Social Entrepreneurship PDF

Chapter 12 - Social Entrepreneurship In this chapter we look at entrepreneurship in another context, namely that of social entrepreneurship. The goal of entrepreneurship in the private commercial then go sector is usually to create economic value for its owners to make profi...

Chapter 12 - Social Entrepreneurship In this chapter we look at entrepreneurship in another context, namely that of social entrepreneurship. The goal of entrepreneurship in the private commercial then go sector is usually to create economic value for its owners to make profits. In social entrepreneurship the primary goal is typically to create better conditions for people both locally and globally, while profit is merely a means to achieve social goals. In other words, profit is not, typically, the guiding goal, but is a 'necessary condition' for realizing a sustainable business. It is specifically the balance between social and economic goals that we discuss in detail in this chapter since social entrepreneurship can easily be characterized by blended and multiple goals. Social entrepreneurship can be created in many different sectors (non-profit, for-profit and public sector), through activities in the areas of culture and leisure, through relief efforts, aid and development projects aimed at people in economically developing nations or by creating new commercial businesses that create better conditions for vulnerable groups. Entrepreneurship in practice In this chapter the case illustrates how the distinction between 'for profit' and 'social' entrepreneurship is not an easy one to cope with. The following parable refers to a community of indigenous entrepreneurship in the US. - The Red Entrepreneur was making what the White Business Advisor called 'good money', but the Angry Group said it was very bad… - The business, called 'Redman Teepees', stood on a well-situated block of Reservation land leased from the Tribal Government, in an area zoned for commercial activity. Here, after some curves and go-slow warnings, the highway straightened again. The well-signed gas station, convenience stores, small museum and the casino were all designed to capture the attention of passing motorists, induce them to stop and spend a bit of time and money. - The best of their speakers called the Red Entrepreneur a 'thief of our culture; a man who degrades our heritage by trivializing the collective home of our ancestors for the cheap amusement of those who stole our land and our pride. He takes what belongs to all, the knowledge, the symbolism, the majesty of the teepee and Speaker Imitations of it, keeping the money for himself. - …Elder man speaking “Offer to your customers the chance to have their life story painted on their teepees. They will like It. They will pay more. You do sell too cheaply and you do not share enough. What extra you make from this, put it toward strengthening the language programme that teaches our children the music of the ages. You do not speak our language and it is a shame that you do not respect this man, our Brother, who does and speaks it majestically” - …The White Business Advisor was very wrong. This was the birth - some would say re-birth of a bigger, more profitable and growing business. - …No-one who came into the teepee could resist reading the beautiful words inscribed on the sculpted buffalo-hide parchment which had pride of place as soon as they stepped inside.  - …Soon, from all over the world the volume of orders created the need for more artists, bigger premises, better training and all the things well known to go along with growing businesses. - …Once, this would have bothered the White Business Advisor but now, it does not. The Red Entrepreneur is very busy. The children's language school is flourishing. The Good Speaker has become a bestselling author. The Angry Group has changed its name to 'The Tribal Council for Cultural Dissemination through Native Enterprise'. - The Elder smiled. But the smile soon faded to a look of deep concern because this good story was submerged in too much tragedy. More good stories are needed urgently. Still, there had been a little learning. And that was very good. Theories of Entrepreneurship Business or a Better World? - That is the question! As mentioned, the main features of social entrepreneurship are similar to entrepreneurship that takes place in a commercial context. The main difference is that the driving force behind social entrepreneurship can often be a desire to ensure social justice, while entrepreneurship in a commercial context is directed primarily at profit (Ebrahim et al 2014). The first perspective on social entrepreneurship focuses on financial objectives as the ultimate goal and social objectives as a means to achieving financial goals + Since the ultimate goal is to create an economically sustainable and profitable organization this kind of social entrepreneurship exists primarily in a commercial context, regardless of the social benefits produced in these organizations. Perspective number two is primarily focused on social elements. Here, the social objectives are the ultimate goal and any commercial exchanges take place only as a means of achieving social goals. Introduction to Social Entrepreneurship The international prevalence of social entrepreneurship The GEM 2016 study is the largest comparative study of social entrepreneurship in the world. The report confirms that social entrepreneurship is taking root in both developing and developed nations, with more entrepreneurs