Scaling sales is scaling impact : A case study of value creation and management in for-profit social enterprises

Conceptualizing social entrepreneurship has proven to be challenging. Social enterprises are often regarded as enterprises that create social value or social impact. However, social value and social impact remain ill-defined and ambiguous concepts. This paper provides a qualitative description of how social enterprises create value, what their impact is and what this entails for managing and conceptualizing them. The analysis is based on a case study that comprises of: a comprehensive review of the literature, four in-depth interviews with for-profit social enterprises that work with renewable energy access in developing countries and secondary data on their impact and environmental context. We find that social enterprises create value through building intricate networks with their stakeholders. They use feedback from their customers and the market to pivot their business models to increase their potential for value creation. The increase in utility of their customers is an important part of their impact. This is also the value creation the customer cares about and is willing to pay for. However, there is impact beyond this increased utility, which seems to result from two things: the fact that the problems and needs the social enterprises target have positive externalities (1); and the fact that the social enterprises seem to purposefully design their value proposition, business model and value chain to maximize positive externalities and minimize negative externalities (2). Finally, we propose that in their value proposition, business model and value chain social entrepreneurs combine a logic of empowerment, collaboration and control.