INTRODUCTION

The social economy currently represents a new area of economic activities characterized by the linking of economic and social goals. It thus represents a new dimension of unconventional entrepreneurial dynamics that is simultaneously a bearer of social innovation and social development, as well as a new impulse for economic growth. The concept of the social economy does not have a single terminological designation; we encounter several terms that emphasize different aspects of socio-economic activities – social economy, solidarity-based economy, work integration social economy, market-oriented social economy (Defourny – Favreau – Laville 2002).

1 ENTREPRENEURSHIP

Entrepreneurship is characterized by five features that must be fulfilled collectively. One without the other does not satisfy the legal definition of the term entrepreneurship. Assessing whether these features are met depends on the type of business activity. These five features consist of: a) Continuity: compared to occasional activity, it indicates that the activity must be repeated. However, its intensity need not be uniform (it may be, e.g., seasonal activity, etc.) b) Independence: it concerns the entrepreneur's right to make decisions and manage the enterprise (as a natural person, or a legal entity in the case of a company). The entrepreneur acts as an independent entity towards their partners and decides independently about the functioning of their enterprise vis-à-vis "third parties." c) Business name: it characterizes the entrepreneur externally, towards third parties (with whom they carry out legal acts, legal submissions, etc.). The business name is perceived as the most significant identifying feature of the entrepreneur; it is a right that belongs to the enterprise. Its use is both a right and an obligation of the entrepreneur. The business name distinguishes the entrepreneur from other business entities. d) Entrepreneurship is carried out at one's own risk: the entrepreneur is responsible for the activity of their enterprise. This term also expresses the business risk associated with entrepreneurship. Manifestation of failure to manage business risk may result in consequences such as liquidation or bankruptcy of the enterprise's assets. In addition to the entrepreneur, another person is also responsible for the enterprise if the competencies of management and decision-making are redistributed among the statutory bodies of the enterprise or members of the statutory body. e) Generation of profit: it is the main goal of business activity. If the activity is actively aimed at generating profit, the feature of entrepreneurship is fulfilled (collective of authors, 2010).

2 SOCIAL ENTREPRENEURSHIP

In 2020, the Alliance for the Social Economy in Slovakia defined the main problems of social entrepreneurship. Legislation in the field of social entrepreneurship was identified as the greatest positive, while conversely one of the greatest negatives was the lack of investment aid. A major positive is the existence of the national program Institute of Social Economy, the existence of regional and support centers, as well as the program statement of the current government, in which social entrepreneurship is mentioned in several chapters. A negative was identified as the lack of comprehensive education on social entrepreneurship; however, this is also insufficient for entrepreneurship in general. The survey showed that the problem is the lack of interdepartmental communication and the absence of functional marketing that would make social entrepreneurship as such visible, as well as specific social enterprises (ases-slovensko.sk, 2020).

2.1 Establishment of a Social Enterprise According to Act of the National Council of the Slovak Republic no. 112/2018 Coll. on the social economy and social enterprises, supplemented by information consulted with the regional center of social economy. First of all, it is necessary to ascertain whether the form of social entrepreneurship is suitable for our type of business. As a first step, it is most advantageous to contact the regional center of social economy and discuss the specific proposal with them.

The establishment of a registered social enterprise is preceded by the following steps:

  • Preparation of a business plan for the social enterprise (according to specific points – coordinators of regional centers will provide the exact template)
  • Preparation of the statute of social entrepreneurship (the coordinator will likewise provide a template)
  • Pre-approval process – in which the coordinator sends the business plan for pre-approval of the registered social enterprise
  • After pre-approval of the registered social enterprise – registration of the business entity (Ltd., NPO, Association, etc.)
  • Application for registration of the registered social enterprise
  • After registration, the registered social enterprise may commence its activities and is obliged to indicate in its business name the designation "registered social enterprise" or the abbreviation "r.s.e."

