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'Can social entrepreneurs do well by doing good? Blending social and economic value creation'- An investigation

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For-profit Social Entrepreneurial Ventures (SEVs) and Entrepreneurial Ventures (EVs) differ from each other in their purpose, mission and process. Many researchers were sceptical about SEVs blending social good with economic benefits. In the extant literature, there are hardly any empirical studies to refute this perceived notion that SEVs find it hard to balance both economic and social gain compared to their commercial counterparts. This study is an attempts to bridge this gap, bringing data from 140 practicing social and business entrepreneurs to answer the two fundamental questions; Can SEVs align wealth creation while serving a social purpose and do it well? Do they still lag behind business enterprises in creating profitable ventures? The study assumed that both EVs and SEVs are two different types of businesses with different nature, striving to achieve different outcomes. The findings show that EVs and SEVs converge and diverge in many variables. There are differences in some of the "not so important" parameters like age of the venture, the number of part-time employees and the number of partners among EVs and SEVs. However, there are no statistical differences in the parameters that really matter for a venture like annual sales turnover, the number of customers, the number of full-time employees and volunteers. Current profitability status of SEVs and EVs also did not differ statistically. The most significant finding of this study is that SEVs are able to reach the same performance level similar to EVs in terms of annual sales turnover and number of customers. They employ the same number of people and are profitable the same way as commercial entrepreneurs. One of the barriers to SEVs' profitability emerged in this study is low employee efficiency ratio compared to EVs. The study showed the nature of the firm has an influence on sales turnover and current status of the venture in terms of profitability. Age of the venture had a significant influence on the profitability status, profitable SEVs were older than profitable EVs.
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Academy of Entrepreneurship Journal Volume 23, Issue 2, 2017
1 1528-2686-23-2-105
“CAN SOCIAL ENTREPRENEURS DO WELL BY
DOING GOOD? BLENDING SOCIAL AND ECONOMIC
VALUE CREATION - AN INVESTIGATION
Shinu Abhi, REVA University
ABSTRACT
For-profit Social Entrepreneurial Ventures (SEVs) and Entrepreneurial Ventures (EVs)
differ from each other in their purpose, mission and process. Many researchers were sceptical
about SEVs blending social good with economic benefits. In the extant literature, there are
hardly any empirical studies to refute this perceived notion that SEVs find it hard to balance
both economic and social gain compared to their commercial counterparts. This study is an
attempt to bridge this gap, bringing data from 140 practicing social and business entrepreneurs
to answer the two fundamental questions; Can SEVs align wealth creation while serving a social
purpose and do it well? Do they still lag behind business enterprises in creating profitable
ventures?
The study assumed that both EVs and SEVs are two different types of businesses with
different nature, striving to achieve different outcomes. The findings show that EVs and SEVs
converge and diverge in many variables. There are differences in some of the “not so important”
parameters like age of the venture, the number of part-time employees and the number of
partners among EVs and SEVs. However, there are no statistical differences in the parameters
that really matter for a venture like annual sales turnover, the number of customers, the number
of full-time employees and volunteers. Current profitability status of SEVs and EVs also did not
differ statistically.
The most significant finding of this study is that SEVs are able to reach the same
performance level similar to EVs in terms of annual sales turnover and number of customers.
They employ the same number of people and are profitable the same way as commercial
entrepreneurs. One of the barriers to SEVs’ profitability emerged in this study is low employee
efficiency ratio compared to EVs. The study showed the nature of the firm has an influence on
sales turnover and current status of the venture in terms of profitability. Age of the venture had a
significant influence on the profitability status, profitable SEVs were older than profitable EVs.
Keywords: For-Profit Social Entrepreneurial Ventures, Triple Bottom Lines, Profitability,
Impact Measurement.
INTRODUCTION
For-profit social entrepreneurial ventures or SEVs are those ventures that blend social
goals with business goals and referred as “double bottom lines organisationsor “bottom of the
pyramid ventures”. They pursue their goals differently compared to their commercial
counterparts viz, entrepreneurial ventures or EVs, whose primary aim is to create more
economic value (Dees & Anderson, 2003; Dorado, 2006; Prahalad, 2006; Chell, 2007). SEVs
for-profit are often posed as an answer to many of the pressing world problems. The combination
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of strong social purpose and an entrepreneurial drive to create a profitable business tend to
deliver genuine results in inclusive growth.
But, does it make sense to blend the profit motive with a social objective? Earlier
researchers like Adam Smith were quite sceptical about blending social good with economic
benefits. The studies show that, the risks of conflict between pursuing profits and serving a social
objective are significant. Successful examples that blend both social and economic value creation
is very rare. (Dees & Anderson, 2003; Thompson & MacMillan, 2010). There are fewer numbers
of entrepreneurs starting a social enterprise compared to commercial ones. The lack of
awareness, perceived high risk, lower financial returns, etc. may push them away from starting a
for-profit social enterprise. There are hardly any studies, empirical or conceptual; to enlighten
these refuted fears about social entrepreneurship (Zahra, 2014; Short et al., 2009).
Further, there are hardly any studies comparing commercial and social entrepreneurship
to exactly understand the similarities or differences in the process and impact creation
(Braunerhjelm et al., 2012; Dorado, 2006; Shaw & Carter 2007). The emergent social
entrepreneurship research has primarily utilised case studies or anecdotal evidence as a means to
assess the phenomena of social venture creation (Mair & Marti, 2006) and systemized data
collection efforts are lacking is limited empirical and quantitative research, rigorous hypothesis
testing is lacking; little variety in research design is applied and the research is based on very
small sample sizes (Braunerhjelm et al., 2012; Hoogendoorn et al., 2010). This trend is mainly
due to the inherent difficulty and lack of widely accepted process or means to assess the value
created by these social ventures (Dees, 1998).
Purpose of this article is thus, to close the research gap on the following unanswered
questions in the existing literature.
Can social entrepreneurs whose products and services are targeted to people at the bottom
of the pyramid create profitable businesses?
If so, what make their ventures profitable at the same time create the desired social
impact?
Can SEVs align wealth creation while serving a social purpose and do it well?
Do they lag behind business entrepreneurs in creating profitable ventures?
This paper answers these questions through an empirical study. The data for this study are
collected from the founders of practising social enterprises (for-profit) and commercial
entrepreneurs from India.
Sevs and Evs: Converge or Diverge in Mission and Process?
The purpose of the literature review is to explore the possible similarities and differences
between the nature and organisational characteristics of commercial and social ventures (SEVs
and EVs) which may lead to differences in their performances.
Social enterprise involves a business like innovative approach to the mission of delivering
community services. While the primary purpose of social entrepreneurs is to serve society, a
social business has products, services, customers, markets, expenses and revenues like a regular
enterprise. It is no-loss, no-dividend, a self-sustaining company, which repays its owners
investments (Yunus et al., 2010).
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Though there is a near unanimity regarding the primacy of social objectives, different
individuals and agencies differ in their views about how they achieve these objectives. The
literature based on conceptual studies says social enterprises can be viewed as a range of
business practices that proactively build economic and social capital across the affected
stakeholder groups. These enterprises are the development of alternate business practices and
structures that support socially rational objectives (Ridley-Duff, 2008). Social enterprise is
maximising revenue generation from programs by applying principles from for-profits business
without neglecting core mission (Pomerantz, 2003).
Venkataraman studying traditional entrepreneurship sees the creation of social wealth as
a by-product of economic value created by entrepreneurs (Venkataraman, 1997). In Social
entrepreneurship, by contrast, social value creation appears to be the primary objective, while
economic value creation is often a by-product that allows the organisation to achieve
sustainability and self-sufficiency. In fact, for social entrepreneurship, economic value creation,
in the sense of being able to capture part of the created value in financial terms, is often limited,
and mainly because the customers may be willing but are often unable to pay for even a small
part of the products and services provided (Seelos & Mair, 2005).
