short case study on social entrepreneurship

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Essentials of Social Innovation

Social entrepreneurship: the case for definition.

Social entrepreneurship is attracting growing amounts of talent, money, and attention, but along with its increasing popularity has come less certainty about what exactly a social entrepreneur is and does.

• download https://ssir.org/images/articles/2007SP_feature_martinosberg.pdf
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By Roger L. Martin & Sally Osberg Spring 2007

A starter kit for leaders of social change.

• Collective Impact

• Social Entrepreneurship: The Case for Definition

• The Dawn of System Leadership

• Design Thinking for Social Innovation

• The Nonprofit Starvation Cycle

• Ten Nonprofit Funding Models

• The Science of What Makes People Care

• Stop Raising Awareness Already

• Rediscovering Social Innovation

• Innovation Is Not the Holy Grail

The nascent field of social entrepreneurship is growing rapidly and attracting increased attention from many sectors. The term itself shows up frequently in the media , is referenced by public officials, has become common on university campuses, and informs the strategy of several prominent social sector organizations, including Ashoka and the Schwab and Skoll Foundation foundations.

The reasons behind the popularity of social entrepreneurship are many. On the most basic level, there’s something inherently interesting and appealing about entrepreneurs and the stories of why and how they do what they do. People are attracted to social entrepreneurs like last year’s Nobel Peace Prize laureate Muhammad Yunus for many of the same reasons that they find business entrepreneurs like Steve Jobs so compelling – these extraordinary people come up with brilliant ideas and against all the odds succeed at creating new products and services that dramatically improve people’s lives.

But interest in social entrepreneurship transcends the phenomenon of popularity and fascination with people. Social entrepreneurship signals the imperative to drive social change, and it is that potential payoff, with its lasting, transformational benefit to society, that sets the field and its practitioners apart.

Although the potential benefits offered by social entrepreneurship are clear to many of those promoting and funding these activities, the actual definition of what social entrepreneurs do to produce this order of magnitude return is less clear. In fact, we would argue that the definition of social entrepreneurship today is anything but clear. As a result, social entrepreneurship has become so inclusive that it now has an immense tent into which all manner of socially beneficial activities fit.

In some respects this inclusiveness could be a good thing. If plenty of resources are pouring into the social sector, and if many causes that otherwise would not get sufficient funding now get support because they are regarded as social entrepreneurship, then it may be fine to have a loose definition. We are inclined to argue, however, that this is a flawed assumption and a precarious stance.

Social entrepreneurship is an appealing construct precisely because it holds such high promise. If that promise is not fulfilled because too many “nonentrepreneurial” efforts are included in the definition, then social entrepreneurship will fall into disrepute, and the kernel of true social entrepreneurship will be lost. Because of this danger, we believe that we need a much sharper definition of social entrepreneurship, one that enables us to determine the extent to which an activity is and is not “in the tent.” Our goal is not to make an invidious comparison between the contributions made by traditional social service organizations and the results of social entrepreneurship, but simply to highlight what differentiates them.

If we can achieve a rigorous definition, then those who support social entrepreneurship can focus their resources on building and strengthening a concrete and identifiable field. Absent that discipline, proponents of social entrepreneurship run the risk of giving the skeptics an ever-expanding target to shoot at, and the cynics even more reason to discount social innovation and those who drive it.

Starting With Entrepreneurship

Any definition of the term “social entrepreneurship” must start with the word “entrepreneurship.” The word “social” simply modifies entrepreneurship. If entrepreneurship doesn’t have a clear meaning, then modifying it with social won’t accomplish much, either.

The word entrepreneurship is a mixed blessing. On the positive side, it connotes a special, innate ability to sense and act on opportunity, combining out-of-the-box thinking with a unique brand of determination to create or bring about something new to the world. On the negative side, entrepreneurship is an ex post term, because entrepreneurial activities require a passage of time before their true impact is evident.

Interestingly, we don’t call someone who exhibits all of the personal characteristics of an entrepreneur – opportunity sensing, out-of-the-box thinking, and determination – yet who failed miserably in his or her venture an entrepreneur; we call him or her a business failure. Even someone like Bob Young, of Red Hat Software fame, is called a “serial entrepreneur” only after his first success; i.e., all of his prior failures are dubbed the work of a serial entrepreneur only after the occurrence of his first success. The problem with ex post definitions is that they tend to be ill defined. It’s simply harder to get your arms around what’s unproven. An entrepreneur can certainly claim to be one, but without at least one notch on the belt, the self-proclaimed will have a tough time persuading investors to place bets. Those investors, in turn, must be willing to assume greater risk as they assess the credibility of would-be entrepreneurs and the potential impact of formative ventures.

Even with these considerations, we believe that appropriating entrepreneurship for the term social entrepreneurship requires wrestling with what we actually mean by entrepreneurship. Is it simply alertness to opportunity? Creativity? Determination? Although these and other behavioral characteristics are part of the story and certainly provide important clues for prospective investors, they are not the whole story. Such descriptors are also used to describe inventors, artists, corporate executives, and other societal actors.