Analyst of the Slovak Business Agency (National Business Center serving to support entrepreneurs) Chmelárová (2020) specializes in the topic of social entrepreneurship. She perceives social enterprises as important contributors to social inclusion, in supporting employment and regional or local development. Among the motivations for registering social enterprises, she sees access to financial support. Financial support in particular can be decisive in achieving a balance between financial sustainability and maximizing positive social impact.

To register a social enterprise, it is necessary to fulfill all conditions stipulated by law. In addition to general conditions, special conditions are also established that arise from the type of registered social enterprise. The Act on the Social Economy and Social Enterprises distinguishes the following types of registered social enterprises (with regard to the focus of their activity):

  • Registered integration social enterprise
  • Registered social housing enterprise
  • General registered social enterprise (§ 6).

The difference between the individual types of social enterprises lies in fulfilling their social impact. In the case of integration social impact, it concerns, for example, supporting employment through the employment of disadvantaged persons or vulnerable persons. A general registered social enterprise fulfills this by providing any socially beneficial service. The Act of the National Council of the Slovak Republic no. 112/2018 Coll. on the social economy and social enterprises defines socially beneficial services as follows: a) provision of health care, b) provision of social assistance and humanitarian care, c) creation, development, protection, restoration and presentation of spiritual and cultural values, d) protection of human rights and fundamental freedoms, e) education, upbringing and development of physical culture, f) research, development, scientific-technical services and information services, g) creation and protection of the environment and protection of public health, h) services to support regional development and employment, i) provision of housing, administration, maintenance and renovation of the housing stock, j) provision of financial resources to entities of the social economy for the performance of socially beneficial services according to letters a) to i). (§ 2)

3 RESEARCH STUDY

The aim of the study was to identify the advantages and risks of registered social entrepreneurship under the conditions of current legislation in the Slovak Republic. The subject of the study was entrepreneurship in Slovakia in the form of a registered social enterprise. We were interested in what conditions, advantages/disadvantages entrepreneurship in the form of registered social enterprise entails. The object of the study were companies engaged in social entrepreneurship in the Slovak Republic. The selection was random in order to obtain a diverse sample for investigation; the epidemiological situation played a significant role, as it did not allow for in-person meetings with participants, and interviews could only be conducted by telephone or online (in the form of email correspondence). It was important for us to have participants from various areas of business, with different forms of enterprise, thus our research sample consisted of diverse enterprises with varying lengths of operation as an RSE. We implemented a qualitative strategy. Hendl (2016, p. 177) states that "a structured interview with open-ended questions consists of a series of formulated questions that individual participants are to answer. This type of interview is used when it is necessary to minimize variation in the questions asked of the respondent. This reduces the likelihood that the data obtained in individual interviews will differ significantly in structure."

We subjected the results to analysis, identification and interpretation through the grounded theory method. We used basic open, selective and axial coding. We examined four areas; for the purposes of this paper we process two of them. In processing the presented study, we selected two research questions: RQ1. What are the experiences of founders and the reasons for establishing a registered social enterprise? RQ2. What problems/perspectives do RSEs encounter in the performance of their activities?

3.1 Evaluation of Research Area No. 1 The first research area is titled: "Reasons and experiences in establishing a registered social enterprise." The aim was to identify the reasons, experiences and professional preparation when founding a registered enterprise. RQ1. What are the experiences of founders and the reasons for establishing a registered social enterprise?

Basic open coding

Research Table No. 1 contains 1 central concept, 1 category and 5 codes. The results of the empirical table were obtained from research data from guided interviews. Central concept — Experiences of founders of registered social enterprises, category — experiences before establishing the RSE, and codes in Table No. 1.

