The 2014 third Conference on Modern Management Sciences (CMMS 2014) Social entrepreneurship Elham Rajabi (Corresponding Author) 1 Fereydoon Azma 2 Bayram Bibi Habiblee 3 Abstract- Social entrepreneurship is commonly seen as a hybrid that combines elements of commercial entrepreneurship and social sector organizations. Social entrepreneurship, as a practice and the field for scholarly investigation, provides a unique opportunity to challenge, question and rethink concepts and assumptions from different fields of management and business research. While the term social entrepreneur may be relatively new, the phenomenon is not. The phenomenon of social entrepreneurship challenges our assumptions about human behavior and economic action. It also challenges our beliefs about the role of entrepreneurship in society. This paper aims at contributing to the field of entrepreneurship by the exploring the phenomenon of social entrepreneurship. Keywords: Social entrepreneurship; Social entrepreneur; Entrepreneurship Introduction First used in the literature on social change in the 1960s and 1970s, the terms social entrepreneur and social entrepreneurship were extensively promoted in the 1980s and 1990s ( Lisetchi, Brancu, 2014). The term of social entrepreneurship was first coined in 1980 by Bill Drayton of Ashoka which is the Global association of the world's leading social entrepreneurs (Sivathanu & V.Bhise, 2013). Social entrepreneurship began from the United States economic system formed by society that is 1 M.A degree of Faculty of management, Islamic Azad University of Aliabad Katoul, Elhamrajabi990@yahoo.com, 09393643005 2 Assistant professor in Islamic Azad University of Aliabad Katoul, Azmafereydoon@yahoo.com, 09112709505 3 M.A degree of Faculty of management, Islamic Azad University of Aliabad Katoul, bhabiblee@yahoo.com, 09115187864 130
individualist, consumerist, and gives priority to wealth as proposed by Schnitzer (1994). The form of social entrepreneurship is corporate social responsibility which appeared in the U.S. when big companies grew significantly and did not care about social environment as proposed by Steiner and Steiner (2006). It resulted on the companies get protest in order to contribute to the social aspect than the economic aspects. (Wiguna, Manzilati, 2014) According to Horwitch & Mulloth (2010), entrepreneurship is seen as a pathway to the solutions of some major problems facing modern society and innovation is an integral element of it to ensure economic growth and prosperity (Ismail; Sohel; Ayuniza,2012). Social entrepreneurship extends the definition of entrepreneurship by emphasis on ethical integrity and maximizing social value rather than private value or profit (Davis, 2002). While the term social entrepreneur may be relatively new, the phenomenon is not. Throughout history, in every culture, we can find examples of leading social entrepreneurs who have left their search on history. The unanswerable question is what innovations and changes might have happened had we done more to focus on social entrepreneurship and nature this valuable social asset (Davis, 2002). Social entrepreneurship, as a practice and the field for scholarly investigation, provides a unique opportunity to challenge, question and rethink concepts and assumptions from different fields of management and business research (Mair & Marti, 2004). It is said that social entrepreneurship is emerging as an innovative approach for dealing with complex social needs (Johnson, 200:1), especially in the fact of diminishing public funding (Peredo; Mclean, 2005). Even if social entrepreneurship is a young term in social science and still lacks a consistent theory to define it, being seen as a large tent (Martin et al., 2007) for all kind of activities, the social phenomenon of social entrepreneurship is becoming wider and stronger as ever before (Oprica, 2013). According to Nilsson (2012) in the lack of a strong political deal delineating a feasible feature of the modern society, entrepreneurship is going to play a backup solution of the society illness (Apolloni et al., 2013). Social entrepreneurship can lead to social change for the better welfare and education (M.Situmorang, Mirzanti, 2012). Social entrepreneurship seeks to harness the practical dynamism of the successful businessman to enrich and help society, specially in countries where the individual is beset with the problems of dire poverty and lack of opportunity (Rajendhiran & Silambarasan, 2012). In next sections we will discuss the phenomenon of social entrepreneurship. Social entrepreneurship approaches The phenomenon of social entrepreneurship challenges our assumptions about human behavior and economic action. It also challenges our beliefs about the role of