Value Creation, Value Capture, and Value Devolution

Abstract

Scientific literature on social enterprise is at an impasse. Either social enterprises maximize profits to have a chance of impact investment or they prevent mission drift by avoiding profit maximization along the lines of traditional philanthropy. This article breaks this stalemate by building on the facts that constrain the daily operation of a social enterprise. It is submitted that a social enterprise is a mechanism for value creation that forgoes value capture and engages in value devolution to serve a wider vulnerable clientele. The term value devolution implies giving away market power for consumers’ sake.