Lecture 1 - Defining the concept of Social Entrepreneurship
SE is based on Entrepreneurship + Social mission. This perspective allows for two main lenses:
Dichotomy of value (dichotomy = a division or contrast between two things that are or are
represented as being opposed or entirely different.)
- Economic value vs social value
- Profit-seeking vs social mission
Holistic Value
- Generic concept of value
- Increase in the utility of society’s members
- Value creation vs value capture
There can be an overlap between the type of value created by a company. Both commercial
and social firms are able to create both commercial and social value.
Theory of Entrepreneurship and Social Entrepreneurship
● Say - value creation (The core of SEE)
● Schumpeter - Innovation and Change agents (Reformers and revolutionaries)
● Drucker - Pursuit of Opportunity (Recognizing unseen opportunities that serve a
mission)
● Stevenson - Resourcefulness (Doing more with less, limited resources)
Social entrepreneurs:
● Social entrepreneurs prioritize social and environmental goals over financial goals
(Santos, 2012).
● It is very important to understand stakeholders
● Exhibit heightened accountability to the constituencies served and for the outcomes
created
○ Sound understanding of constituencies
○ Creating fit between investor values and community needs
The spectrum of enterprises shows the spectrum between traditional non-profits and
traditional for-profits. It shows differences between:
● Key characteristics
○ Maximize value capture vs create social/environmental value
○ Achieve sustainable advantage vs achieve sustainable solution
○ Logic of control vs logic of empowerment
1
, ● Purpose
○ Distribute profits under shareholders vs making the organization
redundant/overbodig
○ Regard for self vs regard for others
● Business model configurations as inter-organizational arrangements
○ Social-mission driven vs profit-making driven
PCDO model from commercial entrepreneurship (Austin et al. 2006) looks at the following
aspects and the interactions between them:
1. People
a. Human and financial inputs
b. Internal or external
c. Skills, attitudes, knowledge
2. Context
a. External factors affecting the outcome of opportunity
b. Macroeconomy, tax, regulation
3. Deal
a. Exchange of value
b. Economic benefits, social recognition, personal satisfaction
4. Opportunity
a. Desired future state
b. Required investment and resources
There are major differences as to how the PCDO model works for a social enterprise in
comparison to a commercial enterprise:
● People/resources - More constraints, less flexibility vs more financial and human
resources or incentives.
○ Critical for both types. Trust and reputation are key
● Context - SEs may pursue opportunities because of inhospitable context. As such, SEs
have a fundamentally different way to respond to adverse context.
○ PESTEL applies to both (Political, Economic, Social, Technological, Legal and
Environmental)
● Deal - Differences in value exchanges and nonmonetary (= not money) value and
motivation
○ Similar concerns for sourcing resources to generate ROI
● Opportunity - Unmet needs and market failure (social returns) vs breakthroughs and
new needs (economic returns)
2
, ○ Similarity in the sense that both invest scarce resources in pursuit of future
returns.
These differences lead to a new framework for SE. This
framework includes:
● Centrality of Social Value Proposition (SVP)
● Additional contextual factors
● Interdependent relationships
● Alignment and interaction
Triple bottom line approach >>>>>>>>>>>>>>>>>>>>>>>>>>>
In conclusion, the key elements of social enterprises are:
1. Strategy - Sustainable solutions over competitive advantage
2. Mission - Focus on creating social and/or environmental value
3. Performance measurement - Trade-off economic value capture to achieve impact
4. Market mechanism - Encourage competition and cooperation over individual success
5. Resource mobilization - Encourage an inclusive logic of empowerment over control
Lecture 2 - Ecosystem Framework
An ecosystem consists of actors (players) + external context and structure of SE (environmental
conditions).
Players: Resource providers, allies, beneficiaries/customers, opponents/problem makers,
influential bystanders, the environment.
● Note the environment as player
Environmental conditions (norms, markets, laws): Politics and administrative structure,
economics and markets, institutions, geography and infrastructure, culture.
