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Toward A Positive Theory of Social Entrepreneurship. On Maximizing Versus Satisficing Value Capture

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  • ESSCA School of Management, France

Abstract

In a recent issue of the Journal of Business Ethics, Filipe M. Santos posits that social entrepreneurs maximize not on value capture, but on value creation, only satisficing on value capture to fuel operations, reinvesting in growth, whatever the specific combination of institutional means is deemed appropriate. No doubt the analytical framework of value creation and value capture casts new light on the phenomenon of social entrepreneurship, but we think Santos is asking too much by advocating a shift in focus away from the organization. On the contrary, we maintain that by refocusing the theory on the organizational level and away from the system it is possible to understand that not all organizational solutions available to social entrepreneurs are able to create value and not all value capture strategies can serve a social goal. Indeed, there is only one form of organization that fulfills the criteria of maximizing on value creation, while satisficing on value capture and that is the social enterprise. See more at: http://link.springer.com/article/10.1007/s10551-013-1948-z
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Journal of Business Ethics
ISSN 0167-4544
Volume 125
Number 4
J Bus Ethics (2014) 125:709-713
DOI 10.1007/s10551-013-1948-z
Toward A Positive Theory of Social
Entrepreneurship. On Maximizing Versus
Satisficing Value Capture
Alejandro Agafonow
1 23
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Toward A Positive Theory of Social Entrepreneurship.
On Maximizing Versus Satisficing Value Capture
Alejandro Agafonow
Received: 27 August 2013 / Accepted: 28 October 2013 / Published online: 8 November 2013
Springer Science+Business Media Dordrecht 2013
Abstract In a recent issue of the Journal of Business
Ethics, Filipe M. Santos posits that social entrepreneurs
maximize not on value capture, but on value creation, only
satisficing on value capture to fuel operations, reinvesting
in growth, whatever the specific combination of institu-
tional means is deemed appropriate. No doubt the analyt-
ical framework of value creation and value capture casts
new light on the phenomenon of social entrepreneurship,
but we think Santos is asking too much by advocating a
shift in focus away from the organization. On the contrary,
we maintain that by refocusing the theory on the organi-
zational level and away from the system it is possible to
understand that not all organizational solutions available to
social entrepreneurs are able to create value and not all
value capture strategies can serve a social goal. Indeed,
there is only one form of organization that fulfills the cri-
teria of maximizing on value creation, while satisficing on
value capture and that is the social enterprise.
Keywords Social entrepreneurship Social
enterprise Value creation Value capture Value
appropriation Public goods Market failures
Introduction
The present article addresses a recent contribution of Filipe
M. Santos to the Journal of Business Ethics in which he
breaks fresh ground by looking at social entrepreneurship
in the context of value creation and value capture. This
allows him to shed new light on the topic, submitting that
social entrepreneurs maximize on value creation and only
satisfice on value capture to reinvest in growth. His theory
is intended to cover a broad combination of institutional
means enabling endeavors characterized by neglected
positive externalities affecting the poor. It is our contention
that there is only one form of organization that fulfills the
criteria of maximizing on value creation, while satisficing
on value capture, and that is the social enterprise.
Our argument starts by summarizing Santos’s thesis.
We then move on to explain why his argument may be ill
suited to examine types of organization that differ from an
enterprise. Next we explain that, contrary to what Santos
postulates, there is only a form of organization that fulfills
the criteria of maximizing on value creation, while satis-
ficing on value capture; also, that neither all organizational
solutions available to social entrepreneurs are able to
create value, nor can all value capture strategies serve a
social goal. Finally, our argument is summarized in a
conclusion.
