Social entrepreneurship: New research findings

www.socscinet.com/bam/jwb

Journal of World Business 41 (2006) 1–5

This special issue on social entrepreneurship has

timely given the increasing attention to this newly

defined area. Multi-lateral organizations such as the

World Bank are promoting the role of social entrepre-

neurs in both the developing and developed countries.

Conferences are appearing worldwide addressing the

topic, NGOs are increasingly being retained to develop

programs, and a wealth of books, manuals, videos, and

learning aides are being produced addressing the needs

of social entrepreneurs, and those whowould help them.

Numerous top-tier Universities, Harvard and Stanford

among them, have dedicated considerable resources and

efforts towards program development, journals, and

scholarship in the field.

We believe that social entrepreneurship is essential

because increasingly, non-governmental organizations,

non-profit organizations (NPOs), entrepreneurial firms,

governments, and public agencies are recognizing the

significance of strategic social entrepreneurship

towards the development of world-class competitive

services. Following recent enthusiasm for privatization,

actors are now highly interested in identifying best

techniques and practices for managing services,

including those in weak or asymmetric markets, as

well as in monopolistic and oligopolistic environments.

In particular, policymakers have little guidance, and

recognize that the invisible hand frequently fails to

assert itself in the most socially beneficial ways.

One of the biggest concerns in identifying a new field

is the issue of definition. Scholars of social entrepreneur-

ship have identified occurrences in a range of different

situations where the implications of strategic orientation

may be expected to have considerable impact on

community. Some apply the concept to entrepreneurial

firms, as well as non-profit organizations and the public

sector, while others impose additional constraints.

1090-9516/$ – see front matter # 2005 Elsevier Inc. All rights reserved.

doi:10.1016/j.jwb.2005.10.003

Due both to globalization and the increasing ease of

access with the internet, social entrepreneurship is

gaining wider notoriety as a means to assist individuals

and societies adjusting to new circumstances, as well as

to promote economic development. In the academic

literature, social entrepreneurship is a new emerging

subject that is increasingly attracting the interest

of researchers, policy makers, and practitioners.

Sub-topics relevant to the study of social entrepreneur-

ship include social marketing, strategic human

resource management, organizational learning, leader-

ship, and intrapreneurship, in both public and non-

profit sectors.

Our interest in this subject began nearly a decade

ago at the Academy of Management, where a core

group of international scholars, many of them

affiliated with the entrepreneurship division, began

meeting surrounding issues related to social entre-

preneurship. Our explorations indicated that stake-

holders in social entrepreneurship include community

leaders, leaders in non-profit organizations, users,

institutional leaders, and entrepreneurs who reach into

their communities. Our activities in the Academy of

Management included bringing numerous profes-

sionals into both the program and pre-conference

sessions, ranging from the ILO to the South Shore

Bank; as well as field trips to organizations ranging

from incubators to artist cooperatives. It soon became

apparent that without an outlet for publication, not

only were we at risk of talking only to ourselves, but

that we would be incapable of attracting emergent

scholars to what we began to appreciate as a very

important field of study.

In the call for papers for this special issue, we

solicited the participation of perspectives that transcend

disciplinary, geographical, and sector-level boundaries.

Editorial / Journal of World Business 41 (2006) 1–52

We encouraged submissions that included the study of

non-profit and public sectors across different countries,

as well as comparison between public versus private

sector entrepreneurship on various dimensions. As this

is a relatively new and emerging area, we sought papers

whose topics ranged from theoretical evaluation to

theory building, and included qualitative case study,

quantitative study – including comparative and critical

discourse and feminist analysis – in the examination of

the strategic issues of social entrepreneurship around

the world. In particular, we sought to examine

scholarship related to the role of entrepreneurs in

social entrepreneurship, the challenges of non-profit

and non-government organizations in social entrepre-

neurship, comparisons of entrepreneurs and social

entrepreneurs, organizing social entrepreneurs into

action like new social ventures, the implementation

of social entrepreneurial strategies, and the role of

culture and cross-cultural relationships in fostering

social entrepreneurship.

We are quite pleased with the quality of the papers

submitted (25 in all), as well as those eventually

selected for publication. We hope that this special issue

will serve as a catalyst for this important ongoing

activity, encouraging further world-class scholarship.