The societal benefits of providing appropriate products to lower-income and
disadvantaged consumers can be profound, while the profits for companies can be substantial,
says Porter et.al (Porter & Kramer, 2011). For a company, the starting point for creating this kind
of shared value is to identify all the societal needs, benefits, and harms that are or could be
embodied in the firm’s products. Meeting needs in underserved markets often requires
redesigned products or different distribution methods.
Profits involving a social purpose represent a higher form of capitalism one that will
enable society to advance more rapidly while allowing companies to grow even more. The result
is a positive cycle of company and community prosperity, which leads to profits that endure
(Porter & Kramer, 2011). Porter calls them as next evolution in capitalism.
Performance and Impact Measurement Practices in SEVs and EVs
The performance of an enterprise can be measured financially or operationally, subjectively
or objectively. Most of the companies use multiple measurement indicators like efficiency,
growth, profit, liquidity, market share etc. along with various subjective measures (Murphy,
Trailer & Hill, 1996). Traditionally, entrepreneurial outcomes have been measured based on
financial performance and firm survival (Ucbasaran, Westhead & Wright, 2001).
In a commercial setting, the main systems of performance reporting in accounting standards
have largely evolved over the last hundred years. The universal unit of performance is financial
and accounting conventions have stabilised over time to support the production of regular,
comparative and longitudinal data (Hopwood & Miller, 1994; Nicholls, 2009). Though there are
robust reporting practices in commercial ventures, there is a striking lack of such practices in
social ventures (Sakarya 2012). Conventional reporting practices have failed to demonstrate the
full value creation offered by these social ventures (Mair & Marti, 2006). While there are many
studies analysing the factors which lead to the success of a commercial firm both external,
internal, there are hardly any such studies on for-profit social ventures (Austin et al., 2006;
Dorado, 2006).
EVs can be evaluated solely on the financial terms, while SEVs cannot, since fundamentally
SEVs are firms start off to serve a social mission that is not overshadowed by profit
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maximisation (Mair & Marti, 2006). In addition, the impact of entrepreneurship is studied at
individual, local, regional or macro economic level and a few studies investigate multiple level
impacts (Haugh, 2006). The performance of a social venture is ultimately measured by its ability
to create and sustain social impact. Private sector practices in social enterprise are borrowed
from commercial businesses and pertain to financial profit- making activities. But, for social
enterprises whose goal is to sustain social impact as well as its own existence, sustainability is a
good deal more complex than simply earning money (Alter, 2010).
There are a number of approaches to quantifying social impact and accountability that are
emerging. The first group of metrical models is qualitative in approach. This means that they
focus on social impact measurement through accounting for specific and therefore, often partial -
descriptive outcomes of strategic action. Such metrics are typically human in scale, looking at
individual or community level changes or developments and largely non-comparative (Nicholls,
2009).
Qualitative metrics have an organisational focus, addressing the issue of ‘what is it we
do?’ One of the most problematic areas for such metrics is defining the appropriate value of each
unit of measurement (Nicholls, 2009). For example, in one venture it may be the number of wells
sunk, for another, it may be the number of rural push-cart vendors who bought solar lanterns.
Clearly, such reporting is highly individualistic and rarely comparative.
There is quite an evolution in the impact measurement practices of SEVs. Moving away
from single bottom line method was the first step in this direction. Double bottom line ventures
are by definition hybrid investments that aim to produce financial returns and mission-related
impacts and can be either for-profit or non-profit in legal form.
The simplest of the qualitative social metrics is the triple bottom line (Elkington, 2004).
This model requires an enterprise’s accounting system to incorporate not only the traditional
measures of financial performance but also social and environmental outcomes. However, unlike
financial accounts, the social and environmental audits are typically descriptive, rather than
quantitative and partial and subjective rather than complete and objective. Any external
comparative dimension is also typically lacking (although internal, longitudinal comparison is
possible). This is primarily the consequence of the lack of agreed social and environmental
performance benchmarks. Finally, in this model, the three bottom lines are not weighted or
integrated into any final statement of performance.
Social return on investment (SROI) framework was first proposed by Roberts Enterprise
development fund (Emerson & Cabaj, 2000). The objective was to develop a credible
methodology for the financial calculation of the unreported benefits of work integration activities
that could then be set against program investments to form a more holistic and realistic
performance measurement system
However, there are still arguments about the right impact measurement practice which
can be applied universally to all social enterprises. The standardised measures of social value
creation are still in the developmental stages as many organisations and investors attempt to
quantify the triple bottom line benefit or blended values of social ventures create for society
(Bonini & Emerson, 2005). The challenge of measuring social change is great due to
unquantifiability, multi-causality, temporal dimensions, and perceptive differences of the social
impact created. Performance measurement of social impact will remain a fundamental
differentiator, complicating accountability and stakeholder relations (Austin et al., 2006).
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Research Gap in Current Literature
Most of the studies point to a common argument that for profit social ventures find it
difficult to balance both social and financial objectives compared to business ventures that
pursue the single objective of creating financial value. However, there is hardly any empirical
evidence proving or disproving this assumption. There are also hardly any empirical studies
exploring factors leading to profitability in social businesses.A study by Hoogendoorn on the
literature available on social entrepreneurship has resulted in 67 conceptual and 31 empirical
articles. They further analysed all the empirical articles and codified them to detect the type of
research, research method, data collection, sample size and school of thought. Only four articles
had quantitative data and rest were based on case studies. (Hoogendoorn, Pennings & Thurik,
2010).
Among more than fifty articles reviewed for this study, only nine of them used
quantitative data collection methods. Out of nine such studies, three used GEM
i
data whose
samples were adults than real entrepreneurs (Estrin et al., 2013; Lepoutre 2013; Harding 2006).
The rest six were case studies based, which clearly show the research gap and a greater need for
empirically tested studies. This study attempts to bridge this gap, bringing data from 140
practising social and business entrepreneurs and comparing the impact created by them.
RESEARCH QUESTIONS AND HYPOTHESES
Research question proposed for this study is to compare the performance and
profitability status of SEVs and EVs and explore the underlying factors and process.The
literature reviews lead to a hypothesised framework that SEV and EVs are two different types of
enterprises with different nature, organisational characteristics, funding sources and impact
created (Figure 1).
FIGURE 1
MODEL FRAMEWORK OF THE DATA ANALYSIS
H1: Nature of SEVs and EVs
SEVs and EVs are differentiated qualitatively by checking their mission statements and
target customers. One of the important demographic variables viz, the age of the venture is
analysed to understand its importance in creating current impact. Other indices like annual sales
turnover, the number of customers, employees, partners, etc. were compared. Additionally,
Nature of the
Funding sources
Factors &
Process
Performa
nce and
H
H
H
H
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various financial and nonfinancial stakeholders to which a social entrepreneurial organisation are
readily accountable to are greater in number and more varied, resulting in greater complexity in
managing these relationships (Austin, Stevenson & WeiSkillern, 2006).
H2: Funding Sources for SEVs and EVs
Austin et al. (2006) argues that social entrepreneurs are restricted from tapping into the
same capital markets as commercial entrepreneurs. They propose that social entrepreneurs
mobilise different human and financial resources which will act as a fundamental differentiator
between SEVs and EVs and lead to different approaches in managing human and financial
resources (Austin et al., 2006). Dorado points that both SEVs and EVs tap their own funds first
and followed by external sources while starting up (Dorado, 2006). However, both the studies
lack empirical evidence. This study attempts to bridge this gap and compares various funding
sources for SEVs and EVs.
H3: Factors Leading to Performance or Impact
A set of the hypothesis is set to understand the importance of variables like a number of
customers, partners and employees, etc., in leading to firm’s profitability. Leveraging of
resources and the organisational building is two important distinctive factors which can lead to
profitability for a social venture. Given a good opportunity and competent team money would
follow (Stevenson & Jarillo, 1990). The study explored profitability in detail to understand the
factors which are leading to profitability while creating the desirable social impact.