Santos’s Positive Theory of Social Entrepreneurship
The profit that can be rendered out of delivering valuable
items for the money customers are willing to pay is the raison
d’e
ˆtre of for-profits. The activity is known as value capture or
value appropriation, and management sciences have been
developed to harness a process of value creation for the sake
of value capture in the interest of a residual claimant of
profits (see Mizik and Jacobson 2003; Alvarez and Barney
2004; Jacobides et al. 2006; Wagner et al. 2010; King and
Slotegraaf 2011). Santos (2012) moved into new territory
when putting social entrepreneurship in this analytical
framework. Contrary to many scholars in this field, Santos
A. Agafonow (&)
ESSCA School of Management, LUNAM Universite
´,
1 rue Lakanal, BP 40348, 49003 Angers, France
e-mail: alejandro.agafonow@essca.fr
123
J Bus Ethics (2014) 125:709–713
DOI 10.1007/s10551-013-1948-z
Author's personal copy
(2012, p. 339) posits that social entrepreneurs maximize not
on value capture, but on value creation, only satisficing on
value capture to fuel operations and reinvest in growth.
Filipe Santos’s use of ‘‘satisficing’’ is different from the
original term coined by Simon (1959), who used it in
support of the aim of value capture for the sake of divided
distribution under conditions of bounded rationality and
incomplete information, intending to build an alternative to
the neoclassical construct of ‘‘maximizing.’’ Santos does
not elaborate much on his novel use of satisficing,
implicitly meaning that the difference between revenues
and costs is going to be lower than under for-profit maxi-
mizing conditions, and carried out for the sake of rein-
vestment into the social venture rather than distributing
dividends to shareholders.
Let us recall that an important part of the scholarship on
social entrepreneurship chooses the profit aim as a starting
point—that is, satisficing on value capture for the sake of
reinvestment is deemed inefficient and the product of an
atavistic bias against earning profits, a viewpoint explicitly
upheld by Dees and Anderson (2003, p. 12–13). It is also
upheld that it is not a fertile line of reasoning to curtail profit
making in the realm of social entrepreneurship (e.g., Drucker
1994; Dees 1998; Seelos and Mair 2004; and Martin and
Osberg 2007). For instance, Peredo and McLean (2006,
p. 64) maintain it is unwarranted to exclude for-profits from
advancing social entrepreneurship and achieving social
objectives. Martin and Osberg (2007, p. 35) submit that as
long as social entrepreneurs’ value propositions target a
disadvantaged population there is no problem with aiming at
turning a profit. Mair and Martı
´(2006) advocate the advan-
tages of mixing social ventures and profit aims, while Porter
and Kramer (2011; also Driver 2012) maintain that profit
coupled with societal benefit is a higher form of profit.
Filipe Santos recognizes that there is a tension between
value creation and value capture. The emphasis on either
one or the other draws from the specific identity of an
organization that allows for the differentiation of entre-
preneurial activities. Hence, referring to this dichotomy,
Santos (2012, p. 339) argues that: ‘‘what distinguishes
social entrepreneurship from commercial entrepreneurship
is a predominant focus on value creation as opposed to
value capture.’’ The agent’s motivation for economic
action thus becomes an important element in distinguishing
the two kinds of entrepreneur. Most importantly, an
entrepreneur’s particular domain of action would be
revealed by the forces of a capitalist-driven society because
an emphasis on value creation in a market with high
potential for value capture will always give the edge to
commercial, for-profit entrepreneurs able to scale their
ventures faster than social entrepreneurs.
Hence, social entrepreneurs will be displaced in the long
term to domains where the market does not perform well,
and the potential for value capture is limited. In response to
the question of what kinds of areas are likely to see social
entrepreneurs thrive, Santos posits:
‘The answer is in areas with strong externalities,
particularly positive externalities, where the potential
for value capture is lower than the potential for value
creation because the benefits for society of the
activity go much beyond the benefits accrued to the
entrepreneurs’’ (Santos 2012, p. 342).
