Advanced Research in Economic and Management Sciences (AREMS)
Volume 19, 2014
ISSN: 2322-2360
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The 2014 third Conference on Modern Management Sciences (CMMS 2014)
Social entrepreneurship
Elham Rajabi (Corresponding Author)1
Fereydoon Azma2
Bayram Bibi Habiblee3
Abstract- Social entrepreneurship is commonly seen as a hybrid that combines elements of
commercial entrepreneurship and social sector organizations. Social entrepreneurship, as a
practice and the field for scholarly investigation, provides a unique opportunity to challenge,
question and rethink concepts and assumptions from different fields of management and
business research . While the term social entrepreneur may be relatively new, the phenomenon
is not. The phenomenon of social entrepreneurship challenges our assumptions about human
behavior and economic action. It also challenges our beliefs about the role of entrepreneurship
in society. This paper aims at contributing to the field of entrepreneurship by the exploring the
phenomenon of social entrepreneurship.
Keywords: Social entrepreneurship; Social entrepreneur; Entrepreneurship
Introduction
First used in the literature on social change in the 1960s and 1970s , the terms social entrepreneur and
social entrepreneurship were extensively promoted in the 1980s and 1990s ( Lisetchi, Brancu, 2014).
The term of “ social entrepreneurship ” was first coined in 1980 by Bill Drayton of Ashoka which is
the Global association of the world's leading social entrepreneurs (Sivathanu & V.Bhise , 2013).
Social entrepreneurship began from the United States economic system formed by society that is
1
M.A degree of Faculty of management, Islamic Azad University of Aliabad Katoul,
Elhamrajabi990@yahoo.com, 09393643005
2
Assistant professor in Islamic Azad University of Aliabad Katoul , Azmafereydoon@yahoo.com, 09112709505
3
M.A degree of Faculty of management, Islamic Azad University of Aliabad Katoul, bhabiblee@yahoo.com,
09115187864
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individualist, consumerist, and gives priority to wealth as proposed by Schnitzer (1994). The form of
social entrepreneurship is corporate social responsibility which appeared in the U.S. when big
companies grew significantly and did not care about social environment as proposed by Steiner and
Steiner (2006). It resulted on the companies get protest in order to contribute to the social aspect than
the economic aspects. (Wiguna, Manzilati, 2014)
According to Horwitch & Mulloth (2010), entrepreneurship is seen as a pathway to the solutions of
some major problems facing modern society and innovation is an integral element of it to ensure
economic growth and prosperity (Ismail; Sohel; Ayuniza ,2012). Social entrepreneurship extends the
definition of entrepreneurship by emphasis on ethical integrity and maximizing social value rather
than private value or profit (Davis, 2002).
While the term social entrepreneur may be relatively new, the phenomenon is not. Throughout history,
in every culture, we can find examples of leading social entrepreneurs who have left their search on
history. The unanswerable question is what innovations and changes might have happened had we
done more to focus on social entrepreneurship and nature this valuable social asset (Davis, 2002).
Social entrepreneurship, as a practice and the field for scholarly investigation, provides a unique
opportunity to challenge, question and rethink concepts and assumptions from different fields of
management and business research (Mair & Marti, 2004). It is said that “ social entrepreneurship is
emerging as an innovative approach for dealing with complex social needs” (Johnson, 200:1),
especially in the fact of diminishing public funding (Peredo; Mclean, 2005). Even if social
entrepreneurship is a young term in social science and still lacks a consistent theory to define it, being
seen as “ a large tent ” (Martin et al., 2007) for all kind of activities, the social phenomenon of social
entrepreneurship is becoming wider and stronger as ever before (Oprica, 2013).
According to Nilsson (2012) in the lack of a strong political deal delineating a feasible feature of the
modern society, entrepreneurship is going to play a backup solution of the society illness (Apolloni et
al., 2013). Social entrepreneurship can lead to social change for the better welfare and education
(M.Situmorang, Mirzanti, 2012). Social entrepreneurship seeks to harness the practical dynamism of
the successful businessman to enrich and help society, specially in countries where the individual is
beset with the problems of dire poverty and lack of opportunity (Rajendhiran & Silambarasan , 2012).
