Business models impacting social change in violent and poverty-stricken neighbourhoods: A case study in Colombia

Abstract

The business model (BM) – a representation of a venture’s core logic for creating value – is an emergent construct of interest in social entrepreneurship research. While the BM concept is normally associated with financial objectives, socio-entrepreneurial BMs are uniquely identifiable by their social value propositions, by their intended target markets and by the projected social change. Drawing from a longitudinal case study of a Colombian foundation, we outline the characteristics of socio-entrepreneurial BMs. We analyse the entrepreneurial process behind the implementation of a BM that draws on communitarian innovative solutions that benefit the excluded and, ultimately, society at large. Focusing on the question of how socio-entrepreneurial BMs progressively evolve to produce social change, we examine the BM of a successful socio-entrepreneurial venture that exhibits the conditions of social change. Our findings show that the social value proposition, the entrepreneur’s passion for social change and a community-based network are decisive factors.

Deconstructing the Way in which Value Is Created in the Context of Social Entrepreneurship

“…Institutions such as the police (K'nife and Haughton ; Roberts and King ), the state and cities (Korosec and Berman ; Luke and Verreynne ) also have great interest in partnering with social ventures that will, for example, contribute to social peace and extend education to violence‐stricken areas (Hlady‐Rispal and Servantie ). In return, institutions will help social entrepreneurs to capture resources, synchronizing with other entities to apply programmes or use tax exemptions and preferential utility charges as incentives (Wong and Tang ).…”

“…Value generation is enabled by human capabilities and organizational resources required by the venture in order to operate (Verstraete and Jouison‐Laffitte ,b; Zott and Amit ). The SE literature argues that value is created by a number of different actors, the first being the social entrepreneur(s) in interaction with other stakeholders (Hlady‐Rispal and Servantie ; Seelos and Mair ). The actors’ values and skills as well as the ways in which these actors are linked have an impact on the degree of value generation (Bowman and Ambrosini ).…”

“…The third dimension, value sharing, refers to the value flows that take place in the ecosystem within which the social organization evolves (Emerson ; Verstraete and Jouison‐Laffitte ,b; Zott and Amit ). Value sharing considers the transfer of value from the social venture to a wider ecosystem, including returns for other stakeholders and society at large (Hlady‐Rispal and Servantie ). It is related to the impact that the venture has on the architecture of the ecosystem in which it evolves and the advantages it provides for stakeholders and society (Porter and Kramer ).…”

“…Thus, value generation deals with the sources of value creation, value capture relates to the benefits retained by the venture, and value sharing refers to value exchanges and value reallocation (Hlady‐Rispal and Servantie ; Verstraete and Jouison‐Laffitte ; Zott and Amit ). The three components highlight, to varying degrees, the social entrepreneurs’ capabilities and organizational resources needed to turn value into reality (value generation), the overall benefits retained by the venture (value capture), and the value flows that occur in an ecosystem during exchanges with stakeholders that benefit the social venture through a value network and society as a whole (value sharing).…”

“…). This clarification is useful for understanding how social ventures evolve to produce social change (Hlady‐Rispal and Servantie ). We argue that it can also foster a better understanding of the SE domain.…”