H4: Performance Measurement
Austin et.al, argues that the social purpose of the social entrepreneur creates greater
challenges for measuring performance than the commercial entrepreneur who can rely on
relatively tangible and quantifiable measures of performance such as financial indicators, market
share, customer satisfaction, and quality.
For this study a simple set of performance indicators are proposed which are directly comparable
across both SEVs and EVs:
Financial performance is measured by,
Current profitability status of the venture ((Dorado, 2006; Ridley-Duff, 2008; Markman,
2016)
Annual sales turnover of the venture
Ebrahim et al. (2014) prescribes a “Logic Model”. Accordingly a set of outputs by the SEVs are
measured here:
Number of employees (full-time, part-time and volunteers),
Number of customers served (Social metric by Acumen Fund),
A number of partners engaged.
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RESEARCH METHODOLOGY
A mixed approach method is used here by mixing both quantitative and qualitative
methods to address specific research objectives. Integrating methodological approaches
strengthen the overall research design, as the strength of one approach offset the weaknesses of
the other and can provide more comprehensive and convincing evidence than single method
studies (Creswell & Clark, 2007; Silverman, 2010).
Both social and commercial entrepreneurs for profit mostly register themselves as private
limited companies in India and there is no way of distinguishing them other than looking at their
mission statements or exploring more in-depth into the nature of the business and customers they
serve. Since there are no single publicly available databases in India about entrepreneurs, the
author built a database using both personal and professional references. The database were
created with the help of personal and professional contacts, along with various entrepreneurship
support organizations and websites NEN, ISB, Yourstory.com, Business World report, Top 100
sutra, NASSCOM, NASE, IIT Chennai’s RTBI, Sankalp forum, Aavishkar funds, New Venture
India, Rajeev Circle Awards and so on.
Research protocol says the key respondent to any survey must be a person who is in the
best position to know the constructs under study (Huber et.al. 1985). The respondents of this
study were founders of the enterprises, EVs and SEVs. The criteria to be included in the sample
were:
The founder needs to register their firms legally,
The firm must have been more than 2 years old,
There were no restrictions on the sector of operations.
NGOs, CSR or any such organization whose major revenue comes from donations were not
considered for this study. All the firms which are registered as a Trust or Society or Foundation
or Section 25 companies were also not included.
The distinction of whether the venture is commercial or social is made based on the
founders’ self-declaration. Their claims were further examined and re-iterated based on the
analysis of their mission statements. For social entrepreneurs the criteria provided by Dees et.al
is considered, firstly, they are incorporated as legal entities and secondly, they are explicitly
designed to serve a social purpose (Dees et al., 2003). Social entrepreneurs are selected by
checking their company profile and who explicitly describes their social mission using words
such as social enterprise, livelihood, rural, social impact, sustainability and so on.
The database built thus had 800 commercial and social entrepreneurs’ details. Out of
which 600 entrepreneurs were contacted who qualified based on the sampling criteria.An initial
e-mail was sent to each of them requesting them to participate in the study. Follow-up e-mails
were sent to collect the data. The online survey was filled by the founders of EVs and SEVs. The
researchers also interviewed and cross verified a few of them (~10% of the total sample) to
verify the data randomly. The data collection was done in 2015.
A final sample size of this study was 140 entrepreneurs/founders of startups with a
response rate of 23.5%, out of which 76 were commercial entrepreneurs and 64 were social
entrepreneurs.
Below is a snapshot of the characteristics of these ventures and their founders (Table 1).
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Table 1
A PROFILE OF THE FINAL SAMPLE OF VENTURES
Description
EV
SEV
Number
%
Number
%
Sample size
76
53.3
64
45.7
Mean age of the organisation (years)
4.79
7.09
-
Mean number of employees
75
-
55
-
Male founders
68
88.3
58
90.6
Female founders
9
11.7
6
9.4
Founders with previous work experience
34
44.2
30
46.9
Founders with no previous work experience
43
55.8
34
53.1
First generation entrepreneurs
63
81.8
44
68.8
Second generation entrepreneurs
14
18.2
20
31.3
LIMITATIONS OF THE STUDY
The study is an attempt to compare the nature and characteristics of enterprise through
entrepreneurs who founded them. The samples of entrepreneurs are limited to the data base built
by the researcher. A need to create a centralised and publicly available database of entrepreneurs
is critical to conduct studies which have larger scope. The SEVs and EVs that are analysed in
this study are not to be considered as comprehensive or perfectly proportionate to the current
range of social and commercial entrepreneurial initiatives around the world or India. Though the
researcher did random check on the veracity of the data, there could a bias since the study is
based on the information given by the founder and is self-declaratory. This study is a cross
sectional one and not a longitudinal study, which would have been more appropriate considering
the nature of this research.
To compare both social and commercial entrepreneurs using same questionnaire may
have its limitations. The literature on constructs like social and financial impact measurement
practices is still evolving and hence the methodology to measure them quantitatively may be
debatable. The practices also may differ amongst countries and sectors.
Finally entrepreneurship is a process rather than an event as few researchers describe this
as entrepreneurial bricolage (Baker et al., 2005; Dorado et al., 2013). It is also a collective effort
of an entire team of people though entrepreneurs play a key role in building the enterprise.
DATA ANALYSIS
The data collected were analyzed in three levels. Initially, t tests were used to compare
SEVs and EVs on various parameters. Next level, a set of ANOVA tests are used to understand
the differences or similarities between three groups of ventures based on their profitability. At
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third level, univariate tests are used to find the interaction between the nature of venture (SEVs
or EVs) and profitability status of the ventures.
An Overview of Nature and Impact Created By Entrepreneurs
At the outset, preliminary investigations of the characteristics of 140 sample firms are captured
in the table below (Table 2).
Table 2
SOCIAL AND ECONOMIC IMPACT CREATED AND NATURE OF THE VENTURE A
SNAPSHOT
SEVs and EVs
Entrepreneur
Social Entrepreneur
Mean
Total
Mean
Sum
Mean
Sum
Age of the venture
4.75
366
7.09
454
5.82
820
Sales Turnover
(USD)
16,871,756
927,946,573
2,842,591
156,342,550
9,857,173
1,084,289,123
Start-up capital
(USD)
55,217
254,312,375
75,980
188,393,150
66,572
442,705,525
No. of full time staff
50
3,807
118
7,555
81
11,362
No. of part time staff
10
802
150
9,595
74
10,397
Number of customers
4,827,559
366,894,494
75,952
4,860,950
2655396
371,755,444
Number of partners
4
262
37
2,381
19
2,643
1. The sample ventures have a sum age of 820 years, with a mean age of 5.82 years,
2. Annual sales turnover of 110 ventures amounts to more than $ 1 Billion
ii
,
3. Start-up capital used to start their ventures is $ 400 million,
4. Total number of staff employed (full time and part time) is 21759 with a mean of 76
employees,
5. Number of customers served are more than 372 million and,
6. Total numbers of partners engaged in 140 ventures are 2643.
As many researchers strongly argue, though all the indicators mentioned in the above
table, are quantifiable on the same scale between these two ventures, making a direct comparison
of social and commercial entrepreneurs is often not fair, since social objectives can be more
difficult to measure. Social benefits are often intangible, hard to quantify, difficult to attribute to
a specific organisation, futuristic and disputable (Dees & Anderson, 2003). Nevertheless, these
directly comparable matrices provide a baseline for further comparison of more complex
performance practices.
A Comparison of EVS and SEVSOrganisational Characteristics
The extant literature pointed to possible differences between commercial and social
entrepreneurs in their nature of enterprise and impact created (Ebrahim et al., 2014; Austin et al.,
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2006; Harding & Cowling, 2006; Mair et.al., 2006; Zahra et.al., 2009). This study analysed
various such measures to explore this in detail (Table 3).
An independent samples t-test is used to compare the means of two independent groups,
EVs and SEVs. The dependent variables are measured on a continuous scale and converted to
log forms to bring in normality. Organisational characteristics like age, turnover, start-up capital,
the number of staff and partners and customers were compared between SEVs and EVs.
