Unit-5

Social Sector:

1. The term social sector is often used to refer sectors of Education, Health, sanitation and
Nutrition etc.

2. The term hasn't been formally defined and thus has come to acquire several implications.
Two main approaches to the definition are identified as:

The Human Resource Development Approach:

i. The human Resource Development Approach emphasizes investment in education, health

and nutrition as a means of enhancing the quality of human capital which may be defined as
"the stock of skills and productive knowledge embodied in people".

ii. An important implication of the human development approach is that it limits the role of
public intervention.

iii. In this approach individuals are expected to undertake investment in education, health
and nutrition on their pursuit of self reliance.

iv. This approach does not pay any attention to the attitudinal and institutional
characteristics that are so necessary for translating individual level skills into enhanced
productivity at the level of the Economy

Human Development Approach:

i. The alternative approach to social sector is that of human development.

ii. This term has been defined by the United Nations Development Programme (UNDP) as
'the process of enlarging people's choices"

iii. This concept encompasses empowerment, cooperation, equity in basic capabilities and
opportunities, sustainability and security

iv. In this approach people occupy centre stage, and measures such as education, health and
nutrition are emphasized from their intrinsic value and not for their role in enhancing their
basic capabilities of people.

Different types of social entrepreneurships are:

i. Community Enterprises: These are the enterprises which serve a specific community eg,
religion, groups etc. The leaders of such kind of enterprises are the representative of same
community.

ii. Social Firms: These firms assist people with physical and learning disabilities and help
them to find place in the mainstream job market.
iii. Credit Unions: These are the community based financial institutions which provides
saving and loan facilities to their members.

iv. Development Trusts: They provide the assistance to the people in the ownership and the
management of community property.

V. Public Sector Spin-outs: These are setup to provide the services that were earlier
provided by public sector enterprises. They are also known as 'externalised services'.

Different opportunities for social entrepreneurship are:

1. Waste Management: Entrepreneurship in solid waste management can be instrumental

in environment protection, economic restructuring and job creation. Entrepreneurial
opportunities in solid waste planning are available in the areas of waste collection, waste
handling, waste sorting, waste storage, waste transport, waste transformation and energy
recovery from waste.

2. Cleaning Services: To keep the world clean and green we have to contribute ourselves
towards it. And for aspiring social entrepreneurs this a great sector to tap. Cleaning industry
is still untapped and it needs young blood to step in and change the face of the sector by
using their innovative skills and techniques.

3. Green Infrastructure: Green infrastructure is vital in providing and connecting life support
systems for urban environments. It includes parks and reserves, waterways and wetlands,
transport corridors, greenways, roof gardens and living walls. This space provides huge
opportunities for entrepreneurs to meet green infrastructure for world.

4. Water Management: In today's time, access to clean water is a tough task for any family
living in remote areas. Social entrepreneur can look into this matter and figure out the best
way to solve this problem with the help of his/her entrepreneurial skills.

5. Recycling Space: Recycling is the best way to turn waste into wealth by converting useless
products into useful ones. With growing awareness for a greener planet and eco-
consciousness among people, recycling business turns out to be one of the most creative
businesses with high returns.

Successful models of social entrepreneurship are:

1. Study Hall Education Foundation (SHEF): It is an organization dedicated to offering

education to the most disadvantaged girls in India. SHEF has worked with over 900 schools
and changed the life of 150,000 girls with the program.

2. Selco: It is a company rendering sustainable energy source to rural regions of the country.
This project was the first rural solar financing program in India.

3. Childline: It aims to provide help in form of healthcare and police assistance, especially to
street children.
4. Goonj: It is social enterprise that collects used clothing from the urban crowd, sorts them,
fix and later distribute among the poor and needy. The relief work was done by Goonj
during the times of natural calamities in Gujarat, Tamil Nadu and Kerala have been highly
acknowledged.

5. Pipal Tree: It worked to create job opportunities for the unemployed youth in rural India.
Pipal Tree was started as a company that aims to impart formal training to the youth and
provides them with reputable jobs in companies across the country.

6. Rangasutra: It aims to revive the craftsmanship and talent that is unharnessed in rural
India and aims to provide them with their deserving recognition.

7. Frontier Markets: It aims to provide the best of technological solutions to the remote
villages in India at the cheapest price possible. It supplies solar energy powered products to
rural India at an extremely affordable cost.

8. Association for Democratic Reforms (ADR): It started as a PIL against the politicians led
to the foundation of the Association for Democratic Reforms (ADR), an organization that
scrutinizes election procedure in India.

Different types of social innovations are:

1. Socio-ideological Innovation: This involves innovation of ideological frameworks, mind-

sets etc.

2. Socio-ethical Innovation: This involves innovation of ethical/ normative frameworks, etc.

3. Socio-economic Innovation: This involves innovation of economic models, business

models, etc.

4. Socio-organisational Innovation: This involves innovation of organisational

arrangements, etc.

5. Socio-technical Innovation: This involves innovation of human- technology interaction,

etc.

6. Socio-ecological Innovation: This involves innovation of human environment interaction,

etc.

7. Socio-analytical Innovation: This involves innovation of analytical and sense-making

frameworks, etc.

8. Socio-juridical Innovation: This involves innovation of legal frameworks and laws, etc.

9. Socio-cultural Innovation: This involves innovation of non-formal institutions, etc.

10. Socio-political Innovation: This involves innovation of governance.

The risks involved in a social enterprise are as follows:

1. Obtaining Finance:

i. Most entrepreneurs require some sort of funding when they start their entrepreneurial
projects.

ii. The problem with social entrepreneurship is that the business models don't often turn
over massive profits.

iii. This, coupled with the fact that social entrepreneurship is widely misunderstood, makes
lenders wary of lending financial support to social entrepreneurs.

