Re-Inventing the Social Business Model: New Opportunities for the Third Sector Organizations in Italy

Re-Inventing the Social Business Model: New Opportunities for the Third Sector Organizations in Italy

Dario Cavenago (University Milano-Bicocca, Italy) and Laura Mariani (University of Bologna – Alma Mater Studiorum, Italy)
DOI: 10.4018/978-1-5225-2537-0.ch015
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Abstract

The recent global economic crises and the decline of the traditional welfare state are challenging the development of third sector organisations involved in the provision of public services. With the support of the Italian case and the experiences of different Italian third sector organisations, this contribution highlights how organisational survival and growth require reinvention of the business model, commencing with the concept of social, economic and environmental sustainability. The scope of third sector organisations depends on the type of government, the stage of economic development, the model of civil society, the existence of philanthropic traditions and the law and regulation. All these variables affect the business model of third sector organisations. This chapter contributes to the third sector knowledge in Italy and concludes with a discussion on solutions that are able to incentivize the use of entrepreneurial principles, stimulate networking, cooperation and growth while maintaining the relationship with the territories.
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Background And Literature Overview

This study builds a framework to investigate the current trends emerging in TSO institutional and social context, and its main consequences on the development of renewed business models. In this context, the definition of nonprofit proposed by Salamon and Anheier (1997) is adopted. The authors identify the five core structural or operational features – namely:

  • Formal constitution;

  • Non-governmental basic structure;

  • Self-governing;

  • Non-profit-distributing;

  • Presence of voluntary activities or resources.

Key Terms in this Chapter

Social Business Model: Actualization of a social business idea through the identification of the value proposition, value constellation and a sustainable profit equation.

Social Context: Combination of demographical, religious, racial diversities, and social capital peculiarities that characterize the task environment of a third sector organization.

Institutional Context: System of bodies, rules, regulation, policies, procedures and processes that characterize the task environment of a third sector organization.

Profit Equation: Translation of the Value Proposition and Value constellation in terms of benefits and costs. It can be furthered decomposed into Social Equation and Economic Equation.

Value Constellation: Ways in which third sector organizations provide their services through both the internal value chain and external partners support.

Social Business Idea: Outcome of an entrepreneurial sensitivity in identifying an emerging social need and the related sustainable answers.

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