Social Entrepreneurship

Managing the Creation of Social Value

Constant Beugré

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781136655937
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Social entrepreneurship differs from traditional forms of entrepreneurship in that the primary goal of the social venture is to address social problems and needs that are as yet unmet. The driving force of such ventures is social value creation. This new textbook aims to provide a comprehensive, cutting edge resource for students, introducing them to the unique concerns and challenges that face social ventures through a comparison with the principles of traditional entrepreneurship. The book consists of fourteen chapters covering all aspects of venture creation and management—from writing a business plan, to financing, people management, marketing, and social impact measurement.

Social Entrepreneurship uses real-life examples and sources to expose students to contemporary developments in the field, encouraging them to think critically about the issues faced by social ventures across the globe, and experiential exercises and assignments are included to provide students with hands-on experience in creating and managing their own social ventures. Also containing review and application questions, illustrative cases, definitions of key terms, and a comprehensive companion website, Social Entrepreneurship is the essential guide to this rapidly emerging field.

Visit the companion website at www.routledge.com/cw/beugre to find:

For Instructors

• PowerPoint slides
• Multiple-choice questions

For Students

• Extra illustrative cases
• Web links
• Links to video

Chapter 1
The Nature of Social Entrepreneurship

Learning Objectives

1 Define social entrepreneurship.

2 Differentiate social entrepreneurship from commercial entrepreneurship.

3 Explore the characteristics of social ventures.

4 Identify the multidimensional nature of social entrepreneurship.

5 Describe social entrepreneurship as a global phenomenon.

This first chapter defines social entrepreneurship, delineates it as a field of study and presents a typology of social ventures. The chapter also describes the similarities and differences between social and commercial entrepreneurship. Finally, the chapter analyzes social entrepreneurship as a global phenomenon. The chapter is intended to help students develop a deep understanding of social entrepreneurship and social ventures.

1 The Nature of Social Entrepreneurship

Social entrepreneurship can be better understood if one has a clear understanding of commercial entrepreneurship. Therefore, it is important to provide a definition of commercial entrepreneurship before discussing social entrepreneurship. Doing so is important because several entrepreneurship scholars have contended that any definition of the term “social entrepreneurship” must start with the word “entrepreneurship.” The word “social” simply modifies entrepreneurship.¹ In this book, the terms “social venture” and “social enterprise” are used interchangeably, although social enterprise may have a slightly different connotation across countries. For example, in the United States, the concept of social enterprise includes organizations that fall within a continuum from profit-oriented businesses engaged in socially beneficial activities (corporate philanthropies or corporate social responsibility) to dual-purpose businesses that mediate profit goals with social objectives (hybrids) to nonprofit organizations engaged in mission-supporting activity (social-purpose organizations). In Western Europe, the concept of social enterprise is roughly drawn along the same continuum but with variations between two streams of thought—a focus on the social impact of productive activities, and the inclusion of social cooperatives in the taxonomy of social ventures.² The main factor, however, is that the social venture addresses a social mission.³

1.1 Defining and Understanding Entrepreneurship

The concept of entrepreneurship is not new. It has been around for more than 200 years. The word itself derives from the French word entreprendre, which literally means “to undertake.” One of the early French writers on entrepreneurship was Jean-Baptiste Say, who noted that the entrepreneur shifts economic resources out of an area of lower productivity and into an area of higher productivity and greater yield.⁴ Translated into the business language of today, Say’s definition implies that entrepreneurs create value. Joseph Schumpeter continued on the path set by Say and defined entrepreneurs as innovators who drive the “creative–destruction” process and their function is to reform or revolutionize the pattern of production.⁵

Today, entrepreneurship is commonly defined as the relentless pursuit of opportunity without regard to resources currently controlled.⁶ In this regard, entrepreneurship is concerned with the discovery and exploitation of profitable opportunities. Hence, entrepreneurial opportunities are those situations in which new goods, services, raw materials, and organizing methods can be introduced and sold at greater than their cost of production.⁷ This implies that entrepreneurship is a process rather than a static state of affairs or an occupation. Other scholars have construed entrepreneurship as a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced.⁸ Thus, entrepreneurship is not limited to the creation of new businesses.

It is a mindset and a type of behavior that can manifest itself in several areas, commercial or social. This is in line with the early works of Jean-Baptiste Say and Joseph Schumpeter, who focused more on the entrepreneur as an innovator and an agent of change rather than a person who necessarily starts a new business.⁹ Hence, entrepreneurship can occur any time one or several individuals engage in an activity that adds value to what already exists. This way of thinking has led some entrepreneurship scholars to consider social entrepreneurship as a subfield of entrepreneurship and to advocate that no specific theory tailored to social entrepreneurship is needed; rather, existing theories of entrepreneurship could inform the understanding and practice of social entrepreneurship.¹⁰

1.2 Defining Social Entrepreneurship

Social entrepreneurship is still emerging as an area of academic inquiry, so much so that its theoretical underpinnings have not been adequately explored, and the need for contributions to theory and practice is pressing.¹¹ This probably explains why social entrepreneurship scholars have not settled on a unified definition. Some scholars even argue that social entrepreneurship is still a contested concept; as a consequence, a universal definition of the concept that would be accepted among all contributors to the debate is hardly possible.¹² Is social entrepreneurship an application of commercial entrepreneurship to the social sector or is it a field in itself? There are debates about whether social entrepreneurship is really different from entrepreneurship as we know it. There are perhaps as many definitions of social entrepreneurship as there are authors who attempt to define it. This has led some scholars to argue that social entrepreneurship is poorly defined and has become an immense tent into which all manners of socially beneficial activities fit.¹³ What sets social entrepreneurship apart is its focus on social needs. However, some social entrepreneurship scholars argue that since the concepts of novelty and profitability are recurrent in the definition of entrepreneurship, any definition of social entrepreneurship must include both terms.¹⁴

The economic dimension in social entrepreneurship is a means to an end—which is the social value. Regardless of the country and governance mechanisms, the definition of social entrepreneurship should include the following four elements:

• address a particular social need;

• be centered on the creation of social value;

• emphasize social impact; and

• acknowledge that the means to attain the social mission can include purely philanthropic, hybrid, or market-orientated mechanisms.

Despite the lack of a clear definition, most authors tend to agree that the main driver of social entrepreneurship is the social proble...