Social Business Typology


5 types on Social Business

5 types on Social Business

Every business is connected with various groups of our society and influences the lives of people in different way. Those people and groups can also be called stakeholders. While some more abstract stakeholders such as the government or the tax-office are rather abstract entities which are not represented by individuals, most of the stakeholders are made up of human beings. Dependent on the size and type of the business, stakeholders are in most cases in a certain degree influenced by the activities of the busyness with having now or limited power to influence this relationship with the business.
There are various way in which those individuals can be connected with the business or organization and sometimes they might even overlap: the teacher of a private school, who sends his students to the same school is customer and employee at once. The worker, who participates with his whole family in a community.
Every business, no matter if a international cooperation, family owned factory, micro-sized business in rural hills or social business startup is permanently in interaction with all those stakeholders and produces a negative, neutral or positive impact on the different groups.

Type A – Customer Oriented

graphic_client_enThe first, Type A Customer oriented is made up of people who buy, purchase, use or consume the good or service provided by the organization. This group, which we should further call customer is not only directly influenced by consuming or using the product or service of a company but shaped by the way how, when and where the customer is provided with the service and product. Where and how the customers can buy the products, if packing material can be recycled by the producer, if the product fulfils a basic need and in how far the product encourages a healthy and sustainable lifestyle would be a few of the to be considered, if looking at the positive social impact.

Type B – Employer Oriented

graphic_employment_enThe second, Type B Employee oriented,is formed by employees, workers and also the working shareholders of a company. Briefly said everybody who earns his or her living from providing his or her labor to the business. A businesses impact derives not only from the financial compensation the individual is provided for his or her working time but also from the inclusion decision making, the workplace safety, educational possibilities, work time agreements and the degree to which precarious day labour and jobs are replaced by more secure monthly income.

Type C – Supplier Oriented

graphic_intermediary_model_enThe third group are all businesses and individuals, which provide raw material, products or services to the business. Any business can show social responsibility in choosing local, social impactive or environmentally friendly suppliers over probably cheaper yet, impact-wise doubtful resources. This becomes even more pressing in case of a monopsony, which means that the business is he only buyer for the given products. Alongside with this one has to furthermore differentiate the types of organisations constituting the supplier side: are those international cooperations, local medium sized businesses or micro-businesses made up of mainly unskilled labour?

Type D Evironmental oriented

Type_D_environment_enThe fourth group is less tangible than the first three one and takes into consideration the indirect influence (or negative externalities) a business has on the environment. Imagine a producer of a solar driven car. If a full city would change to those electric cars, the air quality would improve for all inhabitants not only the ones owning a car. The beneficiaries are therefore not included in the business process in a direct way, but are benefitting through so called positive (or absence of negative) externalities.

Type E – cross subsidization

Type_E_graphic_service_subization_enLast but not least – and this is a very controversially discussed type, we have those target groups, which can not be directly involved in a social business, but are in a distress situation and require access to social service. This type of social business is more often found outside the social market economies of Europe. In what Kim Alter calls the service-subsidisation model the profits from a rather traditional business (I.e. restaurant) are used to sustainable finance operations of a non-profitable social organization, such as orphanages or anti-trafficking activities.

Cause Canvas for drafting your own social business

I have develope a canvas, which can help you to develop your own social business of the scratch. You can download the file below.

After you have filled the cause canvas you can continue working on the business plan canvas. Some of the variables for teh business plan canvas have already been defined by the cause canvas. The document below helps you to identify which aspects of the business plan canvas can be filled by the cause canvas

Photo by Nicole De Khors from Burst