Alternate Hypotheses
H1: EVs and SEVs in this sample study differ in
a. Age of their venture
b. Annual sales turnover and start-up capital
c. The number of full-time and part time staff and volunteers
d. The number of customers served annually
e. The number of partners engaged annually.
Table 3
COMPARISON OF SOCIAL AND COMMERCIAL ENTREPRENEURS
INDEPENDENT SAMPLE T TEST FOR EQUALITY OF MEANS (EQUAL VARIANCES ASSUMED)
Group
N
Mean
SD
t
df
Sig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
Lower
Upper
Age of the venture
(Log)
EV
76
0.58
0.31
-3.03
138
0.003
***
-0.16
-0.25
-0.07
SEV
64
0.74
0.32
Part time staff
(Log)
EV
60
0.71
0.53
-3.50
105
0.001
***
-0.44
-0.65
-0.23
SEV
47
1.15
0.77
Number of Partners
(Log)
EV
74
0.47
0.41
-2.87
136
0.005
***
-0.27
-0.42
-0.11
SEV
64
0.73
0.67
Efficiency Ratio
(Log)
EV
54
0.740
4.43
3.690
107
0.000
***
0.468
0.217
0.719
SEV
55
0.574
3.96
Annual Sales
Turnover USD
(Log)
EV
54
5.7
1.12
1.76
107
0.081*
0.34
0.019
0.67
SEV
55
5.37
0.91
Startup capital
USD (Log)
EV
67
4.09
0.91
1.02
122
0.309
0.19
-0.12
0.52
SEV
57
3.89
1.24
Fulltime staff (Log)
EV
76
1.18
0.77
-1.28
138
0.203
-0.16
-0.35
0.05
SEV
64
1.33
0.63
Volunteers (Log)
EV
9
0.64
0.71
-0.80
32
0.430
-0.17
-0.53
0.19
SEV
25
0.81
0.47
Number of
Customers (Log)
EV
74
2.70
2.06
-1.03
136
0.305
-0.33
-0.85
0.19
SEV
64
3.03
1.61
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SEVs and EVs Divergent
The independent samples t test shows social and commercial entrepreneurs differ
significantly at a p<0.05 levels for a few of the variables. Because the standard deviations for the
two groups are similar, an "equal variances assumed" test is used. Levene’s test for Equality of
variances indicated variances among selected variables differ significantly from each other. A
negative t value shows the second group, SEVs have a higher mean than the first group, EVs.
Age of the venture: SEVs in this sample are older (M=7.09, SD=3.7) compared to EVs
(M=4.78, SD=5.5), t (138)=3.03, p=0.003. SEVs seem to remain in their business longer, as it
may take a longer time to work among the BOPs. This finding is in conjunction with a similar
finding amongst UK social entrepreneurs (Harding & Cowling, 2006).
A number of part time staff: Part time employees are greater in SEVs than EVs with
SEVs work on an average of 150 part time staff compared to EVs who have a lower number of
part-time staff (11). SEVs had M=149.9, SD=941.8, and, EVs with M=10.5, SD=149.9, t
(105)=3.5, p=0.001. Working with part-time employees seems to be the usual practice of SEVs
and may lead to the increase in cost efficiency of the firm. Austin et.al proposed that the
employee resource mobilisation will be a prevailing difference among SEVs and EVs and can
lead to fundamentally different approaches to manage human resources (Austin et al., 2006).
Managing part times employees is a critical challenge faced by SEVs. This means in a broader
sense, SEVs need to put more time and attention managing diverse groups of employees.
A number of partner organisations: SEVs are well networked and work with a greater
number of partner organisation with a mean of 38 other organisations whereas; EVs work with a
mean number of four partner organisations. SEVs had M=3.54, SD=4.52 and EVs had M=37.2,
SD=153.5, t (136)=-2.86, p=0.005. Earlier studies showed that social entrepreneurs show a real
appetite for working with multiple partners since they are acutely aware that they lack the
experience and skills needed (Brenneke et al., 2007). This multi-agency networking nature of
social entrepreneurs is described in the study by Shaw, et.al. (Shaw & Carter, 2007). “Social
quotient” of social entrepreneurs seems to be higher than regular entrepreneurs. Social
entrepreneurs rely on a robust network of contacts that will provide them with access to funding,
board members, management and staff among other resources (Austin et al., 2006). It also points
to the fact that social entrepreneurs may need to spend their precious time and attention
managing diverse partner groups.
Annual Sales Turnover to Employee Ratio: Annual sales turnover to a number of
employees’ ratio is a clear indicator of the efficiency of ventures. This ratio is called as
efficiency or productivity ratio (Huselid, 1995). This ratio is widely used to measure
organisational productivity and is adapted here to bring comparability among ventures
(Ichniowski et al., 1996). The sales-per-employee ratio is a very insightful indicator to assess
entrepreneurial ventures.
Companies with a higher sale per employee figures are generally considered more
efficient than those with lower figures. A higher ratio indicates that the venture can operate on
low overhead costs and therefore, can do more with fewer employees, which may lead to
healthier profits and in turn to growth and sustainability. A study by Harding among UK
entrepreneurs showed that the sales turnover to employee ratio is six times more among social
entrepreneurs than mainstream entrepreneurs. (Harding & Cowling, 2006). This study shows that
the sales turnover to employee ratio of EVs is almost two and a half times
iii
higher than SEVs
and hence EVs are more efficient than SEVs.
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12 1528-2686-23-2-105
This sample showed SEVs have much lower sales to employee ratio (M=3.96 SD=0.574)
which means they are more labor intensive than EVs (M=4.43 SD=0.74). This may be due to the
fact that SEVs work with target groups of low-income consumers who are not educated and
difficult to access. The SEVs may need their human resources to spend precious time in building
a new market and create awareness among the target group. However, SEVs need to strive for
better utilising their employees which can go a long way in increasing profitability.
SEVs and EVs Convergents
On the contrary, a few of the variables showed no statistically significant differences
between EVs and SEVs, with p>0.05 and Levene’s Equality of variance >0.05. A few of the
matrices used to measure the success of an entrepreneurial venture are also valid in the social
arena (Sharir & Lerner, 2006). Several researchers have suggested that growth in revenues or
annual turnover or number of employees influence the future business development and hence
business strength (McGee et al., 1995). A few of the common matrices like annual sales
turnover, a number of employees and customers showed no significant differences among SEVs
and EVs.
Annual sales turnover: This observation lead to the conclusion that both SEVs and EVs
generate the same amount of financial output and there are no differences between them which
are statistically significant. Sales turnover is an important economic impact assessment tool for
any venture. Here in this sample study, both SEVs and EVs seem to create same economic
impact irrespective of their differences in the very nature of the firms.
Start-up capital: There is no statistically significant difference in the money used to
start-up the venture, irrespective of their nature which leads to the conclusion that both of them
use similar financial resources to startup since there are a few studies point out that access to
start-up capital is limited to social entrepreneurs (Baron & Markman, 2003).
Full-time staff: The number of full-time staff employed by both the types of ventures
seems to be similar.
The number of volunteers: Though one may assume that SEVs may use more
volunteers than EVs, there is no statistical evidence in the current sample data.
The number of customers: Another important social impact measurement tool for any
venture is the number of customers served. The data showed no significant differences between
EVs and SEVs, in the total number of customers served annually.
Irrespective of the assumption that it may be difficult to create the same economic output
like commercial ventures, this sample study shows that economic impacts created by both EVs
and SEVs are statistically similar. It also suggests that both the ventures also create the same
amount of social impact in terms of a number of customers and employees.
Comparison of Funding Sources EVs and SEVs
Getting adequate funds is the top priority for almost all the entrepreneurs, whether they
are SEVs or EVs. However, social entrepreneurs were more transparent and responded well to
questions related to financial performance and funding partners, compared to founders of EVs
(Table 4).