In next sections we will discuss the phenomenon of social entrepreneurship.
Social entrepreneurship approaches
The phenomenon of social entrepreneurship challenges our assumptions about human behavior and
economic action. It also challenges our beliefs about the role of entrepreneurship in society. Social
entrepreneurship is complementary economic approach that is based on value creation and operates by
its own rules and logic. Yet, it is an approach that seems able to address some of the most pressing
problems in modern society (M.Santos, 2009 , p. 45).
Approach of social entrepreneurship in the activity is separating the social and economic aspects with
social capital approach. Social capital according Yustica (2006) is a bounded aggregate resource to
realize a durable network for institutionalizing mutually benefit relationship. Social entrepreneurship
needs to interact with the social structure in order to enhance social value. However, on the other hand
it could keep doing its economic activity (Wiguna, Manzilati, 2014)
According to Cukier et al.( 2011) , the generally agreed perspective nowadays on SE concepts refers to
entrepreneurial activities with an embedded social purpose. As Certo and Miller (2008) note, there are
two approaches on the SE construct: first, a broad one, defining SE as an innovative social venture
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(e.g. Cochran, 2007; Dees and Anderson, 2003), and second, a narrow one, defining SE as the use of
economic activities to approach social needs by generating earned income (e.g. Thompson, 2002).
Referring to the first approach, we consider that adding the social dimension to the traditional
(economic) entrepreneurial process is an innovation and, thus, the social entrepreneurship represents a
social innovation of the economic entrepreneurship. Referring to the second approach, in terms of
business models, connecting directly the social needs with economic activities is an innovation and,
thus, the use of economic activities to approach social needs represents a social innovation of the
traditional (economic) entrepreneurial activities ( Lisetchi, Brancu, 2014).
The concept of entrepreneurship has a long history in the business sector. A major theme has been the
creation of value through innovation (Schumpeter ,1951 ; Drucker, 1985). As applied more recently to
social concerns, the concept has taken on a variety of meanings.
Some, for example, have focused on social entrepreneurship as combining commercial enterprises
with social impacts. In this perspective, entrepreneurs have used business skills and knowledge to
create enterprises that accomplish social purpose in addition to being commercially viable (Emerson
and Twersky, 1996)
Others have emphasized social entrepreneurship as innovating for social impact. In this perspective,
attention is focused on innovations and social arrangements that have consequences for social
problems, often with relatively little attention to economic viability by ordinary business criteria(e.g.
Dees, 1998b)
Still others see social entrepreneurship as a way to catalyze social transformation well beyond the
solutions of the social problems that are the initial focus of concern (Alvord; Brown; W. Letts, 2002).
Social entrepreneurship definitions
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Austin, Stevenson & Wei-Skillern (2006): “Entrepreneurial activity with an embedded social
porpose”. (M.Santos, 2009 , p. 2)
Haugh (2007): “ Simultaneous pursuit of economic, social, and environmental goals by
enterprising ventures ”.
Zahra et al., Forthcoming: “ Activities and processes to enhance social wealth”.
Austin et al., 2006: “ Entrepreneurship with a social purpose”. (M.Santos, 2009 , p. 3)
Dees (2001): “ Social entrepreneurship is commonly seen as a hybrid that combines elements
of commercial entrepreneurship and social sector organizations”. (M.Santos, 2009 , p.5)
Brock & Steiner (2010): Social entrepreneurship is the creation of social impact by developing
and implementing a sustainable business model which draws on innovative solutions that
benefit disadvantaged and, ultimately , society at large (M.Situmorang, Mirzanti, 2012).
Zappalà (2001): Social entrepreneurship is the act of carrying out community interest using
entrepreneurial approaches. (M.Situmorang, Mirzanti, 2012).
