The Importance of the Impact-Driven Business Model (IDBM) for Social Enterprises: Tool for Government Practitioners and Education – Model and Cases

The Importance of the Impact-Driven Business Model (IDBM) for Social Enterprises: Tool for Government Practitioners and Education – Model and Cases

Ronny Jerome Beirens (Vives, Belgium) and Jef Tavernier (Vives, Belgium)
DOI: 10.4018/978-1-7998-2714-6.ch009

Abstract

This chapter presents a model that is suitable for government and practitioners and education practitioners as an alternative to the Business Canvas Model. The purpose of the IBDM model is to offer an alternative to the stakeholders who have no business educational background. This chapter first describes the model. This chapter makes a comparison with the Business Model Canvas BMC. From a value point of view the BCM is “value” free model. The main purpose is to create interest or added value for the customer. The underlying, tacit assumption however is the assumption that the invisible hand of the free market will regulate for the best of worlds. The impact driven business model puts the impact on the society on the forefront.
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Background

This chapter is not a theoretical one, it is a guide to discover good practices. Readers of this book have a variety of backgrounds. We are giving some suggestions for reading.

For the reader who wants to know more about Social economy and social entrepreneurship

There is a document published by the European commission. This guide was written by Euricse (2015) (European Research Institute on Cooperative and Social Enterprises) and Commission Staff. This is a general introduction text. The text is aimed at researchers, scholars, decision and policy makers.

There is also the EMES Network this network is compulsory for scholars and people who want to know about the latest developments in Social Entrepreneurship and the research. EMES is a research network of established university research centres and individual researchers whose goal has been so far to gradually build up an international corpus of theoretical and empirical knowledge, pluralistic in disciplines and methodologies, around our “SE” concepts: social enterprise, social entrepreneurship, social economy, solidarity economy and social innovation. For practitioners and educational purposes, we strongly recommend the ECOOPE toolkit (2014).

Our interest in IDBM and Social Entrepreneurship comes merely from a passion for people that have difficulties to find a job in the regular labour market, but of course for other stakeholders, there can be different reasons to start with a Social Enterprise. Many countries nowadays want to preserve their heritage with the help of a minimum of staff on the payroll. Largely relaying on the help of volunteers. Our focus in the two cases we present in this chapter Passwerk and Waak, lies in the first reason people with other abilities finding a difficulty to enter the regular labour market. From experience with different organisations we feel the urge to spread the knowledge of the IDBM to a larger audience. Having worked a lot over the years with the Business Model Canvas (BMC) for training purposes, we have found it more difficult to use for a broad audience. Moreover, in a study Verrue (2014) also pinpoints the weaknesses of this popular model. It is much used by professionals and consultants alike. But has not been put to the test in an academic way yet. For those less acquainted with the model the basic structure BMC balances revenue against costs.

According to Verrue (2017), Total value to customers generates activities and costs on the one hand and a revenue model on the other hand. Gross margins and sales volumes explain how value for customers contributes to profit. Another main challenge in business model mapping is in denominating the critical resources behind the activities.

The Osterwalder business model canvas lacks consistency and power due to many overlaps which in turn are caused by the fixed architecture, the latter too easily leading to a filling-in exercise. Through its business model representation, a company should first of all gain thorough understanding of it. Only then companies can evaluate the model and finally consider some adaptations (p. 1).

We are convinced the IDBM really is a model that makes a thorough understanding of the organisation. We find little or no overlaps. In turn the adaptations to be made, can be clearly understood not only by the organisation itself but also by the stakeholders.

Key Terms in this Chapter

Value: is defined as a permanent process of making choices by the entrepreneur.

Social Impact: The effect of an activity on the social fabric of the community and well-being of the individuals and families.

Social Entrepreneurship: refers to the identification, evolution and exploitation of opportunities that result in social, cultural or environmental value.

Commercial Entrepreneurship: represents the identification, evolution and exploitation of opportunities that result in profit.

Social Enterprise: A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. Notification for the reader. This is only one definition there is a lot of discussion depending among others through differences in legislation in different countries. A specific point of discussion is if the shareholders can participate in the profit and still be called a social enterprise.

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