The papers selected represent a wide range of opinion,

but were chosen in their ability to inform both academic

and practitioner communities. Implications of the

research are meant to provide important insight for

those scholars and practitioners interested in developing

concepts and applications for the understanding of

social entrepreneurship. After an exhausting process

of eliminating some very good and relevant research,

we elected to focus on five outstanding representative

papers that cover a broad swath of this important

topic.

The first paper, based on empirical study, is by

Moshe Sharir and Miri Lerner titled ‘‘Gauging the

success of social ventures initiated by individual social

entrepreneurs.’’ While the research was carried out in

Israel, the objective was to develop generalizable

inductive theoretical contributions to the field. Sharir

and Lerner introduce a model that should be useful to

both researchers and practitioners engaged in the

development and study of new social ventures. This

paper is particularly relevant in those countries where

the welfare state is being re-organized, requiring new

ways of organizing at the community level.

In developing their model, the authors examine

dimension that include a focus on the individual (or

social entrepreneur), the environment, the organization,

non-profit organizations, and the processes of the new

social venture itself. Within these dimensions, they

clarify the factors that contribute to the success of new

social ventures. By focusing on the processes of

initiation and institutionalization, they raise some

important distinctions between new venture start-ups

and new social ventures. The authors identify different

types of legitimacy of the venture idea in the public

discourse, and cite the long-standing cooperation with

other entities as an important aspect for success in new

social ventures.

The Sharir–Lerner paper makes an important

contribution to social entrepreneurship through an

empirical examination of new social ventures. The

methodology of this paper is a qualitative exploratory

examination of 33 new social ventures that where

started in the 1990s. The authors carried out 57

interviews that included team members, management,

customers, and competitors, comparing social ventures

that differed in their backgrounds, in their objectives

and in their operational patterns.

The definition of social entrepreneurship by Sharir

and Lerner is ‘‘the social entrepreneur is acting as a

change agent to create and sustain social value without

being limited to resources currently in hand’’ (p. 3).

This definition mirrors that of Schumpeter (1934) in

which the entrepreneur is defined as a commercial

change agent (who brings innovations to the market

place where there is change) and who also acts beyond

their limited resources. Both of these definitions have

the (social) entrepreneur acting out their vision in the

context of their own business (NPO) and in a market

niche (social need). Instead of seeking a return on

investment the social entrepreneur measures perfor-

mance through implementation of the goals of mission

and service as framed in the context of the NPO. Of

note, they point out that ‘‘whereas the central objective

of entrepreneurship in the business sector is the

attainment of economic returns, the main interest in

social venturing is the added value and social, in that

only too often the recipients do not have the means to

pay the full cost of the services it provides.’’ The authors

also identified variations amongst the variable for the

successful 13 new social ventures. Only two variables

could be defined as necessary conditions: total

dedication to the venture’s success and the venture’s

social network.

The implications of this paper for research and

practice of social entrepreneurship within the new

social venture are the importance of the commitment of

the social entrepreneurs in promoting the goals of the

ventures, previous managerial experience, and the

management of a team with a long-term commitment

Editorial / Journal of World Business 41 (2006) 1–5 3

to the idea of the social venture. At the environmental

level of social entrepreneurship, the social network, and

the critical issue of the positive awareness of the venture

in the public debate are significant for obtaining the

capital resources (like foundations) necessary for the

social venture. The ability to obtain these external

capital resources has important implications for the

internal operations of the new social venture. Further,

established institutions like local government autho-

rities and large NPOs have an important influence on

new social venture in their ability to obtain these

external resources.

The second paper in this issue is by Johanna Mair

and Ignasi Marti, entitled, ‘‘Social entrepreneurship

research: A source of explanation, prediction, and

delight.’’ The authors suggest the lack of a ‘‘compre-

hensive picture’’ and a ‘‘clear understanding’’ of social

entrepreneurship, something their contribution attempts

to address. The authors take on these challenges

examining definitional and theoretical issues that have

implications for both researchers and practitioners.

Mair and Marti point out parallels with the field of

entrepreneurship, and provide a synthesis of a large

variety of definitions for social entrepreneurship, while

comparing and contrasting them with more conven-

tional views of entrepreneurship as expressed by both

classic and contemporary scholarship. By system-

atically mapping social innovation and their definitions,

they develop a number of theories as to how research

into social entrepreneurship can be applied, taking a

multi-disciplinary approach in their comparisons. They

go one step further, by recommending that the

examination and study of social entrepreneurship that

‘‘Provides a unique opportunity for the field of

entrepreneurship to challenge, question, and rethink

important concepts and assumptions in its effort

towards a unifying paradigm.’’ We could not agree

more.

