Bridget Stemmler Unit 3 Final Draft

Stefano Gambirazio
Yu-Yin Lin

Resource Mobilization in Global Social Enterprise

Context Note
Genre:
Scholarly Essay

Interdisciplinary Work:
Resource mobilization within the sector of global social enterprise combines the disciplines of
international humanitarian work with traditional business entrepreneurship.

Purpose:
The goal of this essay is to provide social entrepreneurs with a set of guidelines on how to avoid
resource constraints during the start-up stages of their social ventures. Minimizing or eliminating
these common resource constraints will allow these social enterprises to become more profitable.

Audience:
The issue of global mobilization of resources mainly affects current entrepreneurs and
enterprises that have a strong international social justice element. Specifically, a CFO or
Business Development Manager in an enterprise will be interested in reading this essay.
Although these professionals are the primary audience, the secondary audience will include
people who are not currently involved in a social enterprise but have a vested interest in the work
that these businesses are doing. The essay will be published in journals such as Journal of Social
Entrepreneurship or Journal of International Business Studies.

Glossary of Terms:
1. Social Enterprise - an organization that applies commercial strategies to maximize
improvements in human and environmental well-being.
2. Social Entrepreneurship - the use of start up companies and other entrepreneurs to
develop, fund and implement solutions to social, cultural, or environmental issues.
3. Resource Mobilization - the process of getting resources from resource provider, using
different mechanisms, to implement the organization‘s work for achieving the
predetermined organizational goals.
4. Bricolage - something constructed or created from a diverse range of available things
5. Optimization - the action of making the best or most effective use of a situation or
resource
 Resource Mobilization in Global Social Enterprise

Abstract
This article serves to discuss the constraints social entrepreneurs face with resource
mobilization and what solutions they can use to overcome these constraints. Social
entrepreneurship combines principles from both commercial entrepreneurship and traditional
nonprofits to create a dual pursuit of social and financial value to overcome the challenges within
a country. As social entrepreneurs venture into overlooked or untouched markets, resources
become scarcer which affect the development of their social venture. Through following these
guidelines, social enterprises will also increase in scope, allowing for a more widespread force of
social good. The ultimate goal in tackling this issue is to improve the visibility and success of
social enterprises, creating more social change in areas that need it.

Introduction
Overview of Social Entrepreneurs and Resource Mobilization
With the explosion of global connectivity, social entrepreneurs are given the opportunity
to expand into new demographics, conditions, or environments to tackle social, cultural and
environmental challenges in the most effective way possible. Social entrepreneurship combines
principles from both commercial entrepreneurship and traditional nonprofits to create a dual
pursuit of social and financial value to overcome the challenges within a country. This form of
entrepreneurship is conducted in the public interest to target markets and customers that
traditional profit maximizing commerce has overlooked or insufficiently served (Basu & Desa
2013). Social entrepreneurs are more focused on social change rather than commercial gain, and
for this reason they tend to be more reliant on resources such as accessing capital markets for
funding which leads to resource mobilization constraints. Resource mobilization plays a
fundamental role in the process of entrepreneurship (Shane and Venkatraman, 2000; Shane,
2003; Hsu, 2008; Baumol, 2010). For an entrepreneurial venture, access to resources can play a
large part in emergence (Brush et al., 2008), product development (Plambeck, 2011), growth
(Villanueva, Van de Ven, and Sapienza, 2012; Wadhwa and Basu, 2012), and competitive
advantage (Clarysse, Bruneel, and Wright, 2011).

This dependency on resources from social entrepreneurs originates from two problems,
their hybrid mission and the macro-environmental forces. Due to their hybrid social and financial
mission, not all social ventures are viewed as profitable by investors. Factors such as not being
able to charge market prices or compensate a skilled staff affects funding when the investors are
primarily focused on their ROI. The factors constrain social entrepreneurs from wealthy
investors and makes them more dependent on resources. Since social entrepreneurs are mainly
motivated by social change, a disproportionate amount of these social ventures are located in
more remote, impoverished areas with scarce amount of resources. Social entrepreneurs
venturing into these developing economies face an environment in which quality resources are
extremely scarce and therefore expensive (Collier, 2007; Seelos and Mair, 2005; Zahra et al.,
2009), or where institutional financing mechanisms are absent or weak (Mair and Marti, 2009;
Kistruck et al., 2011). Even in developed countries where the operating conditions are better and
resources are more accessible, the tensions between social mission and financial return can create
resource mobilization challenges (Austen, Stevenson, and Wei-Skillern, 2006; Lasprogata and
Cotton, 2003; Kohler, 2011). This paper tackles the question of how these firms can maintain
their social values that differentiate them from commercial entrepreneurial pursuits, while still
garnering the same financial success.

