Social and Ethical Perspective of entrepreneurship.docx

8/12/2019 Social and Ethical Perspective of entrepreneurship.docx

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Social and Ethical

Perspective of

Entrepreneurship

S u b m i t t e d t o :

M i s s U r o o j Q a m a r

Group Members:

Arfa Khan

Noor Fatima Sajid

Misbah Liaqat

Huzaifa Fatima

M.usman


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Social and Ethical Perspective of entrepreneurship

What is a Social Entrepreneur?

Social entrepreneurs drive social innovation and transformation in various fields includingeducation, health, environment and enterprise development. They pursue poverty alleviation

goals with entrepreneurial zeal, business methods and the courage to innovate and overcome

traditional practices. A social entrepreneur, similar to a business entrepreneur, builds strong

and sustainable organizations, which are either set up as not-for-profits or companies.

A social entrepreneur is a leader or pragmatic visionary who:

Achieves large scale, systemic and sustainable social change through a new invention, adifferent approach, a more rigorous application of known technologies or strategies, or acombination of these.

Focuses first and foremost on the social and/or ecological value creation and tries to optimizethe financial value creation.

Innovates by finding a new product, a new service, or a new approach to a social problem. Continuously refines and adapts approach in response to feedback. Combines the characteristics represented by Richard Branson and Mother Teresa.

The Schwab Foundation employs the following criteria when looking for leading social

entrepreneurs: Innovation, Sustainability, Reach and social impact.

Social entrepreneurs share some come common traits including:

An unwavering belief in the innate capacity of all people to contribute meaningfully toeconomic and social development

A driving passion to make that happen. A practical but innovative stance to a social problem, often using market principles and forces,

coupled with dogged determination, that allows them to break away from constraints imposed

by ideology or field of discipline, and pushes them to take risks that others wouldn't dare. A zeal to measure and monitor their impact. Entrepreneurs have high standards, particularly in

relation to their own organizations efforts and in response to the communities with which they

engage. Data, both quantitative and qualitative, are their key tools, guiding continuous

feedback and improvement.


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A healthy impatience. Social Entrepreneurs cannot sit back and wait for change to happenthey are the change drivers.

What is Social Entrepreneurship?

Social entrepreneurship is

About applying practical, innovative and sustainable approaches to benefit society in general,with an emphasis on those who are marginalized and poor.

A term that captures a unique approach to economic and social problems, an approach thatcuts across sectors and disciplines grounded in certain values and processes that are common

to each social entrepreneur, independent of whether his/ her area of focus has been education,

health, welfare reform, human rights, workers' rights, environment, economic development,

agriculture, etc., or whether the organizations they set up are non-profit or for-profit entities. It is this approach that sets the social entrepreneur apart from the rest of the crowd of well-

meaning people and organizations who dedicate their lives to social improvement.

Sources of Entrepreneurship


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First, there is a growing body of innovation within the public sector, encouraged by contracting-

out, local management of schools and devolution of power within the NHS. This is encouraging

public sector managers and workers to find new ways of delivering welfare services. Second,

the private sector is showing a growing interest in the social setting for business, particularly

the quality of education. This should promote a cross-pollination of entrepreneurial practices

from the private sector into areas of welfare. Third, the voluntary sector is developing an

innovative leading edge which is the most fertile source of social entrepreneurship. Social

entrepreneurs are emerging from often small organizations deploying business skills in tackling

social settings. It is from the conjunction of these three forces (set out in Figure 1) that social

innovation will emerge.

Myths about Social Entrepreneurship

Social entrepreneurs are anti-business The difference between commercial and social entrepreneurship is greed Social entrepreneurs are nonprofit managers Social entrepreneurs are born, not made Social entrepreneurs are misfits Social enterprises usually fail Social entrepreneurs love risk

The value of social entrepreneurs

Social capital and the reform of the welfare state can show what role they should play in the

future of welfare. The case for social entrepreneurs rests on the following five pillars.

Problem solving: These schemes help resolve some of the most pressing and intractable

social problems our society faces: Aids, mental ill-health, joblessness, illiteracy, crime and

drugs. Social entrepreneurs often confront these problems in new ways and find new solutions.

