Managing Entrepreneurship Social Entrepreneurship

Question :

What is social entrepreneurship? What are the motivations in setting up a social enterprise?

Answer :

It is regarded as a driver of social change that aims for social equilibrium. There is no strict definition of social entrepreneurship. It is an evolving concept. Under social entrepreneurship, an entrepreneur continually searches for opportunities that serve the chosen social cause. Social entrepreneurship is different from traditional entrepreneurship but it can be a part of other types of business organizations due to the shared similarities. While social entrepreneurship has to make transformational changes, traditional entrepreneurship creates incremental changes (Braunerhjelm & Hamilton, 2012). However, the operating principles for both are the same with similar stress on innovation. A social enterprise is a combination of profit and non-profit ventures. For example, while corporate social responsibility is an annual accountability for corporate organizations, social responsibility or social causes is the primary influence behind social entrepreneurship and it forms a part of daily business operations.

1.1 Metrics

There are three types of bottom lines, double, triple and quadruple. In double bottom line financial performance and social impact are measured. In triple bottom line, ecological causes are added to the double bottom line. Whereas, quadruple bottom line is concerned with four avenues of financial, social, ecological and cultural value creation (Baber, et al., 2012). The measurement of these metrics vary across organizations as there is no common tool is available. Balanced scorecard, blended value investing, cost-benefit analysis, social return on investment etc. are some of the available tools. 

1.2 Critique

It is one of the emerging trends which is grabbing the attention of many business enthusiasts. Some critics of social entrepreneurship have expressed their argument against social entrepreneurship. According to counter arguments marketization of non-profit institutions are a major part of this trend. List of identified non-profit institutions include religious concerns, educational institutes and even government institutes. When these concerns adopt marketing principles and techniques, there is a danger of profit becoming the sole motive (Swanson & Zhang, 2012). Marketization might eliminate or diminish the need for social values and socially oriented non-business missions. Hence, social enterprises might not be successful in maintaining their social mission objectives. Such critical analysis can bring a wider perspective in the concept of social entrepreneurship.

2 Motivations behind a Social Enterprise

2.1 Social Issues

Community related social challenges can be a major driver. However, social issues or any other drivers act as motivation only when the desire for social entrepreneurship is present. They look for business opportunities which bring a social challenge with them and the response to these problems lead to the creation of a social enterprise. Social causes present a challenging vision which motivates social enterprises (Bragaa, et al., 2014).  Another reason behind social issues acting as motivation for social enterprises is the drive for innovation. Philanthropy is undoubtedly the main motivation behind social enterprise.  When social issues are viewed as embarrassments, social entrepreneurs are encouraged to create social values through social enterprises. This factor as a key motivation has been proved in multiple studies across different time periods. 

2.2 Personal Motivation and Experience

A social entrepreneur’s personal life plays and important role behind social enterprises. Personal motivation and experiences shapes a person and impacts life decisions. Those who establish social enterprises have been a part of situations which provided them with ideas for social enterprises. For example, the entrepreneur’s personal experiences in his or her own community can be a motivation to create a social enterprises that address those social issues. Personal motivation also comes from travelling and global exposures. Encounters beyond one’s own community help a person understand the scope and the depth of social problems which lead to the formation of social enterprises (Ghalwash, et al., 2017). Previous entrepreneurial activities or business or social projects are experiences that motivates social enterprises. The experiences along with business ambitions to dedicate profits towards the welfare of others work as drivers of change. Personal motivation and experiences can be both past and present drivers of social enterprises. As a past driver these serve as motivation behind social enterprises. These shape the plans for social enterprises. As present drivers these provide motivation for continuous innovation. Due to such motivation entrepreneurs always look for opportunities to improve their services towards their chosen social goals. In communities where children are advised not to take up social work due to poverty and other social constraints, social enterprises are not easy to form.   

2.3 Social Networks

A strong social network gives the entrepreneur confidence to take up new opportunities. Therefore, in spite of financial and non-financial constraints entrepreneurs with strong networks are encouraged to start social enterprises. They have an assurance in their social networks that once the enterprise starts they can use their social networks to make it stronger (Bacq & Janssen, 2011). Sometimes, social networks contribute to social enterprises in much greater magnitude than entrepreneurs can do on their own. Also, building social networks through collaborations in the professional field encourage social enterprises. For example, government agencies, educational institutions, health centres etc. can be valuable partners to fulfil the causes of a social enterprise. Another reason behind social networks being a motivator of social enterprise is the ability to share knowledge. Especially in medical causes or community based social problems aiding to the cause not only include material help but also raising social awareness. Therefore, social networks serve as this widespread chain of knowledge and motivation.

3 References

Swanson, L. & Zhang, D., 2012. Social Entrepreneurship. In: Gender, Geographies and Social Context. s.l.:s.n., pp. 171-190.