Although numerous definitions of social entrepreneurship
have been proposed,
1
Santos articulates a new and—in our
view—compelling one based on a deep understanding of
how market failures prevent value capture. Thus, Santos
proposes defining social entrepreneurs as:
‘economic agents who, due to their motivation to
create value without concern for the amount they
capture, will enter areas of activity where the more
severe market and government failures occur []
these are usually areas with neglected positive
externalities affecting disadvantaged populations’’
(Santos 2012, p. 344).
The contrast between social entrepreneurship and com-
mercial entrepreneurship constitutes an appropriate starting
point to consider more concrete organizational features of
the strategies and actions preferred by social entrepreneurs
as opposed to their for-profit peers. If the latter drive their
ventures through for-profit enterprises, we are confronted
with the question of what kinds of organization are most
suitable for promoting social entrepreneurs’ goals. Santos
(2012, p. 345–346) suggests: ‘‘social entrepreneurship is
not specifically about creating market mechanisms or
securing government subsidies or creating a social enter-
prise, it is about crafting effective and sustainable solutions
using whatever combination of institutional means is
deemed effective.’’ This is indeed compatible with the
view of social entrepreneurship as an umbrella concept
with plenty of room for different sorts of initiative tackling
social problems.
Santos (2012, p. 346), however, moves further in this
direction by submitting that the organization is not the
focal unit of analysis when it comes to social entrepre-
neurship because the end is not value capture and,
according to him, only value capture is best conceptualized
at the level of the organization. An emphasis on value
creation, he maintains, requires a move to the level of the
system, requiring a shift from the organization as unit of
1
For a detailed account of these numerous definitions see: Roberts
and Woods (2005); Peredo and McLean (2006); Short et al. (2009);
Zahra et al. (2009); Dacin et al. (2010); Defourny and Nyssens
(2010); Hoogendoorn et al. (2010); OECD (2010); Bacq and Janssen
(2011).
710 A. Agafonow
123
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analysis. This is what we find highly problematic in San-
tos’s theory, for the reasons that follow.
On organizational Entities and Institutional Means
Since social just as much as commercial entrepreneurs
need organizations to achieve their ends, it is not clear what
Santos means when he advocates a shift away from the
organization and focusing instead on the level of the sys-
tem. We find Santos’s theory compelling precisely because
he chose the level of the organization when using the
analytical framework of value creation versus value cap-
ture—that is, these analytical categories in their present
state of development are tailored to the organization as the
focal unit of analysis. Furthermore, they may even be ill
suited to examine certain kinds of organization that differ
from an enterprise, let alone the fuzzy concept of ‘‘the
system.’’ We now proceed to flesh out this contention.
If social entrepreneurship is about crafting solutions to
tackle social problems using effective combinations of
institutional means, we are soon confronted with the fact
that not all solutions fit the analytical framework adopted
by Santos—that is, that social entrepreneurs maximize on
value creation, only satisficing on value capture to fuel
operations. The problem when applying the latter to a
broad array of solutions is that an important part of these
lies within the traditional redistributive and advocacy camp
of donative nonprofits—that is, charities, NGOs, founda-
tions, and associations that redistribute resources created
elsewhere. We do not normally think of these organizations
as creating value in the sense of the terminology adopted
here, but more indirectly as spin-offs in the provision of
public goods that cannot be marketed.
These organizations have traditionally performed a
redistributive function, in which social objectives take
precedence over profit motives. Their goal is to tilt the
balance in favor of a greater redistribution of resources
created elsewhere toward the least advantaged. Therefore,
when weighing the aggregate economic sacrifice against
the aggregate economic output, the third sector has tradi-
tionally meant to operate without concerns with financial
sustainability. That is, the limit to the softening of the
budget constraint of the target population relies on donors’
judgments about how much their activity in the private
sector can fuel charitable objectives. Although these
organizations do a great deal of good for society, it is
untenable to maintain that they maximize on value creation
unless we blur the boundaries of sectors to make room for a
very broad definition of value creation. Still, in Santos’s
theory, value creation is instrumental in fueling operations
for scaling up, which requires the possibility of value
capture—that is to say, appropriating part of the value
created, normally in the form of money, to further finance
the social venture.
