Socially Responsible Enterprises - Full Paper- (Pitschner & Tuncer)

8/13/2019 Socially Responsible Enterprises - Full Paper- (Pitschner & Tuncer)

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INTRODUCTION

The 2henomenon of social entre2reneurshi2 -S;. is emerging in a time in 6hich the :ery

asic needs of di:erse 2o2ulation grou2s are increasingly unmet < not only in de:elo2ing

countries ut also in the economically leading industrialized countries 6here the -social

6elfare. state traditionally ste2s into the reach 6hen market forces fail in their role as the

2rimary mechanism for the -re/.distriution of resources! The go:ernments 6hich ha:e

suffered a se:ere loss of 2o6er are confronted 6ith increased calls for a reduction of ta= loads

and no longer consider themsel:es res2onsile for 2ro:iding economic and social relief

-5eadeater' 1,,7> Catford' 1,,0.! Their ne6 role is rather that of a mere coordinator and

facilitator of 2ri:ate efforts!

Mean6hile' the numer of not/for/2rofit organizations -9?8s. is gro6ing consideraly

-4ing' 8ollak and Black6ood' &$$0. and the social 2rolems are increasing in size and

com2le=ity in the 6ake of a soaring gloalization! Therefore' the 9?8s' 6hich ha:e long een

regarded as the last resort for safeguarding social security' are no6 o2erating in a much more

challenging en:ironment! In the face of the first decline in charitale gi:ing in the @!S! since

1,07 -(i:ing @SA ?oundation' &$$,. they currently ha:e to co2e 6ith an intense com2etition

for donors and are e:en threatened y sustantial funding shortages -8ariyar and 4ard' &$$%>

o2er and Cheney' &$$#.!

In :ie6 of this de:elo2ment' the discussion and solution of social 2rolems recently

entered the s2here of usiness! To e more 2recise' it can e oser:ed that 2ri:ate enter2rises

assume the former social role of the state in t6o distinct 6ays! 4hile charitale acti:ities of

2rofit/dri:en com2anies are far from eing a no:el 2henomenon' the conce2t of cor2orate

social res2onsiility -CS.' firstly addressed y Clark -1,1%.' did not recei:e road attention

in the academic literature until the se:enties -Carroll' 1,,,.! By no6' ho6e:er' it seemst that

:irtually all com2anies ha:e their o6n CS 2rograms' in 2articular ecause such 2rograms

constitute the o22ortunity to ma=imize a com2anys -shareholder. :alue -see for e=am2le


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Mackey' Mackey and Barney' &$$7> (odfrey' Merrill and Hansen' &$$,> Orlitzky' Schmidt

and ynes' &$$3.! In addition to com2anies' also indi:iduals 6ho are 2rimarily dri:en y the

:alue of ustice and the desire to achie:e social im2ro:ements can tackle s2ecific deficiencies

y means of commercial acti:ities if the 2rolems constitute an entre2reneurial o22ortunity!

In todays com2le= en:ironment' such social entre2reneurs freDuently com2lement the

acti:ities of socially res2onsile enter2rises y em2loying inno:ati:e a22roaches -"ohnson'

&$$$.! 4hile there is little dout that social entre2reneurs constitute an enormous 2otential

6ith res2ect to the effecti:e resolution of 2ressing social 2rolems -Harris' Sa2ienza' Bo6ie'

&$$,.' the Duestions that ha:e to e ans6ered are 6here they originally come from' ho6 they

de:elo2' and ho6 they can e incenti:ized!

CS e=hiits a striking resemlance 6ith S; ecause oth conce2ts im2ly economic

:iaility as 6ell as social eneficence! (i:en the theoretical 2ro=imity of the conce2ts' 6e

argue that com2anies engagement in CS is likely to affect the aility of their em2loyees to

recognize o22ortunities for socially entre2reneurial acti:ities' the actual e=2loitation of such

o22ortunities' and the long/term sur:i:al of the resulting social enter2rises! To elaorate on

this hy2othesis' 6e first de:elo2 a definition of social entre2reneurshi2! In doing so' 6e

consider the 6idely acce2ted definitions of commercial entre2reneurshi2 and com2are the

:arious understandings of S; that can e found in the literature! After 2ro:iding a short

illustration of the term cor2orate social res2onsiility 6e 2oint out the similarities and

differences et6een the t6o conce2ts! In the second 2art of the 2a2er' 6e 2resent a theory

2ositing that 2otential social entre2reneurs 6ho are 6orking in a socially res2onsile

enter2rise may start an entre2reneurial career only under certain circumstances! If these

conditions are 2resent' ho6e:er' the :enture is likely to e a success! In the third 2art of the

2a2er' 6e analyze the career 2aths of the social entre2reneurs 6e identified in the Esocial

entre2reneur a22lication 2rogramming interfaceF' 6hich 6as recently de:elo2ed and released


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y the non2rofit initiati:e ESocial ActionsF!&4e conclude y ringing together data and

theory in a short summary and y outlining the further research that is needed regarding the

link et6een CS and S;!

SOCIAL ENTREPRENEURSHIP

It is needless to 2oint out that e:ery 2iece of -Duality. research reDuires as a foundation

unamiguos and 6ell ustified definitions of the core conce2ts used! Ho6e:er' in some fields

of study this 2rereDuisite is more im2ortant than in others and social entre2reneurshi2

certainly -still. ranks among the former! It makes no sense to e:aluate the theoretical and

2ractical significance of this conce2t if a sufficient definition is not 2ro:ided -8eredo and

Mc5ean' &$$#.! On the other hand' it also makes no sense to e=2licitly introduce and define a

ne6 term 6hich is asically congruent 6ith already e=isting conce2ts < a mistake' 6e think'

that has re2eatedly een made in the field of social entre2reneurshi2!

