009). Carroll (1991) describes a conceptual pyramid with four levels: the
firm must “strive to make a profit, obey the law, be ethical, and be a good corporate
citizen” (p. 43), listed in order of priority. Philanthropic activity is understood to be a
result of the for-profit organisation’s economic success, not a driving factor of the
organisation’s activities (Carroll 1991).
One of the early examples of corporate social responsibility is illustrated by the example of
Cadbury. In 1824 John Cadbury, a Quaker, began selling tea, coffee and later chocolate in
Birmingham, UK. After his retirement, his sons opened a new factory and established a
“model village” to “alleviate the evils of modern cramped living conditions” for workers
(Bryson & Lowe 2002). A more current example, Microsoft Corporation, while driven to
deliver shareholder value, aspires “to act as a good corporate citizen …[and] commit to
being a global leader in corporate social responsibility” (Microsoft 2009a), such as
Chapter 2: Social Enterprises
17
partnering with the Philippines Government to introduce technology access and computer
literacy skills to overseas Filipino workers and their families (Microsoft 2009b). For the
purpose of this study, and as supported by Zahra et al (2009), organisations that prioritise
profit generation for shareholders above philanthropy are not considered to be social
enterprises.
Social enterprise and social entrepreneurship
Social enterprises have only recently been explored through the perspective of
entrepreneurship theory and practice. The increasing academic interest in this field is
demonstrated by the publication in 2006 of a special issue of the "Journal of World
Business", focusing on social entrepreneurship and social enterprise that includes five
papers (including empirical studies and reviews of research issues) from the Academy of
Management (Christie & Honig 2006).
Dees (1998b), by describing social entrepreneurship as a “species in the genus
entrepreneurship” (p. 2), implies fundamental similarities between social and commercial
entrepreneurship. Briefly, entrepreneurs create value by finding new ways to do things or
by serving new markets (Dees 1998b) and entrepreneurs can be perceived as catalysts and
innovators behind economic progress (Schumpeter 1942). Drucker (1985) states that
entrepreneurship is not limited to the economic sphere and believes the defining element of
entrepreneurs is their capacity to “always search for change, respond to it and exploit it as
an opportunity” (p. 25). Stevenson et al (1994) posit that entrepreneurship is the “pursuit
of opportunity without regard to resources currently controlled” (p. 5).
Mair and Marti (2006) describe social enterprises as a “tangible outcome of social
entrepreneurship” (p. 37), where social entrepreneurs are practitioners who develop and
operate social enterprises (Alter, SK 2006). Peredo and McLean (2006) however argue
that engagement in a social enterprise is “not necessarily the same as being an
entrepreneur” (p. 62), supporting Pomerantz’s (2003) view that “developing new social
enterprise … is only one facet of social entrepreneurship” (p. 26). Thompson (2009)
explores this further and argues that social enterprises may not in fact be exploiting
opportunities in innovative or creative ways, generally accepted to be a key characteristic
of entrepreneurship. Thompson (2009) concludes that social enterprises “need not be run
by entrepreneurial characters” (p. 160) or behave in ways that would be understood as
Chapter 2: Social Enterprises
18
entrepreneurial. Therefore it is not presumed or required that social enterprises in this
sample exhibit ‘entrepreneurial’ characteristics.
Conclusion
A review of the literature uncovers a general consensus regarding the focus and purpose of
social enterprises. These aspects have been discussed throughout this chapter. A summary
of the varying definitions of social enterprises is detailed in Table 3.
Table 3 Selected definitions of social enterprises (ordered by publication date)
Source Definition
Dees (1998a) “A social enterprise is commercial to the extent that it operates like a
business in how it acquires its resources and distributes its goods and
services. Few social enterprises can or should be purely philanthropic
or purely commercial; most should combine commercial and
philanthropic elements in a productive balance.” (p. 60)
Pomerantz (2003) “The key to social enterprise involves taking a business-like,
innovative approach to the mission of delivering community
services. Developing new social enterprise business ventures is only
one facet of social entrepreneurship. Another facet is maximizing
revenue generation from programs by applying principles from for-
profit business without neglecting the core mission.” (p. 26)
Peredo and
McLean (2006)
Social enterprise is “an activity commonly equated with social
entrepreneurship.” (p. 57)
Mair and Marti
(2006)
Social enterprise is “the tangible outcome of social entrepreneurship”
(p. 37), focused on creating “social value, while economic value
creation is seen as a necessary condition to ensure financial
viability.” (p. 38)
Alter (2006) Social enterprises combine “social interest and market mechanisms
to create both social and economic value with a new type of
institution”. (p. 205). Alter describes the social entrepreneur as the
practitioner and instigator of a new kind of organisation, the social
enterprise.
Bull and Crompton
(2006)
Social enterprises are “businesses with the specific purpose of
addressing ‘social’, ‘community’ or ‘environmental’ aims through a
business structure that allows them to be sustainable.” (p. 10)
Chell (2007) Social enterprises are “not-for-personal-profit enterprises [that]
comprise business activity that generate value for social ends and
wealth to enable reinvestment and sustainability of the business” (p.
18)
Shaw and Carter
(2007)
“Rather than relying on charitable donations, social enterprises seek
to use trading activities to achieve social goals and financial self-
sufficiency.” (p. 421)
Chapter 2: Social Enterprises
19
Defourny and
Nyssens (2008)
“Social enterprises are not-for-profit organisations that provide goods
or services directly related to their explicit aim to benefit the
community, they rely on a collective dynamics involving various
types of stakeholders in their governing bodies, place high value on
their autonomy and bear economic risks linked to their activity.” (p.
204)
Ridley-Duff (2008) “An ideal form of social enterprise encompasses economic and social
goals and practices, with economic and social capital reinvested
across its stakeholder groups” (p. 307)
Thompson (2009) Social enterprises provide “business solutions to social problems”
and are “good at doing good” (p. 152)
In summary, scholars agree that social enterprises exist principally to fulfil a social mission
while engaging in trading activity. One notable anomaly is Austin et al (2006) who state
that while “a social enterprise exists to create social value” (p. 18), it “does not have any
commercial aspect to its operations” (p. 3). Curiously, this statement contradicts Austin at
al’s (2006) findings and implications for further research, where they acknowledge the
adoption of earned-income strategies by social enterprises.
The trading activities adopted by social enterprises influence their financial viability
(Zahra et al 2009). Emerson and Twersky (1996) use the term “double bottom line” to
describe the dual focus to fulfill a social mission and generate revenue to ensure financial
sustainability, a concept applied by Thompson and Doherty (2006) to illustrate the
diversity of social enterprises through eleven case studies. Consistent with other scholars,
including Pomerantz (2003), Borzaga & Defourny (2004) and Ridley-Duff (2008),
Thompson and Doherty (2006) outline the key characteristics of social enterprises:
• “Driven by a social purpose.
• Assets and wealth are used to create community benefit.
• They pursue this with (at least in part) trade in a market place.
• Profits and surpluses are not distributed to shareholders, as is the case with a
profit-seeking business.
• “Members” or employees have some role in decision making and/or governance.
• The enterprise is seen as accountable to both its members and a wider community.
• There is either a double- or triple-bottom line paradigm. The assumption is that the
most effective social enterprises demonstrate healthy financial and social returns –
rather than high returns in one and lower returns in the other” (p. 362)
Chapter 2: Social Enterprises
20
This study argues that trading activities are an integral part of a social enterprise, and are
closely linked to its social mission. Social enterprises are not only about solving unmet
social problems, nor are they only about generating revenue. While social enterprises are
discussed in the literature within the context of entrepreneurship, social enterprises are not
always innovatively or creatively exploiting opportunities to generate revenue, and may in
fact behave in ways not considered to be entrepreneurial (Thompson 2009).
This study adopts Shaw and Carter’s (2007) concise definition, that social enterprises “use
trading activities to achieve social goals and financial self-sufficiency” (p. 421). This
definition reflects the importance of trading activities for social enterprises. While the
term ‘trading activity’ is applied in social enterprise literature, in this study the term
‘business model’ will be used. Chapter 3 will define and discuss the term ‘business
model’, and distinguish it from trading activities.
Chapter 3: Business Models
21
Chapter 3: Business Models
This chapter defines business models as the manner in which a trading organisation
generates and sustains its revenue stream (Stewart & Zhao 2000), and concludes that
business models are one representation of an organisation’s strategic priorities, principles
or concepts. While the business model literature is contradictory and confuses business
models with strategy, scholars agree that an organisation’s financial sustainability is
dependent upon its business model.
As discussed in Chapter 2, the social enterprise literature tends to use the term ‘trading
activity’ instead of ‘business model’. Due to an increase in venture capital funding for
social enterprises, Certo and Miller (2008) argue that “a new business model” (p. 270) has
been created and suggest further research in this area. According to Zahra et al (2009),
sustaining social ventures, or social enterprises, “requires … the use of business models”
(p. 527). Dart (2004) adds that social enterprises become legitimate by adopting particular
business models. What these particular business models are, or what they are driven by,
does not appear to have been explored in the literature. In order to clarify the approach of
this research, an analogy with marketing planning literature is provided. In addition,
conflicting definitions of business models, and the relationships between the business
model, an organisation’s strategy, its trading activities, and its sustainability will be
discussed.
Different perspectives in the literature
Researchers struggle to agree on a clear definition of business models. Osterwalder et al
(2005), after conducting a thorough literature review, observe tremendous variance in the
interpretation and application of the term ‘business model’. Various definitions are
provided by the literature, with some examples provided in Table 4.
Chapter 3: Business Models
22
Table 4 Some definitions of the term ‘business model’ (ordered by publication date)
Source Definition
Timmers (1998) “An architecture for the product, service and information flows,
including a description of the various business actors and their
roles; a description of the potential benefits for the various business
actors; and a description of the sources of revenues.” (p. 2)
Mahedevan (2000) “A business model is a unique blend of three streams that are
critical to the business. These include the value stream for business
partners and the buyers, the revenue stream, and the logistical
stream.” (p. 59)
Stewart & Zhao
(2000)
“A business model is a statement of how a firm will make money
and sustain its profit stream over time.” (p. 290)
Amit & Zott (2001) “A business model depicts the content, structure, and governance
of transactions designed so as to create value through the
exploitation of business opportunities.” (p. 511)
Porter (2001) “The definition of a business model is murky at best. Most often, it
seems to refer to a loose conception of how a company does
business and makes money” (p. 73)
Betz (2002) An abstraction identifying how a business profitably makes money.
(p. 21)
Chesbrough &
Rosenbloom (2002)
“A successful business model creates a heuristic logic that connects
technical potential with the realization of economic value.” (p. 529)
Hindle (2004) “A well-articulated plan for turning effort into profit using
identified resources and stakeholders” (p. 275)
Seddon et al (2004) A business model is the “abstraction of a firm’s strategy” (p. 440).
Morris et al (2005) “A business model is a concise representation of how an
interrelated set of decision variables in the areas of venture
strategy, architecture, and economics are addressed to create
sustainable competitive advantage in defined markets.” (p. 727)
Osterwalder et al
(2005)
A business model is like the detailed “blue-print of how a company
does business” (p. 2) and the “translation of … strategic positioning
and strategic goals into a conceptual model that explicitly states
how the business functions” (p. 2).
Shafer et al (2005) The business model represents an organisation’s “core underlying
logic and strategic choices for creating and capturing value within a
value network” (p. 204)
While most definitions agree that the business model is a description or representation,
exactly what it describes or represents is not consistent. The lack of any one dominant
definition and hence coherent research may contribute to this situation (Osterwalder et al
2005). List’s (2005) examination of the literature concurs there is “confusion between the
business model and business plan [and] no instructive examples” (p. 24). The term
Chapter 3: Business Models
23
‘business model’ has been used synonymously with ‘revenue model’ in the management
literature, for example by Zott and Amit (2009 in press). Osterwalder et al (2005) report
that the term ‘business model’ is interpreted at different levels of abstraction, ranging from
very high level, such as the strategy or mission of an organisation, to the detailed
operational level. Amit & Zott’s (2001) development of a business model framework
overcomes this confusion by examining an organisation’s trading activities as a
manifestation of the business model. Hence trading activities can reveal the business
model of an organisation. Stewart and Zhao’s (2000) straightforward definition, that a
business model describes how a trading organisation “will make money and sustain its
profit stream over time.” (p. 290), will be used in this study.
Research approach analogy
In order to clarify and justify the interpretation of the relationship between social
enterprises (refer to Chapter 2), business models (this chapter) and strategic concepts (refer
to Chapter 4), it may be useful to consider the structure of the marketing plan as analogous
to the research approach taken in this study, where the marketing plan comprises different
levels of abstraction. In the literature on marketing planning, an organisation’s corporate
mission (high level of abstraction) drives its marketing growth and competitive strategies
(intermediate level of abstraction), and hence its marketing activities (as a manifestation)
(McDonald 1989, p. 116-117). A simplified pictorial representation of the components of
the marketing plan adapted from McDonald (1989) (Figure 3) provides a way for thinking
about this study’s approach by interpreting the organisation at different levels of
abstraction.