Here we reach the bottom line of Santos’s theory,
because even if we grant that donative nonprofits create
value in a broad sense, we cannot capture it, for it remains
in the nonmonetized form of positive externalities. Let us
recall that in order to capture value—to fuel the goal of
either dividend distribution or reinvestment in growth—a
firm must create value producing goods, the nature of
which allows an individualized rationing through selling in
the market. But this is normally impossible or prohibitive
in the case of goods that economists have termed public.
The crucial part is how the market can produce public
goods—for instance, national defense, scenic beauty, or
oxygen—with the certainty that every person will pay
according to the subjective well-being that each one gets
from consuming them? To obtain a subjective satisfaction
above the subjective marginal cost of paying for these
goods, individuals will seek to hide or distort their true
preferences so that others stand the burden of paying these
goods. This is why the market is made to fail by producing
too little or nothing at all of public goods.
2
The analytical framework of value creation and value
capture casts new light on the phenomenon of social
entrepreneurship, but Santos is probably going too far in
advocating a shift away from the organization because, on
the one hand, traditional philanthropy and the public sector
are not thought of as creating value—at least in the eco-
nomic sense of the term—and, on the other hand, it is the
economic sense of value creation the one that Santos
assumes when acknowledging that social entrepreneurs
satisfy on value capture. If the latter were not possible
because of nonmonetized positive externalities, social
entrepreneurs would not be able to reinvest in growth at all,
which is the case for those engaged in the production of
public goods that cannot be marketed.
A Holistic Conception of Value?
It has been suggested to us that Filipe Santos may have had in
mind a holistic conception of value. Although, it was not
made explicit in his paper, this is probably what Santos
(2012, p. 346) intended when submitting the following def-
inition: ‘‘value creation from an activity happens when the
aggregate utility of society’s members increases after
accounting for the opportunity cost of all the resources used
in that activity.’’ According to this conception, social
entrepreneurs’ actions have the effect of increasing society’s
aggregate utility, but unlike commercial entrepreneurs, the
2
This was an issue originally raised by Samuelson (1954,1955) and
Musgrave (1959)
Toward A Positive Theory of Social Entrepreneurship 711
123
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former are not concerned so much with the potential for value
capture because what motivates them is the positive exter-
nalities their activities trigger, increasing the aggregate
utility of society.
Let us bear in mind, however, that a holistic conception
of value has been used in the framework of value creation
versus value capture by the literature on relationship mar-
keting, illustrating the limits of business-to-business strat-
egies that underestimate the role of costumers in crafting a
value proposition that delivers real value through the final
good contributing to a long-lasting commercial relation-
ship. Therefore, holistic value means a thorough under-
standing of the implications and spillovers of goods being
transformed along the value chain that go beyond a short-
term concern with profit maximization at the expense of
costumers (e.g., Gro
¨nroos 1994,1997; Sheth and Parvati-
yar 1995; Christyet al. 1996; Henneberg and Mouzas 2004;
Bull and Adam 2011).
No doubt social entrepreneurs are more likely to be
concerned with adding more real value to what they pro-
duce, except that in the presence of nonmonetized positive
externalities it is not possible to reinvest in growth, which
makes the use of ‘‘value capture’’ superfluous in the
argument of Santos. A holistic conception of value in the
sense adopted in relationship marketing is not at odds with
the economic sense of value, and it is instrumental in
appropriating part of the value created for the sake of
shareholders’ wealth.
Refocusing the Theory on the Organizational Level
Despite the achievements of Santos’s theory, its limits
illustrate in general the failure of the scholarly literature to
reconcile the social and commercial aspects of social
entrepreneurial activities. As the story goes, social entre-
preneurs either maximize profits in order to have a chance
of impact investment or they prevent mission drift by
avoiding profit maximization, along the lines of traditional
philanthropy. Put succinctly, the question is whether a
social enterprise should aim at value capture to have a
chance of impact investment or prevent mission drift by
avoiding value capture.
