Strategic Direction

Social entrepreneurs offer different model: But all wealth creators must look beyond self-interest and the bottom line
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, (2011),"Social entrepreneurs offer different model", Strategic Direction, Vol. 27 Iss 6 pp. 15 - 18
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 Social entrepreneurs offer different model
But all wealth creators must look beyond self-interest and the bottom line
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‘‘We were right’’

There are few ‘‘winners’’ emerging from the financial crises of the last two or three years, but
the turmoil has offered some observers the chance to say ‘‘told you so’’.
These have often been people who see Western-style capitalism as a busted flush. The
behavior of the banks gives them an easy target, as do such financial scandals as Enron. There
has always been talk of the need to find some kind of ‘‘middle way’’ in which entrepreneurship
and social responsibility are not mutually exclusive. The Swedish model of economic checks
and balances was much admired throughout the world for much of the late twentieth century,
although its image has become somewhat tarnished during the last two decades.
Nga and Shamuganathan take the view that the time has now surely arrived when a new
generation of entrepreneurs is needed, men and women whose view of business contains
social and environmental as well as economic values: in other words, social
entrepreneurship. They identify a ‘‘Big Five’’ of personality traits that are likely to be
required to make social entrepreneurship possible: openness, extroversion, agreeableness,
conscientiousness and neuroticism, by which they mean an individual’s emotional stability.
These qualities need to be nurtured at college level.

Five dimensions
They further identify five dimensions of social entrepreneurship: social vision, sustainability,
social networks, innovation and financial returns. The key question, then, is the extent to
which personality traits can bring their influence to bear on these social responsibility
dimensions. A study was undertaken involving the opinions of almost 200 business studies
students at a higher education institution in Malaysia. Students were asked via five-point
Likert scale questions (ranging from totally disagree to totally agree) for their views on social
responsibility issues relating to entrepreneurship.
A total of 17 hypotheses were tested, relating to the links between personality traits and the
potential for social entrepreneurship dimensions. Among findings was the revelation that
agreeableness – ability to ‘‘foster social consensus while upholding mutual understanding’’
– was the only trait that exerts significant influence across every dimension of social
entrepreneurship. Openness exerted a positive influence of social vision construction – the
sense among students that they had some social obligation to create a legacy connected
with meeting human needs. With conscientiousness also emerging as a key influence on
potential social entrepreneurship, it follows that such characteristics should be encouraged
and developed via the business and management education curriculum.

DOI 10.1108/02580541111135553 VOL. 27 NO. 6 2011, pp. 15-18, Q Emerald Group Publishing Limited, ISSN 0258-0543 j STRATEGIC DIRECTION j PAGE 15
 ‘‘ Social entrepreneurs embrace risk-taking, creativity and
opportunism, and entrepreneurship education must promote
both rational thought and intuition. ’’

There are obvious overlaps between entrepreneurs who are socially aware and those who
are purely driven by commercial considerations. Social entrepreneurs embrace risk-taking,
creativity and opportunism, and entrepreneurship education must promote both rational
thought and intuition. But student-centered approaches such as co-operation and learning
based on problem solving as part of a team can encourage development of the ‘‘softer’’
people skills associate with social entrepreneurship. The authors cite one authority who says
that teamwork also establishes ‘‘potential social and business networking opportunities’’
which can further pave the way for social entrepreneurship.

Ethical stance
More broadly, education must look at ethics and sustainable practices which are the
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bedrock of social entrepreneurship. Students need to understand that excessive exploration

of environmental resources now can have a negative effect on the ecosystem’s ability to
regenerate itself later. This research focuses entirely on undergraduates. Further studies
could have a broader scope, but this work does emphasize the need for personality traits to
be encouraged among business students that will ultimately promote entrepreneurial spirit
in a socially responsible fashion. As a starting point, social entrepreneurship and its more
hard-nosed commercial ‘‘cousin’’ start from the same roots, combining the head and the
heart, intellect and instinct.

