SOCIAL ENTREPRENEUR, SOCIAL ENTREPRENEURSHIP, SOCIAL ENTERPRISE

Three terms in quest of a theoretical framework

Andrea Bassi

1. A sociological approach to social entrepreneurship

2. The macro level: social entrepreneurship function

3. The meso level: social enterprise function

4. The micro level: social entrepreneur function

5. Towards a theoretical framework of social entrepreneurship

2nd EMES International Conference on Social Enterprise

1-4 July 2009 - Trento

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 In the last few years a new Dictionary of Nonprofit Terms and Concepts has been developed
challenging the previous ways through which scholars of social sciences were used to understand
the wide array of nonprofit organizations acting between the State and the market.
In this new dictionary a central place acquired three terms: social entrepreneur, social
entrepreneurship and social enterprise, both in Europe and in North America.
The aim of the paper is to analyze the sociological reason of this uprising of new terms in the
academic debate and the implication for legal status and management strategies of nonprofit
organizations.

Public Sector Business Sector Third Sector

Social entrepreneur   
Social entrepreneurship  
Social enterprise 

The term of social entrepreneur refers to a quality, a property of a person (an individual) and
it concerns the ability and the capacity to deal with eminent social problems through the adoption of
the style of governance and management typical of an “entrepreneurial approach”. We can find
social entrepreneur in any of the three sector: public, business and nonprofit.

The term of social entrepreneurship refers to a societal function. It is a function that each
society in any time of his history should fulfill. It is an impersonal, abstract, symbolic and
generalized one. It can be carried out in any of the three sector, but usually the historical movement
is from civil society to welfare State (and some time can be undertaken by the market in the form of
corporate social responsibility).

The term of social enterprise refers to a single corporation, firm, organization, association,
that owes several distinct characteristic and act coherently with them.

Through the analysis of the most recent literature on the topic, the paper ends with the
proposal of a synthesis of the current scientific debate introducing the issue of leadership in the
nonprofit and/or social sector.

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1. A sociological approach to social entrepreneurship

J. Schumpeter

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2. The macro level: social entrepreneurship function

Three different meanings of social entrepreneurship:

a) not-for-profit organizations starting for-profit or earned-income ventures;

b) anyone who starts a not-for-profit organization;
c) business owners who integrate social responsibility into their operations.

J.G.Dees (1998, p. 1)

Two main school of though:

a) the Social Enterprise School: this school is focused on the generation of “earned-income” to
serve a social mission.

b) the Social Innovation School: this school is focused on establishing new and better ways to
address social problems or meet social needs

J.G.Dees and B.Battle Anderson (2006, p. 41)

The first school defines “social entrepreneurs” simply as those who organize and operate
businesses that support a “social” objective, even if they do it only by making money to subsidize
more direct, social-purpose activities (Ivi, p.41).

It is coherent with the School the definition of social enterprise constructed by the United
Kingdom Department of Industry and Trade, which is “a business with primarily social objectives
whose surpluses are principally reinvested for that purpose in the business or in the community,
rather than being driven by the need to maximize profit for shareholders and owners.” (Ivi, p. 43)

____________________

The second school defines social entrepreneurs as individuals who reform or revolutionize the
patterns of producing social value, shifting resources into areas of higher yield for society (Ivi,
p.44).

According to this school entrepreneurship could happen in any sphere (Ivi, p.45).

The school use the term “social entrepreneur” to describe innovators pursuing social change, this
reinforce the idea that social entrepreneurship need not be framed in terms of income. It could be
more about outcomes, about social change (Ivi, p.45).

__________________________

We define social entrepreneurship as innovative, social value-creating activity that can occur within
or across the nonprofit, government, or business sectors (J.Wei-Skillern, 2008, p.1)

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The mission came first, not the organization!

It entails identifying new opportunities, creating new strategies (…) an entrepreneurial undertaking
aimed at the innovative cogeneration of social and economic value (Ivi, p.2)

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3. The meso level: social enterprise function

(J.Defourny and M.Nyssen 2008, p. 11)

Most importantly, such indicators never represented the set of conditions that an organization
should meet to qualify as a social enterprise. Rather than constituting prescriptive criteria, these
indicators describe an "ideal-type" in Weber’s terms, i.e. an abstract construction, that enable
researchers to position themselves within the "galaxy" of social enterprises.