As in Sharir and Lerner’s work, their definitions of

social entrepreneurship, after reviewing the range of

alternatives, focuses on the founder as a change agent in

NPOs ‘‘a process consisting in the innovative use and

combination of resources, regardless of whether the

entrepreneur initially has any control over those

resources, that aims at catalyzing social change by

catering to basic human needs.’’ After pointing out the

dearth of research examining the processes and

outcomes of social entrepreneurship, Mair and Marti

argue that all entrepreneurial endeavors contain both a

social and an economic component, and that the

differences often depend on ones’ perspective and

priority. Is the Grameen Bank an economic or a social

enterprise? What of a community development bank,

such as the South Shore Bank in Chicago? They go on to

point out that not all social entrepreneurial endeavors

can be easily measured by economic indices, as well as

highlighting similarities with intrapreneurial endeavors.

The authors conclude with an examination of four

theoretical paradigms: Structuation theory, institutional

theory, social capital, and social movements, in terms of

how they relate to social entrepreneurship. They provide

examples that fit each theory, demonstrating that a wide

range of theoretical approaches may be used in

understanding the phenomenon. The authors conclude

with some recommendations regarding different

empirical approaches, followed by a call for the

development of social entrepreneurship as a distinctive

domain.

The third article in this collection is by Ana Maria

Peredo and Murdith McLean, entitled ‘‘Gauging the

success of social ventures initiated by individual social

entrepreneurs.’’ The authors explore definitional issues,

highlighting the fine balance between not-for-profit and

revenue generating activities, and the difficulty in

separating the two. As in the Mair and Marti paper, the

authors separate the definitional analysis of social

entrepreneurship into ‘‘social’’ and ‘‘entrepreneurship.’’

They point out that any definition must recognize that

‘‘(social) enterprises [as] a set of individuals and groups

who have the capacity to create significantly greater

value, often in a shorter period of time, and thus make

uncommon contributions to the world of enterprise in

which they are engaged. Thus, an important contribu-

tion the authors make to the definitional argument is that

social entrepreneurship is not the sole domain of the

individual but also a team or a group of people. They

identify that collective cultural settings have important

implications o social entrepreneurship. The authors

make the point for collective communities, ‘‘acting

collectively to exercise an entrepreneurship which is

plainly social in many of its aspects.’’ The definition

they develop thus focuses on the group potential of

social entrepreneurship ‘‘Social entrepreneurship is

exercised where some person or group aims either

exclusively or in some prominent way to create social

value of some kind, and pursue that goal through some

combination of (1) recognizing and exploiting oppor-

tunities to create this value, (2) employing innovation,

(3) tolerating risk, and (4) declining to accept

limitations in available resources’’ (see Peredo &

McLean, this issue, page 56). Peredo and McLean

conclude with a range of future research recommenda-

tions for social entrepreneurship including public policy

implications for for-profit firms.

Editorial / Journal of World Business 41 (2006) 1–54

The fourth paper, by Robert B. Anderson, Leo Paul

Dana, and Teresa Dana is titled ‘‘Aboriginal land rights,

social entrepreneurship, and economic development in

Canada: ‘Opting-in’ to the global economy.’’ The

authors examine a unique group of indigenous peoples

in regards to social entrepreneurship who have been

able to negotiate control of their traditional lands from

the national government, thus adding social value. Case

study examples include the MacKenzie Valley Pipeline

Inquiry of 1974, the Inuvialuit Corporate Group (ICG),

the Osoyoos Indian Band Development Corporation

(IODC), the Meadow Lake Tribal Council (MLTC), and

the Lac La Ronge Indian Band through the Kitsaki

Development Corporation (KDC). This paper makes an

important contribution to cross-cultural aspects of

social entrepreneurship in that it focuses on indigenous

issues. Anderson and Dana examine how different

indigenous communities in Canada have developed

their social entrepreneurship initiatives. They study

social entrepreneurship in the context of collective

communities for indigenous culture where there is little

separation of social (collective community) and

entrepreneurship (trade). Importantly, for collective

based communities who are marginalized, social

entrepreneurship may be an important means of gaining

social and economic equality. With this in mind, the

authors define social entrepreneurship in the contexts of

Canadian Indigenous communities as, ‘‘having a dual-

nature strategy, including a degree of cohesion of the

Indigenous people, as well as financial success.’’ The

authors make the point that in the case of social

entrepreneurship, it is often about stakeholder benefit

rather than that of shareholder value. They focus on

social value that includes promoting culture, identity,

and values along with commercial activities of the

indigenous community. Anderson and Dana also make

an important contribution by linking social entrepre-

neurship with economic development processes. In

doing so, they discuss modernization, dependency, and

regulation theories. The authors argue that moderniza-

tion and dependency theories are not appropriate for

indigenous communities and have failed for most.

