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Profit with purpose? A theory of social enterprise

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  • Besley, Timothy
  • Ghatak, Maitreesh

Abstract

When social benefits cannot be measured, an organization that selects managers based on pro-social motivation can be used to balance profits with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers to run firms with flexible missions. We analyze organizational choice between social enterprise, for-profits, and non-profits. The paper also develops the implications of matching between founders and managers based on their preferences for the mission.

Suggested Citation

  • Besley, Timothy & Ghatak, Maitreesh, 2017. "Profit with purpose? A theory of social enterprise," LSE Research Online Documents on Economics 68572, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:68572
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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