entrepreneurship in society. Social entrepreneurship is complementary economic approach that is based on value creation and operates by its own rules and logic. Yet, it is an approach that seems able to address some of the most pressing problems in modern society (M.Santos, 2009, p. 45). Approach of social entrepreneurship in the activity is separating the social and economic aspects with social capital approach. Social capital according Yustica (2006) is a bounded aggregate resource to realize a durable network for institutionalizing mutually benefit relationship. Social entrepreneurship needs to interact with the social structure in order to enhance social value. However, on the other hand it could keep doing its economic activity (Wiguna, Manzilati, 2014) According to Cukier et al.( 2011), the generally agreed perspective nowadays on SE concepts refers to entrepreneurial activities with an embedded social purpose. As Certo and Miller (2008) note, there are two approaches on the SE construct: first, a broad one, defining SE as an innovative social venture 131
(e.g. Cochran, 2007; Dees and Anderson, 2003), and second, a narrow one, defining SE as the use of economic activities to approach social needs by generating earned income (e.g. Thompson, 2002). Referring to the first approach, we consider that adding the social dimension to the traditional (economic) entrepreneurial process is an innovation and, thus, the social entrepreneurship represents a social innovation of the economic entrepreneurship. Referring to the second approach, in terms of business models, connecting directly the social needs with economic activities is an innovation and, thus, the use of economic activities to approach social needs represents a social innovation of the traditional (economic) entrepreneurial activities ( Lisetchi, Brancu, 2014). The concept of entrepreneurship has a long history in the business sector. A major theme has been the creation of value through innovation (Schumpeter,1951 ; Drucker, 1985). As applied more recently to social concerns, the concept has taken on a variety of meanings. Some, for example, have focused on social entrepreneurship as combining commercial enterprises with social impacts. In this perspective, entrepreneurs have used business skills and knowledge to create enterprises that accomplish social purpose in addition to being commercially viable (Emerson and Twersky, 1996) Others have emphasized social entrepreneurship as innovating for social impact. In this perspective, attention is focused on innovations and social arrangements that have consequences for social problems, often with relatively little attention to economic viability by ordinary business criteria(e.g. Dees, 1998b) Still others see social entrepreneurship as a way to catalyze social transformation well beyond the solutions of the social problems that are the initial focus of concern (Alvord; Brown; W. Letts, 2002). Social entrepreneurship definitions Austin, Stevenson & Wei-Skillern (2006): Entrepreneurial activity with an embedded social porpose. (M.Santos, 2009, p. 2) Haugh (2007): Simultaneous pursuit of economic, social, and environmental goals by enterprising ventures. Zahra et al., Forthcoming: Activities and processes to enhance social wealth. Austin et al., 2006: Entrepreneurship with a social purpose. (M.Santos, 2009, p. 3) Dees (2001): Social entrepreneurship is commonly seen as a hybrid that combines elements of commercial entrepreneurship and social sector organizations. (M.Santos, 2009, p.5) Brock & Steiner (2010): Social entrepreneurship is the creation of social impact by developing and implementing a sustainable business model which draws on innovative solutions that benefit disadvantaged and, ultimately, society at large (M.Situmorang, Mirzanti, 2012). Zappalà (2001): Social entrepreneurship is the act of carrying out community interest using entrepreneurial approaches. (M.Situmorang, Mirzanti, 2012). Saïd Business School (2005): Social entrepreneurship may be defined as a professional, innovative and sustainable approach to system change that resolves social market failures and grasps opportunities (Mair & Marti, 2004). Mair (2005) : Social entrepreneurship involves recognizing opportunities, combining and mobilizing resources, triggering positive change in various domains, and building sustainability. 132
