Social Entrepreneurship

Give a man a fish and you feed him for a day. Teach a man to fish and he can feed himself for life. How could you put this principle into practice through the development of a social entrepreneurship venture?

Development of Social Entrepreneurialism

Corporate Social Responsibility

Externalities

Social Inequality

Social Entrepreneurship and Food

Social entrepreneurship was introduced in the 1970s to address the issue of social sustainably and the term “social entrepreneur.” This analysis will begin by providing a brief history as well as a working definition for the concept of social entrepreneurialism. It will also discuss some of the related movements that have been working towards some of the same goals, albeit, from different directions to address various challenges in society and the environment. Furthermore, a more detailed overview of the exact challenges that are present in society that social entrepreneurialism can work to address will be outlined that include environmental problems and social issues such as inequality. Finally, the concepts developed within the study will then be applied to a specific social problem to illustrate some of the ways that a social entrepreneur might work to solve them.

Development of Social Entrepreneurialism

Social entrepreneurship was introduced in the 1970s to address the issue of social sustainably and the term “social entrepreneur” was first mentioned in 1972 by Joseph Banks in his seminal work named The Sociology of Social Movements, where he used the term to describe the need to use managerial skills to address social problems as well as to address business challenges (El Ebrashi, 2013). The concept of social entrepreneurship evolved as part of the entrepreneurship literature, despite the fact that most of the entrepreneurship literature focused on the creation of new ventures to produce profits. However, forming new ventures and their outcomes were not identified for profit making, rather they replaced the notion of individual value creation (creating wealth) with a more holistic concept of value creation that included a broader set of stakeholders, such as on the level of the community and community development goals.

Source

Definition

Core Characteristics

Bornstein (1998)

A social entrepreneur is a path breaker with a powerful new idea who combines visionary and real-world problem-solving creativity, has a strong ethical fiber, and is totally possessed by his or her vision for change.

Mission leader

Persistent

Thompson et al. (2000)

Social entrepreneurs are people who realize where there is an opportunity to satisfy some unmet need that the state welfare system will not or cannot meet, and who gather together the necessary resources (generally people, often volunteers, money, and premises) and use these to “make a difference.” ”

Emotionally charged

Social value creator

Dees (1998)

Social entrepreneurs play the role of change agents in the social sector by:

Adopting a mission to create and sustain social value

Recognizing and relentlessly pursuing new opportunities to serve that mission;

Engaging in a process of continuous innovation, adaptation, and learning;

Acting boldly without being limited by resources currently in hand;

Exhibiting a heightened sense of accountability to the constituencies served for the outcomes created.

Change agent

Highly accountable

Dedicated

Socially alert

Brinckerhoff (2009)

A social entrepreneur is someone who takes reasonable risk on behalf of the people their organization serves.

Opinion leader

Leadbeater (1997)

Social entrepreneurs are entrepreneurial, innovative, and “transformatory” individuals who are also: leaders, storytellers, people managers, visionary opportunists and alliance builders. They recognize a social problem and organize, create, and manage a venture to make social change.

Manager

Leader

Zahra et al. (2008)

Social entrepreneurship encompasses the activities and processes undertaken to discover, define, and exploit opportunities in order to enhance social wealth by creating new ventures or managing existing organizations in an innovative manner.

Innovator

Initiative taker

Opportunity alert

Ashoka (2012)

Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems [ … ] They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.

Visionary

Committed

Table 1 – Contrasting definitions and core characteristics of the terms “social entrepreneur” and “social entrepreneurship” (Abu-Saifan, 2012)

Entrepreneurship has also been described as the process in which an entrepreneur goes about discovering a fit between certain needs and resources, establishing an innovative venture, working on the venture’s growth, pursuing more opportunities to continuously innovate in the venture and producing sensible outcomes (El Ebrashi, 2013). The outcomes of social entrepreneurship are different from traditional entrepreneurship, and measurement of those outcomes is also different and social entrepreneurs have been known to focus on market failures, which resembles the function of entrepreneurs as well; market failures are not only related to price disequilibria or the inability of some people to access certain products or services, rather they focus on some of the issues related to externalities and public goods, and distributional equity (El Ebrashi, 2013).