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13 1528-2686-23-2-105
Table 4
FUNDING SOURCES OF EVS AND SEVS
Funding sources
EV
%
SEV
%
Self
66
85.7
44
68.8
Family & Friends
32
41.6
24
37.5
Corporate Funding
2
2.6
1
1.6
Foundation Grants
5
6.5
6
9.4
Commercial Investor
8
10.4
10
15.6
Social Investor
0
0.0
15
23.4
Government Funding
2
2.6
5
7.8
Bank Loans
3
3.9
8
12.5
Awards & Prizes
2
2.6
11
17.2
Other sources
6
7.8
7
10.9
Totaliv
126
131
GRAPH 1
DIFFERENCES IN FUNDING SOURCES OF EVS AND SEVS
Entrepreneurs in this sample study raised more funds from internal sources than external
sources (Graph1). More and more entrepreneurs take pro-active measures and fund themselves
than looking for external funding sources. This is in line with Dorado’s finding that most of the
entrepreneurs first tap the resources of own and family and friends (Dorado, 2006). SEVs have
utilised more varied funding sources than EVs and majority of the funds are from self, family
and friends. External funding and access to them seem often remain a “mirage” to entrepreneurs.
Surprisingly very few entrepreneurs received Government funding or bank loans, (less than
10%). It points out to the inadequate support from Government and banks to create a positive
0
10
20
30
40
50
60
70
80
90
EV SEV
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14 1528-2686-23-2-105
entrepreneurial ecosystem in India. Social investors seem more active than commercial investors
in this sample study and most of them are international funds. Many of the social entrepreneurs
are also getting public recognition and win awards and use their prize money to fund their
venture (17%). This study also collected data on various funding partners which are listed
v
.
Interestingly, there are more options for social entrepreneurs when looking for
professional funding. This is also due to the reason that most of the commercial entrepreneurs
did not want to reveal the names of their funding partners due to secrecy issues. The list provided
in the Annexure 1 shows that many international social funds are active in India.
PERFORMANCE AND IMPACT ANALYSIS
Performance measurement of social impact will remain a fundamental differentiator,
complicating accountability and stakeholder relations (Ebrahim et al., 2014; Austin et al., 2006).
Entrepreneurs have been asked their ventures’ current status of profitability. Based on this, the
data is explored further to understand the reasons for being a profitable venture. Among the
sample of 140 ventures, 54 were profitable ventures (39%). 37 of them have reached break-even
(35%) and the rest 49 is currently were in deficit (26%) (Table 5).
Table 5
SEV AND EV AND CURRENT STATUS OF THE VENTURE: A CROSS
TABULATION
Group
Current status of venture
Frequency
Percent
EV
Profitable
34
45.5
Breakeven
19
24.7
Deficit
23
29.9
Total
76
100.0
SEV
Profitable
20
31.3
Breakeven
18
28.1
Deficit
26
40.6
Total
64
100.0
The chi square test showed no significant relationship between the current status of the
venture (profitable, break-even and deficit) and the nature of the venture (SEV or EVs.) with
X2=3.13, p=0.209. This again proves that SEVs and EVs do not differ in their profitability status.
Impact of Profitability Status and Nature of the Venture
A set of general linear models, univariate tests are performed to see the effect of more than
two groups on a single dependent variable. The various dependent valuables tested were, the age
of the venture, number of customers, annual sales turnover, number of full-time employees and
efficiency ratio etc. The groups were based on profitability status and the nature of the enterprise.
Here the results which were significant are only reported.
Age of the Venture, Profitability and Nature of the venture (EV or SEV)
The univariate test conducted between the age of the venture and its influence on
profitability and the nature of the venture being SEV or EV showed significant results (Table 6).
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15 1528-2686-23-2-105
H4a: Ventures’ age differs significantly among EVs and SEVs and the current status of profitability of the
venture.
Table 6
UNIVARIATE TESTS OF BETWEEN-SUBJECTS EFFECTS
Dependent Variable: Age of the venture
Source
Type III
Sum of
Squares
df
Mean Square
F
Sig.
Partial Eta
Squared
Corrected Model
452.49a
5
90.49
4.623
0.001
0.146
Intercept
4660.77
1
4660.77
238.09
0.000
0.638
EV or SEV
255.78
1
255.78
13.07
0.000
0.088
Current status of profitability
249.96
2
124.98
6.38
0.002
0.086
EV or SEV * Current status
of profitability
2.88
2
1.44
0.073
0.929
0.001
Error
2642.72
135
19.58
Total
7864.0
141
Corrected Total
3095.21
140
a. R Squared=0.146 (Adjusted R Squared=0.115)
GRAPH 2
COMBINED PROFILE PLOT
The results showed the age of the venture differed significantly between EVs and SEVs with F
(1,140)=13.1; p=0.000. Similarly, the age of the ventures was different between profitable, break
even and deficit ones with F (2,140)=6.38; p=0.002. There was also a significant combined
interaction between nature of the venture (EVs and SEVs) and profitability of the venture on the
age of the venture with F (2,140)=0.073; p=0.93. Post hoc comparisons using the Scheffe test
Academy of Entrepreneurship Journal Volume 23, Issue 2, 2017
16 1528-2686-23-2-105
indicated that the mean score for the profitable ventures (M=6.98, SD=5.28) was significantly
different than the deficit ones (M=4.27, SD=3.07). However, the break-even ventures (M=4.27,
SD=3.07) did not significantly differ from the profitable and deficit ones.
The combined profile plot shows the interaction between age of the ventures and the
nature of the venture and current status more clearly. The SEVs are older compared to EVs,
similarly, older firms are profitable than younger ones. This is quite natural and shows the
importance of perseverance to entrepreneurial firms to reach the profitability status. SEVs have
to strive longer years to reach profitability.
Productivity and Profitability
A univariate test is conducted to know whether productivity ratio differs among EVs and
SEVs and current status of profitability of ventures and the results showed highly significant
differences, and Sales to employee ratio showed high significance to both the independent
variable (Table 7).
H4b: The productivity ratio differs significantly among EVs and SEVs and the current status of profitability of
the venture.
Table 7
UNIVARIATE TESTS OF BETWEEN-SUBJECTS EFFECTS
Dependent Variable: Sales Turnover per employee ratio
Source
Type III Sum
of Squares
df
Mean
Square
F
Sig.
Partial
Eta
Squared
Corrected Model
11.56a
5
2.31
5.77
0.000
0.219
Intercept
1828.45
1
1828.45
4563.27
0.000
0.978
Current Status
(Profitability)
2.88
2
1.44
3.59
0.031
0.065
EV or SEV
6.74
1
6.74
16.82
0.000
0.140
Current Status * EV or
SEV
2.61
2
1.31
3.26
.042
0.059
Error
41.27
103
0.40
Total
1966.93
109
Corrected Total
52.83
108
a. R Squared=0.219 (Adjusted R Squared=0.181)
The results showed the productivity ratio differed significantly between groups indicating
the current status of the venture with F (2,109)=3.59; p=0.031. Similarly, productivity ratio was
different between EVs and SEVs with F (1,109)=16.82; p=0.000. There was also a significant
combined interaction between nature of the venture (EVs and SEVs) and profitability of the
venture (Profitable, break even or deficit) on productivity ratio with F (2,109)=3.26; p=0.042.
Academy of Entrepreneurship Journal Volume 23, Issue 2, 2017
17 1528-2686-23-2-105
GRAPH 3
COMBINED PROFILE PLOT
The combined profile plot shows the interaction between the nature of the venture and
current status more clearly. The EVs have a higher productivity ratio, irrespective of their
profitability status. Productivity ratio is high for both EVs and SEVs who are currently
profitable. EVs which are break-even shows highest productivity ratio compared to profitable
and deficit ones. This may be due to the fact that profitable firms may have a higher number of
employees to manage growth. (Number of employees and number of customers showed very
significant correlation r=0.52**; p=0.000).
The rest of the dependent variables like, annual sales turnover, the number of employees
and customers didn’t show any statistically significant results.