Analogous to the structure of the marketing plan that incorporates different levels of
abstraction, this study identifies the strategic concepts (high level of abstraction) that drive
the business models (intermediate level of abstraction) of social enterprises by examining
trading activities as a concrete manifestation of the strategic concept and business model in
place. This approach deals with the ambiguity surrounding business models and is
consistent with Amit and Zott’s (2001) examination of business models through an
organisation’s trading activities and other identifiable, measurable factors. In comparison,
the definition, elements and composition of an organisation’s marketing growth and
competitive strategies are well-established, therefore such an approach is unnecessary in
the marketing planning context. While depicted here in a linear fashion, feedback between
Chapter 3: Business Models
24
marketing plan components, as well as between strategic concepts, business model and
trading activities, is acknowledged.
Figure 3 Research approach analogy
As this study intends to examine business models at a higher level of abstraction, this
chapter argues that an organisation’s strategy drives its business model, and hence its
trading activities, just as an organisation’s corporate mission informs its marketing growth
and competitive strategies, and hence marketing activities.
Business models and strategy
Much of the business model literature draws heavily on definitions and theories of strategy
provided by Ansoff (1965) and Porter (Porter 1996, 2001). Chesbrough and Rosenbloom
(2002) for example, in their discussion of the evolution of strategy and how it relates to
business models, draw on Ansoff’s (1965) theory requiring strategy development at every
level of the organisation, as strategy provides “rules for decision [making] under partial
ignorance” (p. 121). Ansoff (1965) argues that it is not enough to have one central strategy
as this does not provide enough guidance to account for situations that can occur at all
levels of an organisation, and suggests the need for layers of strategic rules at each level of
an organisation.
This study assumes that strategic rules applied at the operational level inhibit flexibility
and creativity. Rather something more abstract is required of strategy, that is, to provide
Chapter 3: Business Models
25
high level guidance to an organisation’s activities. Therefore, Ansoff’s (1965) definition
of strategy is not compatible with this study’s interpretation of strategy driving the
business model.
Porter’s (2001) definition of strategy has been adopted by other academics who discuss
business models, such as Seddon et al (2004). Porter (2001) posits that the terms ‘strategy’
and ‘competitive advantage’, have been replaced with the term ‘business model’ especially
for Internet players. Porter (2001) claims the term’s “murky” definition leads to “faulty
thinking and self-delusion” (p. 73) by managers because having a business model is not
enough for a company to be successful. In this respect, this study agrees that the terms
‘strategy’ and ‘business model’ are not synonymous.
Shafer et al (2005) define a business model as representing an organisation’s “core
underlying logic and strategic choices for creating and capturing value within a value
network” (p. 204). This definition suggests the need to explain the logic of interpreting
which business models are appropriate and this is related to its strategic choices.
Using the analogy of the construction of an architecturally designed home, Shafer et al
(2005) describe the relationship between a strategy and the business model: future
homeowners discuss with an architect how they wish to live (the strategy). The architect
creates a detailed floor plan based on the homeowners’ choices to turn their vision into
reality (the business model). Osterwalder et al (2005) agree, as the business model is the
“translation of … strategic positioning and strategic goals into a conceptual model that
explicitly states how the business functions” (p. 2). Hindle’s (2009) conceptual framework
of the entrepreneurial process suggests that the strategy selected by the entrepreneur
influences the business model, allowing for feedback.
Hindle’s (2009) conceptual framework and Shafer et al’s (2005) definition can be applied
to the music industry. Illegal downloads and the distribution of music on the Internet have
been described as “life-threatening to the [music] industry” (Premkumar 2003, p. 89).
New business models are required to ensure the music industry survives (Premkumar
2003). Examples of potential new business models, such as revenue generation through
online advertising to offset members’ subscription costs, and the establishment of online
retail stores, are provided. These new business models appear to be driven by an implicit
strategic concept of the industry needing more “anti-piracy” revenue activities. The
business models proposed by Premkumar (2003) would seem to address the music
Chapter 3: Business Models
26
industry’s intent to reduce consumers’ ability to access music for free. This example
highlights that the evaluation of a particular business model can only be made if the
strategy or strategic concept is clearly articulated. Strategic concepts will be discussed in
detail in Chapter 4.
Seddon et al’s (2004) integrated use of the terms ‘strategy’ and ‘business model’ can also
be applied to the music industry. Seddon et al (2004) compare Porter’s (1996) definition
of strategy with definitions of business model across a broad section of literature, and
conclude that the two terms may be interpreted in similar ways. Seddon et al (2004)
perceive business models as the “abstraction of a firm’s strategy that applies to more than
one firm” (p. 440), whereas strategy is described as unique to each firm due to its specific
competitive environment. This interpretation of strategy seems strange; cannot firms have
similar strategies? Seddon et al’s (2004) distinction between strategy and business models
is not compatible with the definitions discussed previously in this section, and is not the
interpretation that will be used in this study. Seddon et al (2004) imply that “anti-piracy”
is a strategy unique to an individual firm, where in fact this strategic concept can apply to
the entire music industry. This researcher instead takes the view of Hindle (2009), Shafer
et al (2005) and Osterwalder et al (2005) that the strategy, as identified by strategic
concepts, drives an organisation’s business model and hence its trading activities.
Business models and sustainability
Mahadevan (2000), Morris et al (2005) and Shafer et al (2005) reflect on the role of the
business model to enable an organisation’s financial sustainability. This is also applicable
to social enterprises. Mahadevan (2000) argues that an organisation’s “long-term
viability” (p. 59), or sustainability, largely depends on the cohesiveness of its business
model. Morris et al (2005) posit that to achieve financially sustainable there must be
internal consistency, or ‘fit’, between the internal components of the business model, as
well as external consistency to ensure the appropriateness of the business model to the
organisation. For social enterprises, their business model, and hence trading activities,
must ‘fit’ with their social mission. As argued in Chapter 2, St Vincent de Paul Society’s
‘Vinnies Centres’ are proposed to be a logical fit with its mission to help disadvantaged
families (St Vincent de Paul Society 2009a). It would not appear consistent for St Vincent
de Paul Society to sell goods to the highest bidders such as second-hand dealers, even
though this activity would possibly generate more revenue than the ‘Vinnies Centres’.
Chapter 3: Business Models
27
Shafer et al (2005) argue that as the survival, or sustainability, of all for-profit
organisations is directly linked to the ability to create and capture value, then all these
organisations require a business model. As financial sustainability is an area of concern to
social enterprises, then business models must also be applicable to these types of
organisations.
Conclusion
In conclusion, the broad cross-section of literature that addresses the term ‘business model’
is neither consistent nor conceptually clear. Through a brief exploration of the term in the
management and business literature, the term ‘business model’ has been used
synonymously with ‘revenue model’ (Zott & Amit 2009 in press), ‘business planning’
(List 2005), and ‘strategy’ (Seddon et al 2004), and has been conceptualized at various
levels of abstraction, as critiqued by Osterwalder et al (2005). This creates a level of
confusion regarding the exact definition of the term ‘business model’, and the role it plays
to represent an organisation’s strategy to create and capture value (Shafer et al 2005;
Hindle 2009). This study adopts Stewart and Zhao’s (2000) definition of the business
model informing how a trading organisation generates and sustains its revenue stream, as
well as Amit and Zott’s (2001) approach, where trading activities are examined as a
manifestation of an organisation’s business model.
The concept of business models has been applied to social enterprises (Certo & Miller
2008; Zahra et al 2009). In this study, the business model is understood to be driven by the
organisation’s strategy or strategic concept, and informs the organisation’s trading
activities. This can be compared to the marketing planning process (McDonald 1989),
where an organisation’s corporate mission (strategic concept) drives its marketing growth
and competitive strategies (business model) and hence its marketing activities (trading
activities). Strategic concepts will be explained in more detail in Chapter 4.
Chapter 4: Strategic Concepts
28
Chapter 4: Strategic Concepts
In this study, strategic concepts allow researchers and social enterprise strategists to
explicitly think about and label what informs or drives the business model of social
enterprises. Due to the conceptual inconsistency in the literature regarding business
models and research approach analogy discussed in Chapter 3, articulating the implicit or
explicit strategic concepts that drive the business models, and hence trading activities, of
social enterprises, appears to be more useful than identifying specific business models.
However, care must be taken to identify the strategic concept at the appropriate level of
abstraction. For example, many social enterprises seem to use the concept of ‘respect’ to
drive decision making. However this concept may not provide enough direction to design
a business model. This chapter explains what is meant by strategic concepts, its
philosophical basis, comparison with other management approaches, and an explanation of
how these strategic concepts might be identified.
Philosophical basis
The term “conception” (Ormerod 2006, p. 898), shortened to concepts, is being used partly
because of its clear philosophical and moral basis as provided by the American Pragmatists
(such as Peirce 1878). Pragmatism, as described by Ormerod (2006), is an epistemology
designed to objectively account for different interpretations of reality. It is seen as being
particularly useful to help decide how to act in response to complex social phenomena
where many viewpoints and perspectives exist. Ormerod’s (2006) examination of the
history of pragmatism identifies Charles Saunders Peirce (1839 – 1914), as the founder of
pragmatism, which Peirce described as a philosophy of meanings or interpretations. This
is relevant here because what is sought in this study is an interpretation of what guides the
business models of social enterprises.
Using logic as a starting point, Peirce argues that what is logical depends on what prior
conceptions, or concepts, are in use from prior experiences. As described by Ormerod
Chapter 4: Strategic Concepts
29
(2006), Peirce’s approach was based on wanting to extend scientific, empirical inquiry, but
with a focus on making explicit peoples’ prior conceptions (concepts). In addition,
Peirce’s “pragmatic principle” (Ormerod 2006, p. 898) explains that our conception
informs our logic or understanding of whatever object, phenomenon or event we, or
organisational strategists, are thinking about, and therefore guides our actions. The same is
assumed for business logic, and the logic behind business models.
The idea of ‘concepts’ and ‘conceptions’ has been adopted in management literature.
Schon (1963) declares there “are no things without concepts” (p. 8), and this includes
observations, perceptions, data and objects. Concepts are not the thing itself; they are
instead a label or description of the thing in question (Schon 1963). For example, ‘quality’
is a concept that helps us understand or interpret something, but is not itself a thing. While
we may think that the word ‘flower’ is a thing, it is in fact a concept that allows us to
communicate in general about the seed and fruit producing parts of plants. Concepts allow
an appropriate level of abstraction to describe what drives an organisation’s business
models.
Concepts and strategic thinking
Mintzberg and Waters’ (1985) definition of strategy as “a pattern in a stream of decisions”
(p. 257) can help explain strategic concepts. Concepts are seen to inform strategy and
strategic thinking. Mintzberg and Waters (1985) propose a continuum within which
strategies are formulated, ranging from deliberate to emergent in nature, and present
several case studies to illustrate how strategies can either be driven by clear intentions from
senior management, or emerge due to external factors. The most effective method for
strategy formulation is for managers to both “direct [activities] in order to realize
intentions while at the same time respond to an unfolding pattern of action” (Mintzberg &
Waters 1985, p. 272). In this study, strategic concepts inform strategic thinking, rather
than planning, and will be interpreted from the visible ‘patterns’ resulting from strategic
thinking, namely the trading activities of social enterprises. This study therefore adopts
Mintzberg and Water’s (1985) more cognitive definition of strategy, rather than the more
prescriptive approach proposed by Ansoff (1965), discussed in Chapter 3.
Chapter 4: Strategic Concepts
30
Concepts as purpose or intent
Popular management theory has focused more on an organisation’s outputs, for example
goals and objectives, than inputs, such as strategy formulation. Bartlett and Ghoshal’s
(1994) example of Komatsu, a construction equipment manufacturer in Japan, illustrates
the value of seeking out the underlying concepts that drive an organisation. Operating
under the objective to “catch up with and surpass Caterpillar” (p.83), seemingly inspired
by Locke et al’s (1990) goal theory, sales at Komatsu had declined and creativity
stagnated. Managers were challenged to think about how to improve sales, and a new
corporate purpose called “Growth, Global, Groupwide” was developed. This articulation
of the company’s strategic intent or concept, rather than an explicit output or goal, allowed
Komatsu to increase sales significantly, including a 40% growth from the non-construction
equipment business that had languished as a result of Komatsu’s obsession with Caterpillar
and its focus on output. This example demonstrates that strategic concepts, articulated at
the appropriate level of abstraction, perform the dual function of providing guidance at a
high level to all employees, as well as allowing employees to creatively and successfully
identify new opportunities for growing Komatsu’s business. This resulted in a new
business model, as well as new trading activities, for Komatsu.