These new approaches could be transferred to the public sector, in much the same way as small

biotechnology and software firms often transfer their innovations to larger pharmaceuticals


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and computer companies. In business we have technology transfer schemes; in welfare we

need social innovation transfer schemes. Public policy needs to help create a much more

effective mechanism to identify, interpret and disseminate best practice in welfare provision.

There is a value to society as a whole in promoting a diversity of attempts to tackle problems

such as illiteracy or drug dependency. Diversity will help to promote experimentation and

expand the portfolio of possible solutions. Of course there are risks to diversity as well, if it

leads to unacceptable inequalities and unfairness. However, at this stage that risk is small

compared with the potential benefits from encouraging more experimentation and innovation.

Supply-side efficiency: These projects are often far more cost effective than the welfare

state because they are less bureaucratic, more flexible and capable of generating far greater

commitment from their staff. One example is the cost-competitiveness of Kaleidoscope com-

pared with other ways of treating heroin addicts and administering methadone. At

Kaleidoscope the cost is 3.01 per patient per day, compared with 4 via a pharmacist. It is

difficult to obtain comparable costs for the public sector. This cost efficiency suggests that

society could get far more innovative social welfare, delivered at lower cost, if the welfare state

adopted solutions developed by social entrepreneurs.

These skills will become more important as the welfare state is decentralized via contracting

out. Already, for instance, the policy of devolving the local management of schools has required

head teachers and school governors to develop more entrepreneurial skills. Decentralization

has further to go: the demand for social entrepreneurship within the public sector will grow.

Public sector trades unions will object that much of the cost-efficiency of non-state

organizations comes from their use of non-union; unpaid labor. This objection only goes so far

In many of these organizations staff are highly professional and paid a rate for the job

comparable with the private sector. All the organizations profiled in this report would seek to

abide by a minimum wage. Much of the higher productivity on these projects comes from

greater commitment and flexibility rather than markedly lower pay.

Active welfare:these schemes are developing new models of active welfare, in which users

and clients are encouraged to take more responsibility for their lives. In most of these schemes,

welfare is not seen as a sum of money or even a package of entitlements. Instead, most of

these schemes embrace a philosophy in which welfare and well-being are inseparable from self-

control and self-confidence. These schemes embrace an ethic of creative individualism which is

at odds with the passive recipient culture of much of the traditional welfare state. These

schemes also embody an active ethic of giving, which will become increasingly critical to the

traditional welfare state. Hospitals and schools often provide an important focus to bring


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together divided communities. Yet beyond that the welfare state as a whole is not regarded

with much affection, it is not particularly effective at generating social support cohesion. To

many of its critics the welfare state breeds passivity bureaucracy and disillusion. In contrast,

social entrepreneurs excel at mobilizing a diverse network of people and private sector

companies to jointly attack social problems. One prime example of that is the way that

Bromley-by-Bow has engaged large companies in the City of London as well as the church and

voluntary groups to come up with joint solutions to local problems of crime and youth

unemployment.

Jobs and output: Many of these schemes generate benefits that can be measured in

traditional economic terms, although many of the entrepreneurs running such projects do not

believe this should be an exclusive measure of their success. Some community enterprise

schemes create viable businesses and jobs. In so far as this reduces unemployment and

generates valuable output, then this will be of benefit to the economy as a whole, as well as the

people involved. Schemes to regenerate housing estates will have measurable benefits in terms

of reducing vandalism and crime as well as upgrading the housing stock. Most of these schemes

involve upgrading the skills of the people involved to make them more self-reliant. This

investment in human capital must have some economic value, even if it is difficult to capture

this in monetary terms. Perhaps the most important economic argument is hypothetical: what

would have happened if these projects had not developed? Had the Mildmay Hospital not

sprung into life it may well have taken much longer and cost much more for Britain to develop a

response for Aids. The investment in various schemes designed to prevent youth crime will paya return in a reduction in future crime rates and insurance losses.