Like most students of entrepreneurship, we begin with French economist Jean-Baptiste Say, who in the early 19th century described the entrepreneur as one who “shifts economic resources out of an area of lower and into an area of higher productivity and greater yield,” thereby expanding the literal translation from the French, “one who undertakes,” to encompass the concept of value creation. 1

Writing a century later, Austrian economist Joseph Schumpeter built upon this basic concept of value creation, contributing what is arguably the most influential idea about entrepreneurship. Schumpeter identified in the entrepreneur the force required to drive economic progress, absent which economies would become static, structurally immobilized, and subject to decay. Enter the Unternehmer , Schumpeter’s entrepreneurial spirit, who identifies a commercial opportunity – whether a material, product, service, or business – and organizes a venture to implement it. Successful entrepreneurship, he argues, sets off a chain reaction, encouraging other entrepreneurs to iterate upon and ultimately propagate the innovation to the point of “creative destruction,” a state at which the new venture and all its related ventures effectively render existing products, services, and business models obsolete. 2

Despite casting the dramatis personae in heroic terms, Schumpeter’s analysis grounds entrepreneurship within a system, ascribing to the entrepreneur’s role a paradoxical impact, both disruptive and generative. Schumpeter sees the entrepreneur as an agent of change within the larger economy. Peter Drucker, on the other hand, does not see entrepreneurs as necessarily agents of change themselves, but rather as canny and committed exploiters of change. According to Drucker, “the entrepreneur always searches for change, responds to it, and exploits it as an opportunity,” 3 a premise picked up by Israel Kirzner, who identifies “alertness” as the entrepreneur’s most critical ability. 4

Regardless of whether they cast the entrepreneur as a breakthrough innovator or an early exploiter, theorists universally associate entrepreneurship with opportunity. Entrepreneurs are believed to have an exceptional ability to see and seize upon new opportunities, the commitment and drive required to pursue them, and an unflinching willingness to bear the inherent risks.

Building from this theoretical base, we believe that entrepreneurship describes the combination of a context in which an opportunity is situated, a set of personal characteristics required to identify and pursue this opportunity, and the creation of a particular outcome.

To explore and illustrate our definition of entrepreneurship, we will take a close look at a few contemporary American entrepreneurs (or pairs thereof ): Steve Jobs and Steve Wozniak of Apple Computer, Pierre Omidyar and Jeff Skoll of eBay, Ann and Mike Moore of Snugli, and Fred Smith of FedEx.

Entrepreneurial Context

The starting point for entrepreneurship is what we call an entrepreneurial context. For Steve Jobs and Steve Wozniak, the entrepreneurial context was a computing system in which users were dependent on mainframe computers controlled by a central IT staff who guarded the mainframe like a shrine. Users got their computing tasks done, but only after waiting in line and using the software designed by the IT staff. If users wanted a software program to do something out of the ordinary, they were told to wait six months for the programming to be done.

From the users’ perspective, the experience was inefficient and unsatisfactory. But since the centralized computing model was the only one available, users put up with it and built the delays and inefficiencies into their workflow, resulting in an equilibrium, albeit an unsatisfactory one.

System dynamicists describe this kind of equilibrium as a “balanced feedback loop,” because there isn’t a strong force that has the likely effect of breaking the system out of its particular equilibrium. It is similar to a thermostat on an air conditioner: When the temperature rises, the air conditioner comes on and lowers the temperature, and the thermostat eventually turns the air conditioner off.

The centralized computing system that users had to endure was a particular kind of equilibrium: an unsatisfactory one. It is as if the thermostat were set five degrees too low so that everyone in the room was cold. Knowing they have a stable and predictable temperature, people simply wear extra sweaters, though of course they might wish that they didn’t have to.

Pierre Omidyar and Jeff Skoll identified an unsatisfactory equilibrium in the inability of geographically based markets to optimize the interests of both buyers and sellers. Sellers typically didn’t know who the best buyer was and buyers typically didn’t know who the best (or any) seller was. As a result, the market was not optimal for buyers or sellers. People selling used household goods, for example, held garage sales that attracted physically proximate buyers, but probably not the optimal number or types of buyers. People trying to buy obscure goods had no recourse but to search through Yellow Page directories, phoning and phoning to try to track down what they really wanted, often settling for something less than perfect. Because buyers and sellers couldn’t conceive of a better answer, the stable, yet suboptimal, equilibrium prevailed.

Ann and Mike Moore took note of a subpar equilibrium in parents’ limited options for toting their infants. Parents wishing to keep their babies close while carrying on basic tasks had two options: They could learn to juggle offspring in one arm while managing chores with the other, or they could plop the child in a stroller, buggy, or other container and keep the child nearby. Either option was less than ideal. Everyone knows that newborns benefit from the bonding that takes place because of close physical contact with their mothers and fathers, but even the most attentive and devoted parents can’t hold their babies continuously. With no other options, parents limped along, learning to shift their child from one hip to the other and becoming adept at “one-armed paper hanging,” or attempting to get their tasks accomplished during naptime.

In the case of Fred Smith, the suboptimal equilibrium he saw was the long-distance courier service. Before FedEx came along, sending a package across country was anything but simple. Local courier services picked up the package and transported it to a common carrier, who flew the package to the remote destination city, at which point it was handed over to a third party for final delivery (or perhaps back to the local courier’s operation in that city if it was a national company). This system was logistically complex, it involved a number of handoffs, and the scheduling was dictated by the needs of the common carriers. Often something would go wrong, but no one would take responsibility for solving the problem. Users learned to live with a slow, unreliable, and unsatisfactory service – an unpleasant but stable situation because no user could change it.