Social entrepreneur definitions Brinckerhoff (2000): Social entrepreneurs are people who take risks on behalf of the people their organization serves. Waddock & Post (1991): Social entrepreneurs are private sector citizens who play critical roles in bringing about catalytic changes in the public sector agenda and the perception of certain social issues. Thompson, Alvy & Lees (2000): Social entrepreneurs are people who realize where there is an opportunity to satisfy some unmet meet that the state welfare system will not or cannot meet, and who gather together the necessary resources (generally people, often volunteers, money and premises) and use these to make a difference (Mair & Noboa, 2003; Mair & Marti, 2004). Bornstein (1998): Social entrepreneur is a path breaker with a powerful new idea who combines visionary and real-world problem-solving creativity, has a strong ethical fiber, and is totally possessed by his or her vision for change. LaBarre, Fishman et al. (2001): Social entrepreneurs are dedicated innovators who are determined to tackle some of society's deepest challenges by embracing new ideas from business (Mair & Noboa, 2003). Ashoka : Social entrepreneurs are the entrepreneurs who "recognize that a part of society is stuck and provide new ways to get it unstuck" (Harding, 2006). The characteristic of social entrepreneurship Social entrepreneurs focus on the social events while traditional entrepreneurs focus on profit opportunity. This presents two different characteristics in the entrepreneurship. Communication, empathy, support, providing intercessors are some of the characteristics that make social entrepreneurs different. Dees (1998) has found five basic characteristics for social entrepreneurship. These are; Determining a mission in the creation of social values, Exploring and following new opportunities. Placing the innovation into a stabile process. Pushing the limits in every way possible regarding this matter instead of being limited in the usage of the sources, Adopting a high sense of responsibility (Erturgut & Soysekerci, 2012). The characteristic of social entrepreneurs Gregorgy Dees from Stanford University (1998) organized the characteristics of social entrepreneurs as : They are reformists in sector. By creating social values, they focus on the mission of sustainability. They follow new social opportunities. They sustain cultural continuity regarding innovation, adapting and learning. They are limitless and brave concerning the usage of resources. They transfer high sense of responsibility to the client (privet sector), citizen (public sector) or volunteers (social sector / non governmental organizations) (Erturgut & Soysekerci, 2012). 133
Differences between social entrepreneurship and traditional entrepreneurship According to Dhesi (2010), Social entrepreneurship is somewhat similar to traditional entrepreneurship with some basic differences. The two basic factors differentiating social ventures from traditional entrepreneurial ventures are First, social value creation is at the heart of the social entrepreneurial process. Social entrepreneurial ventures address social problems which are either ignored or inadequately met by the traditional entrepreneurs or government sector. The fundamental differences is in the mission statement social entrepreneurship's premier mission is to create sustainable social value for the public good whereas commercial entrepreneurship's mission is to create economic profit and may be social value as the byproduct of the process. Second, the dimensions of social ventures are yet to be identified as they always overlap the boundaries between the for-profit ventures and social mission driven non-profit ventures. Some definitions limit social entrepreneurship to nonprofit organizations, while others describe social entrepreneurship as for-profit companies operated by nonprofit organizations, or organizations that create a firm at a financial loss (Ismail; Sohel; Ayuniza,2012). In addition, according to Dees and Haas ( 1998), social entrepreneurs slightly different with entrepreneurs in general, they aware and responsive to generate profit and intent to achieve sustain their mission, yet profit is not their end goal. Profit is not the gauge of value creation; nor is customer satisfaction, social impact is the gauge whereby mission-related impact becomes the central criterion, not wealth creation. (M.Situmorang, Mirzanti, 2012). Values of social entrepreneurship Social entrepreneurs endeavor to "create social" value through innovative, entrepreneurial business models. Social entrepreneurs often create tremendous value when they cater to very basic humanitarian needs; for example, by providing medicines or food, which can be matter of life or death for those who receive them (M. Joshi; Tiwari; V. Joshi, 2007) Experts have proposed a wide variety of more specific values that they see as emblematic of social entrepreneurship, such as: Subsistence on the sales of goods and services; Efficient use of grants; Creative inspiration applied to an unfortunate yet stable equilibrium ( Martin & Osberg, 2007); Quantifiable metrics; Initiation and management by private citizens apart from government and commercial corporations; Cooperative engagement among nonprofits, commercial business and the state; Organization as a nonprofit; Indifference to organizational form, whether for-profit, non-profit or a mixed corporate group; Rejection of organizational form in favor of productive networks or; 134
