Social Entrepreneurs Nicholls

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Defining social entrepreneurship - Due to its relatively new term, it is challenging to define what social entrepreneurship is and the process of deriving its conceptual contexts and boundaries. The main two reasons behind the challenge are 1) lack of strong consensus among scholars and researchers in the subject 2) complex nature of the concept itself. Nicholls (2005) states ‘social entrepreneurship, although being a newly coined term is not new', citing establishment of private hospitals in Victorian era as examples. The statement is on par with Thompson et al (2000) also speaking of the origin of the idea dating back to the days of Florence Nightingale but acknowledging that the term is now used in literature to cover many initiatives and diverse range of activities.

Nicholls and Cho (2006) argue that any profound pursuit to understand and define the meanings of social entrepreneurship must logically begin with a rigorous examination of its foundational concepts: social and entrepreneurship, both individually and in relation to each other. There was a supporting statement during Forum Barcelona 2004 as Strong Idea and from that proposition I quote: “The social entrepreneur aims to combine society and economics.” Fowler (2000) notes the vital importance of differentiating social entrepreneurship from entrepreneurship which is not social. Dees (1998) agrees and adds that it is necessary to understand what social means in the context of social entrepreneurship and how the objectives of social entrepreneurship are distinct from objectives of non-social entrepreneurship. The ‘social' and ‘entrepreneurship' aspects of social entrepreneurship will be discussed in more detail in later sections.

The existence of other so-called social ventures creates further complications. Since these ventures are not new, the distinction is required to differentiate social entrepreneurship from traditional organisation forms such as not-for-profits or philanthropic foundations (Boschee, 1998). Here the distinction being ‘entrepreneurship', it is important to emphasise the critical differentiating elements of entrepreneurship in social entrepreneurship(Nicholls and Cho, 2006). Harding (2006) in GEM (Global Entrepreneurship Monitor) Report for Social Entrepreneurship defines social entrepreneurship broadly as “…Social entrepreneurship is any attempt at new social enterprise activity or new enterprise creation, such as self-employment, a new enterprise, or the expansion of an existing social enterprise by an individual, teams of individuals or established social enterprise, with social or community goals as its base and where the profit is invested in the activity or venture itself rather than returned to investor”. Afterwards she draws on the GEM's definition of entrepreneurship and I quote as “Any attempt at new business or new venture creation, such as self-employment, a new business organisation, or the expansion of an existing business by an individual, teams of individuals, or established business.”

Social Entrepreneurs and their motivations

Social entrepreneurs are defined as people who combine innovation, opportunity and resourcefulness to transform social systems and practices in a wide variety of fields, including, for example, health, employment, education, environment, housing and technology in a report by Schwab Foundation for Social Entrepreneurship. In addition to not being able to agree on an universal definition of a ‘social entrepreneur' there are similar albeit not the same terms such as ‘social innovator', not-for-profit manager, civic entrepreneur and etc.

Yunus (2006) states that social (business) entrepreneurs are the ones who are not interested in profit maximisation but instead the ones being social-objective driven who are totally commited to make a difference to the world and who want to give a better chance in life to other people. Yunus continues that social (business) entrepreneurs want to achieve their objectives through creating and supporting sustainable business enterprises. Drucker (2006) argues that social entrepreneurs “...change the performance capacity of society”. Some of the writers focus on social entrepreneurs seeking social change. Some writers associate social entrepreneurs mainly with ‘non profit' leaders and one of them is Boschee (1998) where he explains social entrepreneurs as “...non-profit executives who pay increased attention to market forces without losing sight of their underlying mission”. Thompson et al. (2000) describe social entrepreneurs as “... the group of people who realise where there is an opportunity to satisfy some unmet need 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 those resources to make social change and a difference to those who were served”.

Going through the literature on social entrepreneurs and social enterprise bring some insights into motivation of social entrepreneurs. Reid and Griffith (2006) explain that the motivations of social entrepreneurs: those who are involved in leading and running the organisations and businesses vary considerably.

‘Entrepreneurship' in social entrepreneurship

Before looking at ‘social' in social entrepreneurship, some sound grounding on entrepreneurship should be established. Following the emphasis by Nicholls & Cho (2006) the entrepreneurial distinction, the literature on entrepreneurship is to be drawn upon followed by its relevance to limited social entrepreneurship literature.

The literature on entrepreneurship is mainly in two divisions where the first one focuses on individual entrepreneurs (for example Martinelli 1994) and the second on structure that induces entrepreneurship (such as Thornton 1999). While Martinelli (1994) explains the prevalence of entrepreneurs in terms of innate psychological traits or how special characteristics are formed in certain social groups, Thorton (1999) makes some highlights on how social and cultural structures trigger of call entrepreneurs to seek opportunities in entrepreneurship.

One of the earliest studies of entrepreneurial individuals was David McClelland's ‘The Achieving Society' (1961) which was important and made significant contribution to the field. The arguments made by McClelland were that certain societies have cultural attitudes which interpret into certain social norms or social conditions that foster entrepreneurial individuals. The rather negative argument by Kets de Vries (1977) was that the entrepreneurial personality was the result of a particularly painful upbringing. Kets de Vries (1977) argument will fit more into Maslow's view of those particular entrepreneurs trying to fulfil their deficiency needs (Maslow, 1970). Some other academics have sought the entrepreneurial personality in risk-taking propensity, internal locus of control, tolerance for ambiguity, over-optimism and need for autonomy (cf. Delmar 2000).

