Defining social entrepreneurship: an academic deciphering

Posted on February 20, 2011

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The purpose of this text is to provide anyone interested in social entrepreneurship as a concept academically, with a brief introduction to some of the essential aspects of the phenomenon, as well as the field of literature surrounding it. Be warned, there will be academic quotes and references, such that those intrigued, can study further. Let us get to it.

Social Entrepreneurship: A Multi-disciplinary Field

As the wording social entrepreneurship implies, it is a multi-disciplinary field which draws together what were previously two distinct research directions (the ‘social part’ and the ‘entrepreneurship part’). Due to its strong standing in practice, and due to increasing awareness of its potential contribution to the economy and society, recently the topic has received considerable attention in different streams of research. Following Mair and Marti (2006:43):

“the variegated nature and multiple expressions of social entrepreneurship make it a fascinating playground for different perspectives and literatures, and at the same time, suggest that is should be studied through diverse theoretical lenses.”

Characteristic however, for an emerging field of literature, it is still largely phenomenon-driven, and appears to lack a comprehensive theoretical framework for the study of the phenomenon (e.g. Mair & Marti, 2006; Sharir & Lerner, 2006). Social entrepreneurship research has therefore eclectically applied highly diverse research designs and methods, drawing on insights and theoretical frameworks from many different disciplines – such as organization theory, management literature, entrepreneurship literature, social movement theory, development studies, corporate social responsibility literature, social innovation literature etc. (e.g. Dees et al., 1998; Mair & Marti, 2006; Sharir & Lerner, 2006). The concept of social entrepreneurship has taken on a variety of meanings and boundaries to other research domains seems vague and undefined (Alvord et al., 2004; Dees et al., 1998). Hence, there is yet to be found consensus around a specific definition or academic understanding of social entrepreneurship.

Organizational Forms for Social Entrepreneurship

While the element of social problem-solving as the primary mission for social entrepreneurial organizations is widely endorsed within the academic field, there is little consensus regarding the organizational form of these ventures. Social entrepreneurship is broadly characterized by a tendency towards combining efforts across private, public and civil society sectors in search for solutions to present to societal problems (Dees, et al., 1998; Johnson, 2000). Within this broad understanding lies multiple potential organizational forms, a topic widely debated in the discourse on social entrepreneurship.

Complex societal changes and increasing globalization have induced changes within the non-profit, private and public sectors alike (Reis, 1999). Part of the explanation to the increasing sector-overlaps and hybrid organizational constructs lies in the global changes over the past decades. These changes have expedited the emergence of social entrepreneurship in response to a growing awareness of the limitedness of a fragmented, single-sector approach to societal problem-solving (Johnson, 2000). Johnson (2000:1) argues that:

“with its emphasis on problem-solving and social innovation, socially entrepreneurial activities blur the traditional boundaries between the public, private and non-profit sector, and emphasize hybrid models of for-profit and non-profit activities.”

This understanding of an organizational form seems all-embracing and inclusive, as opposed to defining and exclusive. One group of scholars defines social entrepreneurship as bringing business expertise and market-based skills to the non-profit sector in order to help this sector become more efficient in providing and delivering these services (Johnson, 2000:6). This understanding includes non-profits that conduct small for-profit business initiatives and reinvest their income back into their social programs, as well as non-profits that apply business management skills or techniques to increase the efficiency of their operations. It remains uncertain where the boundary exists between this definition and the ‘normal’ non-profit organizations, who at times, also undertake small profit-gathering initiatives.

Other researchers adopt a more all- inclusive definition, arguing that social entrepreneurship can occur within the public, private or non-profit sectors, and is in essence a hybrid model involving both for-profit and non-profit activities, as well as cross-sectoral collaboration (Johnson, 2000:7). Inherent in this definition is a potential disregard of the diverging differences related to the organizational form, which must be assumed to influence the process of social entrepreneurship. The later definition includes the concept of social enterprises, which have emerged as a businesslike contrast to the traditional non-profit organizations (Mair & Marti, 2006).

