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Chapter 4 - Supporting Social Entrepreneurship

This document discusses social entrepreneurship, which involves creating ventures to tackle social problems and bring about social change. Social entrepreneurs measure performance based on advancing social and environmental goals. There are different types of social entrepreneurship, including social purpose ventures, social consequence entrepreneurship, and enterprising nonprofits. The document also discusses stakeholders, corporate social responsibility, and the importance of social inclusion globally within social entrepreneurship.

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Gavin Sta Maria
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137 views

Chapter 4 - Supporting Social Entrepreneurship

This document discusses social entrepreneurship, which involves creating ventures to tackle social problems and bring about social change. Social entrepreneurs measure performance based on advancing social and environmental goals. There are different types of social entrepreneurship, including social purpose ventures, social consequence entrepreneurship, and enterprising nonprofits. The document also discusses stakeholders, corporate social responsibility, and the importance of social inclusion globally within social entrepreneurship.

Uploaded by

Gavin Sta Maria
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Supporting

Social
Entrepreneurship
Learning Objectives:
1. Describe what role social
entrepreneurship plays in society.
2. Explain how social entrepreneurship can
help resolved wicked problems around
the world.
3. Identify the different types of social
entrepreneurship.
4. Explain how social entrepreneurs can use
capital markets to fund their ventures.
5. Identify the primary attributes of
stakeholders and how stakeholders can
help or hinder a social entrepreneur.
6. Distinguish between corporate social
responsibility and social
entrepreneurship.
7. Assess the value of social inclusion
globally within social entrepreneurship.



Social entrepreneurship is the process of
sourcing innovative solutions to social and
environmental problems.

Social entrepreneurs create ventures to
tackle social problems and bring about
social change; they measure performance
by advancing social and environmental
goals.

Wicked problems are large, complex social
problems where there is no clear solution,
where there is limited, confusing, or
contradictory information available, and where a
whole range of people with conflicting values
engage in debate.

Whereas many of us avoid wicked problems


because of their complex nature, design thinkers
see wicked problems as a challenge to think
differently or as an opportunity to break through
constraints and develop creative solutions.
without using pesticides, fertilizers, or chemicals. As a participant in the Fair
Trade movement, PACT uses family farms in India and pays a higher price
on the cotton to help sustain the farms and the local communities.

Figure 4.2 Typology of Ventures







Source: Neck, H. M., Brush, C., & Allen, E. (2009) The landscape of
social entrepreneurship. Business Horizons, 52, 13–19.
The aim of social purpose ventures is to
resolve a social problem and make a profit.

Social consequence entrepreneurship


describes a for-profit venture whose
primary market impact is social.

Enterprising nonprofits are a form of


social entrepreneurship where both the
venture mission and the market impact are
for social purposes.
There are two types of enterprising
nonprofits: (1) Earned-income activities
are used as a source of revenue generation.

(2) Venture philanthropy funding


combines financial assistance with a high
level of engagement by the funder. Venture
philanthropists share their experience
with nonprofit entrepreneurs to help grow
and scale the company to drive social
change.
Like many venture capital firms, venture
philanthropists look for nonprofits whose
social impact can be definitively measured
and that demonstrate the potential to
develop and grow.

Hybrid model of social entrepreneurship
describes an organization with a purpose
that equally emphasizes both economic
and social goals.

Stakeholders are the people or groups
affected by or involved with the
achievements of the social enterprise’s
objectives.

By identifying stakeholders, firm will be


able to better understand the impact of the
enterprise’s activities on others.

The most important question you need to
ask is: What is at stake for your
stakeholders, and for whom?

With the potential for so many
stakeholders, how you decide which ones
are the most important? Whom do you
need to prioritize, and what level of
attention should you give?

There are three primary attributes of
stakeholders to consider:
A stakeholder in a position of power has the
ability to either help or hinder your social
objectives.
The second attribute is legitimacy. Legitimate
stakeholders are those whose actions are
appropriate, proper, and desired in the context of
the company, organization, or community.
The third attribute is urgency, which describes
the extent to which stakeholders demand your
attention.







The model is based on the three factors of power, legitimacy, and urgency.
Source: Mitchell, R., Agle, B., & Wood, D. (1997). Toward a theory of
stakeholder identification and salience: Defining the principle of who
and what really counts. Academy of Management Review, 22, 853–866.

These three attributes are not necessarily independent of one another; in fact,
a stakeholder may have both power and legitimacy, or a combination of all
Types of Stakeholders:
Dormant stakeholders are “sleepers”—they hold
power but do not tend to use that power unless
they are given a reason to do so. However,
dormant stakeholders may become significant
when they begin to utilize their power.

Discretionary stakeholders have no power to
influence and no urgent claims, but they have
legitimacy.

Demanding stakeholders possess the urgency
attribute. They have no power or legitimacy and
may be the only dissenting voice in the room.

Dominant stakeholders have both power and
legitimacy, which gives them strong influence in
your organization.
Dependent stakeholders have both urgency and
legitimacy but lack the power to influence. These
stakeholders are the most passionate, and their
passion is likely to attract dominant stakeholders.
Dangerous stakeholders possess both power and
urgency but may use this power to coerce or even
resort to violence. Social issues can be emotive,
and power and urgency exercised against your
objectives can be a significant hindrance.

Definitive stakeholders are the only ones who
possess all three attributes of power, legitimacy,
and urgency. These stakeholders have a
significant role to play in your organization and
must be given priority when it comes to handling
their claims.

Remember that stakeholders are not static—they
can evolve, and through that evolution, they may
either gain or lose attributes. Social entrepreneurs
must continuously monitor the internal and
external stakeholder environment to maintain
relationships with stakeholders and ensure
support for their social mission.

Connecting and collaborating with others is the
key to resolving wicked problems.
Corporate social responsibility (CSR)
describes the efforts taken by corporations
to address the company’s effects on
environmental and social well-being in
order to promote positive change.

CSR adds social objectives while still


pursuing the main goal of making a profit.
social entrepreneurship place equal
emphasis on social and economic goals.
Building trust and being socially responsible is important for all companies—
big or small.

Figure 4.6 CSR Makes Good Business Sense



Social entrepreneurs are working all over
the world to include people on the margins
of society to give them new opportunities
and hope. They are also taking an inclusive
approach to resolving problems in
developing countries.

Social entrepreneurs use the fundamental
principles of entrepreneurship to build
businesses of economic and social value.

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