Santos’s theory carries the seed of an alternative to the
polar opposites of for-profits and nonprofits that currently
constitute a gridlock in social entrepreneurship research.
Contrary to what was postulated though, by refocusing the
theory on the organizational level and away from the sys-
tem it is possible to understand that not all organizational
solutions available to social entrepreneurs are able to create
value and concomitantly, that not all value capture strate-
gies can serve a social goal. Indeed, there is only one form
of organization that fulfills Santos’s criteria of maximizing
on value creation, while satisficing on value capture, and
that is the social enterprise.
Thus, by refocusing the theory on the organizational
level it is possible to expand on social entrepreneurship,
acknowledging that neglecting value capture can be either
a structural feature of the organizational form that social
entrepreneurs choose—like donative nonprofits producing
public goods that cannot be marketed—or a matter of
strategy in using a firm to advance social goals, for
example, a social enterprise that, even producing market-
able goods that bear a potential for value capture, serves
the goal of reinvesting in growth rather than enriching
shareholders. This opens a fertile line of inquiry that sug-
gests a typology of social entrepreneurs based on their
preferences for organizational forms to advance social
goals as well as their attitudes toward a novel concept: that
social entrepreneurs do not have to remain in the camp of
advocacy and redistribution, but can experiment with value
creation strategies that are not necessarily at odds with the
interests of a disadvantaged population.
Conclusion
If social entrepreneurship is about crafting solutions to
tackle social problems using effective combinations of
institutional means, we are soon confronted with the fact
that not all solutions fit the analytical framework adopted
by Santos who maintains that social entrepreneurs maxi-
mize on value creation and only satisfice on value capture
to fuel operations, by whatever combination of institutional
means is deemed appropriate.
In fact, an important array of solutions to social prob-
lems, represented by charities, NGOs, foundations, and
associations, do not create value in the strict economic
sense, but rather indirectly as spin-offs via the provision of
public goods that cannot be marketed. Santos, however,
adopts the economic sense of value creation when
acknowledging that social entrepreneurs satisfy on value
capture, because in order to capture value to reinvest in
growth, as Santos proposes, social entrepreneurs must
move away from the production of nonmonetized positive
externalities—which describes the behavior of donative
nonprofits engaged in the production of public goods that
cannot be marketed.
No doubt the analytical framework of value creation and
value capture casts new light on the phenomenon of social
entrepreneurship, but we believe that Santos is going too
far in advocating a shift of the focus away from the orga-
nization. Contrary to Santos, we maintain that by refo-
cusing the theory on the organizational level and away
from the system it is possible to understand that not all
organizational solutions available to social entrepreneurs
712 A. Agafonow
123
Author's personal copy
are able to create value, and not all value capture strategies
can serve a social goal. Indeed, there is only one form of
organization that fulfills Santos’s criteria of maximizing on
value creation, while satisficing on value capture and that is
the social enterprise.
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... This conceptualization holds that social enterprises are neither nonprofit nor for-profit in the traditional senses. Instead, they entail aspects of both types of ventures, but they also go beyond both types of ventures in a unique way (Agafonow, 2014;Chell, 2007;Mort et al., 2003). This unique way is one operational model that generates value in more than one of the economic, social and natural/ecological value denomination categories. ...
... Social enterprise operations engage areas of the environment that more traditional entrepreneurial ventures do not, and they generate value in those areas in ways that are impossible for more traditional entrepreneurial ventures (Agafonow, 2014). Thus, the organizational boundaries of social enterprises and the individuals who undertake social enterprise activities are different from those of other entrepreneurial ventures. ...