Since EGall sorts of acti:ities are no6 eing called social entre2reneurshi2F -Martin and

Oserg' &$$7) &,. 6e conducted a literature re:ie6 to see if any consistent 2attern of

definition can e identified in the :arious academic 2ulications! In doing so' 6e made no

distinction et6een definitions of entre2reneurshi2 and entre2reneurs ecause the first term

ust denotes 6hat entre2reneurs do> hence' defining either term defines the other -8eredo and

Mc5ean' &$$#.! One key finding is that many authors see a certain o:erla2 of the conce2ts of

social entre2reneurshi2 and -traditional. commercial entre2reneurshi2 -see' for instance'

Thake and adek' 1,,7> ?o6ler' &$$$> Massetti' &$$0.! As ees -&$$1. illustrates it' ESocial

entre2reneurs are one s2ecies in the genus entre2reneur!F But 6hat is an entre2reneurJ

Ski22ing the conce2ts early ?rench history of the si=teenth and se:enteenth century -cf!

&The social entre2reneur a22lication 2rogramming interface -social entre2reneur A8I. can e accessed through

htt2)KKsearch!socialentre2reneura2i!org and is hosted y ESocial ActionsF! It is an o2en dataase containing

information aout entre2reneurs 6ho 6on fello6shi2s or a6ards from rele:ant and esteemed organizations! ataacDuisition 6as conducted on &1!$,!&$$,! On this day' the dataase contained information aout +0, indi:iduals

6ho 6ere decorated y si= different organizations namely Ci:ic Lentures ra2er ichards ?oundation


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Sulli:an Mort' 4eera6ardena and Carnegie' &$$3.' the first maor contriutions ha:e een

made y ichard Cantillion' "ean/Batiste Say and "ose2h Schum2eter 6ho highligthed that

entre2reneurs are ale to ring together and coordinate the different factors of 2roduction in

an inno:ati:e 6ay 6hile eing faced 6ith income uncertainty -Se=ton and Bo6man' 1,0#>

4ee' 5im and 5ee' 1,,+.! According to ees -&$$1.' this traditional definition has recently

een com2lemented y 8eter rucker 6ho stressed that entre2reneurs recognize and e=2loit

o22ortunities! Ste:enson and "arillo -1,,$. argued that entre2reneurs also e=hiit a uniDue

resourcefullness 6hich enales them to 2ursue such o22ortunities e:en in situations in 6hich

their resource endo6ments are :ery limited! The e=2loitation of o22ortunities is accom2anied

y the generation of an entre2reneurial 2rofit -Shane and Lenkataraman' &$$$. and induces a

systematic change of a society facing maor social 2rolems -rayton' &$$&.! Incremental

im2ro:ements to the efficiency of already e=isting goods and ser:ices are not considered an

entre2reneurial act -5arson' &$$$.!

As Catford -1,,0. 2oints out' this asic conce2t of entre2reneurshi2 can e roadened to

also ca2ture the 2henomenon ofsocialentre2reneurshi2! That is' in order for an acti:ity to e

identified as social entre2reneurshi2' it has to ha:e the charecteristics s2ecified ao:e and an

additional Duality 6hich ustifies the use of the su22lemental adecti:e EsocialF! In this regard'

Seelos and Mair -&$$+. note that some authors em2hasize the social outcome of an

entre2reneurial acti:ity 6hile others refer to social 2rolems triggering entre2reneurial

eha:ior! In our o2inion' there is no need to e=2licitly differentiate et6een these t6o

a22roaches' ecause they are mutually de2endent! In order to generate a rele:ant social

out2ut' a social 2rolem -i!e!' an unmet social need. has to e identified first! 4hile all the

definitions 6e analyzed include the element of a social contriution or social :alue' the more

difficult Duestion seems to concern the relati:e 6eighting of the social and economic

outcomes of social entre2reneurshi2!


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T6o e=treme cases can e identified concerning this matter' and 6e argue that oth should

not e e=aminded under the heading of S;! One case is that of 9?8s 6ho' in the face of

decreasing go:ernmental su22ort and 2ri:ate gi:ing' are in search of ne6 sources of funding

-Seelos and Mair' &$$+.! 4ithin the corres2onding Eenter2rise schoolF of social

entre2reneurshi2' researchers e=2lore ho6 the ideas and tools of the usiness 6orld can e

used in a sector that' y definition' ultimately does not make any financial 2rofits at all!

-?ulton and ees' &$$%.! That a great numer of authors treat S; as a not/for/2rofit conce2t

-8eredo and Mc5ean' &$$#. 6as recently confirmed y Taylor' Hos' 9ilsson' OHalloran

and 8reisser -&$$$. 6ho found out that 03 of the articles sur:eyed y them related social

entre2reneurshi2 to the 9?8 sector! Ho6e:er' this understanding of S; is hardly conduci:e

since it does not necessarily im2ly an inno:ati:e 6ay of tackling a social 2rolem! It is

certainly true that 9?8s are increasingly transformed into some kind of Ehyrid organizationE

-8eredo and Mc5ean' &$$#.! Net' the 2henomenon of Ecom2lementary social

entre2reneurshi2F -?o6ler' &$$$. should not e included in an e=tended :ersion of the S;

conce2t' ecause it merely denotes 9?8s ado2ting usiness 2ractices to earn money' 6hich

can then e used to finance social causes! As long as the instruments ultimately used to sol:e

the 2rolems ha:e not changed' that is' as long as relief su22ly is still shi22ed to the South

6ith con:oys' 6e do not see the need for a ne6 field of research!

The other e=treme has een identified y Seelos and Mair -&$$+) 3. as Esocially

res2onsile 2ractices of commercial usinesses engaged in cross/sector 2artnershi2s!F This

definition' in our o2inion' does not set S; a2art from the means/end theory dominating CS

research -Amaeshi and Adi' &$$7. 6hich 6ill e introduced in more detail elo6! 4e

asolutely agree 6ith the argument that CS 2ractices ha:e een refined in the 2ast ut in

most cases they are still means to ust one single end' namely' the generation of 2rofits! This

is not to deney that usinesses freDuently do hel2 to sol:e social 2rolems' ut the social

out2ut is often a mere y/2roduct Therefore cross/sector 2artnershi2s can easily e e=2lained


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2ros2ect of making a real change 6ithout ha:ing to gi:e u2 a reasonale standard of li:ing

6hat makes S; an attracti:e o2tion for usiness school graduates' 6ho rarely intend to 2ursue

a carrer in non2rofit management -(entile' &$$&.!