As this example highlights, focusing on a specific goal or objective can restrict an
organisation’s success (Deci 1992), whereas identifying a strategic intent or concept allows
for flexibility and growth. Supporting Deci’s (1992) argument, Mintzberg (1994) states
that “the most successful strategies are visions, not plans” (p. 107) that can adapt to
changing environments. He believes that strategic planners in organisations inappropriately
focus on analysis, whereas true strategic thinking is fundamentally about synthesis,
involving “intuition and creativity” (Mintzberg 1994, p. 108). This study acknowledges
Mintzberg’s (1994) and Weick’s (2006) concerns about the development of strategy, and
proposes that strategic concepts can be creatively and imaginatively applied to represent an
organisation’s strategy. In contrast, goal theory (Locke et al 1990) and the management by
objectives approach (Drucker 2001) are perceived to be ex post, and do not provide a level
of abstraction that allows for employee empowerment and flexibility.
This raises the question of how many strategic concepts is enough or appropriate. Miller’s
(1956) research into the “magical number seven” suggests that humans have an inbuilt
limitation to the amount of knowledge or information we can contain at one time. Drawing
on Miller’s (1956) research, human beings appear to deal with information by chunking it
Chapter 4: Strategic Concepts
31
into five to seven parts. We label these chunks of information, most commonly by
articulating or rephrasing them “in our own words” (p. 95). This is a trick to help us
remember what is most important. This study proposes a range of approximately five to
seven strategic concepts as sufficient to describe the key drivers of business models of
social enterprises.
Alternative approaches to strategic concepts
In the strategic management literature, strategic concepts have been discussed in the guise
of ‘frames’ (Kaplan 2008), ‘sensemaking’ (Weick et al 2005), ‘mind-sets’ (Gosling &
Mintzberg 2003), metaphors (Schon 1963; Morgan 1980), values (Wiener 1988), and
underlying assumptions (Mitroff et al 1979). These will now be compared to strategic
concepts as understood in this study, particularly in relation to their level of abstraction and
applicability to organisations.
The management psychology literature uses the term ‘frames’ (Kaplan 2008) for an
approach thought to be similar to strategic concepts but with some important differences.
The term ‘frames’ implies individual interpretations, not the language-based, societal
conceptions of the pragmatists. Kaplan’s (2008) model describes how individuals attempt
to transfer their own cognitive frames into the collective frame of the organisation. She
defines frames as “the means by which managers make sense of ambiguous information
from their environments” (p. 729). The collective frame Kaplan (2008) mentions seems
similar to what is being called strategic concepts here. While frames address the
appropriate level of abstraction that is sought in this study, they are principally used to
understand the perspectives of individuals and groups within an organisation, not an
organisation as a whole. For this reason, the term ‘frames’ will not be used.
Gosling and Mintzberg (2003) explore the idea of ‘mind-sets’ as a way to help managers
be successful. Managers are required to synthesise and integrate conflicting insights and
concerns “from different mind-sets into a comprehensible whole” (Gosling & Mintzberg
2003, p. 54). They describe a ‘mind-set’ as being similar to a frame of mind, and suggest
that managers think of them as “mind-sights” (p.56) or perspectives. Gosling and
Mintzberg (2003) believe the five ‘mind-sets’ they identify, such as the reflective, analytic,
and worldly, can help managers better understand and navigate their world. ‘Mind-sets’
are similar to Kaplan’s (2008) ‘frames’ as these apply to an individual, not an organisation.
The term ‘mind-set’, therefore, will not be used in this study.
Chapter 4: Strategic Concepts
32
Sensemaking (Weick et al 2005) fills an important gap in organisational theory, as it
allows people and organisations to convert circumstances into a situation that is understood
explicitly in words and allows for future action. Sensemaking is described as a way for
people to deal with ambiguity, search for meeting, settle for plausibility and move on. This
study argues that strategic concepts provide a means of sensemaking, through the
clarification and articulation of something that was previously unclear and chaotic. This
also fits with Mintzberg’s (1994) description of strategy as a “pattern in a stream of
decisions” (p. 272), where sensemaking helps organisations make sense of these decisions,
resulting in strategic concepts that inform strategy and actions.
Kuhn’s (1979) identification of the paradigm as a means to describe alternate realities
aligns with strategic concepts. Morgan (1980) uses this as the foundation for exploring the
concept of metaphors. Metaphors are clearly similar to concepts (Morgan 1980), as they
help human beings understand the world, and by creatively applying metaphors to a
situation, greater insight and understanding of the scenario can be achieved (Morgan
1980). Morgan (1986) classically uses the metaphors of machines, organisms and theatre
to think about organisations, respectively converted into the concepts of mechanised,
organic and theatrical. The key distinction between a metaphor and a concept is that a
concept does not create a picture in our minds in the evocative way that a metaphor does.
This study argues that the strong mental picture a metaphor creates may in fact inhibit
creativity, whereas strategic concepts are more abstract, allowing for flexibility and
creativity, while still following a central theme. Therefore, the term ‘metaphor’ will not be
used.
Wiener (1988) posits that values guide organisational goals and strategies, and that “proper
values…contribute to organizational effectiveness” (p. 536). While values are important to
organisations (Peters & Waterman 1982), they do not appear to provide enough guidance
for an organisation to determine what it should or should not do. It appears difficult to
connect an organisation’s values, such as “innovative, compassionate, authoritative,
transparent, and independent” (Oxfam Australia 2008, p. 1) to its strategic concept, its
business model, or even its trading activities. Given this difficulty with values, this study
instead focuses on identifying strategic concepts that drive the business models of social
enterprises.
Chapter 4: Strategic Concepts
33
Mitroff et al (1979) emphasise the importance of synthesizing multiple viewpoints to
develop strategy, and propose that this can best be achieved by uncovering underlying
assumptions. That is, to identify and articulate the real driving forces that influence
strategy formulation. For example, is the organisation driven by agility, quality or
reliability? Only by explicitly uncovering these assumptions can a unified strategy and
approach be taken, as each assumption will influence strategy formulation, which in turn
influences actions. This thinking is closely tied to Pierce’s (Ormerod 2006) philosophy of
pragmatism acknowledging multiple interpretations of a situation or object. By explicitly
exploring the different assumptions (conceptions) that managers hold, Mitroff et al (1979)
argue that the essence of a problem and its “basic definition” (p. 584) can be explored and
help the decision maker convert a “problematic situation into an opportunity” (p. 584).
This approach is similar to the use of strategic concepts in this study, where trading
activities are examined to articulate what drives the business models of social enterprises.
Concept identification through concept mapping
Strategic concepts can be identified through a concept mapping process. The process can
be compared to Mitroff et al’s (1979) suggestion discussed above that the assumptions held
by different managers be explored to emerge a problem’s definition. In this study, the
trading activities of social enterprises were identified, organisations with similar trading
activities were linked to each other, and a concept map was generated using the social
network analysis software program, UCINET 6.0 (Borgatti et al 2002).
The resulting concept map, which clusters social enterprises based on the similarity of their
trading activities, allowed the strategic concepts that drive these organisations’ business
models to emerge and be named. This study argues that identifying the strategic concepts
that drive the business models of social enterprises is more useful and meaningful than
identifying ‘frames’ (Kaplan 2008), ‘mind-sets’ (Gosling & Mintzberg 2003) or metaphors
(Morgan 1980). This is due to the generation of the concept map, a visual representation
of the strategic concepts that are revealed.
Conclusion
As understood in this study, strategic concepts drive patterns (Mintzberg 1994) in
organisational activity, to provide input to strategic thinking, and hence the resulting
activities of an organisation, including its business model and trading activities. While
Chapter 4: Strategic Concepts
34
‘frames’ (Kaplan 2008), ‘mind-sets’ (Gosling & Mintzberg 2003), ‘sensemaking’ (Weick
et al 2005), metaphors (Schon 1963; Kuhn 1979; Morgan 1980), values (Wiener 1988) and
underlying assumptions (Mitroff et al 1979) all bear some similarities with strategic
concepts, and could be adopted, key differences exist. Drawing heavily on Pierce’s
(Ormerod 2006) philosophical basis of pragmatism, strategic concepts in this study are
intended to identify the ‘conception’ that drives the business models of social enterprises.
This study argues that strategic concepts provide an appropriate level of abstraction to
allow an organisation to articulate what its core activity is without being prescriptive as to
the specific activities that should be undertaken. This level of abstraction provides
guidance to employees and members of an organisation, allowing them the flexibility and
empowerment to be creative where required. In comparison, an organisation’s values,
such as ‘dignity’ or ‘peace’ are seen as too abstract and provide little guidance as to the
execution of an organisation’s activities. Specific plans, such as ‘sell t-shirts’, are too
concrete and restrictive, limiting flexibility. Strategic concepts articulate the principle or
intent driving an organisation’s activity, and in this study are used to describe the drivers of
business models of social enterprises. The next chapter will describe the research
methodology and method applied in this study.
Chapter 5: Research Methodology and Method
35
Chapter 5: Research Methodology and Method
This chapter will explain and justify the methodology driving the collection of first hand
empirical evidence and the analysis which lead to the thesis that social enterprises use
particular strategic concepts to inform their business models. The question of
generalisation will also be addressed. This chapter will outline the steps taken to collect
and analyse evidence from publicly available annual and financial reports. Trading
activities were identified from these documents and analysed using concept mapping.
Comparison is an essential part of all research, and a consistent feature of social research
(Ragin 1987). Case studies, clinical trials, experiments and longitudinal studies use
comparisons to allow researchers to make interpretations that contribute to knowledge.
Where applicable, comparative research can apply statistical methods to validate or support
comparisons. A mixed method approach (Mingers 2001) to analyse comparisons is
concept mapping (Trochim & Kane 2007), where qualitative statements or ideas are
gathered, sorted and displayed on a network map to demonstrate connections between the
statements. This map can be quantified. This comparative approach was considered
appropriate for this study to compare the business models of social enterprises to identify
underlying strategic concepts. Recognising that some research methods are more
applicable to certain situations than others, the mixed method research design can “provide
a more comprehensive outcome” (Mingers 2001, p. 245). By combining qualitative and
quantitative research methods, this study proposes to reveal more useful results.
Concept mapping as a research method
Concept mapping, while used generically to describe the representation of ideas in network
form, for this purpose is considered a type of integrated mixed methods (Greene et al
1989). The key strength of concept mapping is the integration between qualitative and
quantitative methods, where qualitative information can be represented quantitatively, and
quantitative analysis is enhanced by qualitative judgement (Trochim 2001). Qualitative
Chapter 5: Research Methodology and Method
36
research captures and discovers meaning in social reality through words and pictures,
allowing concepts and ideas to emerge (Neuman 2006). Quantitative techniques generate
maps and data displays to represent the relationships between the ideas and illustrate a
conceptual framework (Trochim & Kane 2007).
Concept mapping is used as a research method across various disciplines. Some recent
examples include the development and prioritization of a research agenda to promote
participation in sporting activities in the United States (Brownson et al 2008) and to
explore the concepts of learning used by school leaders (Pegg 2007). Johnsen et al (2000)
use concept mapping to quantitatively evaluate qualitative data. This method is seen as
appropriate to this study where the goal is to uncover the strategic concepts driving
business models of social enterprises.
Concept mapping in the traditional form as outlined by Trochim and Kane (2007) is used
to conceptualize ideas and display the interrelationships between these ideas in six steps:
1. preparation by identifying the focus, sampling frame or participants;
2. generation of ideas through brainstorming or statement identification by participants;
3. structuring the statements through a sorting or ranking process into groups;
4. representation of the statement groups onto a map using various software programs and
techniques;
5. interpretation of the maps to conceptualize the issue or problem; and
6. use of the concept maps for action, measurement or evaluation (Trochim & Kane
2007).
While most frequently used in groupwork, Trochim and Kane (2007) believe concept
mapping is also suitable for the analysis of statements extracted from other sources, such
as documents or interviews.
Trochim and Kane (2007) recommend analysis and mapping of data through
multidimensional scaling, however in this study network mapping analysis will be used.
Through the application of Alexander’s (1964) idea networking into modern network
analysis software, Metcalfe (2007) proposes that it is possible to conceptualise the
connection between numerous idea statements. To illustrate and analyse the
interrelationships between the social enterprises in this study, a concept map will be
generated using the social network analysis software program UCINET 6 (Borgatti et al
2002). The concept map generated in this study is shown and discussed in Chapter 6.
Chapter 5: Research Methodology and Method
37
Coviello (2005) discusses the value of UCINET 6.0 (Borgatti et al 2002) in combining
network analysis with more classic qualitative approaches, as it allows comparisons
between multiple in-depth, qualitative case research. However, Coviello (2005) warns
researchers not to oversimplify the results of their qualitative research by relying too
heavily on the statistical analysis, as the quantitative element forms only part of the
understanding generated by the research. Trochim and Kane (2007) emphasise that despite
advances in technology, qualitative interpretation is critical to retain the integrity of the
concept mapping process.
Documents as a data source
Scott (1990) believes that documents can be a valuable source of knowledge and
information for social research when handled carefully, and that methodological issues that
relate to document analysis apply to other sources of social research evidence. Quality of
the evidence is critical, otherwise conclusions based on that document may be flawed
(Scott 1990). Scott (1990) outlines four criteria that researchers should adopt to ensure
that the evidence used is of the highest possible quality:
1. establish the authenticity of the evidence;
2. evaluate the credibility of the evidence;
3. ensure that the evidence is representative; and
4. check that the meaning contained within the evidence is clear and comprehensible, for
both literal and interpretative understanding.