Saïd Business School (2005): Social entrepreneurship may be defined as a professional,
innovative and sustainable approach to system change that resolves social market failures and
grasps opportunities (Mair & Marti, 2004).
Mair (2005) : Social entrepreneurship involves recognizing opportunities, combining and
mobilizing resources, triggering positive change in various domains, and building
sustainability .
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Social entrepreneur definitions
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Brinckerhoff (2000): Social entrepreneurs are people who take risks on behalf of the people
their organization serves.
Waddock & Post (1991): Social entrepreneurs are private sector citizens who play critical
roles in bringing about catalytic changes in the public sector agenda and the perception of
certain social issues.
Thompson, Alvy & Lees (2000): Social entrepreneurs are people who realize where there is an
opportunity to satisfy some unmet meet that the state welfare system will not or cannot meet,
and who gather together the necessary resources (generally people, often volunteers, money
and premises) and use these to “make a difference” (Mair & Noboa, 2003; Mair & Marti,
2004).
Bornstein (1998): Social entrepreneur is a path breaker with a powerful new idea who
combines visionary and real-world problem-solving creativity, has a strong ethical fiber, and
is totally possessed by his or her vision for change.
LaBarre, Fishman et al. (2001): Social entrepreneurs are dedicated innovators who are
determined to tackle some of society's deepest challenges by embracing new ideas from
business (Mair & Noboa, 2003).
Ashoka : Social entrepreneurs are the entrepreneurs who "recognize that a part of society is
stuck and provide new ways to get it unstuck" (Harding, 2006).
The characteristic of social entrepreneurship
Social entrepreneurs focus on the social events while traditional entrepreneurs focus on profit
opportunity. This presents two different characteristics in the entrepreneurship. Communication,
empathy, support, providing intercessors are some of the characteristics that make social entrepreneurs
different. Dees (1998) has found five basic characteristics for social entrepreneurship. These are;
 Determining a mission in the creation of social values,
 Exploring and following new opportunities.
 Placing the innovation into a stabile process.
 Pushing the limits in every way possible regarding this matter instead of being limited in the
usage of the sources,
 Adopting a high sense of responsibility (Erturgut & Soysekerci, 2012).
The characteristic of social entrepreneurs
Gregorgy Dees from Stanford University (1998) organized the characteristics of social entrepreneurs
as :
 They are reformists in sector.
 By creating social values, they focus on the mission of sustainability.
 They follow new social opportunities.
 They sustain cultural continuity regarding innovation, adapting and learning.
 They are limitless and brave concerning the usage of resources.
 They transfer high sense of responsibility to the client (privet sector), citizen (public sector) or
volunteers (social sector / non – governmental organizations) (Erturgut & Soysekerci, 2012).
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Differences between social entrepreneurship and traditional entrepreneurship
According to Dhesi (2010), Social entrepreneurship is somewhat similar to traditional
entrepreneurship with some basic differences. The two basic factors differentiating social ventures
from traditional entrepreneurial ventures are –
 First, social value creation is at the heart of the social entrepreneurial process. Social
entrepreneurial ventures address social problems which are either ignored or inadequately met
by the traditional entrepreneurs or government sector. The fundamental differences is in the
mission statement – social entrepreneurship's premier mission is to create sustainable social
value for the public good whereas commercial entrepreneurship's mission is to create
economic profit and may be social value as the byproduct of the process.
 Second, the dimensions of social ventures are yet to be identified as they always overlap the
boundaries between the ‘for-profit’ ventures and social mission driven ‘non-profit’ ventures.
Some definitions limit social entrepreneurship to nonprofit organizations, while others
describe social entrepreneurship as for-profit companies operated by nonprofit organizations,
or organizations that create a firm at a financial loss (Ismail; Sohel; Ayuniza ,2012).