Entrepreneurial Characteristics

The entrepreneur is attracted to this suboptimal equilibrium, seeing embedded in it an opportunity to provide a new solution, product, service, or process. The reason that the entrepreneur sees this condition as an opportunity to create something new, while so many others see it as an inconvenience to be tolerated, stems from the unique set of personal characteristics he or she brings to the situation – inspiration, creativity, direct action, courage, and fortitude. These characteristics are fundamental to the process of innovation.

The entrepreneur is inspired to alter the unpleasant equilibrium. Entrepreneurs might be motivated to do this because they are frustrated users or because they empathize with frustrated users. Sometimes entrepreneurs are so gripped by the opportunity to change things that they possess a burning desire to demolish the status quo. In the case of eBay, the frustrated user was Omidyar’s girlfriend, who collected Pez dispensers.

The entrepreneur thinks creatively and develops a new solution that dramatically breaks with the existing one. The entrepreneur doesn’t try to optimize the current system with minor adjustments, but instead finds a wholly new way of approaching the problem. Omidyar and Skoll didn’t develop a better way to promote garage sales. Jobs and Wozniak didn’t develop algorithms to speed custom software development. And Smith didn’t invent a way to make the handoffs between courier companies and common carriers more efficient and error-free. Each found a completely new and utterly creative solution to the problem at hand.

Once inspired by the opportunity and in possession of a creative solution, the entrepreneur takes direct action . Rather than waiting for someone else to intervene or trying to convince somebody else to solve the problem, the entrepreneur takes direct action by creating a new product or service and the venture to advance it. Jobs and Wozniak didn’t campaign against mainframes or encourage users to rise up and overthrow the IT department; they invented a personal computer that allowed users to free themselves from the mainframe. Moore didn’t publish a book telling mothers how to get more done in less time; she developed the Snugli, a frameless front- or backpack that enables parents to carry their babies and still have both hands free. Of course, entrepreneurs do have to influence others: first investors, even if just friends and family; then teammates and employees, to come work with them; and finally customers, to buy into their ideas and their innovations. The point is to differentiate the entrepreneur’s engagement in direct action from other indirect and supportive actions.

Entrepreneurs demonstrate courage throughout the process of innovation, bearing the burden of risk and staring failure squarely if not repeatedly in the face. This often requires entrepreneurs to take big risks and do things that others think are unwise, or even undoable. For example, Smith had to convince himself and the world that it made sense to acquire a fleet of jets and build a gigantic airport and sorting center in Memphis, in order to provide next-day delivery without the package ever leaving FedEx’s possession. He did this at a time when all of his entrenched competitors had only fleets of trucks for local pickup and delivery – they certainly didn’t run airports and maintain huge numbers of aircraft.

Finally, entrepreneurs possess the fortitude to drive their creative solutions through to fruition and market adoption. No entrepreneurial venture proceeds without setbacks or unexpected turns, and the entrepreneur needs to be able to find creative ways around the barriers and challenges that arise. Smith had to figure out how to keep investors confident that FedEx would eventually achieve the requisite scale to pay for the huge fixed infrastructure of trucks, planes, airport, and IT systems required for the new model he was creating. FedEx had to survive hundreds of millions of dollars of losses before it reached a cash-flow positive state, and without a committed entrepreneur at the helm, the company would have been liquidated well before that point.

Entrepreneurial Outcome

What happens when an entrepreneur successfully brings his or her personal characteristics to bear on a suboptimal equilibrium? He or she creates a new stable equilibrium, one that provides a meaningfully higher level of satisfaction for the participants in the system. To elaborate on Say’s original insight, the entrepreneur engineers a permanent shift from a lower-quality equilibrium to a higher-quality one. The new equilibrium is permanent because it first survives and then stabilizes, even though some aspects of the original equilibrium may persist (e.g., expensive and less-efficient courier systems, garage sales, and the like). Its survival and success ultimately move beyond the entrepreneur and the original entrepreneurial venture. It is through mass-market adoption, significant levels of imitation, and the creation of an ecosystem around and within the new equilibrium that it first stabilizes and then securely persists.

When Jobs and Wozniak created the personal computer they didn’t simply attenuate the users’ dependence on the mainframe – they shattered it, shifting control from the “glass house” to the desktop. Once the users saw the new equilibrium appearing before their eyes, they embraced not only Apple but also the many competitors who leaped into the fray. In relatively short order, the founders had created an entire ecosystem with numerous hardware, software, and peripheral suppliers; distribution channels and value-added resellers; PC magazines; trade shows; and so on.

Because of this new ecosystem, Apple could have exited from the market within a few years without destabilizing it. The new equilibrium, in other words, did not depend on the creation of a single venture, in this case Apple, but on the appropriation and replication of the model and the spawning of a host of other related businesses. In Schumpeterian terms, the combined effect firmly established a new computing order and rendered the old mainframe-based system obsolete.