Scott (1990) emphasises meaning and interpretation as fundamental to social research.
Historically, document analysis was the realm of the historian. Scott (1990) discusses that
written documents have in the past been perceived as superior to other sorts of evidence,
primarily because written documents were stored carefully and therefore generally
survived. Scott (1990) defines a document as an artefact where the text or pictures are the
key feature and purpose, including advertisements, invoices, and oil paintings.
In this study, documents in the form of websites and official reports of social enterprises
were analysed to identify trading activities. It is understood that the Chief Executive
Officer or senior management will have approved the content of the website and official
reports, and therefore the content is interpreted as an official and true reflection of the
organisation and its trading activities.
Chapter 5: Research Methodology and Method
38
Identifying generalisations
This research intends to collect empirics that can be generalised. Williams and Tsang
(2008) describe generalisation as an important yet complex methodological issue. They
explore and critique contradictory definitions of generalization, drawing on Hume’s
“problem of induction”. Sloman and Lagnado (2005) state Hume’s definition of inductive
reasoning as the ability to “apply current evidence or logic to novel conclusions about the
unknown” (p 95). While knowledge of causal relations is based on prior experience, Hume
(Sloman & Lagnado 2005) demonstrates its inadequacy by reasoning that even if we
perceive similarities between cases we can reasonably expect that a case in the future could
be dissimilar to previous cases. Therefore, Hume (Sloman & Lagnado 2005) concludes
that the inductive act of generalisability is not justified.
Williams and Tsang (2008) propose a solution to Hume’s problem by claiming that we
may continue to apply inductive inference on the basis of a strong inference; this inference
must be based on a large enough number of observations that have resisted best efforts to
falsify them. Williams and Tsang (2008) evoke Popper (1969) to require generalisation to
be a well justified conjecture, and therefore propose a five type classification for
generalisation that will be used here. This is based on their argument that conjectures from
theory are deductions and not generalisations. Williams and Tsang’s (2008) classification
of generalisation includes:
1. theoretical generalisations based on generalizing from research findings to theory;
2. within-population generalisation which is closest to statistical generalisation;
3. cross-population generalisation;
4. contextual generalisation where populations exist in different contexts; and
5. temporal generalisation where generalisations are made across populations and time.
This study examines the conjecture that particular strategic concepts inform the business
models of social enterprises. This study collects and analyses data in order to make a
theoretical generalisation (2008) about the strategic concepts of social enterprises. Further,
this study proposes an empirical generalisation that similar strategic concepts may drive
other sustainable social enterprises.
Chapter 5: Research Methodology and Method
39
Research method details
Seventy-five local, national and international social enterprises in Australia were selected
using a random sampling process, and their trading activities identified. Each social
enterprise was linked to other social enterprises with the most similar trading activities. A
concept map was generated using the social network analysis software program UCINET
6.0 (Borgatti et al 2002) that allowed the researcher to identify five distinct clusters. Each
cluster was named.
The seven steps that were taken are discussed below in detail:
1. decide on the selection criteria for social enterprises for this study
2. select the sampling frame and method
3. collect information on trading activities
4. link similar social enterprises to each other
5. enter data into UCINET 6.0
6. generate the concept map using UCINET 6.0
7. name the clusters
1. Decide on the selection criteria for social enterprises for this study
Initially using convenience sampling (Neuman 2006, p. 220), twelve social enterprises
already known to the researcher were identified. The process of identifying and qualifying
these organisations as social enterprises helped to clarify the selection criteria that was then
applied to the sampling frame. The criteria will be discussed shortly.
Few empirical studies on social enterprises are reported in the literature. Peredo and
McLean (2005) investigate social enterprises in Israel but do not include their selection
criteria. Thompson and Doherty’s (2006) characteristics of social enterprises discussed in
Chapter 2 are not specific enough for use in this study. The criteria in this study have been
adopted from studies on social enterprises conducted in the UK (Bull & Crompton 2006;
Hart & Haughton 2007), and are summarised in Table 5. If an organisation did not meet
one of the criteria listed below, it was excluded from this study.
Chapter 5: Research Methodology and Method
40
Table 5 Social enterprise selection criteria
Selection criteria Explanation
The organisation must
have a website.
The Internet is a common way for organisations to provide
information to potential supporters and clients. It is expected
that social enterprises wish to be visible and accessible to the
public. It is also presumed that the website content has been
approved by the organisation’s senior management.
The organisation is not a
government department.
Government bodies are not social enterprises (Leadbeater
1997; Lyons 2001).
The legal status of the
organisation prohibits
profit distribution.
This organisation has a social mission and directs profits to
achieve the social mission (Hart & Haughton 2007). For-
profit social enterprises also exist however are not included in
this study due to the difficulty in accessing their financial data.
The organisation must
generate at least $1m total
income per annum.
Revenue is generated through a combination of fundraising,
grants, sponsorship and trading activity. This indicates the
importance of trading activity to the sustainability of the
organisation (Bull & Crompton 2006).
At least 20% of the total
income, or more than
$1m, must be generated
from trading activities,
excluding government
contracts.
A social enterprise’s trading activity is continuous and
necessary for the financial viability of the organisation to fulfil
its social mission over time (Bull & Crompton 2006). Bull
and Crompton (2006) set benchmarks for earned income
revenue in the UK at 50% for established social enterprises,
and 25% for emerging social enterprises, with revenue
generated from government contracts considered as earned
income. In this study, as funds from the government were not
always clearly labelled as grants or for contract fulfilment,
government revenue was excluded. Therefore the benchmark
for revenue generated from trading activity was set 20% or
more of total revenue.
Note that the researcher searched for the trading activities of each organisation as a
manifestation of the business model in place. Refer to Chapter 3 for details.
2. Select the sampling frame and method
Seventy-five social enterprises were selected using a combination of convenience and
systematic sampling (Neuman 2006, p. 230). This is considered an appropriate and
sufficient number of cases to create a robust concept map (Trochim & Kane 2007). Each
social enterprise was numbered from one to seventy-five to allow easy identification for
the remaining analysis.
Chapter 5: Research Methodology and Method
41
Over 700,000 charitable and not-for-profit organisations operate in Australia (Lyons 2001),
including sporting organisations, religious groups, community groups, as well as social
enterprises and charities. This study conjectures that organisations with a social mission
want to make their work known to the public. Yellow Pages Australia was selected as the
sampling frame from which to select up to one hundred social enterprises for this study,
presumed to be a representative and accessible source of potential social enterprises in
Australia. Three lists selected from the Yellow Pages Australia directory including 1739
organisations in the category “Charities and Charitable Organisations” (2009a), 2226
organisations in the category “Disability Services and Support Organisations” (2009b), and
293 organisations in the category “Organisations—Disadvantaged Groups Aid” (2009c).
To select one hundred social enterprises from the Yellow Pages Australia list of 4258
organisations, a sampling interval of forty-two was calculated as a “quasi-random selection
method” (Neuman 2006, p. 230). The specific criteria outlined above were used. If an
organisation did not meet the criteria, the next organisation in the list was reviewed until an
appropriate organisation was identified. Upon reaching the end of the three Yellow Pages
Australia lists, sixty-three social enterprises had been identified.
Based on the selection criteria, many organisations were excluded from this study. From
the 4258 organisations in the Yellow Pages Australia lists, a total of 1481 organisations
were systematically reviewed in order to select sixty-three social enterprises. In some
cases, more than one hundred consecutive organisations were screened before a social
enterprise was identified. A significant number of organisations did not have a website,
and many with trading activities were excluded due to the lack of financial information.
3. Collect information on trading activities
Information gathered for each social enterprise included:
• type of trading activity or activities undertaken by the social enterprise,
• percentage of total revenue generated from the trading activity or activities,
• total dollar amount generated from each trading activity, and
• statements that illustrated the organisation’s purpose for undertaking the trading
activity or activities.
An annual or financial report was collected for each social enterprise, where available.
Information about the trading activities of each social enterprise is listed in Appendix 3.
Chapter 5: Research Methodology and Method
42
4. Link similar social enterprises to each other
The concept map makes it possible to cluster social enterprises with similar trading
activities and allows commonalities and differences between the organisations to be
explored in a rich way. Rather than allocating social enterprises into predetermined
categories, the categories emerged from an analysis of the concept map.
Each social enterprise was linked to other social enterprises, or cases, based on the
similarity of their trading activities, starting from the first social enterprise in the list, to the
last one. Using the example of the first social enterprise in the list, Activ Foundation Inc.,
the process taken was as follows:
Table 6 Description of the linking process
Step Process Example
1 Identify the trading
activities of the first case
or social enterprise in the
list
The primary trading activity of Activ Foundation Inc.
was identified as “commercial services that provide
supported employment opportunities for the disabled”
(21% of the annual revenue or $11m).
2 Identify cases with
similar trading activities
Screen each consecutive case in the list to identify those
with the most similar trading activities to the first case.
3 Record those cases with
similar trading activities
Cases 10, 18, 35, 37, 41, 50, 60 and 64 were recorded as
having similar trading activities to Activ Foundation
Inc.
4 Identify the trading
activities of the second
case in the list
Continue the process as outlined above for cases 2 to
75. This is therefore a one-way linking process from
the first case to the last.
Each social enterprise was on average linked to two other social enterprises in the list. The
challenge in linking social enterprises to each other was to maintain an appropriate level of
abstraction. If too many social enterprises were linked together, by using broad criteria, no
distinct clusters would emerge in the concept map, and all cases would be deemed to be
similar. On the other hand, if the trading activities were seen as unique and specific to
each social enterprise, not enough social enterprises would be linked together, there would
be many isolates, and no clear clusters would emerge.
The links made between the social enterprises in this sample are listed in Appendix 2.
Examples of trading activities used to imagine links between social enterprises included:
care and support services to the disabled or aged, training courses, retail shops (online or
physical), and commercial services providing supported employment opportunities.
Chapter 5: Research Methodology and Method
43
5. Enter data into UCINET 6.0
The list of links between all the social enterprises in the study was entered into an
interaction matrix in the social network analysis software, UCINET 6.0 (Borgatti et al
2002). In a spreadsheet format (see Figure 4) the links between social enterprises were
identified as a number ‘1’, with ‘0’ indicating no link.
Figure 4 UCINET interaction matrix to enter linking data
For example, in column 1, the number ‘1’ was inserted in the cells on rows 10, 18, 35, 37,
41, 50, 60 and 64 to reflect the connection between Activ Foundation Inc. (the first social
enterprise in the list) and eight other social enterprises in the sample. Column ‘2’
represented the second social enterprise, Anti-Cancer Council Victoria, and rows 9 and 66
were filled with ‘1’ to link this social enterprise with Diabetes Australia and Oxfam
Australia respectively. This process was completed until column 75 was reached and all
links had been entered in the appropriate rows. The software program automatically
populated all the empty cells with ‘0’.
Chapter 5: Research Methodology and Method
44
6. Generate the concept map using UCINET 6.0
A concept map was generated from the interaction matrix using NetDraw, a quantitative
analysis incorporated in the social network analysis software program UCINET 6.0
(Borgatti et al 2002). The NetDraw algorithm creates a visual network of the nodes and
their relationship to each other by grouping together the nodes that are most linked to each
other. The algorithm converts the interaction matrix into the network diagram by best
positioning the nodes given their interconnections. In this study, this means that social
enterprises with the most similar trading activities are positioned close to each other on the
concept map, while those with different trading activities are positioned further away from
each other. Using the software program Mage (Borgatti et al 2002), a three dimensional
image of the concept map was also generated. This rich view of the network allows easier
identification of distinct clusters. These clusters were later distinguished by conducting a
Girvan-Newman (Girvan & Newman 2002) community structure analysis as provided in
UCINET 6.0 (Borgatti et al 2002). The concept map generated in this study revealed five
clusters, discussed in detail in Chapter 6.
7. Name the clusters
As discussed in Chapter 4, Schon (1963) defines concepts as a label or description of ‘the
thing in question’, with language acting as a short-hand to help us internalise and deal with
‘the thing in question’. Everything we conceive we label with a concept, and Schon (1963)
notes that certain situations can be conceived in a multiple ways, reflecting Pierce’s
(Ormerod 2006) philosophy of pragmatism. Concepts make our life easier, as otherwise
we would need a unique name for every individual entity in our world, and it would be
virtually impossible to communicate (Smith & Medin 1981). For example, the concept of
‘flowers’ allows people to say they received flowers, instead of listing each individual
flower in a bouquet, for example, rose, daisy, and so on.
Smith and Medin (1981) state that concepts “capture the notion that many objects or events
are alike in some important respects” (p. 1), and are “critical for perceiving, remembering,
talking and thinking about objects and events in the world” (p. 1). For example, while
flowers share common characteristics such as petals, sepals and stamens, they come in
many colours, shapes and numbers. The collective label of ‘flower’ allows people to
conceive these in an abstract, collective way. In this study, by giving each cluster a name
that the researcher believes best represents the strategic concept driving the business
Chapter 5: Research Methodology and Method
45
models of social enterprises in that cluster, the researcher has constructed meaning that
others can use and interpret. Naming has interpretive, sociological importance (Valentine
1998), and the researcher acknowledges that others may choose a different name to
describe each strategic concept.