These concepts later began to receive support as social entrepreneurship practices emerged in the 1980s when the establishment of Ashoka (https://www.ashoka.org/), which was the first organization to support social entrepreneurs in the world and now is the largest network of social entrepreneurs worldwide, with nearly 3,000 Ashoka Fellows in 70 countries putting their system changing ideas into practice on a global scale (Ashoka, N.d.). This organizations mission is to (Ashoka, N.d.):

“To support social entrepreneurs who are leading and collaborating with changemakers, in a team of teams model that addresses the fluidity of a rapidly evolving society. Ashoka believes that anyone can learn and apply the critical skills of empathy, team work, leadership and changemaking to be successful in the modern world.”

Furthermore, Ashoka has been one of the pioneers in developing the social entrepreneur concept and creating a network to support these entrepreneurs.

Figure 1 — Entrepreneurial Spectrum (Abu-Saifan, 2012)

Corporate Social Responsibility

Many of the same concerns about how capitalism can disadvantage certain segments of the society have manifested through many other more mainstream channels in the business world as well. For example, the term “social innovation” was described in the work of Drucker (1990), who wrote about the need for using management practices in non-profit organizations to increase the efficiency and effectiveness of producing social good (El Ebrashi, 2013). Furthermore, some of the world’s largest corporations have become the targets of activist groups and concerned citizens in regards to how they perform on social and environmental measures, which has shifted their focus from measuring their performance along financial metrics alone. In response to growing concerns about business ethics and sustainable practices, many new frameworks have been developed to attempt to include these factors in the narrative.

In response to the growing pressures relative to consumer expectations and governmental regulations, many corporations are including alternative measures of performance in addition to their primary financial objectives. Much of the literature groups the social and ecological performance concerns together in a concept known as corporate social responsibility (CSR). The definition of CSR is rather vague and all-encompassing, however CSR can be broadly thought of as measure of organizations meet the primary objectives of their immediate stakeholders as well as the extended set of relevant stakeholders, society, and the environment in general (Ecchia, et al., 2007). For example, most people include the treatment of a broader set of stakeholders but the actual boundaries for the extended set may vary significantly, and CSR initiatives can focus on the local community while others might tackle global issues or social issues in underdeveloped nations.

Much of the CSR trend is being fueled by globalization and the massive international growth of corporations, as well as with the advancement of technology which has allowed consumers to be more aware of the operations that are responsible for the products they buy. Consumers can now research a corporations CSR performance from their smartphones while they are in the store making purchasing decisions on the spot. Many people have tried to determine how the CSR performance that an organization exhibits influences their primary financial performance. One such study developed a framework by considering the salience of stakeholders, their perceptions of the CSR effort, and their collective ability to impact a corporation’s financial performance (CFP) (Peloza & Papania, 2008).

There has been growing evidence that broadening the category of stakeholders and their objectives can have a positive benefit to organizations, including to their financial performance. However, such these relationships are far from clear and there has also been a significant amount of conflicting evidence that suggests that socially responsible companies actually are valued less than control sample in the market in a longitudinal study (Becchetti & Ciciretti, 2009). However, despite a general correlation being illusive, there are also many indirect benefits that an organization may gain including (Nwaneri, 2015):

Savings from operational cost

Good corporate image

Increased ability to attract and retain qualify staff

Better relations with government

Sharper anticipation and management of risk

Learning and innovation

Externalities

The social entrepreneurship model has been said to be targeted at externalities in the current production model. The problem of externalities is one economist have struggled with for generations. Externalities are costs or benefits that do not get included in the economic model. The largest problem the current economic model and the distribution of resources in society rest on the externalities that are not counted in the system. Therefore, to understand sustainable development the concepts of externalities must also be understood. One definition of externality is as follows:

“Externalities are indirect effects of consumption or production activity, that is, effects on agents other than the originator of such activity which do not work through the price system. In a private competitive economy, equilibria will not be in general Pareto optimal since they will reflect only private (direct) effects and not social (direct plus indirect) effects of economic activity (Laffont, 2008).”

