WEEK 1
Social and Commercial Entrepreneurship: Same, Different, or Both? - James Austin
Howard Stevenson and Jane Wei-Skillern
This article aims to open up some avenues of exploration for social entrepreneurship theory
development and practice by presenting an exploratory comparative analysis of the extent to
which elements applicable to business entrepreneurship, which has been more extensively
studied, are transferable to social entrepreneurship. To a lesser degree, we will also explore
the reverse applicability or the ways in which insights from social entrepreneurship can
contribute to a deeper understanding of business entrepreneurship.
Common across all definitions of social entrepreneurship is the fact that the underlying drive
for social entrepreneurship is to create social value, rather than personal and shareholder
wealth and that the activity is characterized by innovation, or the creation of something new
rather than simply the replication of existing enterprises or practices.
We define social entrepreneurship as innovative, social value creating activity that can occur
within or across the nonprofit, business, or government sectors
- Market failure. One theory behind the existence of social-purpose organizations is that
they emerge when there is social-market failure, i.e., commercial market forces do not
meet a social need, such as in public goods or in contract failure. Market failure will
create differing entrepreneurial opportunities for social and commercial
entrepreneurship.
- Mission. The fundamental purpose of social entrepreneurship is creating social value
for the public good, whereas commercial entrepreneurship aims at creating profitable
operations resulting in private gain. Differences in mission will be a fundamental
distinguishing feature between social and commercial entrepreneurship that will
manifest itself in multiple areas of enterprise management and personnel motivation.
Commercial and social dimensions within the enterprise may be a source of tension.
- Resource mobilization. The nondistributive restriction on surpluses generated by
nonprofit organizations and the embedded social purpose of for-profit or hybrid forms
of social enterprise limits social entrepreneurs from tapping into the same capital
markets as commercial entrepreneurs. Human and financial resource mobilization will
be a prevailing difference and will lead to fundamentally different approaches in
managing financial and human resources.
- Performance measurement. The social purpose of the social entrepreneur creates
greater challenges for measuring performance than the commercial entrepreneur who
can rely on relatively tangible and quantifiable measures of performance such as
financial indicators, market share, customer satisfaction, and quality. Performance
measurement of social impact will remain a fundamental differentiator, complicating
accountability and stakeholder relations.
Commercial vs. Social
entrepreneurship
- Opportunity:
Breaks throughs and new needs, large
attractive market vs. basic long-
standing needs, social need existing
market
- Context:
Strong market-selection measures vs.
weak market-selection measures
- People and Resources
Large financial resources and incentives vs. small financial resources and incentives
, - Deals
Straightforward compensation strategies, large power of consumers, money must be used
for value creation and is long term, easily quantifiable vs. creative strategies, small power
of consumers, money has a short horizon because many investors needed, more difficult
to quantify
Social entrepreneurship as an essentially contested concept: Opening a new avenue for
systematic future research - Nia Choi, Satyajit Majumdar
The purpose of this article is to address this gap in the current literature. In order to do so we
first establish the essentially contested nature of the concept of social entrepreneurship, and
then propose a means, through the idea of the ‘cluster concept’, to provide a definitional
foundation which can help to advance the development of systematic future research.
Seven key conditions of contested concepts (= endless disputes about proper meaning of
concept, Gallie 1956)
- Appraisiveness
- Internal complexity
- Various describability
- Openness
- Aggressive and defensive uses
- Original exemplar
- Progressive competition
Social entrepreneurship = cluster concept of following sub-concepts:
- Social value creation
- Social entrepreneur
- Social entrepreneurship organization
- Market orientation
- Social innovation
,Applying the theory of essentially contested concepts to social entrepreneurship, it was
demonstrated that social entrepreneurship can be regarded as an essentially contested
concept. Recognizing social entrepreneurship as an essentially contested concept explains as
to why it is so difficult to find a universal definition of social entrepreneurship and why it
prompts different meanings among different parties. In this regard, it was shown that social
entrepreneurship is an appraisive concept leading to value laden debates about its proper
meaning. It was further demonstrated that the valued achievement that social
entrepreneurship signifies consists of different components that make the concept internally
complex. Based on how different users weigh the importance of the different sub-concepts,
social entrepreneurship is variously describable. Moreover, it was shown that social
entrepreneurship is open in character, and therefore subject to modification in the face of new
situations and changing circumstances, which, in turn, further contributes to its contested
character. Applying the theory of essentially contested concepts further showed that social
entrepreneurship is not just what Gallie (1956a) called a “radically confused concept”, which
is the confused use of two or more consistent concepts. The acknowledgment of one original
exemplar and the existence of progressive competition rule out the possibility of social
entrepreneurship being a radically confused concept.
The contribution of this article is twofold. Firstly, it provides an in-depth explanation of the
contested nature of social entrepreneurship and shows that a universally accepted definition
of social entrepreneurship is hardly possible. Secondly, it offers a novel conceptual
understanding of social entrepreneurship which may open a new avenue for systematic future
research despite the contested nature of the concept.
