Social Enterprise has been introduced as a solution for the incapability of government to provide products and services that reduces poverty (Wongtschowski, 2015). It is also known as enterprise with mission, as social enterprise is carrying social mission and economic goals in their philosophy. In the process of achieving their goals, social enterprise continuously doing and creating activities to pursue their goals. While doing this activity, social enterprise also could gain capabilities that will be a supportive path to achieve their mission. This study was conducted with grounded-theory approach, using capabilities theory that widely used in the social enterprise field. The data were collected from 30 interviewees with social enterprise in Indonesia, which mostly are doing knowledge transfer as their social enterprise activity. The result of this research is the theoretical framework of social enterprise capabilities through knowledge transfer, which are divided into three dimensions: individual capabilities, enterprise capabilities, and external capabilities. These dimensions provide new insight in the capabilities theory, as the previous research mostly measuring capabilities on social value creation and human development only.

ABSTRACT 2
2. LITERATURE REVIEW 6
2.1 The Nature of Social Enterprise 6
2.2 Values in Social enterprise 7
2.3 The Origin of Capabilities Approach 7
2.4. Capabilities Theory on Social Enterprise 8
2.5 Knowledge Transfer as Social Enterprise Activity 9
3. Research Methodology 10
3.1 Research Objectives 10
3.2 Research Design 10
3.2.1 Research methods 10
3.2.2 Sample 10
3.2.3 Data Collection 11
3.2.4 Data Analysis 12
3.3 Findings 12
4. Discussions 13
4.1 Individual capabilities 14
4.1.1 Self-enhancement 14
4.1.2. Self-Satisfaction 15
4.1.3 Self-Achievements 17
4.2. Enterprise Capabilities 18
4.2.1. Collaboration Opportunity 18
4.2.2 Enterprise Value Creation 19
4.2.3 Government Support 20
4.3 External Capabilities 21
4.3.1 Environment & Sustainability 21
4.3.2 Improving Society 22
4. CONCLUSION 23
5.1 Framework for Social Enterprise Capabilities 23
5.4 Limitations and Future research 25
REFERENCES 26
Appendix 1 30
APPENDIX 2 31

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