Conclusion
Seventy-five social enterprises were identified and collected through a combination of
convenience sampling (the first twelve cases) and systematic sampling (the remaining
sixty-three cases) (Neuman 2006) over a three week period. This number is sufficient to
create a robust concept map (Trochim & Kane 2007). Criteria to select social enterprises
were adapted from benchmarks identified in two studies conducted on social enterprises in
the United Kingdom (Bull & Crompton 2006; Hart and Haughton 2007). 1481
organisations from the total list of 4258 were reviewed, and their websites scanned to
identify them as possible social enterprises. The documents of potential social enterprises
were then checked against pre-set criteria. If acceptable, details of the trading activities
were extracted. The linking procedure, used to connect social enterprises with similar
trading activities required an appropriate level of abstraction and consistency. The linking
data was entered into the social network analysis software program UCINET 6.0 (Borgatti
et al 2002) and a concept map was generated. Five clusters were revealed. The
interpretation and findings relating to these clusters are discussed in Chapter 6.
Chapter 6: Findings and Discussion
46
Chapter 6: Findings and Discussion
This chapter argues that the visual representation of cases in a concept map allows
interpretation of the strategic concepts that drive the business models of social enterprises.
The concept map presents the social enterprises in clusters that are interpreted by the
researcher and analysed by the software program UCINET 6.0 (Borgatti et al). The key
advantage of the concept map is that it is possible to see where each case, or social
enterprise, is located on the map, relative to the clusters, and to each other. A three
dimensional image of the concept map was generated using the Mage (Borgatti et al 2002)
function to allow the researcher to more easily identify distinct clusters. These clusters
were confirmed by conducting the Girvan-Newman community structure analysis (Girvan
& Newman 2002) in UCINET 6.0 (Borgatti et al 2002).
Initially six clusters were identified however after reflecting on the key attributes of the
trading activities within each cluster, this was reduced this to five clusters. This analysis
led to the creation of a descriptive and short name for each cluster. The process to identify
the five clusters will now be discussed in more detail, and examples of social enterprises in
each cluster will be presented.
Chapter 6: Findings and Discussion
47
Interpreting the concept map
The initial concept map, shown in Figure 5 below, visually illustrates the similarity
between the trading activities of the seventy-five social enterprises in this. Cases that are
closer together have similar trading activities, such as cases 60, 62, 63 and 70 at the bottom
section of the map. Cases that are further apart from each other, such as case 32 in the top
right hand corner, and case 71 in the bottom left hand corner of the map, have different
trading activities. The concept map generated by using NetDraw in UCINET 6.0 (Borgatti
et al) calculates the position of each case based on the number of linkages entered in the
interaction matrix. Note that the lines connecting the cases are of equal length however as
this is a two dimensional view of the concept map, some lines appear to be longer or
shorter.
Figure 5 Concept map generated by UCINET 6.0
The two and three dimensional views available in UCINET 6.0 (Borgatti et al) were used
to identify distinct clusters of social enterprises. The clusters are shown in Figure 6 and
each cluster is described in the order in which it was initially identified by the researcher in
(Table 7).
Chapter 6: Findings and Discussion
48
Figure 6 Concept map with the researcher’s initial clusters
Table 7 How the researcher initially identified each cluster
Cluster How each cluster was identified
1 One tightly clustered group of cases appears to be positioned at the bottom
centre of the map, anchored by cases 60 and 70 in the centre.
2 Another identifiable cluster appears clustered around cases 48 and 53.
3 Cases 49, 28, 32 and 25, located at the top right hand corner of the map, appear
to form a separate cluster.
4 The three dimensional image of the map using Mage (Borgatti et al 2002)
allowed the researcher to distinguish another small cluster in the lower left hand
corner of the two dimensional map comprised of cases 68, 22, 73 and 71. This
cluster was not distinguishable on the two dimensional map. Case 57 does not
appear to fit in this cluster, given that it is linked to case 14.
5 Another smaller cluster appears to be displayed in the lower right hand corner
of the two dimensional view, bounded by cases 36 and 4, including cases 29,
72, 74, 33 and 19.
6 Due to the seemingly equal spread of cases in the top left corner of the concept
map, it was conjectured that these cases may form a large cluster (Cluster 6).
The two and three dimensional views do not present any locus to this cluster.
Chapter 6: Findings and Discussion
49
As all the social enterprises are linked to at least one other social enterprise, there were no
isolates. Several social enterprises are linked to just one or two others in the sample. For
example, moving clockwise from the bottom of the map, cases 57, 71, 3, 9, 65, 38, 40, 25,
52 and 51 are linked to only one other social enterprise. Based on the review of the two
dimensional and three dimensional views, six clusters appear to have emerged.
Validation using Girvan-Newman analysis
Girvan-Newman (2002) analysis of the concept map quantitatively verified the number of
clusters, and the size of each cluster. This statistical analysis identifies the “community
structure” (p. 7821) of a network by recognising that communities exist within larger
networks. Girvan and Newman (2002) posit that by identifying these communities,
understanding of the network itself can be increased. While the traditional method of
hierarchical clustering, which weights the nodes based on how tightly connected they are,
can be useful, nodes that are weighted more weakly may be inaccurately classed as isolates
and not form part of the cluster to which they belong (Girvan & Newman 2002). Rather
than focus on links between nodes that are most central to each cluster or community,
Girvan and Newman (2002) identify the edges, or vertices between nodes, that are least
central, or “between communities” (p. 7822). The algorithm calculates the “betweenness
for all edges in the network” (p. 7823) in an iterative statistical process that identifies the
community structure based on boundaries established by the nodes’ connections to each
other (Girvan & Newman 2002).
This study conjectured that around five to seven clusters would emerge (Miller 1956). For
this reason, the Girvan-Newman community structure analysis was set to statistically
identify five to seven clusters. The result of this analysis is displayed in Figure 7, with
cases in each cluster appearing in a different colour and numbered for ease of reference.
Chapter 6: Findings and Discussion
50
Figure 7 Concept map with six calculated clusters
The Girvan-Newman statistical analysis (Girvan & Newman 2002) suggested six distinct
clusters which correspond closely with the qualitative assessment. Each cluster is
discussed in Table 8.
Table 8 Clusters identified using Girvan-Newman analysis
Cluster Clusters identified using Girvan-Newman analysis
1 Girvan-Newman analysis confirmed the presence of this distinct cluster (cases
28, 32, 49 and 25) that is quite separate from all the other cases in the sample.
2 Girvan-Newman analysis suggests these cases belong together, whereas the
researcher conjectured, based on the two and three dimensional views, that this
could be seen as two separate clusters.
3 The analysis confirmed this tightly connected cluster.
4 The analysis confirmed this small cluster that was only visible using the three
dimensional view.
5 This cluster was not distinguishable as no clearly visible locus is present, the
Girvan-Newman analysis will be used.
6 As with Cluster 5, this cluster was not distinguishable as no clearly visible locus
is present. The Girvan-Newman analysis will be used.
Chapter 6: Findings and Discussion
51
The next step was to carefully review the types of trading activities present in each cluster
to identify the common element linking the social enterprises in each cluster. Based on
this qualitative interpretation, each cluster was given a name that was thought to best
reflect the key attributes of the strategic concept that drives the business model of social
enterprises in that cluster.
Importantly, while Cluster 2 is characterised by services trading, and Cluster 6 by product
trading, these activities are driven by the same strategic concept of ‘developing expertise’.
For this reason, these clusters were merged to form the new Cluster 2. This reduces the
number of clusters from six to five. The concept map showing the final five clusters is
shown in Figure 8 below, and summarised in Table 9.
Figure 8 Concept map with the final five clusters
Chapter 6: Findings and Discussion
52
Table 9 Summary of the five clusters
Cluster Number of cases Percentage of total cases
1 4 5%
2 30 40%
3 23 31%
4 4 5%
5 14 19%
Findings
This study has found that the strategic concepts driving the business models of social
enterprises in Australia can be clustered using the following five strategic concepts. These
are named in order of cluster number:
Table 10 Descriptive and short name for each strategic concept
Descriptive name Short name Example
Provide a safe place to stay overnight or store
belongings, or use revenue from providing
accommodation to fund other social programs.
‘Safety nest’ YMCA,
YWCA
Develop specific expertise and skills that address
specialised, unmet gaps in the market (either product
or service).
‘Expertise
meets social
needs’
Deaf Society
of NSW
Provide people with disabilities supported
employment opportunities, leisure activities, help
them learn and live independently; or help those with
a disadvantage to participate as full and functioning
members of society.
‘Personal
independence
coaching’
Bedford
Group,
BoysTown
Engage clients, members or supporters to interact
directly with the cause to motivate them to get
involved or provide other support (time, skill or
money).
‘Experience
the cause’
National Trust
of Australia
(Victoria)
Source, re-use or distribute physical goods that help
address a social need or gap.
‘Wealth re-
distribution’
St Vincent de
Paul Society
It is thought that many, if not all, business models of social enterprises in Australia are
driven by one or more of these five concepts. The concept mapping method revealed five
strategic concepts and a visual description of the relationship between the social enterprises
in this sample. Importantly, as illustrated by the concept map, these clusters are not
mutually exclusive, nor hierarchical. While the cluster ‘expertise meets social needs’
could be perceived as a generic concept applicable to all social enterprises, identifying five
Chapter 6: Findings and Discussion
53
concepts is more useful to social enterprise strategists, as will be discussed in Chapter 7.
The short name for each strategic concept will be used in further discussion.
The concept map displaying the short name for each strategic concept, and percentage of
cases in each cluster, is displayed below in Figure 9.
Figure 9 The five strategic concepts revealed by the concept mapping method
Chapter 6: Findings and Discussion
54
Examples of social enterprises in each cluster
Examples of social enterprises in each cluster are provided to better illustrate the strategic
concepts. For the full list of social enterprises in each cluster, and financial information
about the trading activities of each organisation, refer to Appendix 2.
Cluster 1: ‘Safety nest’
The strategic concept of ‘safety nest’ appears to drive the business models of the four
social enterprises in this cluster. This cluster was easily distinguishable in the two
dimensional view of the concept map, and the revenue generating activities are quite
different to the rest of the sample, as indicated by their distance from other social
enterprises on the concept map.
Table 11 Social enterprises in the ‘safety nest’ cluster
# Social Enterprise Trading Activity
49 Interact Australia Profits generated from operating the 4.5 star Marrakesh Resort
Apartments fund programs for the disadvantaged (Interact
Australia 2009).
32 YMCA Australia YMCA provides 3.5 star “safe, affordable accommodation”
(2009) with rooms not filled made available to homeless people
or those in need of short term accommodation at a reduced rate.
28 YWCA $5.7m, 31% of total annual revenue was generated through its
hotels and conference facilities (2008) and makes unfilled rooms
available to those in need, similar to the YMCA.
25 Sunshine Coast
Health Foundation
$619K (40% of its annual revenue) was generated through car
park fees for hospital staff and visitors (2008, p. 9). By offering
a safe, convenient place for people to park their cars, Sunshine
Coast Health Foundation provides a sort of ‘safety nest’.
Cluster 2: ‘Expertise meets social needs’
The cluster ‘expertise meets social needs’ was created by merging two clusters (Clusters 2
and 6 as per Figure 8), therefore the cases do not appear to be close together. The clusters
were merged as it was determined that the business models of social enterprises are driven
by developing expertise to address specific social needs. Thirty social enterprises, or 40%
of this sample, fall within the ‘expertise meets social needs’ cluster. Several social
enterprises are linked to only one other social enterprise, indicating a high level of
diversity of the type of expertise developed. Examples are provided in Table 12.
Chapter 6: Findings and Discussion
55
Table 12 Social enterprises in the ‘expertise meets social needs’ cluster
# Social Enterprise Trading Activity
29 Deaf Society of
NSW
Expertise in communication and interpretation services for the
deaf or hearing impaired generated $1.1m (2008).
69 Baptist
Community
Services (BCS)
Through its expertise in providing aged care services, $32m
(20% of its total annual revenue) was generated from residents
living in BCS retirement villages and from services provided to
clients living in their own home (2008).
74 Royal Life Saving
Society (Aust) NT
Branch Inc.
This organisation has the expertise and knowledge to provide
fee-based first aid training courses to the public and generated
55% of its annual income by providing such training (2008).
Cluster 3: ‘Personal independence coaching’
The strategic concept of ‘personal independence coaching’ can be used to describe Cluster
3, the second largest cluster in the sample. Twenty-three social enterprises form this
densely connected cluster, and operate similar business models. In comparison with other
clusters, the number of between-case links in Cluster 3 is very high.
