Social enterprise: a case of terminological ambiguity and complexity

Purpose – To study some of the difficulties involved in defining the nature of social enterprises and the environments in which they operate in order to provide a framework to show how and where social enterprises fit in the overall social economy. Design/methodology/approach – The complexity of organizations involved in the spectrum of the social economy is discussed in terms of the literature to show how many social enterprises in the UK and worldwide can be categorized as small and medium sized enterprises (SMEs). Discusses the ambiguity prevalent in the social economy concerning the terms and concepts of “not for profit”, “non‐profit”, social enterprise and social entrepreneur and illustrates the successes, failures and difficulties of the social enterprise sector. Findings – The four key issues which the definitional debate needs to address, comprise: voluntary participation; independence from the state; the concept of profit (profit making, appropriateness of profit making from certain activities, profit maximization, profit distribution); and ownership and corporate governance. Illustrates the points made in the article with particular reference to three case studies involving: Edinburgh Lothian Council On Alcohol (ELCA) (company limited by guarantee with charitable status); First Scottish University Credit Union Ltd (FSUCUL) (credit union); and Forth Sector (social firm). Originality/value – Sorts out some of the difficulties and complexities in the definition and classification of social enterprises.