CONCLUSION
SEVs Marching Along EVs
The contribution of entrepreneurs for the economic and social development of a country is
undeniable. Studying the phenomenon of entrepreneurship and its complex framework is always
a daunting task. The basic assumption explored in this study is that both EVs and SEVs are two
different types of businesses with different nature, striving to achieve different outcomes. In
general, this study points out that EVs and SEVs converge and diverge in many variables.
Though there are sharp differences among them, there are equally stronger similarities which
make this study quite exciting.
This study revealed mixed results in terms of demographics of the ventures. There are
differences in some of the not so important parameters like age of the venture, the number of
part time employees and the number of partners among EVs and SEVs. But, this point to
potential HR challenges which SEVs have to face, since managing a diverse group of partners
and part time employees need their attention and time. However, there are no statistical
differences in the parameters that really matter for a venture like annual sales turnover, the
number of customers, the number of full-time employees and volunteers. Current profitability
status of SEVs and EVs also did not differ statistically.
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Earlier studies point out that human resource management is critical for the success of
both the ventures, more so in SEVs (Oster, Massarsky & Beinhacker, 2004). Paul Bloom et.al,
opine that the challenges facing commercial and social entrepreneurs interested in the growth of
their venture and scaling of their impact seem to be similar. Both have managed relationships
with multiple stakeholders and find ways to mobilise resources and achieve sustainability
(Bloom & Smith, 2010). However, this study showed a stronger social quotient among SEVs
compared to EVs in terms of working with multiple partners. Social entrepreneurs have more
partners and differ significantly from regular entrepreneurs. SEVs must be more skilled in
working with a diverse range of partners and employees and considering getting a talent who are
aligned with social value creation very challenging.
Among nine funding sources which SEVs and EVs raised funds, six of them were similar
in both the cases. The general trend is to raise funds from internal sources like self, family and
friends than external sources. The number of social venture capitalists who funded 64 SEVs is
around 48, most of them were international venture capital funds.
Though both SEVs and EVs didn’t differ in terms of major financial performance
indicators like annual turnover or number of customers, they differed significantly in a few of the
other indicators like a number of partners, efficiency ratio etc. They didn’t differ in terms of a
number of full-time employees but differed in a number of part time employees. SEVs employ
more part time employees as a means to cut the cost. (Shaw & Carter, 2007). “Social quotient”
of social entrepreneurs seems to be higher than regular entrepreneurs. Social entrepreneurs work
with a diverse array of partners who act as funding, technology, distribution, marketing partners
(Austin et al., 2006). It also points to the fact that social entrepreneurs may need to spend their
precious time and attention managing diverse partner groups and a large number of part time
employees which may slow down their growth.
The most significant finding of this study is that SEVs are able to reach the same
performance level similar to EVs in terms of annual sales turnover and number of customers.
They employ the same number of people and are profitable the same way as other regular
entrepreneurs. One of the barriers to SEVs’ profitability emerged in this study is low employee
efficiency ratio compared to EVs. SEVs need to concentrate on people strategies and increase
employee efficiency. They may have to explore and employ affordable technologies to reduce
their dependence on people which can go a long way in reducing expenses. Improving sales-per-
employee ratio frequently precedes growth in profit margins.
The study showed the nature of the firm has an influence on sales turnover and current
status of the venture in terms of profitability. Age of the venture had a significant influence on
the profitability status, profitable SEVs were older than profitable EVs. Since working with
customers at bottom of the pyramid need more patience and perseverance, SEVs need more
years to be profitable compared to EVs.
SEVs are able to blend social and economic value creation, social impact in terms
number of customers and economic impact in terms of annual sales turnover, which is an
encouraging sign. More and more entrepreneurs need to explore the path of SEVs and develop
solutions to the problems of poor to bring in inclusive growth. To conclude, “SEVs are marching
along EVs and not trailing behind but for one or two years.”
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Annexure 1
THE LIST OF FUNDING PARTNERS OF EVS AND SEVSvi
EVs
SEVs
1. 500 startups (01)
2. NABARD for training programs and for farming
cooperative societies (01)
3. Ascent Capital (01)
4. Blume ventures (02)
4. Creation Investments (01)
5. Department of Scientific & Industrial Research
TePP Scheme (01)
6. Helion Ventures (02)
7. Inventus Capital Partners (01)
8. IL & FS Environmental Infrastructure and Services
Limited (01)
9. India Angel Network (01)
10. India Quotient Ventures (01)
11. IIT Delhi (01)
12. Indo-US Venture Partners (01)
13. Info Edge (01)
14. Sequoia Capital (01)
15. Jungle Ventures (01)
16. Microsoft ventures (02)
17. Mumbai Angels (01)
18. Navam Capital (01)
19. Seedfund ventures (01)
20. The Chennai Angels (01)
21. Times Internet (01)
1. Aavishkaar fund (04)
2. Acumen Fund (01)
3. Bank of Baroda (01)
4. BoP Hub (01)
5. Calvert Funds (01)
6. Centre for Innovation Incubation and
Entrepreneurship (CIIE, IIM Ahmedabad) (01)
7. Christian Aid Foundation (01)
8. City Union Bank (01)
9. CLSA Chairman’s Trust – Unilever (01)
10. Dept. of Biotechnology, Gov. of India (02)
11. ERM Foundation (01)
12. FAO Ventures (01)
13. Ford Foundation (01)
14. Gates Foundation (01)
15. Good Energies Foundation (01)
16. Goodwell Fund (01)
17. Grassroots Business Fund (01)
18. HDFC Bank (01)
19. i2india Ventures (01)
20. IDFC Bank (01)
21. Insitor Fund (01)
22. Intel Capital (01)
23. International Finance Corporation(IFC) (01)
24. International Fund for Agricultural Development
(IFAD) (01)
25. Lemelson Foundation (02)
26. Lok Capital foundation (02)
27. Master Key Holdings (01)
28. Matrix Partners (01)
29. Michael and Susan Dell Foundation (01)
30. Ministry of Rural Development, Gov. of India (01)
31. NABARD (01)
32. National Skill Development Corporation (NSDC)
(02)
33. ONGC (01)
34. Rianta Capital (01)
35. Rural Technology & Business Incubator, IIT
Madras (01)
36. Seedfund (01)
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20 1528-2686-23-2-105
37. State Bank of India (01)
38. Stone Family Foundation (010
39. Swiss Agency for Development Cooperation (SDC)
(01)
40. TATA Group (01)
41. Technology Development Fund, Govt. of India (01)
42. Triodos Microfinance Fund (01)
43. UNDP (01)
44. Unilever India (01)
45. USAID (01)
46. Villgro Innovations Foundation (02)
47. World Toilet Organization (01)
48. Yunus Social Business Fund (01
Note: The number in parenthesis indicates the number of ventures funded by each of the funders in the sample
ENDNOTES
iGlobal Entrepreneurship Monitor
iiThe number of founders responded to this question was as low as 110 in the sample of 140
iiiComputed using real values
ivA few entrepreneurs have not revealed their funding sources
vThe list of funding partners of EVS and SEVs are shown in the annexure 1
viThe list includes only those funding partners revealed by the entrepreneurs
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... El valor económico se origina cuando el retorno financiero supera los costos de inversión (Gallegos & Medina, 2012;Ivarola, 2014), aunque necesario, este no es el único resultado que debe lograr una organización (Acs et al., 2013;Muñoz, 2018). Por su parte, el valor social se crea cuando intervenciones, productos o servicios generan un impacto y/o cambio positivo y sostenible en el bienestar de los individuos y las comunidades (Abhi, 2017;Kroeger & Weber, 2014;Mendoza-Abarca & Mellema, 2016). Se denomina emprendimiento productivo (Baumol, 1990) a la iniciativa que logra configurar un continuo mutuamente incluyente entre valor social y valor comercial equilibrándoles (Acs et al., 2013), para aportar positivamente a la transformación social (Aeeni et al., 2018;Hmieleski & Lerner, 2016). ...