Resource Mobilization Constraints Faced by Social Entrepreneurs

“Unprofitable” Market
The difference between social entrepreneurship and commercial entrepreneurship is that
social entrepreneurship focuses on addressing unmet societal needs and seeks generate social
value while commercial entrepreneurship seeks to create economic value[CE2] even though they
are pursuing opportunities (Meyskens et al., 2010). Because the latter is more money driven, it is
easier for commercial entrepreneurs to make money and have the means to mobilize resources.
The purpose of social enterprises extends beyond simply revenue generation for profit
maximization to include producing goods and services in response to the needs of a community
(Di Domenico et al., 2010). Thus, it makes it much harder for social enterprises to have the funds
to mobilize resources globally.

Furthermore, since a social venture can be structured as either a for-profit, non-profit, or

hybrid blended entity, the profitability margins are lower for social ventures (Meyskens et al.,
2010). For-profit commercial ventures are likely to generate more revenue to mobilize resources
globally. Angel investors and venture capitalists, for example, provide capital to commercial
entrepreneurs with the hope that they will one day receive even more capital in return but that is
not normally the case for social entrepreneurs (Certo & Miller, 2008). Because of this, social
ventures are considered unprofitable so they are unable to receive typical funding as commercial
ventures do.

Commercial entrepreneurs are able to hire employees also because of potential returns.
When individuals decide to work for commercial entrepreneurs, they typically do so based on the
premise that their effort will result in financial rewards such as wages, benefits, etc. (Certo &
Miller, 2008). Without the allure of potential returns, social entrepreneurs face more difficulty in
global resource mobilization[CE3] because employees are less likely to be motivated to work for
a social venture. As a result, social enterprises need to find alternative ways to lure people into
working for social enterprises over commercial enterprises whether it be an increase in wage or
other benefits. If wage needs to be increased, that will create another shortage in profits and cash
flow for social ventures.
Macro-Environmental Issues
Although social enterprises can be found in many different places, they are mostly found
in communities with limited access to resources as a response to the lack a of facilities and
services in those communities (Di Domenico et al., 2010). Social entrepreneurs purposely locate
their activities in areas where markets function poorly, while for profit-commercial entrepreneurs
seek markets that are more affluent and have carrying capacity to support growth (Di Domenico
et al., 2010). This causes hardships to find and mobilize resources to these international regions
with vastly differing institutional environments. Furthermore, quality resources are scarce and
expensive to acquire in these areas (Basu et al., 2013).

In addition to physical resources being scarce, labor resources are also a constraint that
social entrepreneurs face and struggle with. Many social enterprises often employ volunteers as
their source of labor (Basu et al., 2013). The selection and training of volunteers in these
environments is difficult and is affected by economic, political, and educational patterns of the at
the macro-environment level (Basu et al., 2013). Not only is it hard to find volunteers, the
environment only adds to the difficulty.

Weak international governmental infrastructures can also affect resource mobilization for
social entrepreneurs (Desa, 2011). Social enterprises need governmental support to be able to
establish themselves in those environments as well as to gain access to basic resources (Desa,
2011). Many times, social enterprises frame their services to align with the needs of the
government and the environment that they are in (Desa, 2011). For example, services such as
counseling, substance abuse, or public health will be created based on the governments needs
(Desa, 2011). Without local political and government support, the social enterprises will face
issues and complications with access to resources and will need to find alternative ways to
mobilize resources (Desa, 2011).