Since the creation of social value is considered to be a prerequisite of social entrepreneurship,
it can be regarded as a necessary condition of social entrepreneurship and is, therefore,
represented by the large circle encompassing the other four sub-concepts. The creation of
social value, however, is not a sufficient condition for social entrepreneurship: it is the
combination of social value creation along with the other four properties (the social
entrepreneur, the SE organization, market orientation, social innovation) which qualifies
something to be identified as social entrepreneurship. Further, the sub-concepts of the social
entrepreneur, the SE organization, market orientation, and social innovation are not by
themselves necessary conditions of social entrepreneurship and can, therefore, exist in greater
or lesser degrees and even in different combinations in actual instantiations of the concept.
Thus, something can be regarded as social entrepreneurship even if it exhibits less than the
five sub-concepts, presupposed that the creation of social value is given.
, Thus, conceptualizing social entrepreneurship as a cluster concept does not ignore the
diversity within the field of social entrepreneurship but serves as a conceptual tool which
allows to systematically delve deeper into its various possible meanings and forms.
Social entrepreneurship research: A source of explanation, prediction, and delight -
Johanna Mair, Ignasi Martí
This article aims to unveil the core of social entrepreneurship in order to guide future
research.
Our examination of various forprofit and not-for-profit initiatives suggests that the choice of
set-up is typically dictated by the nature of the social needs addressed, the amount of
resources needed, the scope for raising capital, and the ability to capture economic value.
The working definition of social entrepreneurship put forward in this article is intended to
facilitate a more detailed examination of the main components of social entrepreneurship,
namely the social element and the entrepreneurial element.
Many of the issues we have brought up in this article are typical of any emerging field of
research: the need to draw boundaries so as to delimit scope and clarify whether it really is an
independent field of research, and the need to identify the different levels of analysis,
disciplines and literatures. To conclude, we will elaborate on topics and issues we consider
important in order to advance our understanding of social entrepreneurship: social
entrepreneurship as an independent field of research, assessing social performance and
impact, and clarifying the role of embeddedness.
- Probably one the most controversial issues is whether social entrepreneurship is an
independent field of research. Many studies on social entrepreneurship have adopted
concepts and terminology used in the established entrepreneurship literature. Does
this imply that social entrepreneurship is a sub-category of entrepreneurship, in which
the social context provides a new and unusual setting in which to study and test
entrepreneurial phenomena? We argued that social entrepreneurship differs from
other forms of entrepreneurship in that it gives higher priority to social value
creation—by catalyzing social change and/or catering to social needs—than to value
capture. We believe that social entrepreneurship deserves considerable attention as a
Social and Commercial Entrepreneurship: Same, Different, or Both? - James Austin
Howard Stevenson and Jane Wei-Skillern
This article aims to open up some avenues of exploration for social entrepreneurship theory
development and practice by presenting an exploratory comparative analysis of the extent to
which elements applicable to business entrepreneurship, which has been more extensively
studied, are transferable to social entrepreneurship. To a lesser degree, we will also explore
the reverse applicability or the ways in which insights from social entrepreneurship can
contribute to a deeper understanding of business entrepreneurship.
Common across all definitions of social entrepreneurship is the fact that the underlying drive
for social entrepreneurship is to create social value, rather than personal and shareholder
wealth and that the activity is characterized by innovation, or the creation of something new
rather than simply the replication of existing enterprises or practices.
We define social entrepreneurship as innovative, social value creating activity that can occur
within or across the nonprofit, business, or government sectors
- Market failure. One theory behind the existence of social-purpose organizations is that
they emerge when there is social-market failure, i.e., commercial market forces do not
meet a social need, such as in public goods or in contract failure. Market failure will
create differing entrepreneurial opportunities for social and commercial
entrepreneurship.
- Mission. The fundamental purpose of social entrepreneurship is creating social value
for the public good, whereas commercial entrepreneurship aims at creating profitable
operations resulting in private gain. Differences in mission will be a fundamental
distinguishing feature between social and commercial entrepreneurship that will
manifest itself in multiple areas of enterprise management and personnel motivation.
Commercial and social dimensions within the enterprise may be a source of tension.
- Resource mobilization. The nondistributive restriction on surpluses generated by
nonprofit organizations and the embedded social purpose of for-profit or hybrid forms
of social enterprise limits social entrepreneurs from tapping into the same capital
markets as commercial entrepreneurs. Human and financial resource mobilization will
be a prevailing difference and will lead to fundamentally different approaches in
managing financial and human resources.
- Performance measurement. The social purpose of the social entrepreneur creates
greater challenges for measuring performance than the commercial entrepreneur who
can rely on relatively tangible and quantifiable measures of performance such as
financial indicators, market share, customer satisfaction, and quality. Performance
measurement of social impact will remain a fundamental differentiator, complicating
accountability and stakeholder relations.