Social capital creation: Social entrepreneurs create assets for communities that would not

otherwise exist The most obvious examples of these assets are new buildings, new services or a

revived reputation for an area. But in many ways the most important form of capital that a

social entrepreneur creates is social capital. Social capital is the network of relationships that

underpins economic partnerships and alliances. These networks depend upon a culture of

cooperation, fostered by shared values and trust. The theory of social capital has been

developed most effectively by the American social theorist Robert Putnam in Makingdemocracy work: civic traditions in modern Italy and by Francis Fukuyama in Trust. Both books

analyze the role that trust and shared values play in underpinning long-term relationships and

cooperation, which in turn promote shared efforts at innovation. Social capital matters in the

private sector as much as in the voluntary sector. Studies of the success of the German and

Japanese economies for instance have underlined the importance of long-term relationships


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and an ethic of cooperation, which provide the basis for their record of innovation and

manufacturing prowess. Social entrepreneurs work by bringing people together in partner-

ships to address problems that appear insurmountable when they are addressed separately.

Social entrepreneurs set in motion a virtuous circle of social capital accumulation. They use

networks of support to gain access to buildings and money, to recruit key staff and create an

organization capable of growing. The dividends of this process are rarely financial. The main

dividend is itself social a stronger community more able to look after itself, with stronger bonds

of trust and cooperation.

Conclusions:

The value of social entrepreneurs comes in three main forms:

in the short run, social entrepreneurs may bring measurable benefits to the wider economy by

creating jobs, generating output or saving on public spending in the medium run, they have

great value as potential models for the reform of the welfare state, if they can work more

productively in alliance with the public sector their more important long run contribution is

their ability to create and invest social capital.

Social Entrepreneurship MissionTo create and sustain social value

freed from profit as the reward ,the SE can generate opportunities from failure unmet social need may be in the form of unfilled demand or latent demand Opportunity can lead to development of an enterprise concept that is

denominated in its value in three ways: 1. identifiable, 2. defensible, and 3.

measurable.

Note: Failure to identify and denominate social returns and set clear, specific goals atthis stage is a key reason for many social enterprise failures.

Distinguishing Features of Social Entrepreneurship

Social entrepreneurship meets needs unmet by commercial markets and (usually) thegovernment

Social entrepreneurship is motivated by social benefit


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Successful social entrepreneurship usually works with, not against, markets

Social and Commercial Entrepreneurs work in same Manner

The Process of Social Entrepreneurship

1. Find an opportunity2. Develop a business concept3. Figure out what success means and how to measure it4. Acquire the right resources5. Launch and grow6. Attain goals


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The Entrepreneurial Organization

This set of relationships is set out in Figure below. If an organization is successful its interaction

with its environment becomes part of the organizations character. The best entrepreneurial

social organizations are organic and evolutionary; they develop with their users and partners.

They are porous at the edges; the boundary between the organization and its users is not fixed.

Charles Handy,the management thinker, distinguishes two types of voluntary organizations:

self-regarding organizations, which mainly provide services for their members (the Womens

Institute, for instance), and other-regarding organizations, which serve strangers and provide

hardly any services for members (Oxfam). Entrepreneurial social organizations break through

this distinction. They usually exhibit a strong sense of membership and association, becauseusers identify very strongly with the organization. Yet they are not run for the members. They

are not closed and inward-looking.


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The Entrepreneurial Ecosystem summary with examples

The lifecycle of social entrepreneurship

How social entrepreneurs manage birth, growth and maturity


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Growth is the lifeblood of these organizations. Yet once an organization starts to grow it creates

strains and pressures that create unforeseen problems. Social entrepreneurs are restless. They

do not like to sit back and admire their good work. Yet it is not just these psychological qualities

that drive their organizations to grow. Growth is essential because it satisfies vital

organizational imperatives. These organizations are built upon the energy and enthusiasm of

people. To attract these people and motivate them, they need to be given new challenges, new

opportunities. Money and fame are not available as motivators. The only really motive force is

the excitement and pleasure of achievement. To provide a stream of new opportunities, an

organization has constantly to develop and grow. Yet growth brings a range of difficult

problems. The lifecycle of growth that entrepreneurial social organizations go through is set out

in Figure 5 backside. We examine in turn the strains of growth these organizations face and

how they resolve them.