focusing on doing good, rather than solely making a profit. However, there is a wide variation in rates across economies. You should note that social entrepreneurship in the GEM study is quite broadly defined, as it is about people starting any initiative that has a social, environmental or local goal. A similarly narrow definition based solely on the private commercial market reduces the level of social entrepreneurship to an average of 1.1 per cent across 31 GEM economies. The narrow definition only includes: activities, organizations or initiatives that 1) prioritize social and environmental value over economic value, and 2) operate in the private commercial market by producing goods and services. The two different definitions of social entrepreneurship show very clearly that many different forms of social entrepreneurship exist and that these manifest themselves in different ways - from 'pure non-profit model to organizations that marry philanthropy with business models'. Specifically, it is possible to distinguish between four categories: 1) Pure social entrepreneurial activity (where the individual launches or runs a social organization that has no commercial activities); 2) Pure commercial entrepreneurial activity (where the individual launches or runs a commercial organization that has no  particular social goals); 3) Overlapping social and commercial entrepreneurial activity (where the individual launches or runs one and the same organization that is both commercial and social in nature); and 4) Simultaneous social and commercial entrepreneurial activity (where the individual launches or runs both a social and commercial organization which are different entities). IN´s World Goals - call for social entrepreneurs The World Goals consist of 17 concrete goals and 169 sub-goals, which commit all 19 UN member states to eradicate poverty and hunger in the world, reduce inequality, ensure good education and better health for all, decent jobs and more sustainable economic growth. The new agenda also recognises that the 17 SDG goals of social, economic and environmental development, peace, security and international cooperation are closely linked and interrelated, and that sustainable development requires an integrated effort. Whilst most criticisms raised concern some of the 17 SDG goals (see, for example, Battersby 2017), some critical voices against the development agenda in general are now beginning to be heard. For example, whether the development agenda could actually be the transformative force that breaks with the conventional way of acting, in and between countries on the planet is being questioned. Sustainability, circular economy and the triple bottom line As a natural consequence of the increasing awareness of the UN's global goals, there is also a growing focus on sustainability, circular economy and the triple bottom line across the world and in the entrepreneurship literature (Sarkar & Pansera 2017). ”The” report defines sustainability as '... development where the fulfillment of the needs of the present generations is not at the expense of the opportunities of future generations to meet their needs'. Because sustainability brings new business opportunities and competitive advantages to businesses, sustainability is of interest to entrepreneurs. This is done through green business models in which entrepreneurs can, for example, build on improved value chain collaborations with suppliers or customers in an effort to avoid waste and increase resource efficiency within the value chain. In short, circular economics is the antithesis of linear economics. In linear economics, a company produces a product, the product is sold to a consumer who, after consumption, throws it out. The circular economy is changing how we manufacture our products and how we act as consumers. The circular economy is about maintaining the highest possible value for as long as possible of the materials and products in the economic cycle. In other words: Circular Economy is an attempt to eradicate end-of-life products, materials... Another term you need to know is the triple bottom line. Here the focus is on economic sustainability. A twofold consideration here is that while it must pay for companies to produce and sell products and services, citizens must, at the same time, be able to live on the income they earn. Another focus is social sustainability; focusing on whether everyone has a fair share of, and access to relevant resources in the community. The third focus is on environmental sustainability. Social entrepreneurship as a continuum  The continuum contains two extreme perspectives of social entrepreneurship and a mid-placed perspective. One defines social entrepreneurship as activities that are generally governed by social goals and the better world perspective. At the opposite end is a perspective that understands social entrepreneurship as an activity in which social goals are present to some extent, but where business and therefore financial goals are the primary concern - the business perspective. In the center is a third perspective of social entrepreneurship, which combines social and financial objectives in a more balanced relationship, although the social purpose is generally the primary objective - the hybrid of a better world and business perspective. Other essential discussions to keep in mind The emergence tradition and the opportunity tradition According to the emergence tradition, the formation behavior can be described as entrepreneurial if it relates