The primary concepts in the definition that was provided are there it is an indirect effect, either positive, negative, or both, and that it also represents a something less than an optimal state in most efficiency models. There are many externalities to be found when examining the costs of pollution for example.

For example, a business may exploit all of the local natural resources, such as an old growth forest, in the conversation of the resources into products that can in turn maximize profits to the immediate stakeholders of the organization. However, the depletion of the trees that form the raw materials in which these profits are directly derived are typically considered to be under private ownership and do not include consideration the benefits that these trees provide, such providing oxygen or a habitat for biodiversity. Therefore, many of the world’s leading corporations take full advantage of such externalities through an elaborate system that can privatize profits while externalizing a set of costs on society that do not get counted in most economic models and are never accounted for. In such cases, the public good is diminished through the creation of private wealth.

However, with growing ecological concerns and the threat of looming climate change, externalities are quickly becoming the subject of massive scrutiny. Although these externalities are difficult to quantify in practice, attempts to do so are becoming increasingly developed especially in the ecological arena (Davies, 2010). There is a growing body of evidence that examines many different forms of externalities, such as greenhouse gas emissions and the ineffective management of water resources. These models demand that societies must rethink the way they view and manage natural capital and pollution including, but not limited to, reductions in pollutants, such as greenhouse gas emissions, to try to soften the negative effects that climate change and other ecological concerns will have on some of the most vulnerable populations on the planet as well as for future generations. Even though there have been many different economic models developed to attempt to integrate these costs, it is still difficult to quantify social and economic costs that stem from many externalities, and these estimations are usually based on some kind of subjective measure (Marciano, 2011).

China can be used to illustrate the detrimental effects that externalities can have on a society. In China, the unprecedented rapid growth of the manufacturing industry and the county’s industrial capacity has had few regulatory restrictions placed on their private sector industrial growth. Although China has become the premier powerhouse manufacture in the world and accounts for a large bulk of the total world’s production, it has done so largely at the expense of many externalities that have pervaded the society. For example, the air qualities in cities such as Beijing have outrageous levels of pollutants such as particulate matter, sulfur dioxide, and nitrogen oxides (Hao & Wang, 2005).

It is not only the environment that has been sacrificed in order for the country to industrialize quickly, there have been many social casualties as well; in many cases this is true in the literal sense. In 2010, 18 employees working for the manufacturing giant Foxconn in China, one of Apple’s primary producers of the iPhone among other products, attempted suicide in order to focus world attention on the manufacturing supply chains of China’s export industry and horrific working conditions that can be found within them (Chan, 2013). There have been reports of many case of inhumane treatment of workers in these factories, which in some cases have even included capital punishment. Therefore, while many entrepreneurs in China have benefited personally from the adoption of capitalistic practices, many workers face unethical working conditions; this is exactly the trend that social entrepreneurship addresses as the value of social benefits from their operations are more evenly distributed throughout society and a broader set of stakeholders are considered.

Negative externalities can also be easily illustrated in society by various forms of social inequalities as well as pollution, such as sight, sound, water, and air pollution. For example, many people consider billboard advertisements a form of pollution since it detracts from the landscape and are distracting to all passer-byers. However, many forms of pollution are mild compared to the one’s that affect life sustaining natural services. For example, an extreme example of water pollution can be easily illustrated by the BP’s deep sea well disaster in the Gulf of Mexico in 2010 which will have implications for the region indefinitely (Flaherty, 2011). Although BP was eventually ordered to pay fines for the environmental damages that they caused, these awards were not evenly distributed by all those affected.