The creation of a new organizational form marked by blended value and limits on investors profit (see e.g., Borzaga, 2004; Dees & Economy, 2001; Light, 2008; Mair & Hockerts, 2006; Martin & Osberg, 2007; Nicholls, 2006; Nyssens, 2006 in Trexler, 2008, p.68) Moreover, Sivathanu & V.Bhise (2013) organized the values of social entrepreneurship as: Employment development Innovation / new goods and services Social capital Equity promotion System of social entrepreneurship The associations and foundations, cooperatives, social enterprises, mutual assistance hoses etc. represent the forms of organization specific to the social economy in Europe. They provide services and products, which cannot be supplied by the public and traditional private sector and they cover the social needs of a distinct segment of population. The social enterprises are at the crossroads of markets, public policies and civil society (EMES, 2008), create new social value, play a significant role in local development and regenerate the communities, promoting a new economic, social accountable mechanism (Kerlin, 2009). According to GEM ( 2009 Global report), in the last decade they have registered a positive trend, with a small growth rate, but with a high degree of recognizing the major objective of activity, aimed at social inclusion (Matei & Matei, 2012). Fig.1 System of social entrepreneurship Entrepreneurial aspect of social entrepreneurship Dees defines the Entrepreneurial aspect of social entrepreneurship as including: The recognition and relentless pursuit of new opportunities to further the mission of creating social value; 135
Continuous engagement in innovation and modification; Bold action undertaken without acceptance of existing resource limitations. The suggestion that emerges is that the above three elements of recognizing opportunities, innovating in some way, and displaying resourcefulness should be considered prime candidates for inclusion in the amplified notion of entrepreneurship. In addition, the capacity to endure risk, which Tan et. al. (2003) represent many others in including, should be added to the list (Peredo; Mclean, 2005). Social entrepreneurship impact According to Brock & Steiner (2010), Social impact (see Table 1) should involve and prosper community or stakeholders.accordingly, social entrepreneurs have roles in terms of shaping social value in society and creating social value in a complex system of humanity. These are several goals of creating social value; reducing the amount of poverty, improving health care, and the experiencing through climate change (M.Situmorang, Mirzanti, 2012). Table 1. Social entrepreneurship impact Area Social entrepreneurship End goal Lives change Timeframe Long term social impact Owners Non-profit, for-profit, and hybrid forms Rewards Serving the community/ public good Market orientation Underserved markets Target market Ultimately beneficiaries and community Needs Reducing needs Customer orientation Empowerment Value creation Social value Growth orientation Scaling social impact Impact Solutions to social problems, eliminate the needs Source: Brock & Steiner, 2010 (M.Situmorang, Mirzanti, 2012). Challenges faced by social entrepreneurs The challenges [social] entrepreneurs face are severe. Their customers may be willing, but often unable, to pay even a small portion of the cost of the products and services provided. Many social entrepreneurs operate in developing countries that have no structures or recourses that would enable and support traditional entrepreneurship (Seelos et al, 2004 in M. Joshi; Tiwari; V. Joshi, 2007). Sivathanu & V.Bhise (2013) has found several challenges faced by social entrepreneurs. These are; 136
Table 2. Social entrepreneurship challenges Conveying the Business Idea Attracting Donors Working remotely Hiring Finding time Getting fund Raising money Family and friend support Business people support Government approval Maintaining product quality Sustaining employees Competition from others Promoting awareness Acquiring technologies Getting skilled employees Rajendhiran & Silambarasan (2012) using factor analysis concluded that earning profit, family and friend support, business people support, sustaining employees, promoting awareness, getting expert's assistance, improving quality of life are the most sensitive factors of challenges of social entrepreneurs. The social entrepreneurship cases Alvord, Brown & W. Letts (2002), provided a comparative analysis of successful cases of social entrepreneurship. The cases are mentioned as follows: Bangladesh Rural Advancement Committee (BRAC) was established in 1972 by Fazel Abed, a Bangladeshi corporate executive, in the aftermath of the Independence War. The Grameen Bank (GB) was established in 1976 by Muhammed Yunus, a Bangladeshi economic professor, and his colleagues. The Green Belt Movement (GBM) was established in 1977 to encourage tree planting in Nairobi by Wangari Maathai and the National Council of Women in Kenya. The Highlander Research and Education Center (HREC) was founded by Myles Horton in 1932 in a rural Appalachian mountain community in the Southern United States. Plan Puebla (PP) was initiated in Mexico in 1966 by a small group of agricultural researches who recognized that the needs of small subsistence farmers were not being addressed by Mexican agricultural research. The Self-Employed Women's Association (SEWA), founded in 1972 by Ela Bhatt, is a trade union of women who earn their livelihoods in three broad occupational categories that historically have been very difficult to organize: hawkers and vendors, home-based producers, and manual laborers and service providers. Se Servir De la Saison Seche en Savane et au Sahel ( Six-S) is an association set up in 1976 by founders from Burkina Faso and France, Bernard Ledea Ouedraogo and Bernard Lecomte, to promote community development from a peasant perspective, specially in the dry season when jobs are few and far between. 137
Conclusions The purpose of this paper has been to highlight the phenomenon of social entrepreneurship. Social entrepreneurship is commonly seen as a hybrid that combines elements of commercial entrepreneurship and social sector organizations and Social entrepreneurs are private sector citizens who play critical roles in bringing about catalytic changes in the public sector agenda and the perception of certain social issues. Social entrepreneurs slightly different with entrepreneurs in general, they aware and responsive to generate profit and intent to achieve sustain their mission, yet profit is not their end goal. Profit is not the gauge of value creation; nor is customer satisfaction, social impact is the gauge whereby mission-related impact becomes the central criterion, not wealth creation. The social enterprises are at the crossroads of markets, public policies and civil society, create new social value, play a significant role in local development and regenerate the communities, promoting a new economic, social accountable mechanism. Social entrepreneurs have roles in terms of shaping social value in society and creating social value in a complex system of humanity. These are several goals of creating social value; reducing the amount of poverty, improving health care, and the experiencing through climate change. Earning profit, family and friend support, business people support, sustaining employees, promoting awareness, getting expert's assistance, improving quality of life are the most sensitive factors of challenges of social entrepreneurs. References 1. Sarah H. Alvord; L. David Brown; Christine W. Letts. (2002). Social entrepreneurship and social transformation: An exploratory study. Hauser center for nonprofit organizations working paper No.15. http//papers.sssrn.com/abstract=354082 (accessed on May 2014) 2. B. Apolloni; G. Galliani; C. Zizzo; F. Epifania; L. Crosta; I. Cesareo. (2013). Socializing entrepreneurship. Procedia computer science 22 (2013)349-358. 3. Susan, Davis. (2002). Social entrepreneurship: Towards an entrepreneurial culture for social and economic development. http://ssrn.com/ abstract=978868 (accessed on May 2014). 4. Ramazan, Erturgut; Serhat, Soysekerci. (2012). Social entrepreneurship effect on educational activity: the research in Turkey universities. Procedia Social and behavioral sciences 46 (2012) 3945-3958. 5. Rebecca, Harding. (2006). Social entrepreneurship monitor. http://socialinnovationexchange.org/sites/default/files/event/attachments/gem_soc_ent_web. pdf. (accessed on July 2014). 6. Kamariah, Ismail; Sohel, Mir Hossain; Ayuniza, Umuee Nor. (2012). Technology social venture: A new genré of social entrepreneurship?. Procedia Social and behavioral sciences 40 (2012) 429-434. 7. Mair, Johanna; Ignasi Marti. (2004). Social entrepreneurship research: A source of explanation, prediction, and delight. http://ssrn.com/ abstract=673446 (accessed on May 2014). 8. Er. Manoj Joshi; S.P Tiwari; Vindhyalaya Joshi. (2007). Corporate social responsibility : Global perspective, competitiveness, social entrepreneurship & innovation. http://ssrn.com/ abstract=999348 (accessed on May 2014). 138
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