2. Backlash:

i. If you are fighting for a certain cause, in many cases, there will be people fighting against
it.

ii. The more controversial your cause, the more backlash you can expect to get.

iii. Even though social entrepreneurs are known for being selfless and aim to help people
and communities in need, they often experience backlash and criticism.

3. Not Focusing on Profit:

i. Many social entrepreneurs are so caught up in their cause that they do not focus on
creating a profit.

ii. However, making a profit is very important when it comes to satisfying your investors and
maintaining a successful business.

4. Burnout:

Burnout is a genuine risk for social entrepreneurs because they work long hours.

Like with all types of entrepreneurs, there are no set working hours, so entrepreneurs find
their personal lives and their work lives merged

5. Lack of Public Knowledge:

Although social entrepreneurship is growing and expanding, the majority of the general
public does not have a clear idea of what social entrepreneurship is exactly. This makes it
difficult to gain support to your cause

6. Not Having a Substantial Support Structure:

i. Having a support structure and entities that you can turn to for help and advice is very
important for any business.
ii. This is because social entrepreneurship is still relatively new, there are not many support
structures that fall into the social entrepreneurship sphere.

7. Marketing:

i Marketing a social business definitely comes with its challenges.

ii. Many social entrepreneurs do not put enough emphasis on effective marketing and may
not have the resources, time or funds to put into marketing, which could act as a massive
risk and challenge.

Steps to manage risks in social enterprise:

1. Risk Identification: The critical first stage is that the social enterprise, through
environmental scanning, identifies the risk events that could potentially prevent the
realization of its objectives. These risks can arise from

i. Government legislation,

ii. Policies and regulations,

iii. Inadequate funding,

iv. Technological challenges,

v. Security and safety,

vi. Withdrawal of grants and donations,

vii. Legal restrictions,

viii. Norms and culture,

ix. Climatic hazards, and

x. Managerial incompetence.

These and many other risk factors are identified for impact assessment.

2. Risk Impact Assessment:

i. The social enterprise assesses the frequencies and consequences of each identified risk.
ii. Assessment criteria arc used to measure the impact of these risks on the enterprise
objectives. It can consider how the risk events affect cost, schedule, quality, program scope
or performance.

3. Developing the Approach and Plan:

i. The risk management approach determines the processes, techniques, tools, and team
roles and responsibilities for a specific project

ii. The risk management plan describes how risk management will be structured and
performed on the project.

4. Selecting the Risk Management Tools:

i. Risk management tools support the implementation and execution of program risk
management in systems engineering programs.

ii. In selecting the appropriate tools, the project team considers factors such as program
complexity and available resources.

5. Risk Prioritization Analysis:

i. The identified risk events, their impact assessment, probability of occurrence and
consequences are collated to derive a most-to least critical rank order of risks.

ii. The main purpose of prioritizing these risks is to form a basis for allocation of scarce
resources and urgency of attention.

6. Risk Mitigation Planning, Implementation, and Progress Monitoring:

i. At this stage, the social enterprise develops and implements actions designed to enhance
opportunities, eliminate or mitigate threats to an acceptable level.

ii. After implementing a plan, the result is often monitored with the view of revising any
course-of-action if needed.

iii. The risk mitigation strategy or option (ie, accept, avoid, transfer, enhance or reduce) will
be based on the assessed combination of the probability of occurrence and severity of the
consequence for an identified risk. The iterative process continues.

Legal Framework:

1. The rules, rights and obligations of companies, governments, and citizens are set forth in
a system of legal documents called a legal framework.

2. Documents in the legal framework include legislation, policy, regulations and contracts. a
country's constitution,
3. Laws and policy are supposed to have more authority than a contract. However, contracts
can also be written to explicitly override the laws and regulations.

4. Legal documents that cover broad principles, like constitutions, are generally more
difficult to change. More specific documents, like laws and contracts, can often be more
easily amended.

5. Countries with detailed laws and policies often have more stable and predictable legal
frameworks than those that leave more aspects open for negotiation in individual contracts.

Legal Framework Necessities in Business:

1. Maintain Order: A better set of rules and regulations helps a business enterprise in
maintaining order within the organization.

2. Resolve Disputes: A Legal framework helps in resolving disputes within the members of
same organization and also between two co- functioning organization.

3. Establish Generally Accepted Standards: Establishing generally accepted standards for

the business sector allows the groups to act more efficiently and without any collision of
different ideas.

4. Protect Rights and Liberties When it Comes to Business: Protect the general rights of the
employee and the other people working with the organization.

5. Protect Relation to other Businesses, Government Authorities, and the Customers:

Having better rules and laws protect the relation of a business organization with the other
co-working bodies.

The legal structures used in the social entrepreneurship sector are:

1. Non-profits or Charitable Organizations:

i. Non-profits can register as a Trust or as a Society.

ii. The non-profit model is best suited for start-ups that do not expect revenues from their
activities or have a long gestation period before they start to accrue revenues.

Example: Digital Green, Teach for India, Akshaya Patra etc.

2. The for-profit social Enterprise:

i. In India there are many choices when it comes to setting up a for-profit social enterprise.
Broadly, there are five different types of for-profits: sole proprietorship, partnership, limited
liability partnership, private firm and co-operative.
ii. This type of legal structure is perhaps best suited for social enterprises that are looking for
growth and profitability.
Example: Vaatsalya Healthcare, dLight etc.

3. The hybrid model:

i These types of social enterprises start off as a non-profit or for-profit and then launch an
exact opposite.

ii. This is a great model that ensures that social enterprises can both attract donations and
grants, and still be able to have access to social venture funding

Example: Head Held High Foundation, Fractal Foundation, etc.