... La reciprocidad entre ambos valores se evidencia en la proliferación, durante el siglo XXI, de diversos modelos emprendedores productivos (Acs et al., 2013), con y sin ánimo de lucro, con fines sociales como punto en común (Austin et al., 2006;Chu, 2010;Defourny & Nyssens, 2017;Mair & Marti, 2006) que, bajo múltiples fórmulas organizacionales híbridas, articulan valor social y comercial para atender necesidades urgentes de individuos, comunidades y ecosistemas (Abhi, 2017;Brandsen & Karré, 2011;Guzmán & Trujillo, 2008;Yunus & Weber, 2010). Las personas que desarrollan estos emprendimientos tienen una aguda visión y propósito para crear valor integral, reconociendo necesidades y oportunidades de transformación del entorno (Mair & Martí, 2006;Nga & Shamuganathan, 2010;Sastre-Castillo et al., 2015;Vera et al., 2019). ...
... Estudios aplicados al campo emprendedor social señalan que la prosocialidad-productiva se relacionaría con valores asociados a la autotrascendencia, como el universalismo y la benevolencia (Hardy et al., 2010;Lönnqvist et al., 2013) que promueven comportamientos autoexpansivos y dirigidos a buscar el bien común (Abhi, 2017;Hardy et al., 2010;Lönnqvist et al., 2013;Sastre-Castillo et al., 2015). ...
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Se analizaron perfiles psicológicos de emprendedores según el tipo de valor (comercial/social) y el origen (necesidad/oportunidad) de sus emprendimientos, buscando identificar variables predictoras de conductas de prosocialidad-productiva. Se midieron variables como: rasgos de personalidad, valores, empatía y sostenibilidad, en 506 fundadores de diversos emprendimientos en Perú. Se realizó un análisis de conglomerados según las condiciones de valor y origen, y se identificaron cinco grupos/clusters: Oportunidad Comercial, Oportunidad Social, Centro, Necesidad Comercial y Necesidad Social. Se contrastaron muestras independientes con ANOVA de una vía. La discusión explica las particularidades de cada grupo/cluster señalando la diferencia radical del grupo Oportunidad Social respecto a los otros y proponiendo oportunidades de comprensión y promoción de emprendimientos orientados a la prosocialidad en el contexto local.
... Este estudio busca comprender, desde el reconocimiento de un nuevo posicionamiento emprendedor, cómo coexisten y se concilian discursos, aparentemente paradójicos, que articulan la creación de valor social y valor económico. En efecto, en las últimas décadas, se ha fortalecido y extendido el campo de estudio del emprendimiento desde un enfoque que interpela la necesidad de hacer consciencia de su aporte social, en el reconocimiento del fenómeno denominado Emprendimiento Social, cuya característica principal es la de proponer modelos de intercambio de valor, en el mercado de bienes y servicios, para resolver problemáticas sociales, políticas o ambientales que no están siendo atendidas ni por el Estado ni por otras instituciones privadas o no gubernamentales, para así generar tejido y valor social (Abhi, 2017;Bacq, & Alt, 2018;Humbert, & Roomi, 2018). ...
... La literatura del campo señala el incremento del fenómeno en lo que va del siglo XXI y lo atribuye, en parte, a la reducción de ingresos por cuenta del tercer sector, en economías emergentes, conllevando a que muchas iniciativas sociales hayan tenido que apelar a modelos de operación híbridos, para garantizar sus ingresos económicos y de esta manera la sostenibilidad de sus proyectos en el tiempo (Farber, et al., 2015;Vera, et al., 2016). Sin embargo, este es un campo de estudio aún en consolidación y, de hecho, los abordajes no llegan a tomar pleno acuerdo sobre las definiciones o características del emprendimiento social, encontrándose incluso posturas contradictorias, por ejemplo, asociadas a la condición de si el lucro puede ser o no un objetivo de este tipo de organizaciones, y presentando una gran diversidad de abordajes y tipologías de emprendimientos sociales (Abhi, 2017;Brandsen, & Karre, 2011;Defourny, & Nyssens, 2017;Ojeda, & Rodríguez, 2015;Yunus, & Weber, 2010). ...
... Lo interesante con el obrar de estos emprendedores, es la capacidad que tienen para generar valor social y económico en simultáneo, independientemente de si buscan o no el lucro como parte de los resultados de su iniciativa pues, dado que son emprendedores, se valen de estrategias de autofinanciamiento en el mercado de bienes y servicios y recurren a planes de negocio y modelos empresariales (Abhi, 2017), para tener ingresos financieros que brinden la autonomía económica y el logro de los objetivos sociales de la organización (Brandsen, & Karre, 2011). ...
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En las últimas décadas, se ha fortalecido y extendido el campo de estudio del emprendimiento desde un enfoque que interpela la necesidad de hacer consciencia de su aporte social. Este estudio busca comprender cómo se integra, en la subjetividad emprendedora, la coexistencia de discursos sobre la creación de valor social y valor económico. Tras entrevistar a 26 emprendedoras y emprendedores sociales peruanos/as, se propone un concepto de carácter psicosocial, que se configura en la paradoja aparente de integrar fines sociales con fines económicos, la cual se ha denominado como prosocialidad-productiva, a la luz de los desarrollos teóricos sobre la prosocialidad y la sostenibilidad en el ámbito de los estudios del emprendimiento. La cualidad de aparente oxímoron del concepto es analizada en tres repertorios discursivos que le dan contenido. Se reflexiona sobre un posible reposicionamiento subjetivo en la figura de algunos nuevos emprendedores en los convulsionados tiempos actuales, donde urge apostar por transformar el mercado desde sus entresijos. Los resultados dejan planteada la posibilidad de emprender desde alcances solidarios que trasciendan los fines individualistas y competitivos del modelo capitalista actual.
... Durante el siglo XXI, las denominadas empresas sociales se han posicionado como organizaciones híbridas que, recurriendo a estrategias de mercado, buscan resolver problemáticas sociales o ambientales que nadie más está resolviendo (Abhi, 2017;Chell, Spence, Perrini, & Harris, 2016;Mair & Martí, 2006). El objetivo del emprendimiento social es generar impactos socioambientales positivos empleando modelos operativa y financieramente viables (Defourny & Nyssens, 2017;Ojeda & Rodríguez, 2015). ...
... Visión social: definida como el sentido de responsabilidad, compromiso, pasión y conexión emocional que tiene el ES con una causa ambiental o social desatendida (Abhi, 2017;Ovais & Li, 2016). La visión social se considera la condición previa para la creación de valor social, siendo una característica clave del ES (Choi & Majumdar, 2014;Írengün & Arikboga, 2015;Mair & Martí, 2006). ...
... Habilidad para desarrollar redes de contacto: se refiere a la capacidad para mantener relaciones positivas, formales o informales con personas del entorno (Ovais & Li, 2016) para acceder a recursos, capital financiero, clientes potenciales e información (Pollack et al., 2016) y expandir los alcances del emprendimiento (Bikse, Rivza, & Riemere, 2015;Sesen, 2013). Son claves la reputación, la confianza y la credibilidad que el emprendedor social cultiva entre sus contactos, dada la calidad y permanencia de sus relaciones a lo largo de su trayectoria (Abhi, 2017;Carter, Collins, & Beal, 2017;Gurrieri, 2013). Las redes reducen la incertidumbre, impulsan el espíritu emprendedor y previenen conflictos (Carter et al., 2017;Kristiansen & Ryen, 2002). ...
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Objetivo: este estudio tiene como objetivo proponer un abordaje comprensivo de cinco dimensiones teóricas características de los emprendedores sociales, para plantear un modelo conceptual que las analiza desde los constructos psicosociales macro de Creencias y Prácticas. Método: se desarrolló un estudio cualitativo, con 16 emprendedores sociales de la ciudad de Lima (Perú), cuyas trayectorias, por medio de un análisis temático deductivo, se analizaron y operativizaron en tanto creencias y/o prácticas en variables psicosociales más específicas como valores, actitudes, conductas y rasgos. Resultados :la dimensión de Aprecio por Prácticas Sostenibles (APS), de carácter actitudinal, resulta ser el eje articulador en el que confluyen las experiencias de todos los participantes para concretar su visión social, de carácter axiológico, promoviendo conductas competentes de innovación, redes y retornos financieros. Conclusión :se discuten los resultados enfatizando la necesidad de profundizar en el estudio de la dimensión APS de manera contextualizada a las problemáticas sociales del Perú.