Mission management the mission sets an organizations purpose and its boundaries by

determining the activities it will invest in. But as an organization develops, troubling questions

are raised about what activities lie within the boundaries of the mission and what lie beyond its

scope. The questions raised within the Mildmay about the extent of its international work are

an obvious example of this. The organization must have a creative approach to revising its


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mission. It must find time to think and imagine what it might become. This is always quite

difficult in busy, financially stretched organizations. The management team must find a way of

getting all those involved with the project to buy into the revised sense of mission. This process

is fraught with risk. If the procedure is too formal it can become cumbersome without engaging

people. If the management team does not consult enough it may find it does not have the

support of some key constituencies. Another risk is that the mission can be captured by one

group within the organization, which will impose its own agenda. For instance, in most

financially stretched organizations there is a constant threat that the mission may be captured

by the funders, who set conditions on funding that determine what the organization can do. A

different risk is that the consumers dominate the organization too much and effectively set

prices for services so low that the organization runs into financial problems.

Product mix:Entrepreneurial social organizations grow because they respond to emerging

client needs. That means they are often being asked to provide new services. Yet developing a

wider range of services carries risks. As new services develop they often displace existing ones.

More management time and effort will be devoted to the new service at the expense of the

existing activities. In some cases, it may be essential to jettison or de-merge some of its original

activities to allow growth. The development of commercial activities creates particular

problems. Money making ventures often involve greater financial risk than other projects. The

demand that they make money creates a measure of their success that can distract attention

from other schemes that are harder to evaluate. As a result, small commercial activities can

take up a disproportionate amount of management time. Judging what is core to anorganization is always very difficult. The best product extensions are those that build upon an

organizationscore skills and competencies. Yet deciding what those core skills are often more

difficult than it first appears.

Governance:As an organization grows its governance often becomes more complex. There

are more funders, partners, clients and staff. In addition, it is quite likely that a single

organization will have to develop several arms, each with their own legal, tax and governance

structure. This often makes for complicated decision making and cross-cutting lines of

accountability.

Analysis and evaluation: Organizations need to acquire a range of new skills as they

develop. At the outset there is a high premium on creative qualities as the entrepreneur defines

the mission and gathers the capital needed to get going. During this early phase, the

organization generates and depends upon a great deal of goodwill among its partners who

identify with the projects aims. As the project gets larger and more complex, the management


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needs to acquire executive and analytical skills as well as creative ones. As a scheme takes on

contracts to develop services, it needs to get better at executing and delivering what it has

promised to undertake. The organization needs to build a reputation based on its track record.

Once an organization becomes more mature, with a portfolio of schemes and services under its

wing, it is particularly important that it should become better at evaluating the success of its

work. It needs to become better at evaluation for several reasons to make the case to its

donors, clients and the public at large that the organization is effective and useful in its

spending to allow the organization to re-align its organization and management to meet goals

set by the mission which are not being met

to guide its investment decisions and make the case to potential funders that it should be given

more money.

Evaluation methods:in the social, non-profit sector are very under-developed. At the

macroeconomic level, assessing the added value generated by these schemes using traditional

economic tools is problematic. At the microeconomic level, evaluation is hampered by the lack

of financial measures, such as return on equity, which are widely used in the private sector.

Measures of operational efficiencysuch as patient throughputdeveloped in the public

sector are likely to miss the value of the benefits created by small innovative organizations. The

difficulties these schemes have in evaluating their success is more than a mere technicality. If

they are to make a case for taking a large role in social welfare they will have to persuade

politicians and the public that they are delivering value for money.

Permanence and succession:as an organization becomes more mature and established, it

confronts new challenges. Perhaps the most pressing challenges when it reaches the top of the

curve are how to secure its permanence and an orderly management succession. Business

rarely remains small while being genuinely innovative. Innovative businesses tend to fail, grow

or be bought by a larger business. This last route often solves the issue of management

succession. By becoming part of a larger business a small organization gains access to a wider

pool of management talent. As yet social organizations lack such an exit route: there is no

market for takeovers to allow a small project to become part of a larger organization. One route

might be for social organizations to develop a strategic partnership with large companies thatmight anchor the project. Another route might involve a closer relationship with the state. A

durable service contract with the state might provide the best guarantee of stability and

permanence for many of these organizations.

Learning from failure: as well as policies to promote success we need policies to minimize

the costs of failure. An entrepreneurial sector of the economy must have a high failure rate.