Table 1 Experiences of founders and registration of a social enterprise

Regarding the experiences of founders with registered social enterprises, their prior experience was: company director, as P1 states "I had completed secondary education with a school-leaving exam, experience as a director of a company focused on FMCG sales (author's note: Fast Moving Consumer Goods); long-term practice in the social sphere," according to P2 "university education, long-term practice in the social field (emergency housing facility, regional policy)," similarly P3 stated "I was a social worker by education, but essentially we transformed from a sheltered workshop into a social enterprise. We are now in our 10th year, so actually 9 years as a sheltered workshop and now we are in our first year as a sheltered workshop transformed into a social enterprise," P4 also had previous experience in the given area before registering the social enterprise. P5 had a combination of experiences "completed university education and previous practice in healthcare and social services." Research Table No. 2 contains 1 central concept, 1 category and 2 codes. Central concept — Reasons for establishing an RSE, category — motivator, and codes in Table No. 2.

Table 2 Motivation of participants for establishing a registered social enterprise

From the perspective of our research and the implementation of our entire work, it was important for us to find answers to the actual motivation of participants when establishing registered social enterprises. At this point, the range of possible answers narrowed to two: helping disadvantaged people, as P1 states "a scheme by which we can help people who have a serious health problem and help them reintegrate into the work process with regard to their disadvantage, which is often an obstacle in other jobs." Similarly stated P2, "to provide disadvantaged people in the region with the opportunity to gain employment, not to be dependent on assistance, to systematically address the unemployment of the disadvantaged, to create jobs for single mothers from the emergency housing facility operated by the organization under which the social enterprise was originally established, so that they have the opportunity to change their lives, leave the institution and become independent." P4 stated as the main motivation "the possibility to employ several employees thanks to financial support from the state." P5 perceived the main motivation as "helping people who have a health problem and cannot find employment, training in work skills, their necessity for society and themselves." For P3 the main motivation was different, namely "I worked as a social worker, I also worked with a group of disabled citizens, it just felt right to me, I would say."

Research Table No. 3 contains 1 central concept, 1 category and 3 codes. Central concept — Area of education, category — need for education, codes in Table No. 3.

Table 3 Areas of education for the purpose of establishing a registered social enterprise

What all participants agreed on was the need for further education in other areas or skills. Since this involved registering a new enterprise, which also brings new legalities, this need arose primarily in further education in legislation, as P1 states "In my opinion, educating oneself during the performance of any business activity is necessary to do regularly and in all areas. With an RSE, it was necessary to study more in areas connected with the opening of a new operation — legislation, hygiene requirements and others..." P3 answered this question as follows: "It is the marketing and all that is like business. It is actually business like any other, so legal regulations, and especially marketing, or management." P5 has the following experience: "with the RSE it was necessary to study what conditions selected diseases have, what work regulations need to be prepared. For my functioning, knowledge of laws and various hygiene regulations."

Axial coding

For the researched area RQ1, we created a paradigmatic model from the research data titled: "Advantages and risks of establishing a registered social enterprise." For this scheme, we drew from the obtained research data of participants. To create the paradigmatic model, we focused on the category of phenomenon in relation to the following aspects. For the first area — experiences of founders — we have one category and five codes, for the second area — reasons — we have created one category and two codes, for the third area — education — we have created one category and two codes, thereby creating our phenomenon RQ1.

  • Causal conditions: these are causal conditions that influence our phenomenon. The establishment of an RSE creates space for employing people with disabilities.
  • Context: through the first paradigmatic model, these are the reasons and experiences of RSE founders.
  • Intervening conditions: these are the current legal regulations of the Slovak Republic that define the individual actors of social entrepreneurship. Furthermore, education in the specifics of working with the given target group.
  • Action strategies: the pre-approval process of the IA of the Ministry of Labour, Social Affairs and Family of the SR, which is lengthy and demotivating for some RSE founders. The market for goods and services.
  • Consequences: we point out the possibilities of employing people with disabilities, their opportunities for self-realization and the fulfillment of the elements of subsidiarity.