The conce2t social entre2reneurshi2' 6e elie:e' should e closely related to the notion of

ustice! On the one hand' this im2lies that social entre2reneurs direct their actions to6ard the

elimination of an Eunust eDuilirium that causes the e=clusion' marginalization' or suffering

of a segment of humanity that lacks the financial means or 2olitical cloud to achie:e any

transformati:e enefit on its o6nF -Martin and Oserg' &$$7) 3#.! On the other hand' social

entre2reneurs also eha:e ustly! They try to assure that their o6n -economic. outcomes'

relati:e to their in2uts' are in alance 6ith the 2ercei:ed situation of rele:ant others -cf!

Homans' 1,%1.!

CORPORATE SOCIAL RESPONSIBILITY

One of the earliest formal definitions of CS 6as gi:en y ?itch -1,7%) 30.' ECor2orate

social res2onsiility is defined as the serious attem2t to sol:e social 2rolems caused 6holly

or in 2art y the cor2oration!F Carroll -1,7,) #$$.' one of the most 2rominent e=2onents of

CS research' later elaorated on the degree to 6hich usinesses are res2onsile for sol:ing

social 2rolems' EBefore anything else' the usiness institution is the asic economic unit in

our society! As such' it has res2onsiility to 2roduce goods and ser:ices that society 6ants

and to sell them at a 2rofit! All other usiness roles are 2redicated on this fundamental

assum2tion!F This 2ro2osition can e seen as the lynch2in of the suseDuent discussion aout

6hether cor2orations ha:e any oligations that go eyond ma=imizing shareholder 6ealth

2roduction -Barnett' &$$7.! One side' hea:ily influenced y Milton ?riedmans -1,7$) 1&&.

famous statement' EThe Social es2onsiility of Business is to Increase its 8rofitsF' argues

that CS can ha:e 2ractical rele:ance only if the costs accruing from socially res2onsile

eha:ior are lo6er than the financial enefits associated 6ith it -Barnett &$$7. In addition to


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this economic res2onsiility and the res2onsiility to oey the la6' Carroll -1,7,) #$$.

identifies t6o further res2onsiilities of usinesses! EThe ethical res2onsiility re2resents the

kinds of eha:iors and ethical norms that society e=2ects usiness to follo6!F This

res2onsiility is clearly instrumental in that it is not much more than a strategic le:er for

increasing cor2orate re2utation' market o22ortunities and ultimately o6ner 6ealth -4indsor'

&$$%.! The fourth dimension of res2onsile eha:ior identified y Carroll -1,7,. is the

discretionary' i!e!' the 2hilanthro2ic dimension! This refers to indi:idual managers and

cor2orations udgments that can not e ustified y societal e=2ectations! ;m2irical studies

sho6 that this dimension 2lays a relati:ely small role in managers moti:ation to act socially

res2onsile -see' for instance' 8inkston and Carroll' 1,,%.' and it is Duestionale 6hy

managers 6ould decide to li:e out their 2ersonal agenda of res2onsiility y the means of a

-con:entional. usiness! If someone 6ants to e charitale irres2ecti:e of market demand'

then a com2any is certainly not the right 2lace to 2ut this into 2ractice! Therefore' as o22osed

to S;' cor2orate social res2onsiility im2lies a long term shareholder :alue a22roach -?alck

and Helich' &$$7.! 9e:ertheless' S; and CS ha:e some characteristics in common 6hich

6e 6ill estalish in the ne=t 2art of the 2a2er!

BRINGING SE AND CSR TOGETHER

4e ha:e argued ao:e that 6hile 2rofitaility is an essentail feature of social

entre2reneurshi2 it is not its main oecti:e and in 2rinci2le suordinate to the direct solution

of a s2ecific social 2rolem! Critics of this definition 6ill certainly confront us 6ith the

oection that in 2ractice it is almost im2ossile to determine the actual goal structure of a

usiness and the moti:ation underlying socially res2onsile eha:ior' res2ecti:ely! Consider

the case of Ben R "errys as it is descried in detail y Choi and (ray -&$$0.! 8eredo and

Mc5ean -&$$#. are unsure ho6 to classify the famous ice cream com2any! It could e Eust

ice cream 6ith a fashionale dollo2 of cor2orate social res2onsiilityF -Ste2hens &$$3) 17. or


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it could e an inno:ati:e market solution to a social 2rolem! According to 8eredo and

Mc5ean -&$$#.' the former case 6ould e an e=am2le of Ecause randingF' that is'

considering social oecti:es to enhance the fiscal ottom line! Although 6e agree 6ith their

2oint of :ie6 that the identification of a com2anys goal structure is a far from eing an easy

task' 6e do not think that the task is im2ossile and that the identification of those com2anies

6hich 2ursue first and foremost a social agenda 6ould ha:e little 2ractical conesDuence!

4hile the conseDuences 6ill e addressed in more detail in the last 2art of this 2a2er 6e can

illustrate our idea of the definition of S; using the e=am2le of Ben R "errys! The com2anys

mission statement -htt2)KK666!enerry!comKacti:ismKmission/statement. does not indicate a

concrete social 2rolem 6hich is sol:ed y an inno:ati:e a22roach! Indeed' the com2any may

e o2erated in a 6ay to im2ro:e the Duality of life' the usiness 2ractices may res2ect the

en:ironment' and the com2any may e o2erated on a sustainale financial asis! But' as

laudale as this is' Ben R "errys still ust sells ice cream and they do not 2ro:ide an

inno:ati:e and fundamental solution to' for e=am2le' the 2o:erty of small/scale gro6ers in

Africa! 4e do not intend to criticize com2anies 6ith an o:iously high le:el of social

res2onsiility like Ben R "errys! ather' 6e ust em2hasize that there is a difference et6een

them and 6hat 6e 2ercei:e to e social entre2reneurshi2! A2art from these differences' S;

and CS also ha:e some characteristics in common! ?irstly' CS' too' can e theorized as an

e=2ression of ustice -Aguilera' u22' 4illiams and (ana2athi' &$$7> 4ettstein' &$$,.' if' as

