Proceedings of the 49th International Academic Conference, Dubrovnik

THE FINANCIAL AND MANAGERIAL PROBLEMS OF SOCIAL ENTERPRISES AND THEIR OPTIONAL SOLUTIONS

SÁNDOR BOZSIK, JUDIT SZEMÁN, ZOLTÁN MUSINSZKI

Abstract:

The main problems in the social cooperative management are caused by the quality of available human resource and the marketability of products and services. The root of the problems can be found in the quality of labour force and the improper marketing. External specialists are required mostly for administrative duties (in field of book-keeping, taxation and application-writing). The assessment for improving the competitiveness has got less importance. Our questionnaire targeted the economic and financial problems of social enterprises. Based on the result of this survey we created the financing pecking order model for social cooperatives in Hungary. We adapted the traditional pecking order theory invented by Myers (1984) to the financing mix of Hungarian social enterprises. We found that public funds play a dominant role in the external financing of social enterprises (focusing on social cooperatives). State subsidies are most important, but the financial and managerial contribution of local governments is also essential for successful operation. To improve the marketing of products we recommend social cooperatives to use a managerial income statement to determine the most profitable products and markets.

Keywords: social co-operatives, social enterprises, pecking order theory, controlling, financial management

DOI: 10.20472/IAC.2019.049.008

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