Market and government failure
The neoclassical view of markets implies the following:
● Maximizing utility/profits of all economic activity
● Perfect information
● Perfect market - Pareto efficiency
● Equilibrium price
3
SE is based on Entrepreneurship + Social mission. This perspective allows for two main lenses:
Dichotomy of value (dichotomy = a division or contrast between two things that are or are
represented as being opposed or entirely different.)
- Economic value vs social value
- Profit-seeking vs social mission
Holistic Value
- Generic concept of value
- Increase in the utility of society’s members
- Value creation vs value capture
There can be an overlap between the type of value created by a company. Both commercial
and social firms are able to create both commercial and social value.
Theory of Entrepreneurship and Social Entrepreneurship
● Say - value creation (The core of SEE)
● Schumpeter - Innovation and Change agents (Reformers and revolutionaries)
● Drucker - Pursuit of Opportunity (Recognizing unseen opportunities that serve a
mission)
● Stevenson - Resourcefulness (Doing more with less, limited resources)
Social entrepreneurs:
● Social entrepreneurs prioritize social and environmental goals over financial goals
(Santos, 2012).
● It is very important to understand stakeholders
● Exhibit heightened accountability to the constituencies served and for the outcomes
created
○ Sound understanding of constituencies
○ Creating fit between investor values and community needs
The spectrum of enterprises shows the spectrum between traditional non-profits and
traditional for-profits. It shows differences between:
● Key characteristics
○ Maximize value capture vs create social/environmental value
○ Achieve sustainable advantage vs achieve sustainable solution
○ Logic of control vs logic of empowerment
1
, ● Purpose
○ Distribute profits under shareholders vs making the organization
redundant/overbodig
○ Regard for self vs regard for others
● Business model configurations as inter-organizational arrangements
○ Social-mission driven vs profit-making driven
PCDO model from commercial entrepreneurship (Austin et al. 2006) looks at the following
aspects and the interactions between them:
1. People
a. Human and financial inputs
b. Internal or external
c. Skills, attitudes, knowledge
2. Context
a. External factors affecting the outcome of opportunity
b. Macroeconomy, tax, regulation
3. Deal
a. Exchange of value
b. Economic benefits, social recognition, personal satisfaction
4. Opportunity
a. Desired future state
b. Required investment and resources
There are major differences as to how the PCDO model works for a social enterprise in
comparison to a commercial enterprise:
● People/resources - More constraints, less flexibility vs more financial and human
resources or incentives.
○ Critical for both types. Trust and reputation are key
● Context - SEs may pursue opportunities because of inhospitable context. As such, SEs
have a fundamentally different way to respond to adverse context.
○ PESTEL applies to both (Political, Economic, Social, Technological, Legal and
Environmental)
● Deal - Differences in value exchanges and nonmonetary (= not money) value and
motivation
○ Similar concerns for sourcing resources to generate ROI
● Opportunity - Unmet needs and market failure (social returns) vs breakthroughs and
new needs (economic returns)
2
, ○ Similarity in the sense that both invest scarce resources in pursuit of future
returns.
These differences lead to a new framework for SE. This
framework includes:
● Centrality of Social Value Proposition (SVP)
● Additional contextual factors
● Interdependent relationships
● Alignment and interaction
Triple bottom line approach >>>>>>>>>>>>>>>>>>>>>>>>>>>
In conclusion, the key elements of social enterprises are:
1. Strategy - Sustainable solutions over competitive advantage
2. Mission - Focus on creating social and/or environmental value
3. Performance measurement - Trade-off economic value capture to achieve impact
4. Market mechanism - Encourage competition and cooperation over individual success
5. Resource mobilization - Encourage an inclusive logic of empowerment over control
Lecture 2 - Ecosystem Framework
An ecosystem consists of actors (players) + external context and structure of SE (environmental
conditions).
Players: Resource providers, allies, beneficiaries/customers, opponents/problem makers,
influential bystanders, the environment.
● Note the environment as player
Environmental conditions (norms, markets, laws): Politics and administrative structure,
economics and markets, institutions, geography and infrastructure, culture.
Market and government failure
The neoclassical view of markets implies the following:
● Maximizing utility/profits of all economic activity
● Perfect information
● Perfect market - Pareto efficiency
● Equilibrium price
3