Selective coding

The aim of the first RQ was to identify the experiences of founders, reasons and professional preparation when establishing a registered enterprise according to participants. In the first area — experiences of founders with registered social enterprises — participants already had experience with entrepreneurship, but despite this still needed further education in the given area, which we evaluate in the third area of the first research question. In the second area — reasons for establishing a registered enterprise — we defined the category of motivation, where participants answered: helping people with disabilities, assistance in the work process, increasing self-confidence, not being dependent on others, fulfilling elements of deinstitutionalization, utilizing financial resources from the state. We evaluate this as aid to self-help for citizens with disabilities. In the third area — the need for education — we defined the category of education in the area of changes in legislative norms and in the specifics of the consequences of disability.

3.2 Evaluation of Research Area No. 2 The fourth research area is titled: "Problems and perspectives of registered social enterprises in their business operations." The aim was to identify the limits and risks of registered social enterprises in the performance of their activities. RQ2. What problems and perspectives do registered social enterprises encounter in the performance of their activities (in their business operations)?

Basic open coding Research Table No. 4 contains 1 central concept, 1 category and 3 codes. The results of the empirical table were obtained from research data from guided interviews. Central concept — Problems and perspectives, category — limits, codes in Table No. 4.

Table 4 Limits during the operation of a registered social enterprise

Although registered social enterprises seemingly have many benefits compared to ordinary organizations, they still face many challenges, as is typical in business. We asked participants about the limits they had encountered during their operations. P1 stated "more difficult recruitment of staff for the created job positions who have disabilities, since we could not directly write this information in the advertisement so as not to discriminate against healthy citizens... even though we must employ at least 33% disadvantaged persons..." the same applies to P5. For P2, the main limits were "lack of financial resources, problems with production premises, missing equipment (a refrigerated truck, which we have been unable to obtain for several years)." For P3 it was "so far, for example, the agreement with the Labour Office has not been signed yet, but it should be now soon. Probably just administrative matters, bureaucracy, but otherwise I haven't really encountered anything, I'm used to it from when we were a sheltered workshop. Even the accountant has to adapt a bit..." P4 sees the main limit as "probably mainly paperwork, the lengthy process of registering the enterprise." Research Table No. 5 contains 1 central concept, 1 category and 3 codes. The results of the empirical table were obtained from research data from guided interviews. Central concept — Employment of people with disabilities in registered social enterprises, category — perspective, codes in Table No. 5.

Table 5 Perspective of registered social enterprises

For P1 it is "I believe that they will help people who are significantly disadvantaged when applying for employment, as well as in their further work, to find and fulfill their potential." P2 perceives the perspective as follows "it is an excellent tool for reducing unemployment, for creating jobs for disadvantaged people according to their individual needs." P3 was pleasantly surprised, as she states "I am pleasantly surprised, I quite like it, the subsidies. I work as a social worker also for other organizations. I see that municipalities and cities are also establishing these social enterprises and there is an opportunity there, since I work with people with disabilities. Even people with more severe disabilities can find employment. Because the subsidy is there. Otherwise, that citizen cannot achieve such a result on their own. But it is very meaningful to employ them and for them to be socialized. It certainly costs the state less." P4 sees it this way "I can imagine RSE as a more common form of business. It provides space to really help." P5 summarized it as follows "employment of people with disabilities, not just passively receiving, e.g., a disability pension, so that they feel needed for themselves and their family. To increase their self-confidence in a form that is suitable for them." Research Table No. 6 contains 1 central concept, 1 category and 4 codes. The results of the empirical table were obtained from research data from guided interviews. Central concept — Problems and perspectives, category — proposals, codes in Table No. 6.