Solution to Resource Constraints

Two Approaches
While the literature surrounding the topic of resource mobilization and the other
disproportionate obstacles faced by modern social entrepreneurs does a noteworthy job of
identifying these problems, there is a distinct lack of policy suggestion in most of these pieces.
Scholars have spent most of their time distinguishing social enterprise from commercial
enterprise. But uniquely, social enterprise contains both entrepreneurial and humanitarian
elements, and both of these elements can be used to generate revenue and thus further help their
respective communities. The two main approaches to resource mobilization within social
entrepreneurship that this paper focuses on are bricolage and optimization. Combining these
elements of commercial enterprise with the fundraising of charitable organizations allows for the
most effective form of revenue gain.
Bricolage and Resource Optimization
Bricolage in entrepreneurship involves assembling the resources at hand and creatively
manipulating them to gain the desired ends of a social enterprise. This method is frequently cited
in the context of social entrepreneurship precisely because of the difficulties that these
businesses face in regard to resource mobilization (Di Domenico, et al., 2010). Bricolage is
effective in conditions of resource scarcity, when all faculties of a business must be combined in
order to increase the output of that business and generate more financial return. Since social
entrepreneurs are usually in positions of resource restraint, this approach will not only come
easily to them, but also allow those involved in the business to shift their roles to suit its most
imperative needs.

An alternative to bricolage often cited in entrepreneurial literature is resource

optimization. While bricolage focuses on assembling the resources already at hand and utilizing
them to the best of the business’s ability, optimization focuses on gaining new, specific
resources. In implementing resource optimization, social enterprises must take a calculated look
at their mission, decide which resources are essential to achieving that mission, and obtain those
alone (Basu & Desa, 2013). Optimization involves a complete reworking of an enterprise’s
current business plan. In order to successfully gain use of these strategic resources, social
enterprises must reassess how they’ve been previously operating, cut any resource waste, and
focus on gaining access to resources that will help further their mission.

Traditional Fundraising
Conversely, a method of gaining resources unique to social enterprise is the utilization
(sometimes referred to as exploitation) of methods traditional to NGO’s and other socially
motivated firms. This includes the strategic mobilization of a volunteer workforce as well as the
accumulation of grants and donations. This is more than simply asking for help. These methods
are free resources and labor that are the result of proper marketing and strategic branding on the
part of the social enterprise. Furthermore, these methods are not unique to charitable
organizations, as it may seem. In fact, these methods are often utilized in a similar manner by
traditional entrepreneurs. As Viravaidya and Hayssen posit in their UNAIDS piece, “to appeal
for donations, NGOs must understand the motivation of their potential donors, just as
commercial marketing executives must understand the different ‘tastes and preferences’ of their
varied customers’” (2001). Ultimately, this is the strategic utilization of public relations, which is
vital to any enterprise. If the company can effectively sell the social elements of their business,
they can generate capital from their mission statement alone.

While many discussions of how to combat the resource scarcity prevalent within social
enterprise emphasize entrepreneurial business elements over those of a non-governmental
organization, there is still a lot that can be said for the fundraising techniques of the less
business-minded NGO’s. Since these charities are often devoid of any business element, they
have to be resourceful in order to fund their social outreach. Depending on these factors alone is
often not enough to keep a firm afloat. In fact, one of the main tenets of social entrepreneurship
is eliminating the dependency on donations and grants. If social entrepreneurs combine one of
the aforementioned entrepreneurial tactics with traditional charitable fundraising, they are
exploiting their situational capabilities to their advantage and will thus be able to mobilize more
resources and generate optimum revenue.

Conclusion
As more social entrepreneurs venture to new demographics, conditions, or environments
to tackle social, cultural and environmental challenges they will continue to experience diverse
resource mobilization constraints. Making a social change with limited resources is difficult and
there is no exact solution to this problem. As each country’s political and economic conditions
vary, so do the obstacles the social entrepreneur will face in developing a successful social
enterprise. If a social enterprise combines standard tactics of low-resource entrepreneurs, such
as bricolage or optimization, with traditional fundraising methods of charitable organizations, the
company will be utilizing its hybridization and thus be less likely to fall subject to the common
pitfalls of social entrepreneurship. This resource mobilization framework can balance the social
and financial mission of these enterprises. This will allow these social enterprises to improve
visibility and promote growth and financial success, creating more social change in areas that
need it.

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