Social Enterprises – Spring 2015
Homework #1 (Ch 1 – 2) Answer Key
Ch1: 1, 2, 3
Ch 2: 1, 2
Ch 1
1. The two dominant school of thought regarding the definition of social entrepreneurship are the “Social
Enterprise” school and the “Social Innovation” school.
The Social Enterprise school looks at earned-income strategies for social organizations. This type of
organization focuses on generating revenue as well as serving society. The income brought in is used to
perform social activities instead of relying on grants, subsidies or donations. The organization will be rooted
in commercial entrepreneurial practice, but “do good”. The example of the Grameen Bank that was
discussed in class might be an example. Although they do not focus on producing a profit, the social good
they create is based on the practical, revenue generating loans that they make to individuals.
The Social Innovation school of thought looks at organizations attempting to solve societal problems and
meeting needs in novel ways. This type of organization is perhaps not as focused on the practical business
approach though it is based on the basic profit-making business model. An example of this might be the
Paperseed Foundation that is described in the beginning of Ch2. This organization creatively leverages the
primary products their parent, for-profit firm in an attempt solve various societal needs around the world.
The primary difference between the school is how broadly or narrowly the concepts are defined. The Social
Innovation school could be any organization that approaches things from a novel or a creative way. The
Social Enterprise school is more focused on performing through a practical and sustainable approach where
the earned income is a means to solving some social en.
2. The characteristics that social entrepreneurs tend to display are balanced judgement, opportunistic,
virtuous and risk tolerant. They are also often possess certain traits and skills such as creativity, leadership,
able to work well in teams, possess vision and fortitude and community oriented. They are also often share
behavioral attributes such as being open, good communicators, and trustworthy. They often also possess
backgrounds that include prior entrepreneurial experience, good educations and upbringings, etc.
3. There are a few primary factors that drive the birth and development of social entrepreneurship. These
basic factors are unmet demand of social needs, need for earned income opportunities from the external
environment, and potential to contribute significantly against economic downturns and add to social value
creation. Each of the above factors possess several sub-factors that further drive the concepts.
Ch 2
1. Entrepreneurial orientation is a construct that characterizes a person’s or a firm’s entrepreneurial behavior
and includes one or several of these three dimensions: risk-taking, innovativeness and pro-activeness.
Entrepreneurial intensity measures the degree and frequency of person’s or a firm’s entrepreneurial behavior.
These two concepts are usually used in judging the entrepreneurial capacity of an individual or a firm as
both the orientation and intensity are necessary for achieving success. Using these constructs can often be
difficult in social entrepreneurship contexts as the things typically measured in for-profit companies, ie.
Profit maximization focus, are not applicable. Other areas that are often difficult to measure for traditional
social organizations deal with motivations, processes, and outcomes, because profit oriented business
organizations approach all three areas in very different ways.
1. Examples of the following:
a. Periodic / incremental: The Salvation Army operates second-hand good stores around the US and other
countries and then uses the proceeds to fund various social services. There is very little difference or change
from one store to another.
b. Continuous / incremental: Currently, organizations in many regions around the world are establishing
financial institutions that are modeled on the Grameen Bank. Essentially, they are almost franchises of the
original model and the only modifications put into place are those updates to help them better fit to the local
cultural or legal context.
c. Revolutionary: The Paperseed Foundation might be a good representation of this region of the
entrepreneurial grid. They display great and highly varied changes to their social service offerings in the
various countries depending upon local needs. For example, in one region, Paperseed created playgrounds
whereas in other regions, they supplied paper products. To achieve these different offerings, their
organization shows a great deal of flexibility and ability to adapt to new innovation risk taking and
proactiveness levels.