Abstract
This chapter seeks to understand what motivates an investment in a social entrepreneurial initiative (SEI), in order to easy the fit between investors goals and the SEI proposals. It provides a benchmark for investors and a guide for entrepreneurs through the identification of the most valued investment criteria. Data were collected online between March and May 2019 from Schawb foundation, Skoll foundation, Ashoka and Yunus Social Business. It was analyzed by content analysis. The results obtained corroborate previous literature review as well as highlighted different perspectives, suggesting further research for a better understanding where theory can improve practice. This study contributes to a theoretical consolidation of social entrepreneurship research field by means of the identification of common points among the practice of global organizations and the theory. Exploring social entrepreneurship is important because it is a new way of doing business and delivering social value and maybe the better bet to achieving a more sustainable society.
TopIntroduction
Social entrepreneurs seek new ways to combine the concepts: company and society (Seelos & Mair, 2005). Although these structural concepts are present in a diversity of organizations, it is in social entrepreneurship that they related to the search for sustainable solutions to recurrent social problems (Mair & Marti, 2009; Stephan, Uhlaner, & Stride, 2015). It is a new way of doing business and thus a new way of generating and delivering value to society. Its very existence can be seen as an innovation (Seelos & Mair, 2005; Yunus, 2010).
Traditional companies treat their businesses as investments that should generate greater returns. Even the most passionate conventional entrepreneurs pursue, as their main objective, the profit. However, social entrepreneurs take as priority their social mission (Hossain, Saleh & Drennan, 2017; Ormiston & Richard, 2011; Austin, Stevenson & Wei-Skillern, 2006). Where the market sees consumers, the social entrepreneur sees people who need help (Yunus, 2010). This type of entrepreneurship gives us greater hope than just the correction of a market inefficiencies. It encourages us to believe that business can promote the development of more fair and equitable societies (Bosma, Schøtt, Terjesen & Kew 2016, Baker, 2013, Griffiths, Gundry & Kickul, 2013, Seelos & Mair, 2005). By recognizing the importance of social business models in the social value generation one can improve their conditions to happen and increase its understanding about them (Borzaga, Depedri & Galera, 2012).
There is much to be done to understand social entrepreneurship. Although it is a very popular research field, (Rawhouser, Cummings & Newbert, 2019; Lepoutre et al, 2013, Lee, Battilana & Wang, 2014; Hossain et al, 2017) it is still a fragmented theory, lacking consensus on several issues (Hossain et al, 2017, Lepoutre et al, 2013, Lee et al, 2014). Consequently, it is still very difficult to define what is and what involves or covers social entrepreneurship. Some definitions are so broad that any firm would fit, others may be so restrictive that became hard to frame (Pestoff & Hulgärd, 2016, Austin et al, 2006). The literature is mainly composed by theoretical articles or by single case studies, idiosyncratic, ignoring the complexity of the interrelationships of social ecosystems (Hoogendoorn, 2016, Lee et al, 2014; Lepoutre et al, 2013; Dacin et al, 2010).
Accordingly, Choi & Majumdar (2014), state that social entrepreneurship is an essentially contested concept, thus almost impossible to define. This kind of concept has basics characteristics that may or may not manifest in the same way at the same time. In addition, it assumes different meanings for different people. Love, freedom and art are examples of essentially contested concept.
Van Der Have and Rubalcaba (2016) argue that the conceptual ambiguity and the theoretical fragmentation of social entrepreneurship can be a strength by connecting different approaches and disciplines, promoting academic diversity. The potential for change and innovation is immense as social entrepreneurship extends the boundaries between public and private, creating synergies beyond the capacity of non-profit organizations (Tate & Bals, 2018; Zhara, Gedajlovic, Neubaum & Shulman, 2009; Seelos & Mair, 2005).
Key Terms in this Chapter
Scalability: It means maximizing and expanding the effect of the social initiative. Scalability refers to how ease and how fast a system can be expanded.
Sustainability: Sustainability means harmony between environmental, social and economic aspects. The economic goals are means to achieve social purpose. It can adopt the perspective of adequate resources to balance the business model or the prospect of social effect perpetuation. It is also observed that in the course of the operation no socio-environmental damage are generated, since it would not make sense to treat one problem by creating others.
Social Economy: A set of formally constituted private companies, autonomous decision-making and free membership-based, created to serve the needs of their associates across the market, providing goods and services, including insurance and financing. It includes not for profit organizations that provide social services whose surpluses cannot be appropriated by the economic agents who create, control or finance them.
Social Innovation: Social innovation consists of a breakdown of norms necessary for the social business model to be maintained in a capitalist context. It allows the focus on generating social value above personal wealth generation and profit, by combining scarce resources to generate useful, affordable and desirable products and services. The business model itself is an innovation when the economic result is not an end, but a means to increase the social value generation.
Social Entrepreneurship: Social entrepreneurship is an essentially contested and multidimensional concept that takes the perspective of entrepreneurship as a process. It is about combining and using resources in an innovative way to pursue cost-effective opportunities. Its main intention is to overcome social problems. Its business model must be stable and sustainable, with the explicit goal of generating social value of collective interest. It must make full or partial use of factors of production (wage labor, capital and resources), in addition to including participatory and inclusive governance.
Social Value: Social value is an essentially contested concept, characterized by the multiplicity and complexity of its elements. It is the stable and continuous result of social entrepreneurial initiative (SEI) operation. It is what the organization produces and delivers to its customers or beneficiaries.
Social Impact: By social impact is meant the result of the process of assessing the implications of a given initiative over the time. It’s the social entrepreneurial effect on society.