to the formation of a new organization, regardless of whether there is anything innovative involved. In contrast, the opportunity tradition considers behavior to be entrepreneurial if it involves creation or discovery and exploitation of an innovative and ground-breaking opportunity, whether this results in a new organization or not. As with the emergence tradition, Peredo and McLean define an activity as entrepreneurial if it is realized with social objectives in mind and results in the formation of a new organization. The truly Schumpeterian social entrepreneurs will significantly reform or revolutionize their industries' (Dees 2001: 4). In order for a new activity to be described as social entrepreneurship, that activity should be innovative and imaginative; it does not matter whether the activity involves creation of a new organization. The risk of mission drift Also relevant to this discussion are the challenges that hybrid organizations may face when trying to blend or balance between the better world and business perspectives. This is especially relevant for hybrids that are at the crossroads of social and economic goals. Although social enterprises promise to create both social and commercial value, along the way they risk losing their focus on social missions, because efforts to generate revenue take over a risk called 'mission drift. At worst, the legitimacy of citizens, politicians and other users or customers (such as NGOs, donor organizations or charities) can disappear. Thus, combined with these two challenges, social enterprises face a unique challenge; namely, how they handle the trade-off between their social and commercial activities to generate enough revenue, but without losing sight of their legitimate social purpose. Three types of social entrepreneurs with different impacts There are differences between them in how they 1) discover opportunities (i.e. social needs), 2) see their social missions, 3) acquire resources, and 4) address social disorders. These differences allow us to identify three different types of social entrepreneurs: Social Bricoleur, Social Constructionist, and Social Engineer. Social Bricoleurs typically focus on discovering and meeting small local needs. These are opportunities that arise within the sphere of their own knowledge, and which are often fulfilled by improvising solutions.  Social Constructionists typically exploit opportunities and market failures by filling in gaps for underserved users in the market. They do this by introducing reforms and innovations into the broader social system. These social entrepreneurs not only want to serve their clientele, but also try to introduce social change and reform. Moreover, the extent of the social needs that must be addressed often require larger and relatively complex organizations with significant funding and staffing needs. Finally, there are Social Engineers who focus on systemic problems within existing social structures and address them by introducing revolutionary changes. As a result, the goal is often to radically change existing systems and replace them with newer and more suitable ones. Thus, social engineers differ significantly from the other two types of social entrepreneurs. Social Entrepreneurship: Business or Better world? A theoretical interpretation The Parable of the Teepee can be taught in many contexts and interpreted in many ways. This book talks about 'the business perspective' versus 'the better world perspective', but how can this case be interpreted from respectively a business perspective and a better world perspective? The Business Perspective The teepee case fits well with the business perspective. Whatever his passion for his native heritage, The Red Entrepreneur has a world view of business that is more connected to the White Advisor and mainstream attitudes to commerce than the Good Speaker, who genuinely regards the earning of individual profits from community property - the heritage, intellectual property of the tribe's intimate connection to the teepee as a cultural artifact as anathema. The Angry Group's reaction to the new teepee venture can be seen as a collective protest against its for-profit and individualistic character. The teepee case does not specify exactly what kind of business we are talking about after the reform and, for some scholars and practitioners, this is decisive when evaluating the 'social character of any venture: how is it organized, was its mission statement changed, how is power distributed, how are profits allocated etc.? The Better World Perspective The reformed teepee venture especially can be seen as an example of social entrepreneurship. The reformed business definitely embraces a wider range of stakeholders than the individualistic, for-profit true as it started out. It involves more community people, enhances the knowledge level in the community, revitalizes traditions, creates new relationships with outsiders and shares some of the profits with community members not actually involved in running the business. For the author of this case, Kevin Hindle, the distinction between 'social' and 'individual' entrepreneurship is not seen as important. For Hindle, the 'why' question - the motives and reasons for an entrepreneur starting a venture (for social good or personal profit) - is less interesting than the 'what, how and where' questions. '  What' and 'how' describe the process (Hindle 2010b). 'Where' involves the vital importance of community factors to the entrepreneurial process (Hindle 2010a).