Four criteria reflect the economic and entrepreneurial dimensions of social enterprises:
A - a continuous activity producing goods and/or selling services
B - a high degree of autonomy
C - a significant level of economic risk
D - a minimum amount of paid work

Five other indicators tend to encapsulate the social dimensions of such enterprises:
E - an explicit aim to benefit the community
F - an initiative launched by a group of citizens
G - a decision-making power not based on capital ownership
H - a participatory nature, which involves various parties affected by the activity
I - a limited profit distribution

DEFINITION:

"Social enterprises are not-for-profit private organizations providing goods or services directly
related to their explicit aim to benefit the community. They generally rely on a collective dynamics
involving various types of stakeholders in their governing bodies, they place a high value on their
autonomy and they bear economic risks linked to their activity" (Ivi, p. 11).

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4. The micro level: social entrepreneur function

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

• Adopting a mission to create and sustain social value (not just private 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, and

• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes
created.
J.G.Dees (1998, p. 4)

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5. Towards a theoretical framework of social entrepreneurship

VALUE CHAIN FRAMEWORK

Procuring Employing Designing Producing Marketing to

supplies workers/volunteers product/service product/service target
customers/users

Social entrepreneurs might create social value at any of these steps in the process (Dees and Battle
Anderson, 2006, p. 52).

Public Sector Business Sector Third Sector

Social entrepreneur   
Social entrepreneurship  
Social enterprise 

Why the term appears in the academic and scientific debate?

What does the term underlies? What concepts the term refers to?

What vision of society it encompass? What role of third sector organizations it suggests?

New word for old facts?

What do we see and what do we cover using it?

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 MACRO LEVEL – SOCIAL ENTREPRENEURSHIP

Political
entrepreneurship

Economic
IMPRESE Social
entrepreneurship entrepreneurship

Cultural
entrepreneurship

FIG. 1 – The internal functional differentiation of the macro dimension

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 MESO LEVEL – SOCIAL ENTREPRISE

Governance:
democracy and
participation

Economic Human resources:

resources: volunteers;
solidarity and altruistic
donation motivations

Social Values:
mutuality and
solidarity

FIG. 2 – The internal functional differentiation of the meso dimension

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 MICRO LEVEL – SOCIAL ENTREPRENEUR

Creation of new
ideas

Activation of new Catalyst of new

resources aggregations

Promotion of new values

FIG. 3 – The internal functional differentiation of the micro dimension

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References

Bornstein D. (2004), How to Change the World: Social Entrepreneurs and the Power of NewIdeas,
New York: Oxford University Press.
Brafman O. and Beckstrom R.A. (2008), The Starfish and the Spider. The Unstoppable Power of
Leaderless Organizations, Penguin Books, London.
Dees, J. G. (1998) "The Meaning of Social Entrepreneurship", Working Paper, Kauffman Center for
Entrepreneurial Leadership.
Dees, J. G. & Anderson B.B. (2006), “Framing a Theory of Social Entrepreneurship: Building on
Two Schools of Practice and Thought” in Research on Social Enterpreneurship ARNOVA
Occasional Paper Series, vol.1, no 3, 39-66.
Defourny J. and Nyssens, M. (2008) Conceptions of Social Enterprise in Europe and the United
States: Convergences and Divergences, paper presented at the 8th ISTR International Conference 2d
EMES – ISTR European Conference University of Barcelona, July 9-12, 2008
Nyssens, M. (ed.), (2006) Social Enterprise - At the Crossroads of Market, Public Policies and
Civil Society, London and New York: Routledge.
Schumpeter, J. A. (1934) The Theory of Economic Development, 3d printing, 1963, New York:
Oxford University Press.
Young, D. (1983) If Not for Profit, for What?, Lexington, Mass.: Lexington Books.
Young, D. (1986), “Entrepreneurship and the Behavior of Non-profit Organizations: Elements of a
Theory”, in S. Rose-Ackerman (ed.), The Economics of Non-profit Institutions, New York: Oxford
University Press, 161-184.
Wei-Skillern J., Austin J., Leonard H., Stevenson H. (edited by) (2007), Entrepreneurship in the
Social Sector, Sage, London.
Wei-Skillern J. (2003), The Growth of the Social Enterprise, in HBS Working Knowledge, October,
6.
Wei-Skillern J. (2008), Putting Entrepreneurship in the Social Sector, in HBS Working Knowledge,
February, 4.

Andrea Bassi (PhD)

University of Bologna
Faculty of Economics
Piazzale della Vittoria, 15
47100 Forlì

andrea.bassi7@unibo.it

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