Table 6 Proposals for practice

The proposals for practice from individual participants were varied, as is probably the case with any other type of business, since every entrepreneur experiences a different story. P1 sees the main recommendation as "the above-mentioned law, so that we do not have to be careful during recruitment interviews about whether we are discriminating against healthy participants, since we are trying to primarily help the disadvantaged..." P2 was very satisfied and summarized it as follows "well, since we have been operating as an RSE for a year, which brought us what it brought, and we survived only because we employ disadvantaged people and we have an agreement with the Central Office of Labour, Social Affairs and Family for them and receive a contribution, so from that perspective nothing better comes to mind at the moment. I am happy that we have so far maintained jobs and have not been forced to lay off anyone." P3 expressed herself as follows: "less bureaucracy, yeah, but otherwise it's okay. The bureaucracy is very heavy. Even for the establishment, but the implementation agency helps with that, I had a very good regional (coordinator) who helped me with the establishment." Similarly mentioned by P3 "reduction of bureaucracy, speeding up the approval process, greater involvement of the state — cooperation with health insurance companies — other benefits for people with disabilities, for companies that employ them..." Very similarly summarized by P5 "faster support from regional centers, individual workers are overloaded and so the pre-approval of project plans is difficult."

Axial coding

For the researched area RQ4, we created a paradigmatic model from the research data titled: "Limits and risks of entrepreneurship in the form of RSE." For this scheme, we drew from the obtained research data of participants. To create the paradigmatic model, we focused on the category of phenomenon in relation to the following aspects. For the first area — limits during RSE operation — we have one category and three codes, for the second area — perspective of RSE — we have created one category and three codes, for the third area — proposals for practice from RSE — we have created one category and four codes, thereby creating our phenomenon RQ4.

  • Causal conditions: these are causal conditions that influence our phenomenon, namely the subject of business and the target groups of employees.
  • Context: through the first paradigmatic model, these are regulations and cooperation with the Labour Office.
  • Intervening conditions: these are the current legal regulations of the SR and the current state of the market.
  • Action strategies: compensatory contribution for employees from the Labour Office.
  • Consequences: employability of disadvantaged citizens of the SR.

Selective coding

The aim of the RQ was to identify the limits and risks of registered social enterprises in the performance of their activities. In the first area — limits in employing persons with disabilities — registered social enterprises established cooperation with: Ltd., NPO, companies fulfilling the mandatory quota of citizens with disabilities. In the second area — limits when starting a registered social enterprise — these involved cooperation with institutions, e.g., the Labour Office, selection of a suitable citizen with disabilities, the approval process, some actions bore elements of bureaucracy. In the third area, participants provided proposals for practice, where emphasis is placed on non-discrimination of both healthy employees and employees with disabilities. They expressed the opinion that during the pandemic situation they were able to continue working, as they had guaranteed financial contributions.

DISCUSSION

The first research question was focused on the reasons and experiences in establishing a registered social enterprise, where we identified the reasons, experiences and professional preparation when founding a registered enterprise. Within basic open coding, we defined the codes presented in Tables 1-3; we select: company director, long-term practice in the social sphere, transition from a sheltered workshop, experience in the given area before registration, social services + healthcare. We created the categories: experience before establishing the RSE, concept: experiences of RSE founders. From the perspective of problems and main challenges, the combination of excessive bureaucracy, insufficiently prompt response from regional centers, and financial assistance appeared most frequently among our participants. One of the approached participants even returned the status of registered social enterprise (and thus did not participate in our research), because investment assistance from the state was lengthy and unclear at the time. Gregorová and Švidroňová (2020) agree with this in their research, stating that many instruments are not fully developed, investment instruments for the development of social entrepreneurship are lacking, human capacities in the field of social entrepreneurship are lacking — people who would both understand social entrepreneurship and be able to support, promote and develop it, as well as people who would be able to work in social enterprises. From their perspective, comprehensive education in the field of social entrepreneurship is lacking in this area, and they perceive this sphere as being in its infancy. They add that public awareness in this area is insufficient. Likewise, there is insufficient understanding of what the social economy actually is, on the part of entrepreneurs as well as public administration entities — ministries, regional and local self-government. As they state, people still do not know what social entrepreneurship actually is. We encountered this fact also during the preparation of our research and discussions in our surroundings. Except for entrepreneurs engaged in social entrepreneurship, no one had deeper knowledge about this form of business.

Within selective coding, we created two areas for sorting codes. In the first area — experiences of founders with registered social enterprises — participants already had experience with entrepreneurship, but despite this still needed further education in the given area, which we evaluate in the third area of the first research question.