Article
Full-text available
Purpose Social enterprises are defined in practice in terms of one operational model generating measurable value in more than one of the economic, social and natural/ecological value denomination categories. However, entrepreneurship theory does not generally or explicitly reflect this definition, which has generated confusion about the social enterprise concept. The purpose of this paper is to contribute to social enterprise theory by delineating novel aspects of this definition and their conceptual ramifications. Design/methodology/approach The authors review the social enterprise literature with a focus only on the most original contributions and most distinct research questions. The authors do not explicitly review research on traditional for-profit entrepreneurial ventures, not-for-profit/non-governmental organizations or mainstream social entrepreneurial ventures. Findings The authors offer several implications for social enterprise theory based on practices that are unique to the area but not amenable other areas of entrepreneurship. The contribution is instrumental to establishing social enterprise as a distinct theoretic area. Originality/value By focusing on novel aspects of social enterprise not easily explainable by mainstream theoretic traditions, the authors offer an original contribution to the development of social enterprise theory.
... Nous prenons en compte que les entrepreneurs diffèrent dans leur approche de mission, ainsi que dans leur approche de la création de marché. Concrètement, nous reconnaissons que les missions sociales peuvent se concentrer sur la fourniture de biens et de services aux bénéficiaires ou sur l'intégration productive des bénéficiaires (Agafonow, 2014;Hockerts, 2015;Santos, 2012). ...
Thesis
Cette recherche se propose de mettre en évidence les différentes configurations des visions des entrepreneurs et les modèles d’affaires associés. La problématique de la recherche traitée met en perspective l’historique du secteur social, et tout d’abord, le cas des associations à but lucratif et social au sein du marché. Pour répondre à notre objectif de recherche, le fait de s’appuyer sur le processus méthodologique est une posture épistémologique qui utilise une méthode triangulatoire combinant typologie et taxonomie: la typologie déductive basée sur le cadre théorique en mobilisant le contexte institutionnel, la théorie basée sur les ressources et le courant stratégique de l’entreprise sociale, pour proposer une typologie à huit configurations des visions stratégiques des entrepreneurs du Business Model des publications. Afin d’arriver à l’induction sur un terrain particulier pour présenter à travers l’analyse de correspondance, les configurations quantitatives d’une analyse taxonomique par une double classification en groupes homogènes et non hiérarchiques sur une base constitué par 14 entreprises sociales. Afin d’élaborer une grille de lecture opérationnelle de la vision stratégique que l’entrepreneur a utilisée dans le modèle d’affaire des organisations sociales. Le processus méthodologique mobilisé a aussi intégré une exploration recentrée sur l’étude de cas des entreprises sociales, et ainsi relever les trois configurations du Business Model Social représentées par les profils des entrepreneurs sociaux dénommés « actifs », « bienfaiteurs » et « dominants ». L’analyse des résultats par l’étude de trois cas sociaux des maisons de retraites colombiennes, a permis de présenter les visions stratégiques des entrepreneurs et de montrer la relation avec l’approche RCOV (Demil & Lecocq, 2010) au moyen de modèles statiques et de modèles transformationnels dans le Business Model Social. Enfin, les résultats obtenus seront des éléments de pistes et de réflexion pour les entrepreneurs dans la conduite de leurs entreprises sociales à travers des diverses configurations du Business Model Social
... Social entrepreneurship is a relevant field of study from sociological and researchbased perspectives [8]. Social entrepreneurs are oriented towards a social mission [9]; they pursue a fair distribution of social income [10], focusing on alleviating the most unfavored segments of society [11] and establishing commercial profit as a secondary priority [12]. ...