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There is an element of risk involved in entrepreneurship which is quite alien to the public

sector. People must try out a new idea, quite possibly fail, learn from their failure and then try

again. But in the social sector, where reputation and probity matter so much, failure is often

punished harshly. An organization that runs into financial difficulties often finds it hard to get

new sources of funding. An entrepreneur who founds an organization that then runs into

trouble might find it difficult to find work again elsewhere in the social sector. To create a more

vibrant socially entrepreneurial sector we need to devise ways for people to experiment and to

fail, without their being written off. Ideally, we need ways to support social entrepreneurs

through peaks and troughs just as the best banks support innovative small businesses.

Conclusions:

Entrepreneurial social organizations are driven to grow. But as they grow they often run into a

range of management obstacles that can thwart their growth or lead to their failure. If socialentrepreneurs and their partners were better able to understand these pressures they would

be in a better position to overcome them or avoid them.

Social Entrepreneurship from Islamic Perspective:

Social entrepreneurship has also been discussed in the holy Quran. In Islam, helping the poor

through and donation are emphasized in many verses.

You cannot attain to righteousness unless you spend (in charity) out of those things which you

love

People always have been invited to charity and Ehsan in the Quran and we canfind a chapter

in the Quran that, they were the way of God *26+. In addition, Allah loves those people who

help others.

Do good to others, surely Allah loves those who do good to others *27+.

The Prophet also said: Give charity without delay,for it stands in the way of calamity *28+.

The Prophet Muhammad (peace be upon him) said:

Every Muslim has to give in charity. The people then asked: (But what) if someone has nothing

to give, what should he do? The Prophet replied: He should work with his hands and benefit

himself and also give in charity (from what he earns). The people further asked: If he cannot

find even that? He replied: He should help the needy who appeal for help. Then the people


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asked: If he cannot do (even) that? The Prophet said finally: Then he should perform good

deeds and keep away from evil deeds and that will be regarded as charitable deeds

According to Al-Attas, based on the Islamic principles, businesses should be conducted for the

wellbeing of the society [30]. Hence, this will help in the societal advancement which willultimately bring the blessings of Allah. Furthermore, in understanding the Islamic values,

another study has pointed out that every Muslim entrepreneur and related supporting agent

should work towards greater productivity [31]. The authors further elaborated that there is a

need to empower the Muslim entrepreneurs vision which will generate more products in a

good way which is attributed by Islam.

Pakistani Perspective:

Dr. Abdul sattar Edhi

Dr. Abdul Sattar Edhi, NI, LPP, RMA, IBP, GPA, MSP (Memoni, Urdu: , Gujarati:) is a prominent Pakistani philanthropist, social activist and humanitarian. He

is the founder and head of the Edhi Foundation, a non-profit social welfare organization in

Pakistan. Together with his wife, Bilquis Edhi, he received the 1986 Ramon Magsaysay Award

for Public Service. He is also the recipient of the Lenin Peace Prize and the Balzan Prize. In 2006,

Institute of Business Administration Pakistan conferred an honoris causa degree of Doctor of

Social Service Management for his services. In 2010 Edhi was awarded with The Ahmadiyya

Muslim Peace Prize for the Advancement of Peace. In September 2010, Edhi was also awarded

an honorary degree of Doctorate by the University of Bedfordshire. In 1985 Edhi received the

Nishan-e-Imtiaz from the Government of Pakistan. On January 1, 2014, Eidhi was voted Person

of the year 2013 by the readers of The Express Tribune.

He was born in 1928, in the city of Bantva in what is now Gujarat, western India. Edhi's first

interaction with human suffering occurred at the age of eleven, when his mother was physically

paralyzed and later suffered from mental illness. Edhi spent his waking hours caring for her, andher worsening health and eventual death left a lasting impact on his life. In 1947, at the age of

19, Mr. Edhi's family was forced to flee their hometown and relocate to Karachi. Finding himself

in a new city without any resources, Edhi resolved to dedicate his life to aiding the poor, and

over the last sixty years, he has single handedly changed the face of welfare in Pakistan. Edhi

founded the Edhi Foundation, with an initial sum of a mere five thousand rupees. Regarded as a


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guardian for the poor, Edhi began receiving numerous donations, which allowed him to expand

his services. To this day, the Edhi Foundation continues to grow in both size and service, and is

currently the largest welfare organization in Pakistan. Since its inception, the Edhi Foundation

has rescued over 20,000 abandoned infants, rehabilitated over 50,000 orphans and has trained

over 40,000 nurses. It also runs over three hundred and thirty welfare centers in rural and

urban Pakistan which operate as food kitchens, rehabilitation homes, shelters for abandoned

women and children and clinics for the mentally handicapped.