In the case of Omidyar and Skoll, the creation of eBay provided a superior way for buyers and sellers to connect, creating a higher equilibrium. Entire new ways of doing business and new businesses sprang up to create a powerful ecosystem that simply couldn’t be disassembled. Similarly, Smith created a new world of package delivery that raised standards, changed business practices, spawned new competitors, and even created a new verb: “to FedEx.”

In each case, the delta between the quality of the old equilibrium and the new one was huge. The new equilibrium quickly became self-sustaining, and the initial entrepreneurial venture spawned numerous imitators. Together these outcomes ensured that everyone who benefited secured the higher ground.

Shift to Social Entrepreneurship

If these are the key components of entrepreneurship, what distinguishes social entrepreneurship from its for-profit cousin? First, we believe that the most useful and informative way to define social entrepreneurship is to establish its congruence with entrepreneurship, seeing social entrepreneurship as grounded in these same three elements. Anything else is confusing and unhelpful.

To understand what differentiates the two sets of entrepreneurs from one another, it is important to dispel the notion that the difference can be ascribed simply to motivation – with entrepreneurs spurred on by money and social entrepreneurs driven by altruism. The truth is that entrepreneurs are rarely motivated by the prospect of financial gain, because the odds of making lots of money are clearly stacked against them. Instead, both the entrepreneur and the social entrepreneur are strongly motivated by the opportunity they identify, pursuing that vision relentlessly, and deriving considerable psychic reward from the process of realizing their ideas. Regardless of whether they operate within a market or a not-for-profit context, most entrepreneurs are never fully compensated for the time, risk, effort, and capital that they pour into their venture.

We believe that the critical distinction between entrepreneurship and social entrepreneurship lies in the value proposition itself. For the entrepreneur, the value proposition anticipates and is organized to serve markets that can comfortably afford the new product or service, and is thus designed to create financial profit. From the outset, the expectation is that the entrepreneur and his or her investors will derive some personal financial gain. Profit is sine qua non, essential to any venture’s sustainability and the means to its ultimate end in the form of large-scale market adoption and ultimately a new equilibrium.

The social entrepreneur, however, neither anticipates nor organizes to create substantial financial profit for his or her investors – philanthropic and government organizations for the most part – or for himself or herself. Instead, the social entrepreneur aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large. Unlike the entrepreneurial value proposition that assumes a market that can pay for the innovation, and may even provide substantial upside for investors, the social entrepreneur’s value proposition targets an underserved, neglected, or highly disadvantaged population that lacks the financial means or political clout to achieve the transformative benefit on its own. This does not mean that social entrepreneurs as a hard-and-fast rule shun profitmaking value propositions. Ventures created by social entrepreneurs can certainly generate income, and they can be organized as either not-for- profits or for-profits. What distinguishes social entrepreneurship is the primacy of social benefit, what Duke University professor Greg Dees in his seminal work on the field characterizes as the pursuit of “mission-related impact.” 5

We define social entrepreneurship as having the following three components: (1) identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own; (2) identifying an opportunity in this unjust equilibrium, developing a social value proposition, and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state’s hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and the creation of a stable ecosystem around the new equilibrium ensuring a better future for the targeted group and even society at large.

Muhammad Yunus, founder of the Grameen Bank and father of microcredit, provides a classic example of social entrepreneurship. The stable but unfortunate equilibrium he identified consisted of poor Bangladeshis’ limited options for securing even the tiniest amounts of credit. Unable to qualify for loans through the formal banking system, they could borrow only by accepting exorbitant interest rates from local moneylenders. More commonly, they simply succumbed to begging on the streets. Here was a stable equilibrium of the most unfortunate sort, one that perpetuated and even exacerbated Bangladesh’s endemic poverty and the misery arising from it.

Yunus confronted the system, proving that the poor were extremely good credit risks by lending the now famous sum of $27 from his own pocket to 42 women from the village of Jobra. The women repaid all of the loan. Yunus found that with even tiny amounts of capital, women invested in their own capacity for generating income. With a sewing machine, for example, women could tailor garments, earning enough to pay back the loan, buy food, educate their children, and lift themselves up from poverty. Grameen Bank sustained itself by charging interest on its loans and then recycling the capital to help other women. Yunus brought inspiration, creativity, direct action, courage, and fortitude to his venture, proved its viability, and over two decades spawned a global network of other organizations that replicated or adapted his model to other countries and cultures, firmly establishing microcredit as a worldwide industry.

The well-known actor, director, and producer Robert Redford offers a less familiar but also illustrative case of social entrepreneurship. In the early 1980s, Redford stepped back from his successful career to reclaim space in the film industry for artists. Redford was struck by a set of opposing forces in play. He identified an inherently oppressive but stable equilibrium in the way Hollywood worked, with its business model increasingly driven by financial interests, its productions gravitating to flashy, frequently violent blockbusters, and its studio-dominated system becoming more and more centralized in controlling the way films were financed, produced, and distributed. At the same time, he noted that new technology was emerging – less cumbersome and less expensive video and digital editing equipment – that gave filmmakers the tools they needed to exert more control over their work.

Seeing opportunity, Redford seized the chance to nurture this new breed of artist. First, he created the Sundance Institute to take “money out of the picture” and provide young filmmakers with space and support for developing their ideas. Next, he created the Sundance Film Festival to showcase independent filmmakers’ work. From the beginning, Redford’s value proposition focused on the emerging independent filmmaker whose talents were neither recognized nor served by the market stranglehold of the Hollywood studio system.