Bosse' 8hilli2s and Harrison -&$$,. sho6 y means of stakeholder theory and the assum2tion

of reci2rocal eha:ior' ust treatment of stakeholders creates an additional rent! Secondly' in

order to do good' irrele:ant of the underlying moti:e' a socially Eunust eDuiliriumF -Martin

and Oserg' &$$7) 3#. has to e identified first! Both in the case of CS and in the case of S;'

this unust eDuilirium re2resents an economic o22ortunity! But 6hile the marketale

elimination of social unustice is the :ery raison dQtre of social entre2reneurshi2' it is a means

to an end for a socially res2onsile enter2rise By referring to their differences and similarities


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6e 6ill no6 2ro2ose a so far unstudied link et6een the t6o conce2ts' namely the function of

socially res2onsile enter2rises as an incuator for social entre2reneurs!

A THEORY OF INCUBATORS FOR SOCIAL ENTREPRENEURS

In order to ecome an entre2reneur -of any kind. one first of all has to recognize an

o22ortunity 6hich can e e=2loited -Shane and Lenkataraman' &$$$.! Net' o22ortunities for

social entre2reneurshi2 are o:iously of a different nature than o22ortunities for commercial

entre2reneurshi2! 9amely' they arise out of a condition of social inustice 6hich has so far not

een resol:ed y the market! Therefore' market im2erfections not only contriute to social

-and en:ironmental. 2rolems' they also 2ro:ide the o22ortunities for entre2reneurial action

-see Cohen and 4inn' &$$7' for en:ironmental 2rolems and the res2ecti:e entre2reneurial

o22ortunities.! But these o22ortunities 6ill not e recognized and e=2loited y commercial

entre2reneurs ecause their oecti:e function is dominated y the financial ottom line! Only

if the im2lications that ne6 :enture creation has for social 6ealth are considered y the

entre2reneur' does the creation of ustice ecome a 6orth6hile endea:or! Therefore' social

entre2reneurs ha:e to e led y the dee2 desire to estalish social ustice! This :alue 6ill gi:e

them a different focus of 2erce2tion! EThey see o22ortunities 6here others only see em2ty

uildings' unem2loyale 2eo2le and un:alued resourcesF -Catford' 1,,0) ,%.! 4e argue that

this flair may not e com2letely inorn ut can in fact e trained! The 2ractice field could e

either a socially res2onsile enter2rise or a com2any characterized y clearly unfair usiness

2ractices! odrigo and Arenas -&$$0. ha:e found em2irical su22ort for the former case! Their

study re:ealed that CS 2rograms ha:e a 2ositi:e effect on the sense of ustice of em2loyees!

This can e e=2lained y the influence of 2ersonal e=2eriences 6hich Elead em2loyees to

identify 6ith 2ersons 6ho ha:e een marginalized' e=2loited' or e:en socially o22ressedF

-odrigo and Arenas' &$$0) &7+. 4e thus relate the de:elo2ment of social entre2reneurs to

the conce2t of incuator organizations 6hich is 6idely/used in entre2reneurshi2 research -see


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for e=am2le' Coo2er and 8ark' &$$0> Coo2er and unkelerg' 1,0%.! Indeed' the rele:ant

literature concentrates on commercial entre2reneurshi2 in the field of high technology ut 6e

argue that the theory can 6ell e ado2ted for social entre2reneurshi2! Commercial

entre2reneurs Erecognise o22ortunities through social and conte=tual learning' identifying

2ossiilities and unmet demands 6hich can e re/framed as o22ortunitiesF -ae' &$$+) 1,0.

and 6e do not see 6hy this should e different in the case of usiness o22ortunities arising

out of a social need 6hich is not satisfied y either the market or 9?8s and the state -Seelos

and Mair' &$$+.! If indi:iduals are unoser:ant and fail to Duestion the things around them

they cannot identify actually e=isting o22ortunities -Thom2son' Al:y and 5ees' &$$$.! But the

em2loyees of a socially res2onsile enter2rise are likely to engage in a 2rocess of conte=tual

learning 6hich includes learning through dee2' situated e=2eriences 6ithin the industry or

community! The outcome of this 2rocess e=clusi:e to socially res2onsile enter2rises is the

aility to recognize and act on emergent market o22ortunities -ae' &$$+.! The 2otential

entre2reneurs attention can further e attracted y interaction 6ith others! This interaction

can hel2 them make sense of o6n e=2eriences -"ones' 5atham and Betta' &$$0.! 4ith res2ect

to the aforementioned e=am2le of Ben R "errys it is' for e=am2le' concei:ale that

em2loyees in certain 2ositions 6ill learn aout the social 2rolems related to the 2urchasing

of commodities like :anilla' cocoa' and macadamia nuts from de:elo2ing countries 6hile

eing in:ol:ed 6ith the 2roduction and selling of the res2ecti:e 2roducts! 8articularly if the

res2onsile eha:ior of a com2any is e=tensi:ely 2romoted through marketing cam2aigns'

also the consumers may e a6are of social issues related to a 2roduct' ut it is assumed that

they 6ill not learn aout the roots and the s2ecific circumstances of the social 2rolems!

Ho6e:er' a dee2 and situated kno6ledge of the cultural conte=t and the needs of the target

grou2 are 2roaly necessary to identify and eing ale to act on socially entre2reneurial

o22ortunities -ae' &$$+.!