Table 13 Social enterprises in the ‘personal independence coaching’ cluster
# Social Enterprise Trading Activity
37 Bedford Group $9.4m, or 23% of its total revenue in 2008, was generated
through commercial services that provide those with a disability
supported employment in areas including packaging, assembly
and landscaping (Bedford Industries Inc. 2008). Tasks are
broken into manageable blocks that those with an intellectual or
physical disability can accomplish, and staff support and coach
these people. Bedford Group provides development options,
leisure activities, and supported accommodation. All these
activities generate revenue for the social enterprise (2008).
60 House With No
Steps
Based in New South Wales and Queensland, this is one of the
most highly linked-to cases in this cluster. House With No Steps
generated $16m from trading activities including a bakery,
tourist attraction, and recycling, established to provide supported
employment for people with disability (2008).
5 BoysTown BoysTown helps disadvantaged children and youth connect with
the community (2008, p. 3). $6.6m, or 12% of its annual revenue
was generated through commercial services established to
provide young, disadvantaged people with work experience, an
employment reference, and mentoring to help them enter and
stay in the workforce (2008, p. 39). More than 70% of its
revenue was generated from the BoysTown lottery (2008, p. 39),
with profits are used to operate services (BoysTown 2009).
Chapter 6: Findings and Discussion
56
Cluster 4: ‘Experience the cause’
The strategic concept of ‘experience the cause’ is given to the four social enterprises in
Cluster 4, with the business models represented in this cluster quite different to others in
this sample. This cluster was clearly visible in the three dimensional view of the concept
map.
Table 14 Social enterprises in the ‘experience the cause’ cluster
# Social Enterprise Trading Activity
73 National Trust of
Australia (Victoria)
$3.4m (34%) of its annual revenue was generated by providing
access to and tours of beautiful historic gardens and houses
(2008, p. 22) to tourists, wedding parties and film crews.
68 Art Gallery of
South Australia
Fees for special art exhibitions and art-related events subsidise
the purchase and restoration of artwork (2008).
71 Australian Wildlife
Conservancy
Fees charged for tours of the bush are directed towards the
preservation of endangered wildlife (2008).
22 Scouts Australia
(NSW)
25% of its revenue ($2.1m) was generated through activities
undertaken and paid for by children and young people who
participate in “a wide range of fun, constructive and
challenging activities” (2009).
Cluster 5: ‘Wealth re-distribution’
The business models of social enterprises in Cluster 5, positioned close together in the
concept map, appear to be driven by the strategic concept of ‘wealth re-distribution’.
While the specific trading activities are diverse, ‘wealth re-distribution’ appears to describe
what drives the business models represented in this cluster.
Table 15 Social enterprises in the ‘wealth re-distribution’ cluster
# Social Enterprise Trading Activity
24 St Vincent de Paul
Society
“Vinnies Centres” selling cheap second hand items generated
21% or $31.6m in 2008 (St Vincent de Paul Society 2008).
11 Foodbank
Australia Ltd
Foodbank forms “food alliances” to ensure a reliable, sustainable
supply of foodstuffs to charities. A nominal handling fee
equivalent to 17% of the food’s retail price that helps “welfare
agencies to stretch their limited budgets” (2008, p. 5) generated
71% of its revenue ($895,000) (2008).
67 RSPCA WA The retail shops and animal shelter sales generate 27% of
RSPCA WA’s annual income (2008).
Chapter 6: Findings and Discussion
57
Conclusion
This chapter described the process taken by the researcher to identify and name the five
strategic concepts that drive the business models of social enterprises in this sample.
Through interpretation of two and three dimensional views of the concept map generated
by UCINET 6.0 (Borgatti et al 2002), and the aid of Girvan-Newman community structure
analysis (Girvan & Newman 2002), five distinct clusters were identified. A descriptive
and short name for each strategic concept was developed, and examples of social
enterprises in each cluster were discussed.
The five clusters identified are neither mutually exclusive nor hierarchical, and all social
enterprises in this study are interconnected, as illustrated by the concept map.
Using the findings of this study, in Chapter 7 the researcher presents recommendations for
strategists of social enterprises to validate their existing business models, or creatively
develop new ones. Contribution to the literature and implications for further research are
also proposed.
Chapter 7: Conclusion and Recommendations
58
Chapter 7: Conclusion and Recommendations
This study named five strategic concepts that drive the business models of local, national
and international social enterprises in Australia. Using a mixed method approach (Mingers
2001) combining qualitative and quantitative research, annual and financial reports of
social enterprises were interpreted and analysed to identify each organisation’s trading
activities. Social enterprises were linked to each other based on the similarity of their
trading activities. The concept mapping method generated a visual network of the social
enterprises and their interrelationships. Five clusters of social enterprises linked by their
trading activities were identified and named to provide a collective label to explain the
business models within each cluster. This study’s contribution to the literature is
discussed, as well as recommendations to social enterprise strategists, and implications for
further research.
The five strategic concepts identified in this study
This study identified five strategic concepts that drive the business models of social
enterprises in Australia:
• ‘Safety nest’
• ‘Expertise meets social needs’
• ‘Personal independence coaching’
• ‘Experience the cause’
• ‘Wealth re-distribution’
These concepts can be thought of as the conceptual or strategic drivers behind each
organisation’s business model. It is thought that all the business models of social
enterprises in Australia may be placed under one or more of these concepts. This study
proposes that identifying five strategic concepts is useful (Miller 1956) as these may help
social enterprise strategists evaluate existing as well as explore new business models.
Chapter 7: Conclusion and Recommendations
59
Identifying just one or two strategic concepts may inhibit creativity, while identifying eight
or more strategic concepts may create unnecessary confusion.
Contribution to the literature
Generating revenue from paying customers is an integral component of social enterprises
(Shaw & Carter 2007), so their business models have been identified as an area for
potential research (Certo & Miller 2008). Given the definitional problems of business
models, this study has focused on the conceptual drivers behind these business models.
Rather than identify and describe the detail of the business models of specific social
enterprises, this study argues that it is more strategic and useful to focus on a higher level
of abstraction. This study draws on similar approaches, such as surfacing underlying
assumptions (Mitroff et al 1979) or conceptual metaphors (Morgan 1986) in organisations,
however this approach appears not to have been previously applied to social enterprises.
This study proposes that identifying the strategic concepts that drive the business models
of social enterprises is more useful than focusing on individual business models.
This empirical study proposes a theoretical generalisation (Williams & Tsang 2008), that
the business models of social enterprises in this sample are driven by one or more of the
five identified strategic concepts. The study’s empirical generalisation (Williams & Tsang
2008) is that these five strategic concepts can be used to explain the business models of
social enterprises not included in the sample. The five strategic concepts provide a starting
point to understand the business models of social enterprises. Secondly, these concepts
provide a way of thinking about potential business models for those seeking to establish
new social enterprises.
Concept mapping, a mixed method approach (Mingers 2001), does not appear to have been
applied to social enterprises. The identification of the five strategic concepts that drive the
business models of social enterprises demonstrates the value of illustrating qualitative
interpretation of organisations as a network that can be quantitatively evaluated using
network analysis. This approach to structuring organisational attributes and to concept
mapping may be used by other researchers to understand different aspects of organisations
and their strategies.
The criteria used to select the social enterprises (see Chapter 5) included in this study may
be used and validated by other researchers. This represents a novel and useful application
of the literature review combined with a close reading of the annual and financial reports
Chapter 7: Conclusion and Recommendations
60
of social enterprises in Australia. Further qualification of the proportion of revenue
generated from trading activities may be required, as the selection of either 20% of total
revenue, or minimum $1m, was determined by the context of this study. Government
contracts were not considered as trading activities in this study due to the difficulty in
establishing this information. The figures used in this study seem appropriate, as the UK
studies required a minimum of 50% generated from trading activities, including revenue
from government contracts (Hart & Haughton 2007).
The five strategic concepts named in this study can also act as a prompt for creative
development of new business model ideas. Examples of this process are provided below
as a recommendation to social enterprises strategists. This appears to be a new application
of the concept mapping method.
Recommendations to social enterprise strategists
This research is considered to be of practical use to the strategists of existing or potential
social enterprises. Dees (1998) and Foster and Bradach (2005) mandate a consistent ‘fit’
between the business model and social mission of the organisation. Socially driven
organisations must carefully evaluate whether the existing or proposed business model is
congruent with the social mission, and proactively minimise operational and cultural
conflict. Foster and Bradach’s (2005) list of mission-led questions may help here. Internal
consistency, or ‘fit’, between an organisation’s business model and mission, as well as
external ‘fit’ to the marketplace, contribute to an organisation’s financial sustainability
(Morris et al 2005). The five strategic concepts allow social enterprise strategists to reflect
on both of these requirements for ‘fit’.
The five strategic concepts can be applied in at least three further ways. Firstly, an
established social enterprise may identify the strategic concept that seems to drive their
organisation’s business model, and hence trading activities. By articulating the strategic
concept most applicable to their organisation, social enterprises may be able to think more
conceptually and strategically about their present and potential business models. Equally,
a not-for-profit organisation that does not generate a significant percentage of revenue
through earned income activities, but intends to transform itself into a social enterprise,
may also benefit from using the concepts to think about how best to enter the marketplace,
in a way that ‘fits’ with their organisation. Due to the level of abstraction, the strategic
concepts allow members at all levels of an organisation to generalise about the type of
Chapter 7: Conclusion and Recommendations
61
business model they have or might adopt while allowing for flexibility and creativity in the
detail of how these are executed. For example, if a social enterprise articulates its strategic
concept as ‘expertise meets social needs’ then it may reflect on exactly what that expertise
is, and how it might extend its business model to take advantage of that expertise. The
strategic concept acts as a conceptual anchor to think about alternative intentions for the
organisation, as illustrated by the example of Komatsu (Bartlett & Ghoshal 1994).
Secondly, these five strategic concepts can be used by those wishing to establish a social
enterprise to help develop new business model ideas. For example, a group planning to
establish a social enterprise to assist African immigrants arriving in Australia may use
them to identify revenue generating opportunities. The group can identify potential
business models inspired by each individual strategic concept. Possible options triggered
by thinking about each of the concepts for this African immigrants group may include:
• Develop expert knowledge about the types of culture shock that Africans may
experience and develop counselling programs and materials to help them settle into life
in Australia (‘expertise meets social needs’).
• Based on expert knowledge of African cultures, develop training courses and
workshops for schools to educate young people about the value of other cultures and
illustrate how Africans and other immigrants contribute to society (‘expertise meets
social needs’).
• Sell handicrafts or food made by African immigrants (‘wealth re-distribution’).
• Establish a museum or venue where African artefacts, history, stories, music,
photographs, traditional dress and other items are displayed and charge a fee for the
public or schools to visit (‘experience the cause’).
• Establish a restaurant or café that sells African food and provide African cooking
classes delivered by immigrants (‘experience the cause’).
• Acquire or lease a building to provide accommodation, and reserve a proportion of
rooms for recently arrived African immigrants who stay at a reduced rental rate for a
period of time before they find their own accommodation (‘safety nest’).
Through this creative process that draws on each of the five strategic concepts, the group
may identify which business model ideas are viable, whether they have the appropriate
resources and skills to implement these business models, and whether these are congruent
to the group’s social mission.
Chapter 7: Conclusion and Recommendations
62
A possible third application of the concept map is for social enterprises to also consider
business models inspired by combining two or more strategic concepts. This can be called
‘idea-driven thinking’ or ‘focused thinking’, as ideas are generated by creatively merging
two or more concepts. For example, by reflecting upon the combination of ‘experience the
cause’ and ‘expertise meets social needs’, a social enterprise may coordinate holiday
packages to visit conflict areas in Africa. In this way, potential sponsors may gain more
empathy for African immigrants. Or by combining the concepts of ‘experience the cause’
and ‘wealth re-distribution’, a social enterprise may charge a fee for tours of organic farms
that encourage participants to establish their own organic gardens, and provide a venue for
excess produce to be swapped, such as my excess lemons for your excess spinach or eggs.
This new and creative use of the concept mapping method is a contribution apparently not
previously applied in the literature.
Implications for further research
An alternative to the use of publicly available annual and financial reports, as used here, is
a survey or in-depth interviews. However, these approaches have their own
epistemological problems. The alternatives were not used here also because of the limited
time frame available to conduct this six month study by one researcher. It is thought that
the best way to gain insights into the existing and potential business models of social
enterprises is through in-depth qualitative interviews with the Chief Executive Officer of
both successful and unsuccessful social enterprises locally, nationally or globally. This
information could be used to validate the strategic concepts identified in this study, and
provide additional information about the thinking behind specific business models.
The legal status of social enterprises included in this study, where profit distribution to
individual stakeholders or shareholders is prohibited, meant that social enterprises run as
for-profit enterprises were excluded. The primary reason for excluding for-profit social
enterprises was due to the lack of publicly available financial data about the trading
activities undertaken. Future studies, using in-depth qualitative interviews may overcome
this barrier to collecting the required information.
While this study has identified five strategic concepts, alternative clusters may emerge if a
different sample were used, perhaps including social enterprises from outside Australia, or
if trading activities were linked together differently. Future research that attempts to
distinguish the drivers of business models included in the ‘expertise meets social needs’
Chapter 7: Conclusion and Recommendations
63
cluster may yield interesting, alternative strategic concepts. However, the researcher
proposes that the five strategic concepts identified in this study provide a useful set of
concepts for thinking about any social enterprise.
