Social Enterprises: Relationship between Economic Profits and Social Values

Abstract

Social enterprises emerge as a newer type of organization that that combines elements of for-profit and non-profit organizations, and are gaining recognition as a potential driver of sustainable development. Social enterprises typically have the economic and the social objective that may contradict each other to produce trade-offs, or reinforce each other to produce synergies. Hence, this research aims to determine whether there are trade-offs or synergies between the economic and the social objective of social enterprises in Thailand, and determine the micro, meso and macro level factors that influence the relationship between the objectives of social enterprises. This research performed regression analysis on social enterprises data, and also analyze macro level factors of Thailand based on the Macro-Institutional Social Enterprise (MISE) framework. The results show that social enterprises in Thailand show trade-offs with prioritization of the economic objective over the social objective, which is consistent to the macro level factors showing relatively low government social welfare spending and international aid, and an efficiency-driven economy. These findings raise the potential concern of the co-optation of the social enterprise concept by private companies. Additionally, the results show that funding by grants lead to higher output of the social objective of social enterprises. With this in mind, this research recommends that policy support should incentivize private companies to give funding in the form of grants to social enterprises to deter co-optation, while social enterprises must also be able to demonstrate higher output of the social objective to be eligible to receive the grants.