They are generally understood as organizations employing market-based strategies to achieve a social purpose, which includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social. Clearly, the distinctions between the different terms and understandings are overlapping and indistinguishable. Ashoka vaguely claims to support enterprise-based solutions to social problems, which they also call citizen-sector initiatives. Although the statement is open to interpretation, it seems that they generally support non-profit initiatives utilizing to varying degrees, ‘business- based-approaches’ to societal problems. In some cases these include creating small profit-generating activities in order to become increasingly self-sustainable (Ashoka.org). It seems difficult to distinguish the degree to which an organization is employing ‘enterprise-based’ solutions as opposed to general non-profit activities. This reveals an unresolved question of the definitions present within the academic field of social entrepreneurship.

Essential Characteristics of Social Entrepreneurship

Social entrepreneurship can be defined as; “a process that creates innovative solutions to immediate social problems and mobilizes the ideas, capacities, resources, and social arrangements required for sustainable social transformation” (Alvord et al., 2004:262). Let us look closer at what this means by extracting the key components of this definition and examining them individually.

1 Social entrepreneurship as a process

Within the academic field three prevalent research areas are: social entrepreneurship, the social entrepreneur, and social enterprise (Mair & Marti, 2006). Definitions of social entrepreneurship often regard a process or behavior; definitions of social entrepreneurs tend to focus on the founder of the social venture; and definitions of social enterprises mostly deal with the tangible outcomes of social entrepreneurship (Mair & Marti, 2006). By referring to social entrepreneurship as ‘a process,’ the definition above delimits itself from two latter research areas prevalent within the literature, emphasizing social entrepreneurial activities as catalysts in social transformation.

2 The innovativeness of the organizational idea

Secondly, the notion of creating ‘innovative solutions to immediate social problems’ implies that ‘fitting under’ the label of being a social entrepreneurial organization requires that the organization break with existing institutions. This can be achieved through an innovative business model, through serving new markets (i.e. addressing new social issues), or a combination of both. In line with traditional and institutional entrepreneurship literature the understanding of social entrepreneurship emphasizes the importance of the novelty of the idea. Most definitions of social entrepreneurship emphasize the innovative character of the venture (Alvord, et al., 2004). The accentuation of the innovative aspects of a social entrepreneurial organization is essential, since it allows for a more inclusive definition; ‘weeding out’ social initiatives which are merely replication or expansion of existing practices of an organization within a specific context. As previously mentioned, the discourse on social entrepreneurship encompasses a broad range of activities and initiatives with a social character (e.g. Dees, et al., 1998; Johnson, 2000). Holding a firm emphasis on the element of innovation of the organizational idea when defining and discussing social entrepreneurship might help strengthen the term by making it more selective. However, literature does not satisfyingly provide detailed specifications as to when an organizational idea is new or innovative or when it breaks with existing institutions.

3 The social mission

Thirdly, the definition above includes the focus on creating solutions ‘to immediate social problems’ along with an ambition of catalyzing ‘social transformation,’ which roots definitions of social entrepreneurship (e.g. Dees, et al., 1998; Mair & Marti, 2006; Sharir & Lerner, 2006). Social entrepreneurs are simply put, entrepreneurs with a social mission. Several scholars (e.g. Dees et al., 1998; Martin & Osberg, 2007) emphasize that social entrepreneurship should be understood on the basis of the existing strong tradition of entrepreneurship theory and research. While there are many areas of overlap regarding the general notion of an entrepreneur, the distinctive challenges faced by the social entrepreneurs while maintaining the social mission at the core of the venture set them apart (Dees, et al., 1998). The social mission is explicit and pivotal in social entrepreneurship. It is about applying and mastering entrepreneurial skills in order to solve a social problem. Clearly, this affects the way these types of entrepreneurs perceive and evaluate opportunities, and they are driven primarily towards social transformation, not wealth creation. If wealth is included, it is mainly as a means to an end in creating social change (Dees, et al., 1998). In brief, social entrepreneurial activities can be understood as initiatives where the main focus is on creating social value and where economic value creating, if present, is seen as a necessary means to ensure financial viability (Mair & Marti, 2006).

