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Abstract: A social enterprise differs from a traditional business enterprise primarily because it operates with a social mission (Dacanay, 2004; Bornstein, 2004; Borzaga & Solari, 2001). Its social mission focuses on meeting the previously unmet economic and social needs of a marginalized community in society. Specifically, it provides employment opportunities to members of a particular marginalized community, thereby providing them with a sustained source of income, improving their quality of life, empowering them, and integrating/reintegrating them into the mainstream society.

Its social mission implies that the social enterprise must contend with maintaining a double bottom line. Unlike the traditional business enterprise which focuses on a single bottom line—profitability, the social enterprise needs to balance the objective of financial sustainability with its social objective (as defined by its social mission). The goal of meeting a double bottom line creates immense challenges for the social enterprise, as the financial sustainability or profit objective is often in conflict with the social objective.

This paper examines the viability and sustainability of the social enterprise sector, given the extensive challenges that social enterprises face. This discussion is based on qualitative data collected on eight social enterprises operating in Singapore. The Singapore context offers an interesting research setting: its institutional environment is characterized by the preponderance of governmental agencies. The pervasive power of the government offers a stark contrast to the relative powerlessness and weakness of the civil society. Paradoxically, the heavy hand of the government does not extend significantly to the sphere of social welfare. The social welfare needs of the poor and marginalized in Singapore have traditionally been met by voluntary welfare organizations and other types of social services organizations. This institutional setting thus highlights the significant role that social enterprises can play in addressing the economic and social needs of poor and marginalized communities, in the context of minimal governmental involvement in social welfare.

Keywords: Legitimation; Cooptation; Embeddedness; Social Enterprises

25 pages, July 4, 2007

Note: Paper submitted to EGOS-Colloquium 2007, Vienna, Austria, July 4-7, 2007

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