... Appeals to ethical consumers seemed to usher in the ability for hybrids to earn significant returns on investment. One recent study found that social ventures and for-profit ventures earned a profit on par with each other (Abhi 2017). However, type of social enterprise matters: for-profit social enterprises are more likely than nonprofit social enterprise to rely on earned income through sales (Guo and Peng 2020). ...
... Early predictions asserted that appeals to ethical consumers would allow hybrid ventures to turn profits (Doherty, Foster, and Meehan 2009;Golding and Peattie 2005;Zahra et al. 2009). Along with Abhi (2017), our findings suggest that the appeals for ethical consumerism have been fruitful: both hybrid ventures and for-profit ventures seem to earn revenue on parat least in the early stages of their development. This suggests that a focus on social impact has been recognized and is now being received in the financing market. ...
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The dual financial and social missions of hybrid social ventures can make it difficult for founders to obtain the financial investments needed to launch their startup. In response, founders may use various bricolage strategies to obtain funding. This study explores differences in financing strategies between hybrid social ventures and their non-profit and for-profit counterparts. As hypothesized in this study, social ventures earn higher revenue and more external equity than non-profit ventures, and less of both kinds of funding than for-profit ventures. The opposite is true for philanthropic support. Results are more nuanced for debt and ‘bootstrapping’ finance strategies related to founders’ own investments. While these findings support and contradict previous research in different areas, they also suggest that the nature of hybridity may force bricolage to interact with traditional finance theories to better explain the nature of hybrid venture financing.
... This means that entrepreneurship's role is important in the daily business environment and enhances a modern and productive world economy (Prasetyo, 2020a(Prasetyo, , 2020b. Social entrepreneurship has always been a concept often contested in academic discourse and practice (Abhi, 2017;Callavo, 2018). However, there is no statistical difference in the parameters for economic and social entrepreneurship (Abhi, 2017). ...
... Social entrepreneurship has always been a concept often contested in academic discourse and practice (Abhi, 2017;Callavo, 2018). However, there is no statistical difference in the parameters for economic and social entrepreneurship (Abhi, 2017). The concept is often associated with social entrepreneurs and social enterprises , 2020b. ...
... Entrepreneurship is the leading revenue source for social enterprises to finance their social objectives. Abhi (2017) opines that the model requires the firms to blend value creation and economic benefits by ensuring their operations provide sufficient revenues. Besides, it promotes sustainability since the firms do not rely on external financing that may be unpredictable based on quantity and availability (Gupta et al. 2020). ...
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Non-profit and for-profit social enterprises struggle to source funding. Current limited understanding on the funding sources of these enterprises originates from disconnected body of studies based on different subject areas. This paper systematically reviews 50 articles published between 2009 to 2022 to bridge the existing knowledge in the subject area. This is achieved by mapping the sources of funding for social enterprises at organizational, personal, and institutional levels; analyzing the results to design an extensive model; and suggesting future areas for study in the field. It is found that studies at personal levels majorly focus on the perspective of funders of the features of a social entrepreneur. Social enterprises’ dual logic is usually addressed by research at the business level; including their effect on the effective funding of these enterprises. Institutional level research is clustered into legal, social, economic, and cultural factors. The paper suggests the need for studies, which use an extensive view by looking at all the three levels of analysis together and applying both organizational and economic theories.
... Por otra parte, estudios con emprendedores sociales evidencian que estos presentan valores de conservación, como la seguridad y la tradición (Ormeño Coronado, 2014), y valores de autotrascendencia, como la benevolencia y el universalismo (Abhi, 2017;Ormeño Coronado, 2014;Sastre-Castillo et al., 2015), asumiendo un posicionamiento ético altamente altruista, orientado por la búsqueda del bienestar social (Cater III et al., 2017;Ruskin et al., 2016). ...
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Este estudio buscó analizar la capacidad predictiva de los valores (Schwartz, 1992) y la personalidad (Goldberg, 1990) en el aprecio por prácticas sostenibles (APS). El APS es una dimensión actitudinal hacia la sostenibilidad, medida con una escala desarrollada específicamente para esta investigación y aplicada en el contexto de la actividad emprendedora. Asimismo, se analizó la capacidad clasificatoria del APS para la identificación de perfiles de emprendedores, según el tipo de emprendimiento que realizan (social versus comercial), y se comparó con la capacidad clasificatoria de los valores y la personalidad. Para tales fines, se utilizó una muestra no probabilística intencionada de emprendedores de Lima Metropolitana, previamente identificados como sociales (n = 135) o comerciales (n = 198). Una regresión lineal múltiple muestra que el APS es predicho por valores de autotrascendencia y por los rasgos de agradabilidad y apertura intelectual. Un análisis de regresión logística binaria muestra que la capacidad clasificatoria del APS alcanza un 68,8% de efectividad en la identificación correcta de casos, según tipo de emprendimiento, versus un 76% de los valores y la personalidad en conjunto. Sin embargo, la capacidad clasificatoria del APS es superior a la de los valores y la personalidad cuando se analizan las dimensiones de estos constructos por separado. Se discuten la capacidad clasificatoria del APS para la detección de emprendedores de orientación social como un criterio parsimonioso, alternativo y complementario a los perfiles de valores y personalidad y las implicancias del mismo en la comprensión de emprendimientos innovadores y sostenibles.
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Social enterprises have a unique characteristic in their business objectives, which is the element of profit as well as creating value that addresses social issues in society. In practice, the sustainability impact represents the value that shows how social enterprises establish strategies, conduct daily operations, and build partnerships with stakeholders. Therefore, this study aims to explore and understand the meaning of "impact" from the perspective of social enterprise actors. The research data consists of observations and interviews with social enterprise business actors, as well as documentation related to the research theme. Data analysis was conducted using a case study approach, which involves data reduction, coding, and theme determination, followed by interpreting the analysis results to address the research problem. The findings illustrate that the impact for social enterprises can be interpreted as creating positive changes in the lives of people in society. This is ingrained from the strategy setting to daily operations because success for a social enterprise is not only measured by profit but also by the social impact generated. Additionally, a social enterprise is also considered a green business when impact thinking correlates with sustainability principles.
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Corporate Social Responsibility (CSR) has received great attention from companies, academics, researchers, and policy makers over the past few years. Companies should maximize the implementation of CSR to create value for the company, society, government, and stakeholders. In its implementation, CSR does not only focus on community development and involvement, but also implementation that is aligned and relevant to company policies, so CSR measurement is important and measurable so that companies have guidelines in CSR program policies. The idea of CSR is an important element for both companies and society, and the literature shows that the concept is gaining popularity. However, the current understanding is still limited to planning and evaluation for successful CSR implementation. This paper systematically reviews 268 articles published between 2017 and 2022 to bridge the existing knowledge in the field of CSR. This is achieved by mapping CSR implementation in companies. Finding that many studies are not aligned with companies' CSR objectives, this paper suggests the need for developmental research related to frameworks to analyze CSR implementation in general.
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Grameen bank, founded in 1976, has both pioneered the development of micro-finance, and created nearly 30 businesses designed to alleviate poverty. The article traces the gradual development of Grameen’s expertise in formulating social business models, which require new value propositions, value constellations and profit equations, and as such, resembles business model innovation. The article presents five lessons learned from this experience: three are similar to those of conventional business model innovation: challenging conventional thinking, finding complementary partners and undertaking continuous experimentation; two are specific to social business models: recruiting social profit-oriented shareholders, and specifying social profit objectives clearly and early. We suggest these new business models - where stakeholders replace shareholders as the focus of value maximization - could empower capitalism to address overwhelming global concerns.
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