Although most forms of pollution are limited to a regional location, there are many others that can harm ecological systems worldwide. For example, greenhouse gas emissions accumulate in the atmosphere, changes the entire planet’s energy balance, and threatens the entire population of literally billions of people worldwide. Although some regions are actually predicted to have beneficial changes to their climates like Canada and Russia, no one will be immune from the greater spread of diseases, migrations of displaced populations, as well as the conflicts or wars over key resources such as water (Dyer, 2008). The damages inflicted to the environment have come on many fronts, from local to global, and require new business models that incorporate sustainable practices to have any chance at being successfully mitigated.

Social Inequality

There are many other forms of externalities that have manifested under the current system of global production. Social inequality is a problem on many levels throughout the world and not only is there significant amount of inequality between countries, but there are also growing amounts of inequality within countries as well. For example, in countries such as the U.S. that have significant amounts of inequality domestically, there have been massive social divisions that have emerged. Inequality is closely linked to social sustainability and any society needs to ensure that all of its member’s basic needs are met in order to maintain a level of social stability.

A country will not gain a level of social stability if large parts of the population are oppressed and excluded from prosperity, then social instability is a potential outcome and this can have implications for all parts of society. There have been many waves of social tensions that have erupted in many countries with high levels of inequality and as a result a number of social movements have developed across the globe in recent years. Many of these movements have ignited in vastly different such as the Arab Spring movement in Middle Eastern countries and the Occupy Wall Street (OWS) movement that affected the country with the world’s largest economy (Mak, 2011). Some have explained the development of these movements as the result of an increasing social consciousness about the roles of public institutions and private organizations in maintaining a sense of social cohesion and fairness. Such events seem to indicate that the levels of social equality in society has crossed a new threshold of acceptability in public debate in many populations around the world.

There have been attempts to try to incorporate levels of inequality and social sustainability into different business metrics that can help track its progress. One model, the 3Ps, tries to encourage a balance between people, profits, and the planet which has become popular in many industries (Tsai & Chou, 2007). However, generally speaking, the people category in the model is typically used to represent internal employees rather than a broader set of stakeholders that would include the communities in which businesses operate. However, this model which is actually required in accounting from by some regulatory agencies, has eventually become known as the triple bottom line and represents one of the most accessible sustainability metrics for companies despite its inherent limitations (Norman & MacDonald, 2004).

Beyond the individual organizational level, on the country level, many researchers have also called for a wider accounting of relevant metrics to be included as well. On the basis that such metrics can help organizations and institutions make more sustainable decisions, many have argued that more comprehensive measures than the standard gross domestic product (GDP) measure, which measure economic productivity alone. For example, a wider set of relevant metrics could also address needs to be used on a macro scale that can help illustrate levels of inequality, environmental performances, and different measures of quality of life.

The Genuine Progress Indicator (GPI) was one of the first alternatives to the GDP to be vetted by the scientific community and used regularly by governmental and non-governmental organizations worldwide; such a measure includes many factors that go beyond economic factors, such as income distribution, education, resource depletion, health measures, and even leisure times to evaluate the real health of a country (Redifining Progress, N.d.). If such a measure were applied to a country such as Bangladesh, it would clearly illustrate the low level of education, limited access to land, low paying jobs, and high levels of overall inequality (The World Bank, N.d.). Another application of the GPI index has revealed insights such as that while global Gross Domestic Product (GDP) has increased more than three-fold since 1950, economic welfare, as estimated by the Genuine Progress Indicator (GPI), has actually decreased since 1978 (Kubiszewski, et al., 2013).

The metrics in which business models develop to manage operations are also an inherent consideration of social entrepreneurship of vital importance given their dedication to pursuing other interests beyond the traditional financial measures. The social entrepreneur is typically thought of as a non-profit entity, but can also represent an entrepreneur that holds alternative metrics in equivalence, or potentially in higher regard, that financial ones. For example, this position would go farther than the popular triple bottom line model that was developed by creating entrepreneurial models that are designed to focus on specific social or environmental problems with financial returns being of secondary concern.