In the second area — reasons for establishing a registered enterprise — we defined the category of motivation, where participants answered: helping people with disabilities, assistance in the work process, increasing self-confidence, not being dependent on others, fulfilling elements of deinstitutionalization, utilizing financial resources from the state. We evaluate these reasons as aid to self-help for citizens with disabilities. We speak of elements of subsidiarity. The second research question was focused on the problems and perspectives of registered social enterprises in their business operations, where we investigated the limits and risks of registered social enterprises in the performance of their activities.

Within basic open coding, we defined the codes presented in Tables 11-13; we select: difficult recruitment of suitable personnel, bureaucracy, employing more disadvantaged citizens... We created the categories: limits, perspectives, proposals for practice, concept: Employment of people with disabilities in registered social enterprises.

Within selective coding, we created three areas according to codes. In the first area — limits in employing persons with disabilities — registered social enterprises established cooperation with: Ltd., NPO, companies fulfilling the mandatory quota of citizens with disabilities. In the second area — limits when starting a registered social enterprise — these involved cooperation with institutions, e.g., the Labour Office, selection of a suitable citizen with disabilities, the approval process, some actions bore elements of bureaucracy. In the third area, participants provided proposals for practice, where emphasis is placed on non-discrimination of both healthy employees and employees with disabilities. They expressed the opinion that during the pandemic situation they were able to continue working, as they had guaranteed financial contributions.

CONCLUSION

In our personal lives, we regularly discuss the topic of social entrepreneurship not only with entrepreneurs but also with people who are not currently in business. It is surprising to us that most people know nothing or very little about this form of social enterprise. The research we conducted fulfilled the goal we had set. Therefore, for the promotion of this powerful tool for employing people with disabilities, we recommend conducting research focused on active instruments of employment policy.

Author: Mgr. Jana Kamanová

LIST OF BIBLIOGRAPHIC REFERENCES

  1. ALLIANCE FOR THE SOCIAL ECONOMY IN SLOVAKIA, 2020. Problems of social entrepreneurship [online], Bratislava, 2020. [cit. 2021-01-11]. Available from: http://www.ases-slovensko.sk/2020/07/05/problemy-socialneho-podnikania-v-sr/
  2. DEFOURNY, Jacques, NYSSENS, Marthe, 2006. Social Enterprise: At the crossroads of market, public policies and civil society. New York: Routledge. ISBN 978–0415–37879–6.
  3. Collective of authors, 2020. Social entrepreneurship in Slovakia. Social economy [online], Bratislava: Implementation Agency of the Ministry of Labour, Social Affairs and Family of the SR, 13.10.2020 [cit. 2021-01-27]. Available from: https://socialnaekonomika.sk/socialne-podnikanie-na-slovensku/
  4. HENDL, Jan. 2005. Qualitative research — basic methods and applications. Prague: Portál, 2005. ISBN 978-80-262-0982-9.
  5. CHMELÁROVÁ, Michelle, 2020. Registration of a social enterprise — advantages and procedure. [online], Považská Bystrica, 2020. [cit. 2021-02-12]. Available from: https://www.podnikajte.sk/registracne-povinnosti/registracia-socialneho-podniku

Laws Act of the National Council of the Slovak Republic no. 513/1991 Coll.: Commercial Code Act of the National Council of the Slovak Republic no. 455/1991 Coll. on Trade Licensing Act of the National Council of the Slovak Republic no. 5/2004 Coll. on Employment Services as amended Act of the National Council of the Slovak Republic no. 112/2018 Coll. on the Social Economy and Social Enterprises

1 The state of emergency in Slovakia was adopted by a government resolution and came into effect on 1 October 2020 on the territory of the Slovak Republic. From 1 January 2021, a strict curfew continues to apply, the range of exceptions has been narrowed, and new restrictions have been added. The state of emergency was again extended in Slovakia by another 40 days from 8 February, and the COVID automat came into effect (Ministry of Interior of the SR, 2020, 2021).