Redford structured Sundance Institute as a nonprofit corporation, tapping his network of directors, actors, writers, and others to contribute their experience as volunteer mentors to fledgling filmmakers. He priced the Sundance Film Festival so that it appealed and was accessible to a broad audience. Twenty-five years later, Sundance is credited with ushering in the independent film movement, which today ensures that “indie” filmmakers can get their work produced and distributed, and that filmgoers have access to a whole host of options – from thought-provoking documentaries to edgy international work and playful animations. A new equilibrium, which even a decade ago felt tenuous, is now firmly established.

Victoria Hale is an example of a social entrepreneur whose venture is still in its early stages and for whom our criteria apply ex ante . Hale is a pharmaceutical scientist who became increasingly frustrated by the market forces dominating her industry. Although big pharmaceutical companies held patents for drugs capable of curing any number of infectious diseases, the drugs went undeveloped for a simple reason: The populations most in need of the drugs were unable to afford them. Driven by the exigency of generating financial profits for its shareholders, the pharmaceutical industry was focusing on creating and marketing drugs for diseases afflicting the well-off, living mostly in developed world markets, who could pay for them.

Hale became determined to challenge this stable equilibrium, which she saw as unjust and intolerable. She created the Institute for OneWorld Health , the first nonprofit pharmaceutical company whose mission is to ensure that drugs targeting infectious diseases in the developing world get to the people who need them, regardless of their ability to pay for the drugs. Hale’s venture has now moved beyond the proof-of-concept stage. It successfully developed, tested, and secured Indian government regulatory approval for its first drug, paromomycin, which provides a cost-effective cure for visceral leishmaniasis, a disease that kills more than 200,000 people each year.

Although it is too early to tell whether Hale will succeed in creating a new equilibrium that assures more equitable treatment of diseases afflicting the poor, she clearly meets the criteria of a social entrepreneur. First, Hale has identified a stable but unjust equilibrium in the pharmaceutical industry; second, she has seen and seized the opportunity to intervene, applying inspiration, creativity, direct action, and courage in launching a new venture to provide options for a disadvantaged population; and third, she is demonstrating fortitude in proving the potential of her model with an early success.

Time will tell whether Hale’s innovation inspires others to replicate her efforts, or whether the Institute for OneWorld Health itself achieves the scale necessary to bring about that permanent equilibrium shift. But the signs are promising. Looking ahead a decade or more, her investors – the Skoll Foundation is one – can imagine the day when Hale’s Institute for OneWorld Health will have created a new pharmaceutical paradigm, one with the same enduring social benefits apparent in the now firmly established microcredit and independent film industries.

Boundaries of Social Entrepreneurship

In defining social entrepreneurship, it is also important to establish boundaries and provide examples of activities that may be highly meritorious but do not fit our definition. Failing to identify boundaries would leave the term social entrepreneurship so wide open as to be essentially meaningless.

There are two primary forms of socially valuable activity that we believe need to be distinguished from social entrepreneurship. The first type of social venture is social service provision. In this case, a courageous and committed individual identifies an unfortunate stable equilibrium – AIDS orphans in Africa, for example – and sets up a program to address it – for example, a school for the children to ensure that they are cared for and educated. The new school would certainly help the children it serves and may very well enable some of them to break free from poverty and transform their lives. But unless it is designed to achieve large scale or is so compelling as to launch legions of imitators and replicators, it is not likely to lead to a new superior equilibrium.

These types of social service ventures never break out of their limited frame: Their impact remains constrained, their service area stays confined to a local population, and their scope is determined by whatever resources they are able to attract. These ventures are inherently vulnerable, which may mean disruption or loss of service to the populations they serve. Millions of such organizations exist around the world – well intended, noble in purpose, and frequently exemplary in execution – but they should not be confused with social entrepreneurship.

It would be possible to reformulate a school for AIDS orphans as social entrepreneurship. But that would require a plan by which the school itself would spawn an entire network of schools and secure the basis for its ongoing support. The outcome would be a stable new equilibrium whereby even if one school closed, there would be a robust system in place through which AIDS orphans would routinely receive an education.

The difference between the two types of ventures – one social entrepreneurship and the other social service – isn’t in the initial entrepreneurial contexts or in many of the personal characteristics of the founders, but rather in the outcomes. Imagine that Andrew Carnegie had built only one library rather than conceiving the public library system that today serves untold millions of American citizens. Carnegie’s single library would have clearly benefited the community it served. But it was his vision of an entire system of libraries creating a permanent new equilibrium – one ensuring access to information and knowledge for all the nation’s citizens – that anchors his reputation as a social entrepreneur.

A second class of social venture is social activism . In this case, the motivator of the activity is the same – an unfortunate and stable equilibrium. And several aspects of the actor’s characteristics are the same – inspiration, creativity, courage, and fortitude. What is different is the nature of the actor’s action orientation. Instead of taking direct action, as the social entrepreneur would, the social activist attempts to create change through indirect action, by influencing others – governments, NGOs, consumers, workers, etc. – to take action. Social activists may or may not create ventures or organizations to advance the changes they seek. Successful activism can yield substantial improvements to existing systems and even result in a new equilibrium, but the strategic nature of the action is distinct in its emphasis on influence rather than on direct action.