Therefore, by definition, the social entrepreneur needs more advanced tools to monitor performance against its primary objectives that what could be found in the traditional financial statements such as the profit and loss statement. However, the research was unable to identify much literature related to the next generation metrics that could provide effective tools for the social entrepreneur. Therefore, it is likely that the social entrepreneur will have to develop their own frameworks which in many cases will likely be limited to various heuristics and antidotal measures. Furthermore, this is one area of research that could substantially expand the resources that social enterprises have to pursue their objectives in future generations of organizations that share in social objectives.

Conclusion: Social Entrepreneurship and Food

To provide a real-world example of how these concepts apply and given that the research prompt that included the old parable of teaching someone to fish as opposed to giving them the fish, it seems appropriate to look at how such a concept might be represented in appropriately in the food as a social driving force for social entrepreneurial objectives. This has become a major issue in many oppressed communities and there have been several issues that have been identified related to how the diets in these communities are often systematically predisposed to being less nutritious than other populations segments. For example, according to census data, the percent of black members in a community was positively associated with fast-food access, controlling for population density and percent poverty the average distance to fast food was 3.56 miles closer than healthier options in areas with the highest versus lowest quartile of percentage of black residents; although poverty was not independently associated with fast-food access, the relationship between fast-food access and race was stronger than poverty, although these factors have strong correlations (Peter, et al., 2014).

Thus if communities with certain demographic characteristics, such as predominantly low income or minority, disparities in obesity rates are of particular concern for the nation’s health, with African-Americans experiencing the highest prevalence of obesity relative to other racial/ethnic groups (Reitzel, et al., 2014). In such areas there have been increases in the density of fast food restaurants coupled by other trends such as the growth of food deserts, which is defined as areas in which residents are hard-pressed to find affordable, healthy food (Brooks, 2014). Obesity is a troubling trend for many different reason since it has been shown to lead to an increased likelihood of developing comorbidity with other diseases such as an increased risk of developing the metabolic syndrome, cardiovascular disease, and its associated retinal and renal complications, nonalcoholic fatty liver disease, obstructive sleep apnea, polycystic ovarian syndrome, infertility, asthma, orthopedic complications, psychiatric disease, and increased rates of cancer, among others (Kelsey, et al., 2014).

Using the social entrepreneurial model, there are several different ways in which an individual could build a sustainable effort to address the problems found in such communities. For example, one opportunity would be to implement a community garden program or urban farm in order to produce fresh vegetables locally to not only offset the effects of food costs as well as the availability of healthy foods, but also help to build community which also has been shown to have positive impacts on the community. There has been a significant amount of literature dedicated to showing how urban and peri-urban agriculture and forestry (UPAF) in cities of developing regions can help to be a mitigating force against issues such as poverty and the impacts of climate change (Lwasa, et al., 2014). Another option would to be to create a locally sourced restaurant that operates with a reasonable price point and can offset the effects of fast food density within the local community.

Works Cited

Abu-Saifan, S., 2012. Social Entrepreneurship: Definition and Boundaries. [Online]

Available at: http://timreview.ca/article/523

[Accessed 28 April 2016].

Ashoka, N.d.. Vision and Mission. [Online]

Available at: https://www.ashoka.org/visionmission [Accessed 27 April 2016].

Ashoka, N.d.. About Us. [Online]

Available at: https://www.ashoka.org/about [Accessed 27 April 2016].

Becchetti, L. & Ciciretti, R., 2009. Corporate social responsibility and stock market performance. Applied Fincancial Economics, pp. 1283-1293.

Brooks, K., 2014. Research shows food deserts more abundant in minority neighborhoods. Johns Hopkins Magazine, p. Spring.

Chan, J., 2013. A Suicide Survivor: The Life of a Chinese Migrant Worker at Foxconn. [Online]

Available at: http://www.truth-out.org/news/item/18391-a-suicide-survivor-the-life-of-a-chinese-migrant-worker-at-foxconn [Accessed 29 April 2016].