Commercial vs. Social
entrepreneurship
- Opportunity:
Breaks throughs and new needs, large
attractive market vs. basic long-
standing needs, social need existing
market
- Context:
Strong market-selection measures vs.
weak market-selection measures
- People and Resources
Large financial resources and incentives vs. small financial resources and incentives
, - Deals
Straightforward compensation strategies, large power of consumers, money must be used
for value creation and is long term, easily quantifiable vs. creative strategies, small power
of consumers, money has a short horizon because many investors needed, more difficult
to quantify
Social entrepreneurship as an essentially contested concept: Opening a new avenue for
systematic future research - Nia Choi, Satyajit Majumdar
The purpose of this article is to address this gap in the current literature. In order to do so we
first establish the essentially contested nature of the concept of social entrepreneurship, and
then propose a means, through the idea of the ‘cluster concept’, to provide a definitional
foundation which can help to advance the development of systematic future research.
Seven key conditions of contested concepts (= endless disputes about proper meaning of
concept, Gallie 1956)
- Appraisiveness
- Internal complexity
- Various describability
- Openness
- Aggressive and defensive uses
- Original exemplar
- Progressive competition
Social entrepreneurship = cluster concept of following sub-concepts:
- Social value creation
- Social entrepreneur
- Social entrepreneurship organization
- Market orientation
- Social innovation
,Applying the theory of essentially contested concepts to social entrepreneurship, it was
demonstrated that social entrepreneurship can be regarded as an essentially contested
concept. Recognizing social entrepreneurship as an essentially contested concept explains as
to why it is so difficult to find a universal definition of social entrepreneurship and why it
prompts different meanings among different parties. In this regard, it was shown that social
entrepreneurship is an appraisive concept leading to value laden debates about its proper
meaning. It was further demonstrated that the valued achievement that social
entrepreneurship signifies consists of different components that make the concept internally
complex. Based on how different users weigh the importance of the different sub-concepts,
social entrepreneurship is variously describable. Moreover, it was shown that social
entrepreneurship is open in character, and therefore subject to modification in the face of new
situations and changing circumstances, which, in turn, further contributes to its contested
character. Applying the theory of essentially contested concepts further showed that social
entrepreneurship is not just what Gallie (1956a) called a “radically confused concept”, which
is the confused use of two or more consistent concepts. The acknowledgment of one original
exemplar and the existence of progressive competition rule out the possibility of social
entrepreneurship being a radically confused concept.
The contribution of this article is twofold. Firstly, it provides an in-depth explanation of the
contested nature of social entrepreneurship and shows that a universally accepted definition
of social entrepreneurship is hardly possible. Secondly, it offers a novel conceptual
understanding of social entrepreneurship which may open a new avenue for systematic future
research despite the contested nature of the concept.
Since the creation of social value is considered to be a prerequisite of social entrepreneurship,
it can be regarded as a necessary condition of social entrepreneurship and is, therefore,
represented by the large circle encompassing the other four sub-concepts. The creation of
social value, however, is not a sufficient condition for social entrepreneurship: it is the
combination of social value creation along with the other four properties (the social
entrepreneur, the SE organization, market orientation, social innovation) which qualifies
something to be identified as social entrepreneurship. Further, the sub-concepts of the social
entrepreneur, the SE organization, market orientation, and social innovation are not by
themselves necessary conditions of social entrepreneurship and can, therefore, exist in greater
or lesser degrees and even in different combinations in actual instantiations of the concept.
Thus, something can be regarded as social entrepreneurship even if it exhibits less than the
five sub-concepts, presupposed that the creation of social value is given.
, Thus, conceptualizing social entrepreneurship as a cluster concept does not ignore the
diversity within the field of social entrepreneurship but serves as a conceptual tool which
allows to systematically delve deeper into its various possible meanings and forms.
Social entrepreneurship research: A source of explanation, prediction, and delight -
Johanna Mair, Ignasi Martí
This article aims to unveil the core of social entrepreneurship in order to guide future
research.
Our examination of various forprofit and not-for-profit initiatives suggests that the choice of
set-up is typically dictated by the nature of the social needs addressed, the amount of
resources needed, the scope for raising capital, and the ability to capture economic value.
The working definition of social entrepreneurship put forward in this article is intended to
facilitate a more detailed examination of the main components of social entrepreneurship,
namely the social element and the entrepreneurial element.
Many of the issues we have brought up in this article are typical of any emerging field of
research: the need to draw boundaries so as to delimit scope and clarify whether it really is an
independent field of research, and the need to identify the different levels of analysis,
disciplines and literatures. To conclude, we will elaborate on topics and issues we consider
important in order to advance our understanding of social entrepreneurship: social
entrepreneurship as an independent field of research, assessing social performance and
impact, and clarifying the role of embeddedness.
- Probably one the most controversial issues is whether social entrepreneurship is an
independent field of research. Many studies on social entrepreneurship have adopted
concepts and terminology used in the established entrepreneurship literature. Does
this imply that social entrepreneurship is a sub-category of entrepreneurship, in which
the social context provides a new and unusual setting in which to study and test
entrepreneurial phenomena? We argued that social entrepreneurship differs from
other forms of entrepreneurship in that it gives higher priority to social value
creation—by catalyzing social change and/or catering to social needs—than to value
capture. We believe that social entrepreneurship deserves considerable attention as a