In addition, according to Dees and Haas ( 1998), social entrepreneurs slightly different with
entrepreneurs in general, they aware and responsive to generate profit and intent to achieve sustain
their mission, yet profit is not their end goal. Profit is not the gauge of value creation; nor is customer
satisfaction, social impact is the gauge whereby “mission-related impact becomes the central criterion,
not wealth creation.” (M.Situmorang, Mirzanti, 2012).
Values of social entrepreneurship
Social entrepreneurs endeavor to "create social" value through innovative, entrepreneurial business
models. Social entrepreneurs often create tremendous value when they cater to very basic
humanitarian needs; for example, by providing medicines or food, which can be matter of life or death
for those who receive them (M. Joshi; Tiwari; V. Joshi, 2007)
Experts have proposed a wide variety of more specific values that they see as emblematic of social
entrepreneurship, such as:
 Subsistence on the sales of goods and services;
 Efficient use of grants;
 Creative inspiration applied to “ an unfortunate yet stable equilibrium” ( Martin & Osberg,
2007);
 Quantifiable metrics;
 Initiation and management by private citizens apart from government and commercial
corporations;
 Cooperative engagement among nonprofits, commercial business and the state;
 Organization as a nonprofit;
 Indifference to organizational form, whether for-profit , non-profit or a mixed corporate
group;
 Rejection of organizational form in favor of productive networks or;
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
The creation of a new organizational form marked by “ blended value” and limits on
investors’ profit (see e.g., Borzaga, 2004; Dees & Economy, 2001; Light, 2008; Mair &
Hockerts, 2006; Martin & Osberg, 2007; Nicholls, 2006; Nyssens, 2006 in Trexler, 2008,
p.68)
Moreover, Sivathanu & V.Bhise (2013) organized the values of social entrepreneurship as:
 Employment development
 Innovation / new goods and services
 Social capital
 Equity promotion
System of social entrepreneurship
The associations and foundations, cooperatives, social enterprises, mutual assistance hoses etc.
represent the forms of organization specific to the social economy in Europe. They provide services
and products, which cannot be supplied by the public and traditional private sector and they cover the
social needs of a distinct segment of population. The social enterprises are “ at the crossroads of
markets, public policies and civil society” (EMES, 2008), create new social value, play a significant
role in local development and regenerate the communities, promoting a new economic, social
accountable mechanism (Kerlin, 2009).
According to GEM ( 2009 Global report) , in the last decade they have registered a positive trend, with
a small growth rate, but with a high degree of recognizing the major objective of activity, aimed at
social inclusion (Matei & Matei, 2012).
Fig.1 System of social entrepreneurship
Entrepreneurial aspect of social entrepreneurship
Dees defines the Entrepreneurial aspect of social entrepreneurship as including:
 The recognition and “ relentless” pursuit of new opportunities to further the mission of
creating social value;
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 Continuous engagement in innovation and modification;
 Bold action undertaken without acceptance of existing resource limitations.
The suggestion that emerges is that the above three elements of recognizing opportunities, innovating
in some way, and displaying resourcefulness should be considered prime candidates for inclusion in
the amplified notion of entrepreneurship. In addition, the capacity to endure risk, which Tan et. al.
(2003) represent many others in including, should be added to the list (Peredo; Mclean, 2005).
Social entrepreneurship impact
According to Brock & Steiner (2010), Social impact (see Table 1) should involve and prosper
community or stakeholders .Accordingly, social entrepreneurs have roles in terms of shaping social
value in society and creating social value in a complex system of humanity. These are several goals of
creating social value; reducing the amount of poverty, improving health care, and the experiencing
through climate change (M.Situmorang, Mirzanti, 2012).
Table 1. Social entrepreneurship impact
Area
End goal
Timeframe
Owners
Rewards
Market orientation
Target market
Needs
Customer orientation
Value creation
Growth orientation
Impact
Social entrepreneurship
Lives change
Long term social impact
Non-profit, for-profit, and hybrid forms
Serving the community/ public good
Underserved markets
Ultimately beneficiaries and community
Reducing needs
Empowerment
Social value
Scaling social impact
Solutions to social problems, eliminate the
needs
Source: Brock & Steiner, 2010 (M.Situmorang, Mirzanti, 2012).