4 Resource mobilization and challenges

Finally, the last part of the definition states that social entrepreneurship ‘mobilizes the ideas, capacities, resources, and social arrangements required for sustainable social transformation.’ This implies that organizational activities in terms of resource mobilization are prerequisite given the ambition of fostering social transformation. “Like business entrepreneurs, social entrepreneurs establish new organizations, develop and implement innovative programs, and organize and distribute new services” (Sharir & Lerner, 2006:7). They face multiple challenges of identifying opportunities and needs, planning, gaining support information and resources, promoting their idea and creating demand, and constructing organizational frameworks (Sharir & Lerner, 2006). The mobilization of resources is necessary for their success and the financial situation of an organization is an indicator of its ability to survive and grow in the future (Dees, 2007). Creating wide-scale social transformation requires organizational growth and/or geographical expansion, which again requires access to new human and financial resources (Alvord, et al., 2004; Dees, 2007). Both can be problematic. These organizations often need “hybrid skills, blending business, political, and social savvy” which makes it challenging to find a ‘fitting match’ (Dees, 2007:11). Sharir and Lerner (2006:7) state, that “even though they are differently motivated, the challenges and problems social entrepreneurs face during the initiation, establishment and institutionalization of their ventures resemble those faced by business entrepreneurs.” Their statement seems to contrast the view of Dees et al. (1998) presented in the section above, arguing that due to their social mission social entrepreneurs face distinctive challenges, differentiating them from business entrepreneurs.

Yet to come

Social entrepreneurship represents a turn away from a traditional charity approach to poverty reduction, and offers an approach based on a strategic use of market forces to promote social improvements. What is new, Dees argues (Dees, 2007:2), is “the openness and enthusiasm with which entrepreneurial, market-oriented approaches are being embraced as an integral element in creating lasting social change.” Following Dees (2007) one potential drawback of social entrepreneurship, is the existence of many fragmented efforts with little learning and sharing is established between them. Consequently, the social innovations might not diffuse to reach the vast amount of people who could benefit from them. Dees (2007) emphasizes that these societal solutions can and should spread to new locations, naming micro-credit as a successful example. Following Dees, (2007:12) the academic field needs a better understanding of the conditions under which social organizations can achieve significant, lasting social change and a better comprehension of the institutional structures and supports that enable social these organizations to thrive. Deepening our knowledge in those ways, might lead to new or sharper approaches to social change.

References

Alvord, S. H., Brown, L. D., & Letts, C. W. 2004. Social Entrepreneurship and Societal Transformation: An Exploratory Study. Journal of Applied Behavioral Science, 40(3): 260-282.

Dees, G. J., Haas, M. & Haas, P. 1998. The Meaning of “Social Entrepreneurship”. Working Paper, The Kauffman Center for Entrepreneurial Leadership.

Dees, G. J. 2007. Philanthropy and Enterprise: Harnessing the Power of Business and Entrepreneurship for Social Change.

Johnson, S. 2000. Literature Review on Social Entrepreneurship. Canadian Centre for Social Entrepreneurship, 1-17.

Mair, J., & Marti, I. 2006. Social entrepreneurship research: a source of explanation, prediction, and delight. Journal of World Business, 41(1): 36-44.

Martin, R. L., & Osberg, S. 2007. Social Entrepreneurship: The Case for Definition. Stanford Social Innovation Review.

Reis, T. 1999. Unleashing the New Resources and Entrepreneurship for the Common Good: a Scan, Synthesis and Scenario for Action. Battle Creek, MI: W.K. Kellogg Foundation.

Sharir, M., & Lerner, M. 2006. Gauging the success of social ventures initiated by individual social entrepreneurs. Journal of World Business, 41: 6-20.

Ashoka @ www.ashoka.org

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