Why not call these people social entrepreneurs? It wouldn’t be a tragedy. But such people have long had a name and an exalted tradition: the tradition of Martin Luther King, Mahatma Gandhi, and Vaclav Havel. They are social activists. Calling them something entirely new – i.e., social entrepreneurs – and thereby confusing the general public, who already know what a social activist is, would not be helpful to the cause of either social activists or social entrepreneurs.

Shades of Gray

Having created a definition of social entrepreneurship and distinguished it from social service provision and social activism, we should recognize that in practice, many social actors incorporate strategies associated with these pure forms or create hybrid models. The three definitions can be seen in their pure forms in the diagram to the right.

In the pure form, the successful social entrepreneur takes direct action and generates a new and sustained equilibrium; the social activist influences others to generate a new and sustained equilibrium; and the social service provider takes direct action to improve the outcomes of the current equilibrium.

It is important to distinguish between these types of social ventures in their pure forms, but in the real world there are probably more hybrid models than pure forms. It is arguable that Yunus, for example, used social activism to accelerate and amplify the impact of Grameen Bank, a classic example of social entrepreneurship. By using a sequential hybrid – social entrepreneurship followed by social activism – Yunus turned microcredit into a global force for change.

Other organizations are hybrids using both social entrepreneurship and social activism at the same time. Standards-setting or certification organizations are an example of this. Although the actions of the standards-setting organization itself do not create societal change – those who are encouraged or forced to abide by the standards take the actions that produce the actual societal change – the organization can demonstrate social entrepreneurship in creating a compelling approach to standards-setting and in marketing the standards to regulators and market participants. Fair-trade product certification and marketing is a familiar example of this, with organizations like Cafédirect in the United Kingdom and TransFair USA in the U.S. creating growing niche markets for coffee and other commodities sold at a premium price that guarantees more equitable remuneration for small-scale producers.

Kailash Satyarthi’s RugMark campaign provides a particularly striking example of a hybrid model. Recognizing the inherent limitations of his work to rescue children enslaved in India’s rug-weaving trade, Satyarthi set his sights on the carpet- weaving industry. By creating the RugMark certification program and a public relations campaign designed to educate consumers who unwittingly perpetuate an unjust equilibrium, Satyarthi leveraged his effectiveness as a service provider by embracing the indirect strategy of the activist. Purchasing a carpet that has the RugMark label assures buyers that their carpet has been created without child slavery and under fair labor conditions. Educate enough of those prospective buyers, he reasoned, and one has a shot at transforming the entire carpet-weaving industry.

Satyarthi’s action in creating RugMark lies at the crossroads of entrepreneurship and activism: In itself, the RugMark label represented a creative solution and required direct action, but it is a device meant to educate and influence others, with the ultimate goal of establishing and securing a new and far more satisfactory market-production equilibrium.

Social service provision combined with social activism at a more tactical level can also produce an outcome equivalent to that of social entrepreneurship. Take, for example, a social service provider running a single school for an underprivileged group that creates great outcomes for that small group of students. If the organization uses those outcomes to create a social activist movement that campaigns for broad government support for the wide adoption of similar programs, then the social service provider can produce an overall equilibrium change and have the same effect as a social entrepreneur.

Bill Strickland’s Manchester Bidwell Corporation , a nationally renowned inner-city arts education and job-training program, has launched the National Center for Arts & Technology to advance systematically the replication of his Pittsburgh-based model in other cities. Strickland is spearheading an advocacy campaign designed to leverage federal support to scale up his model. So far, four new centers are operating across the U.S. and several more are in the pipeline. With a sustainable system of centers in cities across the country, Strickland will have succeeded in establishing a new equilibrium. It is because of that campaign that the Skoll Foundation and others are investing in Strickland’s efforts.

Why bother to tease out these distinctions between various pure and hybrid models? Because with such definitions in hand we are all better equipped to assess distinctive types of social activity. Understanding the means by which an endeavor produces its social benefit and the nature of the social benefit it is targeting enables supporters – among whom we count the Skoll Foundation – to predict the sustainability and extent of those benefits, to anticipate how an organization may need to adapt over time, and to make a more reasoned projection of the potential for an entrepreneurial outcome.

Why Should We Care?

Long shunned by economists, whose interests have gravitated toward market-based, price-driven models that submit more readily to data-driven interpretation, entrepreneurship has experienced something of a renaissance of interest in recent years. Building on the foundation laid by Schumpeter, William Baumol and a handful of other scholars have sought to restore the entrepreneur’s rightful place in “production and distribution” theory, demonstrating in that process the seminal role of entrepreneurship. 6 According to Carl Schramm, CEO of the Ewing Marion Kauffman Foundation, entrepreneurs, “despite being overlooked or explicitly written out of our economic drama,” 7 are the free enterprise system’s essential ingredient and absolutely indispensable to market economies.

We are concerned that serious thinkers will also overlook social entrepreneurship, and we fear that the indiscriminate use of the term may undermine its significance and potential importance to those seeking to understand how societies change and progress. Social entrepreneurship, we believe, is as vital to the progress of societies as is entrepreneurship to the progress of economies, and it merits more rigorous, serious attention than it has attracted so far.