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Through qualitative analysis, this paper examines the role of social entrepreneurs as an example of innovative and alternative professional career development. We review the dominant literature about social entrepreneurs’ distinct intentions, attitudes, abilities, and behaviors. We also directly connect social entrepreneurs’ biographies and discourses with the actual nature of their social enterprises. We have found some fundamental common factors as critical determinants of the final social entrepreneurial decision and result: (i) motivations such as emotional connection, moral judgment, personal dissatisfaction, purpose achievement and change, and social needs; (ii) personal internal resources such as connection skills, conviction, creativity, efficiency skills, and learning orientation; (iii) facilitating external factors such as financial and social support, higher and social education, relevant past events, and previous professional experience. Putting together all these factors, we develop a theoretical framework that can explain social entrepreneurship as an alternative career option and connect it with a dominant social entrepreneur’s narrative and profile
... Also, the studies related to understanding the response mechanism of SEs related to the COVID-19 global crisis highlights that these ventures need to rapidly deploy their resources for achieving intended social outcomes (Weaver 2020;Bacq and Lumpkin 2021). Under these dynamic conditions the SEs, due to their missionary zeal of serving the cause of society, integrating the social needs as well as their structural model for the maximisation of resources, provide hope for the re-establishment of economic activities in the society (Ebrahim, Battilana, and Mair 2014;Santos 2012;Agafonow 2014). Focussing on this context, the current study attempts to contribute to the extension of SE literature through the lenses of DCs. ...
Article
The purpose of this paper is to present the significant dynamic capabilities (DCs) that facilitate the development of social enterprises (SEs). The paper synthesises the findings of identified seven qualitative studies to provide a conceptual framework for the interaction of various factors and DCs that lead to the achievement of dual-mission goals of SEs. The study recognises the capabilities of SEs that contribute towards the enhancement of their capacities to sense opportunities, seise opportunities, and reconfigure their resource base. In this paper, the authors have employed a meta-synthesis approach that involves the eight-step meta-synthesis method proposed by Hoon. The findings of this study emphasise various DCs of SEs that enable them to achieve continuous social improvement and socio-economic success. It also brings forth the critical factors that enable the development of DCs in SEs. The study will benefit the social entrepreneurs as well as academicians to acknowledge the significance of DCs in SEs, which will assist them in managing resources in their pursuit of dual-mission goals. This study contributes to the debate in the social entrepreneurship (SE) literature regarding developing the theory of DCs in SEs. Furthermore, the factors identified in this study as enablers for developing DCs in SEs have not been discussed in prior research.
... Individual level strategy is also part of the research and is normally reflected in the above structures as the mission and vision of the companies. Some other scholars have tried to work on key sub-themes and the evaluation of the relationship, and the prioritisation of these themes, for example, to focus on value creation and value capture (Agafonow, 2014;Li & Dai, 2015). In their analysis of business models and marketing strategies of the music industry, Vaccaro and Cohn (2004) use a service marketing perspective and emphasise the growing importance of marketing strategies in helping companies generate money and profits. ...
Chapter
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From an industry perspective, it makes sense to follow the market logic and best practices in the established music industry prototypes around the world, particularly the music industry in the US. However, that assumption is based on an established music industry with a healthy industry structure and sophisticatedly developed policy environment (not without its new challenges). In order to get the music industry developed in a healthy way, there are a number of aspects to consider in a Chinese context.
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This multiple case study of nine entrepreneurial ventures with social emphasis operating in Colombia, Peru, and Chile identifies vital elements that make these firms impactful in three dimensions: economic, environmental, and social. The results found that the founder's proximity to the social/ecological problem is a trigger to start up a business. The “purpose” is a motivational factor to both start up a business and keep the business during hard times, such as the COVID-19 pandemic. The purpose is the fuel, but it does not guarantee the success of the company. The value proposition is the critical factor for success. These companies are continually re-inventing and changing their value proposition while keeping the purpose of the organization as a keystone. The authors shed light on a model for social entrepreneurship in South America.
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Innovationen in der Arbeitswelt sind kein klar definierter Gegenstand. Der Beitrag verortet diesen zunächst als organisationale in Abgrenzung zu technischen und institutionellen sowie in Anlehnung an soziale Innovationen. Im Anschluss werden die Charakteristika dieses Innovationstyps entlang exemplarischer arbeitsweltlicher Innovationen näher bestimmt. Abschließend wird die Verortung als Subtyp sozialer Innovationen hinterfragt und der Ertrag des Beitrags reflektiert.
