Sunday, May 19, 2013

Enterprise

You may wonder what I was worrying about. 

Let me give you my answer in a convoluted way:

The original idea of social enterprise is to use commercial strategies for maximizing improvements in human and environmental well-being, rather than the profits for any shareholder. In other words, the primary goal of the enterprise is to solve social problems, and the two common means are to hire disabled persons and to provide loan to people or companies that are not considered by ordinary bankers.

(I believe the social enterprise that I met in the palace of Pluto belongs to the former.)

And, here comes the common misconceptions. First, not for profit is a misleading criterion. Social enterprises should in fact provide incentives to their employees and investors through dividends, although the distribution of profits should come after the enterprises' social objectives.

To go one step forward, there is an important distinction between non-profit organization and social enterprise. In the latter, the majority of the revenue comes from the business transaction rather than through grants or donations.

In other words, social enterprise has to mind its own business.

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