Author FAIDON ZARAS  (I.M. PANAGIOTOPOULOS SCHOOL, GREECE)

Traditional vs social enterprise

The conceptual definition outlined above includes the most important defining factor of social enterprises, the mission to create social value by providing solutions to social problems. However, SEs are also enterprises in the sense of striving for economic value creation, as do traditional enterprises, but that is only one of multiple goals which they pursue simultaneously.

In terms of goal priorities, we could say that the triple bottom line approach  finds its most suitable application in social enterprises. Generally, while traditional enterprises seek to maximise profit, socially impactful businesses strive for success in:

• social goals (people)

• environmental goals (planet)

• financial goals (profit)

7A company will have a healthy triple bottom line when they are taking measures to:

• Ensure the well-being of customers and all stakeholders. 

The people, or human capital bottom line refers to fair and beneficial business practices toward labour and the community and region in which an enterprise operates. For example, a social enterprise would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education.


• Minimize their footprint by paying close attention to resources and consumption. 

A social enterprise reduces its ecological footprint by carefully managing its consumption of energy and non-renewable resources and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. SEs should monitor their emissions, seek to recycle effectively and opt for renewable energy. 

• Grow profit margins and increase prosperity of all stakeholders. 

The profit or economic bottom line deals with the economic value created by the organization. The "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment and includes the internal profit made by a company as well as the economic impact on the community. SEs seek to help local suppliers stay in business and innovate, their activities do not place local economies at risk, and offer salaries that can sustain spending.