Instead, the authors argue that disadvantaged regions

can interact with the global economy based on their own

terms. They point out the increasing opportunities in

global markets suggesting a movement towards alliance

capitalism.

The fifth and final paper by Jay Weerawardena and

Gillian Sullivan Mort, ‘‘Investigating social entrepre-

neurship: A multi-dimensional model,’’ makes an

important contribution to social entrepreneurship by

empirically studying and developing a model of social

entrepreneurship for established NPOs. For practi-

tioners, the contribution of this paper is that it identifies

how NPOs in the changing welfare state can distinguish

themselves from their for-profit counterparts. For

researchers, they highlight the subtle yet critical

differences between for-profit and not-for-profit social

enterprises. Similar to the previous studies of this issue,

this paper argues that social entrepreneurship is at an

early stage of development; however, their work is

based on examples from developed countries where the

welfare state is being re-organized to more closely

match neo-liberal free market attributes. They point out

that NPOs may be competing directly with new entrants

in the for-profit social enterprise sector.Weerawardena

and Mort begin with the proposition that not all NPOs

are socially entrepreneurial, and not all for-profit

organizations are entrepreneurial. Based on this

proposition, they carry out a wide-ranging literature

review of social entrepreneurship. The authors identify

that the literature on social entrepreneurship has

evolved from non-government NPOs and social

enterprises that carry out for-profit activities to assist

non-profit initiatives. Employing a grounded theory

research that develops a multi-dimensional model of

social entrepreneurship, the authors provided an in-

depth examination of nine organizations. Their findings

are explained through a narrative of CEOs and middle

managers from NPOs. The authors report that govern-

ment sub-contracting to these NPOs recently has

become increasingly competitive. Their findings sug-

gest that social entrepreneurship can be conceptualized

as a multidimensional model involving the three

dimensions of innovativeness, proactiveness, and risk

management that they identify as social value creation.

They also identify three possible constraints for the

NPO engaged in social entrepreneurship; these are

sustainability, social mission, and the dynamic envir-

onment.

For practitioners, this paper provides a framework

for managers to reflect on their own actions and means

regarding the implementation of their actions. As the

authors state, ‘‘social entrepreneurial organizations

must clearly address value positioning strategies, and

take a proactive posture as well as providing superior

service maximizing social value creation.’’ Their study

thus provides a model for established NPO social

entrepreneurship that meets the unique challenges of a

renewed welfare state and is at the same time

competitive.

In sum, these five papers make a significant

contribution to social entrepreneurship for both theory

and practice. The papers can be grouped into two types:

Editorial / Journal of World Business 41 (2006) 1–5 5

the first dealing with definitional and theoretical issues

for social entrepreneurship, and the others providing

empirical research and testing theoretical models. As can

be expected from such a new field, the models were

developed in different contexts, but applied to social

ventures, established NPOs, and indigenous enterprises.

Lastly, wewish to thank themany persons responsible

for encouraging, assisting, and contributing to this

special issue. In particular, Frank Hoy, Journal of World

Business editor, has been a constant source of

encouragement and support. Although they are too

numerous to mention, none of this would have been

possible without their sustained and effective commit-

ment ofmanymembers of theAcademy ofManagement,

Entrepreneurship Division. You all know who you are.

We therefore dedicate this issue to their continued

success and scholarship, with the proviso that all errors

and omissions fall squarely on our own shoulders.

Reference

Schumpeter, J. A. (1934). The theory of economic development.

Cambridge, MA: Harvard University Press.

Michael J. Christie*

Murdoch University, Peel Campus,

Z Building, Room 2.017, Perth, WA, Australia

Benson Honig1

Wilfrid Laurier University,

Waterloo, Ont., Canada N2L3C5

*Corresponding author. Tel.: +61 7 9582 5559

E-mail addresses: m.Christie@murdoch.edu.au

(M.J. Christie)1Tel.: +1 519 884 0710x2909; fax: +1 519 884 0201

bhonig@wlu.ca (B. Honig)