Edhi has remained a simple and humble man. To this day, he owns two pairs of clothes, has

never taken a salary from his organization and lives in a small two bedroom apartment over his

clinic in Karachi.[9][10] He has been recommended for a Nobel Peace prize by the Prime

Minister of Pakistan. On June 25, 2013 Edhis kidneys failed and it was announced that he willbe on dialysis for the rest of his life, unless he finds a kidney donor.

Western Perspective:

Jim Rohn

For more than 40 years, Jim Rohn honed his craft like a skilled artist-helping people the world

over sculpt life strategies that have expanded their imagination of what is possible. Those who

had the privilege of hearing him speak can attest to the elegance and common sense of his

material. It is no coincidence, then, that he is widely regarded as one of the most influentialthinkers of our time, and thought of by many as a national treasure. Jim authored countless

books and audio and video programs, and helped motivate and shape an entire generation of

personal-development trainers and hundreds of executives from America's top corporations.

Born to an Idaho farming family in the mid-1900s, Jim was ingrained with a work ethic that has

served him well throughout his life. At 25, he met his mentor Earl Shoaff. And over the next six

years he made his first fortune, yet didn't get into speaking until he moved to Beverly Hills,

California, when a friend at the Rotary Club asked him to tell his success story, which Rohn

titled "Idaho Farm Boy Makes It to Beverly Hills."

His speech went over so well that he received more invitations to share it, and better yet, they

started paying him for it. In the beginning, he spoke in front of college and high-school classes

and at service clubs, before moving on to seminars in 1963, which launched him into the

personal-development business. From then on, Jim Rohn became a trailblazer in the self-help

and personal development industry, impacting the lives of millions through his life-changing

material.


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Jim Rohn focused on the fundamentals of human behavior that most affect personal and

business performance. His is the standard to which those who seek to teach and inspire others

are compared. He possessed the unique ability to bring extraordinary insights to ordinary

principles and events, and the combination of his substance and style captures the imagination

of those who hear or read his words.

Global Perspective:

Most socially responsible companies:

Wal-Mart

The retail giant trounced second-place McDonald's

(yes, McDonald's). In fact, 28 percent of consumers picked

Wal-Mart Stores as the most responsible company,

compared with 17 percent for McDonald's and 16 percent

for third-place Microsoft.

Ethics:

A set of principles outlining a behavioral code that lays out what is good and right or badand wrong

May outline obligations and appropriate moral actions for both the individual and theorganization

Ethics does not just apply to business It may be difficult for individuals or groups in society to agree upon what is right and

wrong

Ethics within the business:

Many businesses develop their own codes of ethics or conduct

These codes outline what employees are to do in order to carry out what the companysees as the right thing to doin various circumstances

Outline for a code of Ethics:


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Over all, a code of ethics should be a formal statement of a businesss values concerning ethics

and social issues. It commonly speaks to acceptable norms of behavior, guided by six areas of

concern:

1. Honesty: to be truthful in all your endeavors; to be honest and forthright with one anotherand with customers, communities, suppliers, and other stakeholders.

2. Integrity: to say what you mean, to deliver what you promise, and to stand up for what is

right.

3. Respect: to treat others with dignity and fairness, appreciating the diversity of the people

you deal with and their uniqueness.

4. Trust: to build confidence through teamwork and open, candid communication.

5. Responsibility: to speak up without fear of retribution and report concerns in the

workplace and elsewhere, including violations of laws, regulations, and company policies.

6. Citizenship: to obey all laws of the countries where you do business and to improve the

communities where you live and work.

Being Socially Responsible:

It is not enough to be ethical, or do the right thing anymore (thankfully) Businesses are now expected to act in a socially responsible mannerthey need to be

good citizens as well as give back to the societies (including global) in which they exist.

Can you think of a company that is socially responsible? One that is not? There are financial benefits to being a socially responsible company or organization.

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Social and Ethical Perspective of entrepreneurship.docx