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Once an o22ortunity is identified y Elatent entre2reneursF -Thom2son et al!' &$$$.

currently em2loyed y a com2any' they ha:e to decide 6hether to take action and lea:e the

com2any or to stay in their current 2osition! Coo2er and unkelerg -1,0%. indicate that

research attaches great im2ortance to dis2lacements and 2ushes as triggers for Duitting the o

and starting an entre2reneurial career! 4e elie:e that such dis2lacements can 2rimarily e

found on the le:el of :alues! In this regard' Heming6ay -&$$#. has 2resented an interesting

a22roach! She argues that there may e a conflict et6een the :alues of the indi:idual

em2loyees and the cor2orate en:ironment in 6hich these em2loyees 6ork! The em2loyees

:alues may either signalize a high concern for others -Ecollecti:istic 2ersonal :aluesF. or a

2ersonal focus -Eindi:idualistic 2ersonal :aluesF.! Considering that :alues are seen as

im2ortant dri:ers of eha:ior -see' for instance' Agle and Cald6ell' 1,,,.' it is reasonale to

assume that em2loyees may lea:e a com2any if the cor2orate culture is unsu22orti:e of

collecti:istic attitudes! Ho6e:er' Heming6ay -&$$#. does not e=2licitly account for this

reaction and instead assumes that the 2otential entre2reneurs 6ill eha:e Emorally muteF'

engage in cogniti:e adustments or o2erate entre2reneurially Eunder the radarF inside the

com2any! She also addresses the case of socially res2onsile enter2rises and argues that

indi:iduals 6ith collecti:ist 2ersonal :alues 6ill 2ursue a CS agenda 6ithin these

organizations! odrigo and Arenas -&$$0. are su22orti:e of this argument and e=2lain that

em2loyees of com2anies e=tensi:ely engaging in CS 6ill feel 2roud! More 2recisely' the

indi:idual em2loyees 6ill feel' Ethat his or her contriution to society has a smaller im2act

com2ared 6ith the social contriution that the organization can make' and so the em2loyees

6ish to make a social contriution is satisfied through the organizationF -odrigo and Arenas'

&$$0) &71. and they 6ill see no need to Duit their o and ecome an social entre2reneur!

Another ranch of the e=isting literature seems to e insightful 6ith regard to our research

Duestion' namely' the analysis of the link et6een CS and organizational commitment!

;:ans and a:is -&$$0. hold that indi:idual 2erce2tions of CS 6ill influence the


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attracti:eness of an organization to its em2loyees! Collier and ;stean -&$$7. as 6ell as

8eterson -&$$+. sustantiate this claim y referring to social identity theory' 6hich im2lies

that the 6ays in 6hich em2loyees think aout their organization sha2e their eha:iour!

Therefore' means/end a22roaches of CS are likely to elicit a strong commitment of

em2loyees 6ith collecti:istic 2ersonal :alues! Commitment' in turn' is related to

organizational outcomes like 6ork 2erformance' asenteeism' and turno:er -8eterson' &$$+.!

This im2lies that the identity of an organization characterized y a tendency to6ards ineDuity

may ha:e negati:e connotations for the em2loyees and may ultimately trigger Duitting the o!

Indi:iduals 6ho ha:e Duitted their os are then on their o6n and may decide to start an

entre2reneurial career! esearch in the field of commercial entre2reneurshi2 has sho6n that

the succes of such a career is to a large e=tent de2endent on the human ca2ital of the

entre2reneur -see' for instance' a:idsson and Honig' &$$3> iochon' Menzies' (asse' &$$0.!

Therefore' for the :entures of social entre2reneurs to e economically successful' the aility

to recognize o22ortunities must e accom2anied y certain ailities! More 2recisely' to

successfully create and manage a :enture 6hich is economically sustainale -i!e!' 2rofitale.'

the entre2reneur firstly needs to e eDui22ed 6ith general and s2ecific com2etencies -Baum'

5ocke and Smith' &$$1.! 4hile general com2etencies are ailities' 6hich are not e=clusi:ely

related to management and include' inter alia' oral 2resentation skills' decision/making aility'

and conce2tualization aility -Boyatzis' 1,0&> Herron and oinson' 1,,$.' s2ecific

com2etencies can only e a22lied in a usiness conte=t and are em2hasized y the

management school of entre2reneurshi2 -Cunningham and 5ischeron' 1,,1.! This stream of

research suggests that eing 2roficient in at least the asic techniDues of usiness

administration is a must for the indi:idual -social. entre2reneur to e successful -Chandler

and "ansen' 1,,&> Bro6n' &$$7> 5ussier' 1,,#.! Although the 2ure EenactorF/entre2reneur

might sometimes e ale to delegate tasks 6hich reDuire e=tensi:e managerial skills to an

EenalerF -Thom2son et al &$$$. the enactor 6ill mostly e on her or his o6n 6hen it comes


15/31

1#

to economically rele:ant decisions in the early stages of the :enture life cycle -Samasi:an'

Adul and Nuso2' &$$,> see 4ester' 1,77> azanian and razin' 1,,$ for e=am2les of life

cycle models.! In their meta/analysis of the relationshi2 et6een human ca2ital and different

success indicators @nger' auch' ?rese and osenusch -&$$,. found out that human ca2ital

in:estments ha:e a consideraly 6eaker effect on entre2reneurial success than human ca2ital

conce2tualized as outcomes of human ca2ital in:estments! ?urthermore' correlations 6ith

success 6ere found to e higher for s2ecific task/related com2etencies than for general

com2etencies and ailities! In our o2inion' this su22orts the argument that a socially

res2onsile usiness is a good 2lace for 2otential social entre2reneurs to learn the s2ecial

ailities constituting the foundation for suseDuent entre2reneurial success!

Besides human ca2ital' research has identified social ca2ital as another im2ortant :ariale

influencing the success of entre2reneurs -a:idsson and Honig' &$$3.! Social ca2ital theory

holds that indi:iduals can e=tract enefits from social structures and grou2 memershi2s! ?or

e=am2le' 2ersonal relationshi2s and a net6ork of rele:ant contacts are crucial for the effecti:e

2rocurement of needed 2hysical and financial ca2ital' the de:elo2ment of trust' :isiility' and

crediility -Thom2son et al!' &$$$.' and ultimately for the sustainaility of inno:ation and

gro6th -5arson' &$$$.! Al:ord' Bro6n and 5etts -&$$+. su22ort the argument rought

for6ard y Austin' Ste:enson and 4ie/Skillern -&$$%.' that this relationshi2 is not only :alid

in the case of commercial entre2reneurs ut also in that of social entre2reneurs! 4e think that

it is reasonale to assume that a socially res2onsile com2any is the est 2lace for 2otential

social entre2reneurs to socialize and to uild effecti:e net6orks 6hich are a 2rereDuisite for

the succes of entre2reneurial actions targeted at social 2rolems of the res2ecti:e com2anys

stakeholders! This argument is in 2rinci2le consistent 6ith the literature on commercial

entre2reneurshi2 6hich holds that a2art from s2ecific technical and cogniti:e com2etencies'

industry kno6ledge is another im2ortant asis for the sur:i:al of an entre2reneurial :enture

-see for e=am2le outriau= and Simyar 1,07> Shane &$$$> Mcel:ie and 4iklund &$$+.