Clearly, there is much to be learned and understood about social entrepreneurship, including why its study may not be taken seriously. Our view is that a clearer definition of social entrepreneurship will aid the development of the field. The social entrepreneur should be understood as someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large.

This definition helps distinguish social entrepreneurship from social service provision and social activism. That social service providers, social activists, and social entrepreneurs will often adapt one another’s strategies and develop hybrid models is, to our minds, less inherently confusing and more respectful than indiscriminate use of these terms. It’s our hope that our categorization will help clarify the distinctive value each approach brings to society and lead ultimately to a better understanding and more informed decision making among those committed to advancing positive social change.

The authors would like to thank their Skoll Foundation colleagues Richard Fahey, chief operating officer, and Ruth Norris, senior program officer, who read prior drafts of this essay and contributed important ideas to its evolution.

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Entrepreneurship Case Studies

Fieldfresh foods.

Mukesh Pandey, K Sudhir, Raman Ahuja, and Deepali Tewari Customer/Marketing, Entrepreneurship, Operations

By 2010, the FieldFresh team had been able to create an efficient supply chain for baby corn across Punjab and Maharashtra at all levels. But success brought with it the expectation of growth. Should FieldFresh grow opportunistically into different foreign markets as retailers and wholesalers demanded different products for their respective markets? Should FieldFresh continue to focus on baby corn, whose supply chain-market linkages it had perfected, or should the company expand the range of products it would supply? Should FieldFresh continue to maintain its primary export focus, or shift relative emphasis to the growing domestic market?

DonorsChoose.org

Anna Blanding, Jennifer Stredler, Kim Su, Ivy Washington, Sharon Oster, Jaan Elias and Andrea R. Nagy

Customer/Marketing, Entrepreneurship, Operations, Social Enterprise

After an auspicious start, Charles Best (Yale College ’98) and DonorsChoose.org set their sights on growing beyond New York City. Supported by a $14 million grant from Silicon Valley executives in 2005, DonorsChoose.org scaled up its organization and began a step-by-step expansion into various locales.  By 2009, the organization had made great strides toward completing its expansion. However, observers wondered whether DonorsChoose.org could reach its goal of providing $100 million per year in gifts to classrooms and whether it would have an impact on the fundamental inequities within the educational system.

James Baron and Jaan Elias

Employee/HR, Entrepreneurship, Ethics & Religion

AgBiome co-founders, Scott Uknes and Eric Ward,  were admirers of self-managed organizations and commitment culture, approaches to organizational structure and process that encouraged openness and collaboration. Accordingly, they built AgBiome to operate without supervisory relationships, job titles, formal performance evaluations, and individual performance bonuses. Instead, AgBiome relied on a committee structure that encouraged people with the greatest expertise to make decisions on matters within their ambit.  By 2017, AgBiome employed 80 people and was projecting further expansion. But observers wondered, could a company, which worked on the basis of commitment and without a hierarchy, scale?

The Alibaba Group

Yi guo,yao jing, charles liu, michelle wang, jaan elias, and zhiwu chen.

Competitor/Strategy, Entrepreneurship, Investor/Finance, Law & Contracts

By July of 2011, Yun “Jack” Ma had achieved his goal of creating one of the world’s leading e-commerce companies. Ma founded the Alibaba Group and took advantage of growing internet usage in China to launch the leading B2B, C2C and B2C sites in the country and capture a huge market. Despite his success, Ma had a troubled relationship with Yahoo!, the largest investor in the Alibaba Group. Ma’s decision in January of 2011 to transfer Alipay (the Alibaba Group’s online payment unit) from the Alibaba Group to a company under his personal control was just making matters worse.

What is Next? Search Fund Entrepreneurs Reflect on Life After Exit

A.j. wasserstein.

Entrepreneurship, Investor/Finance, Leadership & Teamwork

During his time at the Yale School of Management, Matt Dittrich (Yale SOM ‘18) became interested in how recent MBA students gathered search funds, structured small acquisitions, propelled themselves into being a CEO, and then participated in a liquidity event only a few years after acquisition and graduation.  He appreciated the case studies about entrepreneurs facing acquisition, strategy, and financing issues.  But what did entrepreneurs do after their exits?  At the urging of his teacher, A.J. Wasserstein, he interviewed former search fund entrepreneurs who had experienced an exit to learn what exactly they chose to do, and why. Overcome by curiosity, Dittrich was excited to begin his informational interviews (summaries included here). 

Advanced Leadership 2016

Jaan elias, james quinn and james baron.

Employee/HR, Entrepreneurship, Innovation & Design, Leadership & Teamwork, Social Enterprise

Biographies of the following seven leaders are provided:

• Rodney O’Neal, Delphi,
• Neal Keny-Guyer, Mercy Corps,
• David Cote, Honeywell,
• Linda Mason, Bright Horizons,
• General Stanley McChrystal, United States Military,
• Donna Dubinsky, Numenta, and (7) Laszlo Bock, Google. 