New business models can also emerge from between-cluster strategic concepts. This
would be an example of potential creative thinking that this study has not addressed
empirically. In addition, extending the definition of the strategic concepts found here may
also inspire new types of business models. These may provide areas for further research.
In response to the considerable confusion in the literature over the term ‘business model’
(Osterwalder et al 2005), this study identified five strategic concepts that drive the business
models of social enterprises. It therefore did not investigate the specifics of the business
models of social enterprises. Future research may define and then evaluate the business
models used by social enterprises.
Appendix 1
64
Appendix 1
An evidence map presents the key questions and arguments and indicates where the
evidence can be found within this thesis. These questions have been outlined in Figure 10.
Appendix 1
65
Figure 10 Evidence map for this thesis
Is this problem relevant? (See
Chapters 1 and 7)
Social enterprises have business models
(See Chapters 2 and 4)
What are strategic concepts? (See
Chapter 3)
How are social enterprises different to not-for-profit
organisations? See
Chapter 2)
Where is the evidence? (See literature evidence in Chapters 2, 3 and 4, and
empirical evidence in
Chapters 5 and 6)
Strategic concepts drive business models (See
Chapters 3 and 4)
Strategic concepts provide an appropriate
level of abstraction
(See Chapter 3)
What are social enterprises? (See Chapter
2)
Strategic concepts can help social enterprises
brainstorm new business models (See Chapter 7)
The mixed method approach provides a more comprehensive
research outcome (See Chapter 5)
Does document interpretation and analysis produce
valid evidence? (See
Chapter 5)
What is a business model? (See Chapter 4)
How is the concept map created and interpreted? (See
Chapters 5 and 6)
Strategic concepts can be identified through concept
mapping (See Chapters 3, 5 and 6)
What are the criteria used to select social enterprises
in this study? (See
Chapter 5)
Strategic concepts drive
the business models of
social enterprises
Appendix 2
66
Appendix 2
Five strategic concepts were identified from the concept map generated in this study.
Figure 11 displays the five strategic concepts and percentage of cases in each cluster. The
trading activity details of each social enterprise are listed in Table 17.
Figure 11 Five strategic concepts identified from the concept map
Appendix 2
67
Table 17 lists the seventy-five social enterprises selected and analysed in this study, grouped by cluster in descending order of case number, with
details about each trading activity, revenue per activity, website address and the links made between the social enterprises. The ‘Links’ column
indicates which other social enterprises have similar trading activities, as interpreted by the researcher.
Table 16 List of all social enterprises in this study, grouped by cluster in descending order (14 pages) Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
1 "Safety nest" 25 Sunshine Coast Health Foundation
(1) Rental (car park fees) [$619K; 40%] Total 2008 Revenue $1.53m http://www.healthfoundation.com.au/
49
1 "Safety nest" 28 YWCA (1) Hotel accommodation [$5.2m; 28%] (2) Conference facilities / food / beverage [$550K; 3%] Total 2008 Revenue $18.6m. 31% generated through social enterprises http://www.ywcansw.com.au/
32, 49
1 "Safety nest" 32 YMCA Australia (1) Hotel accommodation [$8.2m; 4%] (2) Child care services [$34.3m; 16% - combined govt grants & fees] (3) "Other" including training, health centres, op shops [$37m; 18%] (4) Retail sales (online store) [$1.9m; 1%] Total 2008 Revenue $205m (service activities revenue combines govt grants & fees) http://www.ymca.org.au/
49
1 "Safety nest" 49 Interact Australia (1) Hotel accommodation (Marrakesh Resort) (2) Training courses and accreditation 100% of profits directed to community services (no revenue information available); some programs also funded by govt grants http://www.interactaust.com.au/
58
Appendix 2
68
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
2 "Expertise meets social needs" (originally Cluster 2)
4 Autism Queensland (1) Professional development & training courses [$492K; 5%] (2) Services for autistic children / families [$413K; 4%] (3) Membership & other fees [$166K; 2%] Total 2008 Revenue $10.2m http://www.autismqld.com.au/index.html
20, 29, 36, 72, 74
2 "Expertise meets social needs" (originally Cluster 2)
15 Life Care (Churches of Christ Life Care Inc)
(1) Aged care services incl. residential care, retirement living, community services [$6m; 23%] Total 2008 Revenue $26.5m http://www.lifecare.org.au/
17, 53, 58, 69
2 "Expertise meets social needs" (originally Cluster 2)
17 Melbourne Citymission (1) Client services (aged care, disability, children) & residents fees [$3.17m; 8%] Total 2008 Revenue $39.6m http://www.melbournecitymission.org.au/about.html
26, 43, 45, 48, 53, 59
2 "Expertise meets social needs" (originally Cluster 2)
19 Our Community Pty Ltd (1) Training and accreditation (2) Membership fees to Institutes 100% of revenue from trading activities (no govt support, no donations) Total 2008 Revenue unknown http://www.ourcommunity.com.au/
33, 72, 74
2 "Expertise meets social needs" (originally Cluster 2)
26 UnitingCare NSW.ACT (1) Aged care services incl. residential care, retirement living, community services [$109m; 25%] (2) Rental (commercial buildings) [$4m; 1%] (3) Children's services (child care) [$2.9m; >1%] (4) Family services (activities, support) [$611K; >1%] (5) Corporate programs [$246K; >1%] Total 2008 Revenue $431.5m, 26% generated through commercial activities http://www.unitingcarenswact.org.au/
34, 40
2 "Expertise meets social needs" (originally Cluster 2)
29 Deaf Society of NSW (1) Interpreting & communication services for the deaf [$1.1m; 19%] (2) Education and training [$205K; 4%] Total 2008 Revenue $5.7m, 23% generated through commercial activity http://www.deafsocietynsw.org.au/index.html
36, 59
Appendix 2
69
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
2 "Expertise meets social needs" (originally Cluster 2)
33 Action on Disability within Ethnic Communities Inc
(1) Training and workshops [$250K; 15%] (2) Conference facilities - minimal [$110K; 7%] Total 2008 Revenue $1.6m, 22% from commercial activities http://www.adec.org.au/
72, 74
2 "Expertise meets social needs" (originally Cluster 2)
36 Autism Spectrum Australia (1) Services to autistic children (special schools, assessments, psychology services) $3.2m; 10%] Total 2008 Revenue $32.5m http://www.autismspectrum.org.au/
52, 59, 69, 72
2 "Expertise meets social needs" (originally Cluster 2)
40 CatholicCare (previously Centacare)
(1) Care and support services (aged, disabled) (2) St Patrick's Business College fees Combined revenue $6.3m (19% of total $20.3m) http://www.centacare.org/
n/a
2 "Expertise meets social needs" (originally Cluster 2)
43 Eastern Access Community Health Inc.
(1) Care and support services (community) [$1.3m; 5%] Total 2008 Revenue $27.9m http://www.each.com.au/en/
48, 53, 69
2 "Expertise meets social needs" (originally Cluster 2)
45 E.W. Tipping Foundation (1) Care and support services (disabled) [$3.2m; 20%] Total 2008 Revenue $16m http://www.tipping.org.au/
47, 48, 53, 59
2 "Expertise meets social needs" (originally Cluster 2)
47 Hartley Lifecare (1) Care and support services (disabled) [$844K; 19%] (2) Hall Markets revenue (stalls / entry fees) [$200K; 4%] Total 2008 Revenue $4.39m http://hartley.org.au/index.html
48, 53
2 "Expertise meets social needs" (originally Cluster 2)
48 Homecare Plus (Division of ParaQuad SA)
(1) Care and support services (aged, disabled) 100% of revenue from trading activites, no govt grants or donations http://www.pqasa.asn.au/index.php?page=homecare-plus
59
2 "Expertise meets social needs" (originally Cluster 2)
52 Belconnen Community Services Inc
(1) Child care fees [$4.6m; 48%] Total 2008 Revenue $9.62m http://www.bcsact.com.au/index.php
n/a
2 "Expertise meets social needs" (originally Cluster 2)
53 Mecwacare (1) Aged care services (residential, respite, nursing) [$10.9m; 40%] Total 2008 Revenue $27.5m http://www.mecwacare.org.au/
58, 69
Appendix 2
70
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
2 "Expertise meets social needs" (originally Cluster 2)
58 Little Company of Mary Health Care
(1) Private hospital care [$456m; 67%] Total 2008 Revenue $682m http://www.lcmhealthcare.org.au/
n/a
2 "Expertise meets social needs" (originally Cluster 2)
59 Spinal Cord Injuries Australia (1) Care and support (for disabled) [$1.25m; 23%] (2) Accommodation (for disabled) [$78K; 1%] Total 2008 Revenue $5.5m http://scia.org.au/
69
2 "Expertise meets social needs" (originally Cluster 2)
69 Baptist Community Services (BCS)
(1) Care and support (aged, disabled, disadvantaged) [$32m; 20%] (2) Assistive technology / meals for aged or disabled [$10m; 6%] Total 2008 Revenue $160m http://www.bcs.org.au/Default.aspx
n/a
2 "Expertise meets social needs" (originally Cluster 2)
72 Stride Foundation (1) Training & education (to young people, schools) [$209K; 17%] (2) Resource sales / membership [$86K; 7%] Total 2008 Revenue $1.2m http://www.stride.org.au/
74
2 "Expertise meets social needs" (originally Cluster 2)