16/31

1%

It 6ill most likely e much more difficult to identify the 2ro:iders of infrastructure and

resources as 6ell as the 2otential customers for those indi:iduals 6ho do not ha:e the

o22ortunity to ta2 the social ressources of an estalished usiness in the rele:ant area!

Through social net6orks' 2otential entre2reneurs can in 2articular get access to tacit industry

kno6ledge! Mitchell -1,,7) 1&+. further e=2lains this y referring to e=2ert information

2rocessing theory! According to him' Ee=2erts out/2erform no:ices 6ithin their s2eciality

ecause' on the asis of their uniDue ut common history' they can recognize immediately

that 6hich no:ices may miss or reDuire great effort to disco:er) com2liance of e=2ertise/

s2ecific circumstances 6ith an e=2ert Qscri2tQ!F

?rom our 2oint of :ie6' the ottom line of the 2receding discussion turns out to e as

follo6s! In order to ecome a successful social entre2reneur' indi:iduals are in need of certain

ca2ailities! Some of them can 2ossily e acDuired through lectures' seminars' and so forth

6hile others may e inorn! But study and fate may not e sufficient! ather' 2ractical

e=2erience in already estalished enter2rises 2rior to the first entre2reneurial act is likely to e

another im2ortant :ariale! ?urthermore' gi:en the theoretical 2ro=imity of the conce2t of

CS to S;' com2anies engagement in CS is likely to affect the aility of em2loyees to

recognize o22ortunities for socially entre2reneurial acti:ities' the actual e=2loitation of such

o22ortunities and the long/term sur:i:al of the resulting social enter2rises! 4e make the case

that com2rehensi:e CS 2ractices could e the hands/on e=2erience 6ith social inustice

2otential social entre2reneurs need to de:elo2 and succeed! Ho6e:er' it is Duestionale if

these indi:iduals 6ill e:er lea:e their nest gi:en that the :alues underlying their em2loyers

culture and o2erations are consistent 6ith their o6n :alues! In fact' the asence or mere

su2erficial acce2tance of social res2onsiility could e the trigger lea:ing the com2any and

ecoming a social entre2reneur!


17/31

17

METHOD

Research Apprach

In the 2re:ious section of this 2a2er 6e discussed the 2henomena of cor2orate social

res2onsiility and social entre2reneurshi2! Indeed' the literature on social entre2reneurshi2

has gro6n consideraly in the last cou2le of years and theory formation has egun! Net'

literature on the link et6een S; and cor2orate social res2onsiility is :irtually none=istent!

4ith this as a ackdro2 it seems reasonale to use the research method of directed content

analysis to gain insights! According to Hsieh and Shannon -&$$#.' this a22roach isa22ro2riate if the goal of research is to :alidate and e=tend already e=isting theoretical

foundations! As a first ste2 of this rather e=2loratory ende:our' 6e tried to de:elo2 sufficient

instrumentations for social res2onsiility on the institutional le:el' i!e! CS' and the :alue of

social ustice on the 2ersonal le:el! There6ith' 6e aimed at understanding the real meanings

and the 2atterns of the original 2henomena! Our analysis egan 6ith a deducti:e a22roach

dealing 6ith the theoretical foundations and definitions of CS and S; -8atton' 1007.! In this

2hase of research' 6e already had some e=2ectations and 6orked on certain s2ecific research

Duestions! According to ;isenhardt -1,0,.' this a22roach is definitely 2romising since it hel2s

to limit the flood of information and to focus the research! Ho6e:er' during the analysis our

data egan to s2eak u2 for itself and it ecame ine:itale to also take an inducti:e a22roach

and to look for some originally unconsidered 2atterns!

4e decided to select a Dualitati:e case study a22roach from the :arious inDuiry methods

ecause it offers the 2ossiility to ca2ture and re2ort indi:idualized outcomes as 6ell as

organizational le:el im2acts 8atton -1,07.! Social entre2reneurs are generally indi:iduals 6ho

stri:e for the solution of social 2rolems y means of ne6 :enture creation! Ho6e:er' the

indi:idual manifestations of entre2reneurshi2 :ary significantly! Our aim 6as to analyze these

indi:idual 2aths and to identify common 2atterns as 6ell as salient discre2ancies! The conce2t


18/31

10

of social res2onsiility' for e=am2le' is 2roaly not understood eDually in different countries'

cultures' communities' and firms!

Sa!p"e a#$ Research I#s%r&!e#%

As the unit of em2irical analysis 6e ha:e used cases of social entre2reneurshi2! 4e

concentrated on e:aluating indi:idualized outcomes that are ustifialy reluctant to generate

standardized criteria and scales against 6hich all :alues can e com2ared -8atton' &$$&.! ;ach

case deli:ers a certain outcome story consisting of descri2ti:e information aout the life and

es2ecially the career of the res2ecti:e indi:idual suseDuent to the decision to ecome a social

entre2reneur! 4e chose our sam2le 2ur2osefully and reached a case numer of +& through 3

sam2ling stages)

Stage I: Extreme Sampling. After a first acDuaintance 6ith the Social ;ntre2reneur A8I'

6e decided to start 6ith the +0, social entre2reneurs 6ho 6ere a6arded for their

contriutions to social change and ecame fello6s of :arious su22orting organizations! 4e

used the a6arding of 2rices and fello6shi2s as a criterion for success since research has not

yet identified a single est 2ractice for measuring the 2erformance of neither commercial

entre2reneurs -Mur2hy' Trailer and Hill' 1,,%. nor 9?8s -see Sa6hill and 4illiamson' &$$1.