Challenges faced by social entrepreneurs
The challenges [social] entrepreneurs face are severe. Their “customers ” may be willing, but often
unable, to pay even a small portion of the cost of the products and services provided. Many social
entrepreneurs operate in developing countries that have no structures or recourses that would enable
and support traditional entrepreneurship (Seelos et al, 2004 in M. Joshi; Tiwari; V. Joshi, 2007).
Sivathanu & V.Bhise (2013) has found several challenges faced by social entrepreneurs. These are;
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Table 2. Social entrepreneurship challenges
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Conveying the Business Idea
Attracting Donors
Working remotely
Hiring
Finding time
Getting fund
Raising money
Family and friend support
Business people support
Government approval
Maintaining product quality
Sustaining employees
Competition from others
Promoting awareness
Acquiring technologies
Getting skilled employees
Rajendhiran & Silambarasan (2012) using factor analysis concluded that earning profit, family and
friend support , business people support, sustaining employees, promoting awareness, getting expert's
assistance, improving quality of life are the most sensitive factors of challenges of social
entrepreneurs.
The social entrepreneurship cases
Alvord, Brown & W. Letts (2002), provided a comparative analysis of successful cases of social
entrepreneurship. The cases are mentioned as follows:
 Bangladesh Rural Advancement Committee (BRAC) was established in 1972 by Fazel Abed, a
Bangladeshi corporate executive, in the aftermath of the Independence War.
 The Grameen Bank (GB) was established in 1976 by Muhammed Yunus, a Bangladeshi
economic professor, and his colleagues.
 The Green Belt Movement (GBM) was established in 1977 to encourage tree planting in
Nairobi by Wangari Maathai and the National Council of Women in Kenya.
 The Highlander Research and Education Center (HREC) was founded by Myles Horton in
1932 in a rural Appalachian mountain community in the Southern United States.
 Plan Puebla (PP) was initiated in Mexico in 1966 by a small group of agricultural researches
who recognized that the needs of small subsistence farmers were not being addressed by
Mexican agricultural research.
 The Self-Employed Women's Association (SEWA) , founded in 1972 by Ela Bhatt , is a trade
union of women who earn their livelihoods in three broad occupational categories that
historically have been very difficult to organize: hawkers and vendors, home-based producers,
and manual laborers and service providers.
 Se Servir De la Saison Seche en Savane et au Sahel ( Six-S) is an association set up in 1976 by
founders from Burkina Faso and France, Bernard Ledea Ouedraogo and Bernard Lecomte , to
promote community development from a peasant perspective, specially in the dry season when
jobs are few and far between.
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Conclusions
The purpose of this paper has been to highlight the phenomenon of social entrepreneurship. Social
entrepreneurship is commonly seen as a hybrid that combines elements of commercial
entrepreneurship and social sector organizations and Social entrepreneurs are private sector citizens
who play critical roles in bringing about catalytic changes in the public sector agenda and the
perception of certain social issues. Social entrepreneurs slightly different with entrepreneurs in
general, they aware and responsive to generate profit and intent to achieve sustain their mission, yet
profit is not their end goal. Profit is not the gauge of value creation; nor is customer satisfaction, social
impact is the gauge whereby “mission-related impact becomes the central criterion, not wealth
creation. The social enterprises are “ at the crossroads of markets, public policies and civil society”,
create new social value, play a significant role in local development and regenerate the communities,
promoting a new economic, social accountable mechanism . Social entrepreneurs have roles in terms
of shaping social value in society and creating social value in a complex system of humanity. These
are several goals of creating social value; reducing the amount of poverty, improving health care, and
the experiencing through climate change. Earning profit, family and friend support , business people
support, sustaining employees, promoting awareness, getting expert's assistance, improving quality of
life are the most sensitive factors of challenges of social entrepreneurs.
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