74 Royal Life Saving Society (Aust) NT Branch Inc.
(1) Training & education (first aid) [$554K; 55%] Total 2008 Revenue $1m http://www.royallifesaving.com.au/www/html/186-nt-website-home-page.asp
n/a
2 "Expertise meets social needs" (originally Cluster 6)
7 CanDo4Kids (1) Retirement villages residents' fees (2) Assessment clinic & products (3) Accreditation & training (4) Internet Service Provider Combined revenue $4.1m (47% of total in 2008) Total 2008 Revenue $8.7m http://www.cando4kids.com.au/Home/tabid/35/Default.aspx
34, 39, 53
2 "Expertise meets social needs" (originally Cluster 6)
27 Wesley Central Mission (1) Commercial printing business (sold in June 2008) [$3.7m; 9%] (2) Client services (support, activities, care) [$3.3m; 4%] (3) Commercial services (supported empl) (ceramics, café) - minimal Total 2008 Revenue $41.4m http://www.wesley.org.au/welcome.htm
39, 54
Appendix 2
71
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
2 "Expertise meets social needs" (originally Cluster 6)
30 ParaQuad NSW (1) Services for clients (care, support for paraplegic and quadraplegic) [$14.3m; 45%] (2) Retail sales (online / delivery) of health related products [$6.9m; 22%] (3) Commercial revenue (supported empl) - minimal Total 2008 Revenue $31.3m, 67% generated through service & commercial activity http://www.paraquad.org.au/index.html
55, 39
2 "Expertise meets social needs" (originally Cluster 6)
34 St Laurence Community Services
(1) Accommodation and support services (aged and disabled) [$5.8m; 17%] (2) Commercial services (supported empl) (paper services) [$700K; 2%] Total 2008 Revenue $34m http://www.stlaurence.org.au/default.asp
44
2 "Expertise meets social needs" (originally Cluster 6)
38 Florey Neuroscience Institute (Brain Research Institute)
(1) Commercialisation of research through collaboration [$1.4m; 8%] Total 2008 Revenue $17.9m http://www.brain.org.au/index.html
54
2 "Expertise meets social needs" (originally Cluster 6)
39 Care Connect (1) Telecare Connect (assistive technology) consultancy and contract [$2.8m; 14%] (2) Support and service fees (aged, disabled, families) [$400K; 2%] Total 2008 Revenue $20.3m http://www.careconnect.org.au/
42, 54, 55
2 "Expertise meets social needs" (originally Cluster 6)
42 Novita Children's Services (1) NovitaTech assistive technology sales (for disabled) [$2.1m; 11%] (2) Lotteries/Bingo [$2.1m; 11%] Total 2008 Revenue $12.4m http://novita.org.au/Default.aspx?p=1
n/a
2 "Expertise meets social needs" (originally Cluster 6)
54 Northcott Society (1) Mobility equipment sales [$1.5m; 7%] (2) Conference & function centre [$606K; 3%] Total 2008 Revenue $20.3m http://www.northcott.com.au/index.php
65, 66
2 "Expertise meets social needs" (originally Cluster 6)
55 Independence Australia (formerly ParaQuad Victoria)
(1) Care and support (paraplegic and quadraplegic) [29%; actual sales unknown] (2) Retail (health care products) profits from Independence Australia Health Solutions Total 2008 Revenue unknown http://www.paraquad.asn.au/
n/a
Appendix 2
72
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
2 "Expertise meets social needs" (originally Cluster 6)
65 BEST Community Development
(1) Commercial revenue (printing, café, conference facilities) [$2.4m; 19%] Total 2008 Revenue $12.6m http://www.bestcd.org.au/about-best-community-development.php
n/a
3 "Personal independence coaching"
1 Activ Foundation (1) Commercial services (supported empl) (product manufacturing, assembly, packaging, textiles, property care) [$11m; 21%] (2) Services for the disabled (care, support) [$3.68m; 7%] (3) Transport services for the disabled [$1.65m; 3%] Total 2008 Revenue $54.4m http://www.activ.asn.au/
10, 18, 35, 37, 41, 50, 60, 64
3 "Personal independence coaching"
5 BoysTown (1) Lottery [$41m; 73%] (2) Commercial cleaning services [$6.6m; 12%] Total 2008 Revenue $56.4m http://www.boystown.com.au
47, 70, 75
3 "Personal independence coaching"
10 Endeavour Foundation (1) Commercial services (supported empl) [$21.8m; 18%] (2) Lotteries [$16.7m; 14%] (2) Services for the disabled [$10.1m; 8%] Total 2008 Revenue $119.2m http://www.endeavour.com.au/index.asp
18, 31, 35, 41, 56
3 "Personal independence coaching"
12 Royal Society for the Blind (1) Commercial services (supported empl) (packaging, assembly) (2) Retail sales (online / physical shop) low vision aids Combined revenue 12% of total contributing to a surplus of $1.6m in 2007/08 http://www.rsb.org.au/index.html
18, 20, 60
3 "Personal independence coaching"
14 Kidney Health Australia (1) Lottery [$3.84m; 40% including some donations] (2) Management fees (customer service centre) [$458K; 5%] Total 2008 Revenue 9.6m http://www.kidney.org.au/
42, 57, 70, 75
3 "Personal independence coaching"
18 Nadrasca (1) Commercial services (supported empl) (packaging, assembly, printing, timber processing) [$1.8m; 21%] (2) Fees for activities (for disabled) $443K; 5%] (3) Rental income from residents $193K; 2% Total 2008 Revenue $8.56m http://www.nadrasca.com.au/index.htm
41, 50, 60, 61, 62, 64
Appendix 2
73
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
3 "Personal independence coaching"
20 Vision Australia (Royal Blind Society of NSW)
(1) Retail sales (online / physical shop) low vision aids (2) Consultancy to corporations / groups (Access Advice, low vision friendly websites, training courses) (3) Commercial services (supported empl) (packaging, logistics, warehousing) Combined revenue $8m (9% of total) Total 2008 Revenue $88m http://www.visionaustralia.org/
37, 60, 61, 62, 63, 64
3 "Personal independence coaching"
31 Spastic Centre of NSW (1) Raffle [combined with bequests $14.8m; 23%] (2) Services to clients (care, support for people with cerebral palsy) [$$3.6m; 5%] (3) Commercial services (supported empl) - minimal [$678K; 1%] Total 2008 Revenue $64.5m http://www.thespasticcentre.org.au/
44
3 "Personal independence coaching"
35 Australian Foundation for Disability (AFFORD)
(1) Commercial services (supported empl) (packaging, assembly, garment hangers) [$7.6m; unknown %] (2) Lottery [$1m; unknown %] Total 2008 Revenue not detailed in Annual Report http://www.afford.com.au/
56, 70
3 "Personal independence coaching"
37 Bedford Group (1) Accommodation, support and activities services (for disabled) [$12m; 30%] (2) Commercial services (packaging, assembly, catering, cleaning, egg farm, landscaping) [$9.4m; 23%] (3) Lotteries [$2.3m; 5% - includes fundraising] Total 2008 Revenue $39.8m http://www.bedfordgroup.com.au
44, 50, 60, 64
3 "Personal independence coaching"
41 Barossa Enterprises (1) Commercial services (supported empl) (Woodwerx, packaging) [$1.8m; 60%] (2) Accommodation and care (disabled) [$300K; 10%) Total 2008 Revenue $3m http://www.barossaent.com.au
46, 56, 62, 63, 70
3 "Personal independence coaching"
44 Scope (Vic) Ltd (1) Care and support services (disabled) [$4.5m; 7%] (2) Commercial revenue (supported empl) (food processing) [$2m; 3%] Total 2008 Revenue $64.5m http://www.scopevic.org.au
55, 61, 64
Appendix 2
74
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
3 "Personal independence coaching"
50 Karingal (1) Commercial revenue (supported empl) (landcare, industrial, packaging, catering) [$3.69m; 8%] (2) Care and rent (disabled) [$2.27m; 5%] Total 2008 Revenue $42.5m http://www.karingal.org.au/index.aspx/from=icon/
60, 61, 62, 63
3 "Personal independence coaching"
51 Learning Links (1) Lottery (Charity Housie) [$3.9m; 39%] (2) Care, support and assessment fees (children in need) [$1.7m; 17%] Total 2008 Revenue $9.9m http://www.learninglinks.org.au/index.htm
75
3 "Personal independence coaching"
56 Phoenix Society (1) Commercial revenue (supported empl) (printing, assembly, packaging, timber products, industrial services) [$8.6m; 62%] (2) Lottery [$1.4m; 10%] Total 2008 Revenue $13.7m http://www.phoenixsoc.org.au/
70
3 "Personal independence coaching"
57 Royal Institute for Deaf and Blind Children
(1) Rainbow Lottery [$4.66m; 13%] (2) Retail (online shop) [$2.15m; 6%] Total 2008 Revenue $35.9m http://www.ridbc.org.au/index.asp
n/a
3 "Personal independence coaching"
60 House With No Steps (1) Commercial revenue (supported empl) (tourism, gift shop, avocado and macadamia farms, Aussie Biscuits) [$16m; 23%] (2) Lotteries (Art Union) [$5.9m; 9%] (3) Care, accommodation (disabled) [$2.9m; 4%] Total 2008 Revenue $68.8m http://www.hwns.com.au
61, 62, 63, 64, 73
3 "Personal independence coaching"
61 Valmar Support Services ltd (1) Commercial revenue (supported empl) )Taskwrights, Pinecome Recycling, Pinecome Timber Recovery, Butter Factory Café) (2) Care and support services (disabled) Combined revenue $1m; 14% Total 2008 Revenue $6.85m http://www.valmar.com.au/index.html
62, 63, 64
Appendix 2
75
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
3 "Personal independence coaching"
62 Westcare Incorporated (1) Commercial revenue (supported empl) (printing, safety garment manufacturing, packaging, food packaging) [$5.1m; 69%] (2) Accommodation (disabled) [$523K; 7%] Total 2008 Revenue $7.34m http://www.westcare.com.au/
63, 64
3 "Personal independence coaching"
63 Kurrajong Waratah (1) Commercial revenue (supported empl) (recycling, catering, commercial laundray, timer processing) (2) Accommodation and care (disabled) Combined revenue $6.3m; 45% Total 2007 Revenue $14m (2008 Annual Report unavailable) http://www.kurrajongwaratah.org.au
70
3 "Personal independence coaching"
64 Minda Incorporated (1) Accommodation and lodging (disabled) [$3.5m; 8%] (2) Commercial revenue (supported empl) (packaging, environmental care, furniture, nursery, laundry & cleaning service, catering) [$1.9m; 3%] (3) Repite care (disabled) [$522K; 1%] Total 2008 Revenue $44.4m http://www.minda.asn.au/
n/a
3 "Personal independence coaching"
70 Access Industries for the Disabled Ltd
(1) Lotteries (Art Union) [approx $1.8m] (2) Commercial revenue (supported empl) (packaging, health products packaging, commercial laundry, timber products, light engineering & fabrication, commercial sewing, outdoor furntiture) [unknown] Total 2008 Revenue unknown, however only 20% funded by govt grants http://www.accessindustries.com.au/
n/a
3 "Personal independence coaching"
75 Epilepsy Action Australia (1) Lottery [$2.3m; 52%] Total 2008 Revenue $4.4m http://www.epilepsy.org.au
n/a
Appendix 2
76
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
4 "Experience the cause"
22 Scouts Australia (NSW) (1) Membership fees [$1.65m; 13%] (2) Camps and activity centre revenue [$1.5m; 12%] (3) Retail sales (physical shop) scouting, activity and camping equipment [$1.1m; 9%] Total 2008 Revenue $12.5m http://www.nsw.scouts.com.au/
68, 73
4 "Experience the cause"
68 Art Gallery of South Australia (1) Retail (physical shop) (art related, café) [$949K; 6%] (2) Entry Fees & Facilities Hire [$564K; 4%] Total 2008 Revenue $15.7m http://www.artgallery.sa.gov.au/agsa/home/
73
4 "Experience the cause"
71 Australian Wildlife Conservancy
(1) Tours (education, awareness) [$1m; 6%] (2) Accommodation & facilities (camping) [$604K; 3%] Total 2008 Revenue $16.7m http://www.australianwildlife.org/Home.aspx
73
4 "Experience the cause"
73 National Trust of Australia (Victoria)
(1) Tours, access to properties (weddings, filming) [$3.4m; 34%] (2) Retail (farm produce, gift shop sales) [$1.6m; 16%] (3) Rental accommodation [$190K; 2%] Total 2008 Revenue $9.9m http://www.nattrust.com.au/
n/a
Appendix 2
77
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
5 "Wealth re-distribution"
2 Anti-Cancer Foundation (1) Retail sales (online / physical shop) [$1.735m; 6%] Total 2008 Revenue $43m http://www.cancervic.org.au/
9, 66
5 "Wealth re-distribution"
3 Australian Red Cross (1) Retail sales (online / physical shop) [$16.5m; 11%] (2) First aid training courses ($10.6m; 7%] (3) Lottery / raffle [$5.6m; 4%] (4) Rental (commercial) [$4m; 2%] Total 2008 Revenue $150m http://www.redcross.org.au/default.asp
67
5 "Wealth re-distribution"
6 Brotherhood of St Laurence (1) Retail (recycled clothing stores) [$14.7m; 31%] (2) Commercial services (cleaning, landscaping, security) [$4.8m; 10%] Total 2008 Revenue $48.7m http://www.bsl.org.au/main.asp
8, 21, 23, 46, 67
5 "Wealth re-distribution"
8 City Misssion (1) Retail (recycled clothing stores) [$2.6m; 43%] (2) Rental income (buildings) [$460K; 7%] Total 2008 Revenue $6m http://www.citymission.org.au/index.html
21, 23, 24, 26
5 "Wealth re-distribution"
9 Diabetes Australia (1) Retail sales (NDSS commision) [$3.9m; 45%] (online / physical stores) [$1.25m; 14%] (2) Membership fees [$1.44m; 17%] Total 2008 Revenue $8.47m http://www.diabetesqld.org.au/
n/a
5 "Wealth re-distribution"
11 Foodbank Australia Ltd (1) Fees for coordination and distribution of food [$895K; 71%] Total 2008 Revenue $1.24m http://www.foodbank.com.au/default.asp?id=1,41,,45
13, 16
5 "Wealth re-distribution"
13 Helping Hand Group (1) Source and coordination auctions of unique memorabilia (2) Art framing business 100% of revenue from trading activities (no govt support, no donations) http://www.helpinghand.com.au/
16, 66
Appendix 2
78
Cluster Case Name of social enterprise Trading Activity (in order of revenue generated) and Website Links
5 "Wealth re-distribution"
16 Meals on Wheels SA (1) Preparation and distribution of food [approx $6m; 80%] Total 2008 Revenue calculated from information available on the website http://www.mealsonwheelssa.org.au/index.php
n/a
5 "Wealth re-distribution"
21 Salvation Army (1) Retail (recycled clothing stores) [$66.3m; 28%] (2) Residents' contribution fees (rental, care) [$8.8m; 4%] Total 2008 revenue $231m http://www.salvationarmy.org.au/SALV/HOMEPAGE/HOME.html
23, 24, 66
5 "Wealth re-distribution"
23 The Smith Family (1) Nonwoven textile commercial manufacturing (ie BlueSky insulation, cleaning cloths for Jif) (2) Retail sales (physical shops) Combined revenue $2.6m (5% of total $51.6m) http://www.thesmithfamily.com.au/site/page.cfm
24, 66
5 "Wealth re-distribution"
24 St Vincent de Paul Society (1) Retail sales (Vinnies Centres of Charity) [$31.6m; 21%] (2) Client contributions (care, support) [$10.7m; 7%] Total 2008 Revenue $151.2m http://www.vinnies.org.au/home-sa
42, 46
5 "Wealth re-distribution"
46 Good Samaritan Industries (1) Retail (recycled clothes; supported empl) [58% of total revenue] (2) Commercial revenue (supported empl) (packaging, industrial cloths) [10% of total revenue] Total 2008 Revenue not listed on website; no annual report http://www.goodsamaritan.com.au/
n/a
5 "Wealth re-distribution"
66 Oxfam Australia (1) Retail (online / physical shops) [$10.7m; 18%] Total 2008 Revenue $59m http://www.oxfam.org.au/
67
5 "Wealth re-distribution"
67 RSPCA WA (1) Retail (physical shops / shelters) [$1.35m; 27%] (2) Training (dogs) [$150K; 3%] (3) Inspectorate services [$50K; 1%] Total 2008 Revenue $5m http://www.rspcawa.asn.au/
68
References
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