The structural tradition of research was undertaken to understand factors that trigger or induce entrepreneurship by looking at different factors. Martinelli (1994) emphasises on ease of access to resources such as advice and financial support for start-ups whereas Busenitz, Gomez and Spencer (2000) focuses on issues such as regulatory factors (e.g. institutions and policies), cognitive factors (e.g. knowledge of how to start ventures and obtain financial support), and normative factors (e.g. the perception of entrepreneurship as a career) which are used to explain both types and levels of entrepreneurship in different countries. On the other hand management researchers sometimes emphasise the influence of organisations and especially prior work experience in established firms (Freeman 1986). Established organisations are good platforms for would-be entrepreneurs to learn and nature themselves whilst organisations provide opportunities to build confidence especially in the ability to create new organisations; provide industry knowledge and specific information about entrepreneurial opportunities; and provide social networks which will be crucial to entrepreneurs' later career and access to critical resources (Audia and Rider 2005).

“Social” in social entrepreneurship

It is the ‘social' part of social entrepreneurship that makes social entrepreneurship special and different from its commercial cousins. However more importantly, the term ‘social' means very different things to different people, depending on their personal and cultural backgrounds (Seelos and Mair, 2005). There is a consensus of various authors in putting special emphasis on social entrepreneurship ventures having social objectives and missions (Dees, 1998, Henton et al, 1997 and Boschee 1998). Dees et al (2002) in their working paper addressed the important and rather interesting factor of social entrepreneurship: social impact and scalability of social entrepreneurship.

I have problems talking more about ‘social' in social entrepreneurship

Similarities between social entrepreneurs and (economic/commercial) entrepreneurs

Authors such as (Dees, 1998; Henton et al., 1997) acknowledge that social entrepreneurs being very similar to their commercial counterparts do not get discouraged by the lack of initial funds and other resources to limit their options, and that their reach often exceeds their grasp. Prabhu (1999) notes that not only social entrepreneurs thrive even with the lack of initial resources but also they have a high tolerance for uncertainty like their commercial cousins. Catford (1998) notes that social and commercial entrepreneurs are similar in the way that they are both focused on vision and opportunity and possess the same abilities to enroll and empower others to help and support them to turn these visions into a reality. From above authors one can assume that social entrepreneurs and commercial/economic entrepreneurs have more in common than difference. Austin et al (2006) argue that there is no dichotomous distinction between social entrepreneurship and commercial entrepreneurship but there is rather a continuum of organisations with their purposes ranging from purely social to purely economic. Also they state that both elements of social and economic are present even at the extreme ends of the continuum with examples given as, charitable activities still requiring economic outcomes and economic activities that still generate social value.


There are without doubt other major differences between social and economic entrepreneurs. Prabhu (1999) argues that they are distinguished primarily by ideology, which guides their choices of mission, means and ends, and that social entrepreneurs are “...persons who create or manage innovative entrepreneurial organizations or ventures whose primary mission is the social change and development of their client group” (p. 140) rather than the pursuit of profit. Social entrepreneurs also possess a strong desire for social justice. Social entrepreneurs involved in for-profit activities see profit as a means to an end, while economic entrepreneurs see profit as an end in itself (Dees, 1998) In addition, social entrepreneurs are generally operating in community environments that are dynamic and somewhat unpredictable” (De Leeuw, 1999), adding yet another layer of complexity to the process. Austin et al (2006) propose that human and financial resources mobilisation in social entrepreneurial ventures are contrastingly different from commercial entrepreneurial ones because of the non-distributive restriction on social entrepreneurial organisations and the difficulty in tapping into same financial markets that commercial entrepreneurs and enterprises utilise.

Interestingly the literature states that somewhat unlike their economic counterparts, social entrepreneurs emerge not only as highly entrepreneurial individuals, but also highly collaborative ones, providing “....collaborative leadership to bring diverse parties to the table, identify common ground and take joint action. They build bridges” (Henton et al., 1997, p. 153). The ability to develop a network of relationships and contacts is a hallmark of visionary social entrepreneurs, as is the ability to communicate an inspiring vision in order to recruit and inspire staff, partners, and volunteers (Thompson et al., 2000, p.331). Because social entrepreneurship often demands establishing credibility across multiple constituencies, and the ability to mobilize support within those constituencies, networking is a critical skill for social entrepreneurs (Prabhu, 1999). Unlike economic entrepreneurs, Prabhu argues that social entrepreneurs are often highly supportive of each other's efforts, in some cases writing letters to one another to show this support.

Opportunities for social entrepreneurship

Austin et al (2006) claim that there are more opportunities for social entrepreneurship than for commercial entrepreneurship because of the social problems we face in the world. Sit say par ++ Talk about perception x

The issue of ethics in both entrepreneurship and social entrepreneurship