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There is an emerging consensus among scholars that a unified definition of social entrepreneurship would empower better research and legitimize the entire field. In spite of these benefits, none of the four definitions identified here is clearly superior to the others. Moreover, a unified definition might be unattainable and it would arguably also have negative side effects that have been so far overlooked—namely, managerial issues for social entrepreneurs, efficiency issues for the economic system, theoretical issues for scholars, as well as ethical issues at large. Finally, this chapter argues that the alleged benefits of a unified definition might be obtained with two definitions or more.
Chapter
Social incubation is a recent phenomenon, but it is rapidly growing on an international scale in response to the expansion of the social economy and the increased awareness that social enterprises can play a pivotal role in reforming the welfare system. The academic literature on this topic is still in its early days and detailed investigations of whether these organizations embrace sustainable business models are still missing. Consequently, we do not yet know whether social incubation creates value in a sustainable manner and, if so, how to maximize and optimize the creation of such value. Understanding the sustainability and the overall viability of social incubation is both important and timely, as the phenomenon consolidates and expands internationally. This chapter offers a preliminary, but systematic study of this issue through an extensive empirical investigation of 14 social incubators in Italy. The main theoretical contribution of this chapter is a new theoretical framework that elaborates on the literature streams of social entrepreneurship and social and business incubators. A secondary, empirical contribution is the first systematic mapping of the social incubators across Italy.
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IESE Occasional Papers seek to present topics of general interest to a wide audience.
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Extending Teece's landmark 1986 article, we consider how innovators benefit from value appropriation and creation. We elaborate on value appropriation, first by pointing out the importance of "industry architectures", i.e. sector-wide templates that circumscribe the division of labor; and second, by treating complementarity and factor mobility as distinctive components of cospecialization. This allows us to qualify Teece's prediction, by positing that firms can create an "architectural advantage" in terms of high levels of value appropriation without the need to engage in vertical integration. Such architectural advantage comes about when firms can enhance both complementarity and mobility in parts of the value chain where they are not active. We then elaborate on value creation by indicating how actors can benefit from investing in assets that appreciate because of innovation, which suggests that firms can benefit from encouraging imitation while investing in complementary assets. We also consider how investment in complementary assets changes the scope of the firm and thereby the development of capabilities that support future innovation. Finally, we provide an integrative guide that explains how firms should manage their position along the value chain to capture returns from innovation, thus extending and qualifying Teece's (1986) original predictions and prescriptions.
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We examine the current state of the social entrepreneurship literature, asking what is unique about social entrepreneurship and what avenues create opportunities for the future of the field. After an evaluation of social entrepreneurship definitions and comparison of social entrepreneurship to other forms, we conclude that while it is not a distinct type of entrepreneurship, researchers stand to benefit most from further research on social entrepreneurship as a context in which established types of entrepreneurs operate. We demonstrate these opportunities by describing avenues for further inquiry that emerge when examining valuable assumptions and insights from existing theories inherent in conventional, cultural, and institutional entrepreneurship frameworks and integrating these insights in ways that address the unique phenomena that exist in the context of social entrepreneurship.
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In this interview Michael Porter explores social entrepreneurship in the context of a larger transformation of capitalism. He suggests that social entrepreneurship is an important transitional vehicle toward the creation of shared value and a capitalist system in which meeting social needs is not just a peripheral activity but a core aspect of every business. Porter discusses the implications of this perspective on social entrepreneurship with a view to new opportunities but also responsibilities for educators in the field. I examine how this fits with but also extends current debates on social entrepreneurship. The interview concludes by examining where Porter's ideas may take us and reflecting on social entrepreneurship education as conversations about the social becoming more entrepreneurial but also the entrepreneurial becoming more social.
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