Davies, W., 2010. The Politics of Externalities: Neo-liberalism, Rising Powers and Property Rights. [Online].

Dyer, G., 2008. Climate Wars. s.l.:Scribe Publications.

Ecchia, G., Dragone, D., Orsini, P. & Pasotti, P., 2007. Corporate social responsibility as an extended model of corporate governance: multi-stakeholder fair balance and bargaining, conformity and reputation, self-regulation and regulation. [Online]

Available at: http://www.secs.unibo.it/SECS/projects/Corporate_social_responsibility_as_an_extended_model_of_corporate_governance.htm

El Ebrashi, R., 2013. Social entrepreneurship theory and sustainable social impact. Social Responsibility Journal, 9(2), pp. 188-209.

Flaherty, P., 2011. BP Oil Spill Commission Chief Counsel Blames BP. [Online]

Available at: http://www.nlpc.org/stories/2011/02/21/bp-oil-spill-commission-chief-counsel-blames-bp-instead-entire-industry [Accessed 24 April 2016].

Hao, J. & Wang, L., 2005. Improving urban air quality in China: Beijing case study. Journal of the Air & Waste Management Association, pp. 1298-1305.

Kelsey, M., Zaepfel, A., Bjornstad, P. & Nadeau, K., 2014. Age-Related Consequences of Childhood Obesity. Age-Related Consequences of Childhood Obesity, pp. 222-228.

Kubiszewski, I. et al., 2013. Beyond GDP: Measuring and achieving global genuine progress. Ecological Economics, Volume 93, pp. 57-68.

Laffont, J., 2008. Externalities. [Online]

Available at: http://www.dictionaryofeconomics.com/article?id=pde2008_E000200&q=externality&topicid=&result_number=9

[Accessed 28 April 2016].

Lwasa, S. et al., 2014. Urban and peri-urban agriculture and forestry: Transcending poverty alleviation to climate change mitigation and adaptation. Urban Climate, Volume 7, pp. 92-106.

Mak, T., 2011. Occupy Wall Street uses Arab Spring model. [Online]

Available at: http://www.politico.com/news/stories/1011/64993.html

[Accessed 27 April 2016].

Marciano, A., 2011. Buchanan on externalities: An exercise in applied subjectivism. Journal of Economics Behavior & Organization, pp. 280-289.

Norman, W. & MacDonald, C., 2004. Getting to the bottom of “Triple Bottom Line.” Business Ethics Quarterly, 14(2), pp. 243-262.

Nwaneri, E., 2015. The Impact of Corporate Social Responsibility (CSR) on Organizational Profitability. International Journal of Business and Management, 10(9), pp. 60-68.

Peloza, J. & Papania, L., 2008. The Missing Link between Corporate Social Responsibility and Financial Performance: Stakeholder Salience and Identification. Corporate Reputation Review, pp. 169-181.

Peter, J., Mariana, C., Devin, M. & Reginald, T., 2014. Do minority and poor neighborhoods have higher access to fast-food restaurants in the United States?. Health Place, pp. 10-17.

Redifining Progress, N.d.. Genuine Progress Indicator. [Online]

Available at: http://rprogress.org/sustainability_indicators/genuine_progress_indicator.htm

[Accessed 29 April 2016].

Reitzel, L. et al., 2014. Density and Proximity of Fast Food Restaurants and Body Mass Index Among African-Americans. American Journal of Public Health, 104(1), pp. 110-118.

The World Bank, N.d.. Poverty in Bangladesh: Building on Progress. [Online]

Available at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPA/0,,contentMDK:20208955~menuPK:435735~pagePK:148956~piPK:216618~theSitePK:430367~isCURL:Y~isCURL:Y,00.html

[Accessed 28 April 2016].

Tsai, W. & Chou, W., 2007. Selecting management systems for sustainable development in SMEs: A novel hybrid model based on DEMATEL, ANP, and ZOGP. Expert Systems with Applications, 36(2), pp. 1444-1458.