Stage II: Criterion Sampling. 4e then defined our o6n selection criteria to narro6 do6n

our focus on certain issues! 9amely' 6e decided to concentrate on the entre2reneurial

2rocesses and decisions -see Tale I.! Therey' 6e identified 113 social entre2reneurs!

GGGGGGGGGGGGGGGG!!

Insert Table 1 about here


19/31

1,

Stage III: Intense Sampling.In the end' 6e decided to use +& information/rich cases that

manifest the 2henomenon of social entre2reneurshi2 thoroughly! There6ith' 6e ho2ed to

reduce redundancy and to enhance case heterogeneity!

In order to e ale to identify cross/case 2atterns -;isenhardt' 1,0,. and 6e structured the

cases y means of a tale consisting of fi:e criteria)

- Career and personal background of the social entrepreneur

- Experience with corporate social responsibility

- Recognition of an opportunity based on social inustice

- !ecision to become a social entrepreneur

- Resources used in the process of "enture creation

RESEARCH FINDINGS

Career a#$ pers#a" 'ac()r$ * %he sc+a" e#%repre#e&r

4e feel that the data su22orts one of our main theoretical arguments' namely that

indi:iduals 6ho are dri:en y the :alue of social ustice and start a social :enture enefit from

2ractical e=2erience as an em2loyee and are likely to sur:i:e in the market! Actually' the

usiness conce2ts of social entre2reneurs are mostly directly related to the entre2reneurs

2rofessional careers' 2articularly 6ith regard to

the the usiness conce2t itself

the com2etencies the social entre2reneurs acDuired during 2receding em2loyments

the target grou2

the access to resources -social ca2ital' human ca2ital' financial ca2ital. gained through

a 2rior em2loyer

the usiness 2artners -6ho 6ere often former colleagues.
http://dict.leo.org/ende?lp=ende&p=5tY9AA&search=thoroughlyhttp://dict.leo.org/ende?lp=ende&p=5tY9AA&search=thoroughly


20/31

&$

E,per+e#ce -+%h crpra%e sc+a" resp#s+'+"+%.

4e found out that references to social res2onsiility in the o definitionsKassignments of

the em2loyees often indicate the direct e=2osure to s2ecific social 2rolems like e=clusion'

:iolence' disease or discrimination 6hich are in turn realizations on inustice! Ha:ing faced

6ith these 2rolems' the em2loyees notice that

the issue is different' i!e! more -in:isile. factors are rele:ant and the roots of the

2rolem dee2er than assumed from a certain distance

the issue needs a more fle=ile solution 6hich can only e 2ro:ided y indi:iduals and

not y large and cumersome -ureaucratic. organization

ErealF social res2onsiility can only e assumed on the local le:el 6here indi:iduals

can actually e=2erience the social 2rolems for themsel:es

Rec)#+%+# * a# ppr%+%. 'ase$ # sc+a" +#/&s%+ce

Social ;ntre2reneurs de:elo2 hands/on/a22roaches to deal 6ith the ErealF social

res2onsiility instead of the theoretically de:elo2ed solutions for a 2rolem seen from a

distance! They de:elo2 contacts 6ith the target 2o2ulation' other organisations and market

2artici2ants in:ol:ed in the social issue on the local le:el! Target 2o2ulation needs to learn

ho6 to hel2 themsel:es


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&1

Dec+s+# % 'ec!e a sc+a" e#%repre#e&r

After defining the ErealF res2onsiility' Social ;ntre2reneur must suggest a 6ay that

su22lies a self/sufficient R interacti:e system in 6hich the target 2o2ulation 6ould e

2art of the 2rocesses like decision making' 6ork force de:elo2ment etc!

is con:incing in the eye of the target 2o2ulation -seen mostly as a 2ull factor.

6ould e a etter solution to the 2rolem than the ones till no6 -through 2ersonal

initiati:e' fle=iility' em2athy etc!.

6ould change the destiny of the target 2o2ulation in the long term!

uring our analysis 6e 6ere ale to oser:e the institutional influence on the design'

2ositioning and customer retention 2rocesses of the ne6ly formed entre2reneurial systems

through the e=2erience of the entre2reneur! 4e ha:e more e=2ectancy aout this issue and in

the second stage of our research 2rocess> 6e are ho2ing to recei:e more insights aout this

influence inter:ie6ing the chosen social entre2reneurs so that 6e can analyse it further) in

6hich as2ects' ho6 and to 6hat e=tent!

Res&rces &se$ +# %he prcess * 0e#%&re crea%+#

Our findings sho6 that the resources reached through on the institutional e=2erience 2lay

an im2ortant role! The a:ailaility of the resources for a social entre2reneur are influenced y)

The re2utation of the institution and Social ;ntre2reneur

8artnershi2 6ith the former institution

Su22ort coming directly from the institution -in a monetary or non/monetary 6ay.

Human Ca2ital acDuired in the institution < usiness R management skills from

2ractice

Social Ca2ital -contacts 6ith the other 2artici2ants of the markets.


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&&

I#$&c%+# *r! %he prac%+ce Pers#a" E,per+e#ce -+%h Sc+a" I#/&s%+ce

As 6e egan our research' 6e kne6 that the le:el of 2ersonal in:ol:ement 6ould e

higher than the normal entre2reneur as a result of his 2hilanthro2ic a22roach ut 6e did not

reckon a 2ersonal e=2erience 6ith social inustice! According to our findings' this e=2erience

can e made in one of the entre2reneurs life cycles at any time) in his childhood or e:en

during his e=2erience co2ing 6ith the social res2onsiility and it can e the result of

immigration' health disease' aging' gender issues' family issues' community issues' ineDuity

issues' education' and unem2loyment among others! Ha:ing had such an e=2erience is firstly

a :ery strong moti:ation to find out the ErealF res2onsiility! Secondly it accelerates the act of

entre2reneurshi2! These findings sho6 a striking resemlance 6ith 6omen entre2reneurshi2

and immigrant entre2reneurshi2 2henomena!