Question of balance
The differences between commercial and social entrepreneurship lie at the heart of the
research by Hamby, Pierce and Brinberg. They contend that both camps have much to learn
from one another, and they have devised a validity network schema (VNS) that aims to
achieve this end by describing the components, stages and paths through which research is
conducted. The VNS begins by revealing the way that there are three domains to research:
methodological, conceptual and substantive. The conceptual (ideas-based) and
substantive (problem-based) domains are respectively the natural territory for commercial
and social entrepreneurs.
Typically, a commercial entrepreneur might be seeking a gap in the market that can be filled by
some new product or service. A social entrepreneur will see a society-related issue which
needs tackling, and which can be approached through economic means. Examples in the UK
include the Big Issue magazine, a publication that is sold on the streets by homeless or formerly
homeless people who keep a percentage of the cost of each magazine they sell. Community
building projects, such as housing associations, have their roots in social entrepreneurship.
A key feature of the VNS is examining the trade-offs that can take place in both the conceptual
and substantive domains, enabling the two sides to see both the potential capabilities and
limitations of their approach to entrepreneurship. One such trade-off occurs in the substantive
domain over cost and the wellbeing of the people whose lives are in some way the target of the
enterprise; improving their well-being, for example, the cost of the enterprise might rise.
Considering Big Issue sellers again: if they take too large a cut, the enterprise would fail; too
little and the very people meant to benefit would be the subject of exploitation.
The authors describe social issues as ‘‘wicked’’ (as opposed to ‘‘tame’’) problems that
require ‘‘a creative problem-solving approach’’, and with which the various stakeholders can
help. Where a social problem is within a particular community, the local culture must be
considered, as well as people’s willingness to in some way be involved in the project. In this

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PAGE 16 STRATEGIC DIRECTION VOL. 27 NO. 6 2011
 respect, charitable organizations often fail to fulfill their brief because they ignore these local
cultures or even, in some cases, the causes of the social issues behind the very problems
that are being addressed.
The VNS, then, can help commercial and social entrepreneurship to learn from one another
as both have strengths in different domains from which the other can benefit. If commercial
entrepreneurship is viewed through a substantive, problem-based lens, practitioners and
proponents can learn important lessons relating to market complexities that ultimately affect
them. Conversely, social entrepreneurship viewed through the ideas-based conceptual lens
will allow practitioners the opportunity to see models that work better when put into practice.
For both sides, the sheer complexity of what they are engaged in means that the more
perspectives that can be brought to bear, the better. Social entrepreneurs, as much as their
commercial counterparts, have to deal with, for example, branding, customer focus,
franchising and promotion but they sometimes fail to engage sufficiently with some or all of
these issues.

More united than divided

Where the validity network schema is applied to research on both commercial and social
entrepreneurship, these insights can benefit all parties. The writers refer to a ‘‘potential
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rapprochement between these two forms of entrepreneurship.’’ What unites them is far more
significant that any ideological divisions.
Dacin et al. take the view that the best way to understand social entrepreneurship is by
focusing on the results – whether these prove positive or not – of its adherents’ attempts to
create social value. This can perhaps overcome the view of some experts that all
entrepreneurial is social. One extreme view holds that the only social goal of a business should
be making a profit. This seems to be a very literal interpretation, one that involves measuring
the well being of a society purely by gross domestic product. A more rational view would be
that it is difficult to separate entirely the economic value enterprise brings from social benefits
that such wealth provides. Nevertheless, that would still depend on the willingness of wealth
creators, and the governments to which they are subject, to share that wealth.
It is not always easy to pigeonhole different forms of entrepreneurship as specifically social
or conventional. Many privately-owned for profit companies have mission statements which
indicate a commitment to social issues; some social entrepreneurship ventures have been
accused of hypocrisy, or betraying their altruistic roots by becoming increasingly
hard-nosed and market driven. Other forms of entrepreneurship can further be identified
as having social elements. These include institutional entrepreneurship, where the mission
might be to establish new patterns of human behavior. The authors cite Kodak as a ‘‘classic
market example’’ of institutional entrepreneurship for the way the company changed social
perceptions of photography; what had been a technical profession became a leisure activity
and hobby in which everyone could participate.

