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Social entrepreneurship: New research findings
Journal of World Business 41 (2006) 1–5 www.socscinet.com/bam/jwb
Social entrepreneurship: New research findings
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 entrepreneurs 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 who would 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 entrepreneurship 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 entrepreneurship include social marketing, strategic human resource management, organizational learning, leadership, and intrapreneurship, in both public and nonprofit 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 entrepreneurship. Our explorations indicated that stakeholders 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 professionals 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.
2
Editorial / Journal of World Business 41 (2006) 1–5
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 entrepreneurship, 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 performance 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
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 authorities 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 ‘‘comprehensive 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 conventional views of entrepreneurship as expressed by both classic and contemporary scholarship. By systematically 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
3
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 contribution 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 opportunities 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 recommendations for social entrepreneurship including public policy implications for for-profit firms.
4
Editorial / Journal of World Business 41 (2006) 1–5
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 dualnature 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 entrepreneurship with economic development processes. In doing so, they discuss modernization, dependency, and regulation theories. The authors argue that modernization 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 entrepreneurship: 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 practitioners, 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 indepth examination of nine organizations. Their findings are explained through a narrative of CEOs and middle managers from NPOs. The authors report that government sub-contracting to these NPOs recently has become increasingly competitive. Their findings suggest 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 environment. 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
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, we wish to thank the many 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 commitment of many members of the Academy of Management, 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.
5
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: [email protected] (M.J. Christie) 1 Tel.: +1 519 884 0710x2909; fax: +1 519 884 0201 [email protected] (B. Honig)
Social entrepreneurship: New research findings
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 entrepreneurs 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 who would 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 entrepreneurship 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 entrepreneurship include social marketing, strategic human resource management, organizational learning, leadership, and intrapreneurship, in both public and nonprofit 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 entrepreneurship. Our explorations indicated that stakeholders 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 professionals 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.
2
Editorial / Journal of World Business 41 (2006) 1–5
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 entrepreneurship, 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 performance 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
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 authorities 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 ‘‘comprehensive 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 conventional views of entrepreneurship as expressed by both classic and contemporary scholarship. By systematically 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
3
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 contribution 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 opportunities 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 recommendations for social entrepreneurship including public policy implications for for-profit firms.
4
Editorial / Journal of World Business 41 (2006) 1–5
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 dualnature 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 entrepreneurship with economic development processes. In doing so, they discuss modernization, dependency, and regulation theories. The authors argue that modernization 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 entrepreneurship: 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 practitioners, 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 indepth examination of nine organizations. Their findings are explained through a narrative of CEOs and middle managers from NPOs. The authors report that government sub-contracting to these NPOs recently has become increasingly competitive. Their findings suggest 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 environment. 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
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, we wish to thank the many 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 commitment of many members of the Academy of Management, 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.
5
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: [email protected] (M.J. Christie) 1 Tel.: +1 519 884 0710x2909; fax: +1 519 884 0201 [email protected] (B. Honig)