23/31

&3

RESEARCH MODEL

(etting in touch 6ith the target 2o2ulation

Oser:ing the coreKrea"2rolem issues

ecognizing the need for !resocial ustice

efining the ga2s

;ntre2reneurial ecision

Meeting 6ith social res2onsiility

on the +#s%+%&%+#a"le:el

/(o:ernment/9(O

/Com2anies

/ach:erUnde/Other

/Immigration

/Health disease

/Aging

/(ender issues

/?amily issues

/Community issues

/IneDuity issues

/;ducation

/@nem2loyment/Other

;=2erience 6ith Social Inustice

on pers#a"le:el

2ersonal e=2erience R

le:el of in:ol:ement

9e6 esource Cominations for Social "ustice

2ersonal insights * institutional

2rocesses * social ca2ital* re2utation


24/31

&+

DISCUSSION

Our research sho6s that institutions are 2laying a 2ioneer role in social entre2reneurshi2 that has

until no6 stayed in shado6! The mo:e of social res2onsiility from the institutional le:el to the

entre2reneurial le:el is essential for etter solutions of social ustice for communities R societies

6hich can ust e de:elo2ed through a hands/on/a22roach and the su22ort


25/31

immigrant entre2reneurs 6ho 6ork for a etter standard of li:ing on the community le:el could

also lead us to different links and facts!

FIGURES

Table I : Selection Criteria

a. Entrepreneurial Emphasis:

Entrepreneurship definitions

Entrepreneurial processes

(Opp. Recognition, Competitive Advantage etc.)

Formation of a new & independent (or

promising to be) organisation/body

Business idea/ Business plan

b. Social Responsibility Emphasis:

Target population in need/excluded

Social nclusion

!irect nterference with the business plan

Table 2: Steps of the Research

Ste2 IQ&a"+%a%+0e Case S%&$.Analysis of +& 2ur2osefully chosen cases

for the first insights

Ste2 IIQ&a"+%a%+0e I#%er0+e-s6ith narrati:e and 2rolem oriented character

including 1# social entre2reneurs to model the

2henomenon and to ring it to a measurale le:el

Ste2 IIIQ&a#%+%a%+0e Research

6ith a scale de:elo2ed oth deducti:ely and

inducti:ely for measurement' defining the causal

relationshi2s et6een constructed :ariales


26/31

&%

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Herron' 5! R oinson' ! B! 1,,$! Entrepreneurial s1ills An empirical study of the missing

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Homans' (! C! 1,%1!Social $ehavior ts elementary forms"9e6 Nork) Harcourt' Brace!

Hsieh' H!/?!KShannon' S! ;! &$$#! Three a22roaches to Dualitati:e content analysis! .ualitative

%ealth Research' 1#-,.) 1&77/1&00!

"ohnson' S! &$$$!6iterature review on social entrepreneurship"4orking 2a2er of the Canadian

Centre for Social ;ntre2reneurshi2' @ni:ersity of Alerta' Alerta' CA9!


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Massetti' B! 5! &$$0! The social entre2reneurshi2 matri= as a Eti22ing 2ointF for economicchange!E7,1$-3.) 1/0!

Mayring' 8! &$$&!Einf8hrung in die 9ualitative So(ialforschung. 4einheim u! Basel) Beltz

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Mcel:ie' A! R 4iklund' "! &$$+! Ho6 kno6ledge affects o22ortunity disco:ery and

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Mitchell' ! ! 1,,7! Oral history and e=2ert scri2ts) demystifying the entre2reneuriale=2erience!nternational Journal of Entrepreneurial Behaviour and Research,3-&.) 1&&/13,!

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research!Journal of Business Research,3%-1.) 1#/&3!

Orlitzky' M!' Schmidt' ?! 5!' R ynes' S! 5! &$$3! Cor2orate social and financial 2erformance) A

meta/analysis! 7rgani(ation Studies,&+-3.) +$3/++1!

8ariyar' B! R 4ard' A! ;! &$$%! Social entrepreneurship !roducing 0unus out of Branson

and Teresa:4hite ose C;T5; 4orking 8a2er' @ni:ersity of Nork' Nork' @!


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8ulications!

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8eterson' ! ! &$$+! The relationshi2 et6een 2erce2tions of cor2orate citizenshi2 and

organizational commitment'Business and Society,+3-3.) &,%/31,!

8inkston' T! S! R Carroll' A! B! 1,,%! A retros2ecti:e e=amination of CS orientations) Ha:e

they changedJJournal of Business Ethics,1#-&.) 1,,/&$%!

ae' ! &$$+! 8ractical theories from entre2reneursQ stories) iscursi:e a22roaches toentre2reneurial learning! Journal of Small Business and Enterprise #evelopment,11-&.) 1,#/

&$&!

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em2loyees according to their attitudes!Journal of Business Ethics,03-&.) &%#/&03!

o2er' "! R Cheney' (! &$$#! 5eadershi2' learning and human resource management! The

meanings of social entre2reneurshi2 today! orporate *overnance,#-3.) ,#/1$+!

Samasi:an' M!' Adul' M!' R Nuso2' N! &$$,! Im2act of 2ersonal Dualities and management

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organizations!/onprofit Management & 6eadership,11-3.) 371/30%!

Seelos' C! R Mair' "! &$$+! Social entrepreneurship The contri$ution of individualentrepreneurs to sustaina$le development" I;S; Business School 4orking 8a2er 9o! ##3!

@ni:ersity of 9a:arra' Barcelona' ;S!

Seitanidi' M! M! R Crane' A! &$$,! Im2lementing CS through 2artnershi2s) @nderstanding the

selection' design and institutionalisation of non2rofit/usiness 2artnershi2s!Journal of Business

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Shane' S! R Lenkataraman' S! &$$$! The 2romise of entre2reneurshi2 as a field of research!

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Shane' S! &$$$! 8rior kno6ledge and the disco:ery of entre2reneurial o22ortunities!

7rgani(ation Science,11-+.) ++0

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