Culture clash
In this sense it has close links with cultural entrepreneurship. One interpretation of that would
be promotion of the arts to create wealth as well as cultural value. However, culture can also

‘‘ Social entrepreneurs, as much as their commercial

counterparts, have to deal with, for example, branding,
customer focus, franchising and promotion but they
sometimes fail to engage sufficiently with some or all of these
issues. ’’

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VOL. 27 NO. 6 2011 STRATEGIC DIRECTION PAGE 17
 refer to patterns of social behavior. The Boston Symphony Orchestra’s rise from populist
beginnings to symbol of New England high culture as one of America’s ‘‘Big Five’’ symphony
orchestras, could be said to straddle both connotations of the term ‘‘cultural’’.
Social entrepreneurs differ from their conventional counterparts through a greater
determination to carry through an enterprise despite less favorable market conditions.
While they will pay considerable attention to the economic and societal circumstances in
which they are operating, they are less likely to delay or even shelve a project because ‘‘the
time is not right’’. They are also more likely to be cooperative, and less likely to set up
competitive barriers. As an example, India’s Aravind Eye Clinic has a global outreach
program which teaches people its techniques.
This could be described as the purest form of social entrepreneurship, based on social
conscience. Organizations such as the ice-cream makers Ben & Jerry’s and The Body Shop
could more accurately be described as conventional entrepreneurs with a social
conscience. The ‘‘true’’ social entrepreneur exists because of the social issues that are
being addressed. Many entrepreneurs with a social conscience are working the other way
round, by operating conventionally then seeing that they can give something back.
But the rules of good entrepreneurship operate universally. For this reason, anyone
researching social entrepreneurship needs to examine entrepreneurial failure, and its
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causes. By the same token, the distinctive nature of social entrepreneurship needs to be fully
appreciated. That way, business people will be more able to create enterprises which at their
core have a social and altruistic raison d’être.

Comment
This review is based on ‘‘The influence of personality traits and demographic factors on
social entrepreneurship start up intentions," by J.K.H. Nga and G. Shamuganathan, ‘‘A
conceptual framework to structure research in strategic and social entrepreneurship,’’ by
A. Hamby, M. Pierce and D. Brinberg; ‘‘Social entrepreneurship: Why we don’t need a new
theory and how we move forward from here,’’ by P. Dacin, M.T, Dacin and M, Matear.
The adage about nurture and nature spring to mind when reading Nga and Shamuganathan’s
article. Entrepreneurship and the ‘‘caring’’ qualities the writers emphasize do not always make
comfortable bedfellows. Such qualities can doubtless be encouraged via education, but such
values cannot be ‘‘imposed’’ any more than can democracy
Hamby et al. is not an easy read . . . some useful observations emerge especially on the fact
Keywords:
that social entrepreneur is not clear cut; charitable bodies do not necessarily fit the bill.
Entrepreneurs,
Social responsibility, Dacin, Dacin and Matear offer a comprehensive, somewhat academic examination of current
Society, research on social entrepreneurship. An interesting area of study might be the ways that social
Value added entrepreneurship can turn sour, through loss of the original vision, and why this occurs.

References
Dacin, P., Dacin, M.T. and Matear, M. (2010), ‘‘Social entrepreneurship: why we don’t need a new theory
and how we move forward from here’’, Academy of Management Perspectives, Vol. 24 No. 3, pp. 37-57,
ISSN 1558-9080.
Hamby, A., Pierce, M. and Brinberg, D. (2010), ‘‘A conceptual framework to structure research in
strategic and social entrepreneurship’’, Journal of Asia Pacific Business, Vol. 11 No. 3, pp. 166-78, ISSN
1059-9231.
Nga, J.K.H. and Shamuganathan, G. (2010), ‘‘The influence of personality traits and demographic
factors on social entrepreneurship start up intentions’’, Journal of Business Ethics, Vol. 95 No. 2,
pp. 259-82, ISSN 0167-4544.

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