Mike Erwin: An Accidental Social Entrepreneur

A. j. wasserstein.

Mike Erwin, a decorated army veteran from West Point, never envisioned himself as a social entrepreneur or activist. Yet in 2012, he found himself the CEO of an organization with 15,000 members and 34 chapters reaching from Syracuse, NY to Houston, TX. Though Erwin was proud of his organization’s growth and had excelled in leadership positions, he questioned whether he was the right person to scale Team Red, White and Blue. Would someone else with more experience be more appropriate? If he indeed moved on, how could he ensure the organization would continue to thrive amid a change in leadership and potential restructuring?

Searching for a Search Fund Structure: A Student Takes a Tour of Various Options

Employee/HR, Entrepreneurship

Before entering the Yale School of Management, James Guba (SOM’18) had thought about becoming an entrepreneur. He did not have a specific idea to build a business around, but he did aspire to take charge of an organization and grow it. At Yale, Guba discovered an entrepreneurial niche called “search funds” that would allow him to acquire and lead a company that he had not built from scratch. Inspired, Guba met with search fund entrepreneurs to learn about their different paths to building their funds.

Kalil Diaz: A DR-based search firm considers its first acquisition

Customer/Marketing, Entrepreneurship

After nearly two years of searching, Kalil Diaz (SOM '14) wondered if he had finally found the company for which he had been looking. The decision he was facing would have a big impact on his investors as well as his own life. He was somewhat confident he could access funds from his current investors to purchase the company despite several investors being slow in their response to commit. However, Diaz still wondered if making the investment was the right move. How would he transition from the search to being CEO and running a company? Would the acquisition provide suitable financial returns for his investors and himself?

Clorox, Inc

Elise rindfleisch and allison mitkowski.

Customer/Marketing, Entrepreneurship, Sustainability

In October 2007, Clorox announced that it would buy Burt’s Bees for $925 million – more than five times Burt’s Bees’ annual sales. Clorox’s move caught many in the industry by surprise - Burt’s Bees had a folksy image and natural appeal for customers. Could such a brand find a home within a company best known for a toxic cleanser? Would Clorox’s push into “green” cleaners satisfy Burt’s Bees’ faithful customers? Had Clorox paid too much for its acquisition? Or, were there potential synergies that justified the purchase? What was the future of this market?

Project Masiluleke: Texting and Testing to Fight HIV/AIDS in South Africa

Rodrigo canales, jean rosenthal, jaan elias, and william drenttel.

Entrepreneurship, Healthcare, Innovation & Design, Social Enterprise

The traditional Zulu greeting, "Sawubona," literally translates as "I see you." The major challenge faced by Project Masiluleke could be captured in this local greeting – could Project M see the lives of the individuals they hoped to help? Could they find ways to understand each other and the individuals threatened by HIV/AIDS well enough to design effective solutions to a major health crisis? PopTech, frog design, and the Praekelt Foundation joined with iTeach, an HIV/AIDS and TB prevention and treatment program, to look for new approaches to address South Africa's health issues. Access to this case has been made freely available to the public.

Project Samaan

Rodrigo canales, jean rosenthal, jaan elias, ashley pandya and samuel sturm.

Entrepreneurship, Healthcare, Innovation & Design, Social Enterprise, State & Society, Sustainability

In a unique partnership, governments, designers, architects, academics, and NGOs had come together to create new sanitation solutions for India's urban slums. Specifically, the group set about tackling one of the developing world's leading problems – open defecation in crowded urban settings. But by fall 2013, not a single community toilet had been approved. What had gone wrong? And what could this experience teach others about an overall solution to the problem?

San Miguel: Expanding the Amaranth Market

Jaan elias, mario alan gonzález hernández, carlos gil garcía, rodrigo canales, and kaveh khoshnood.

Competitor/Strategy, Customer/Marketing, Employee/HR, Entrepreneurship, Innovation & Design, Leadership & Teamwork, Operations, Social Enterprise

San Miguel, a small Amaranth processing company in Huixcazdhá, Mexico, was started as a development project to sustainably employ local residents.  Despite the plant’s rural location and unschooled workforce, the company pioneered the processing of amaranth into a number of unique products. Though the company yielded a small but steady profit, the plant was operating at only 20 percent of capacity and the organization lacked a coherent marketing strategy. What new markets could the company target and what communications strategy should it employ?

Haiti Mangoes

Andrea nagy smith and douglas rae.

Entrepreneurship, Operations, Social Enterprise, State & Society

JMB S.A. had been in the mango processing business since 1998, and CEO Jean-Maurice Buteau had built up a profitable business that exported around 2,000 tons of mangoes per year.  The January 2010 earthquake devastated Haiti, but JMB appeared to survive intact, and the Soros Economic Development Fund (SEDF) was eager to move forward. In spring 2010 SEDF proceeded with a $1.3 million loan and a $1 million equity investment in JMB. But by spring 2012, after pouring $2.55 million into JMB, SEDF realized that it had to make a decision: invest another $2 million and reorganize the company under new management; sell the company, or shut down JMB S.A. altogether.

Allison Mitkowski, Alexandra Barton-Sweeney, Tony Sheldon, Arthur Janik, and Jaan Elias

Customer/Marketing, Innovation & Design, Social Enterprise, State & Society, Sustainability

In 2009, SELCO was considering its plans for how the company might expand. The company decided to institutionalize its design process by building an innovation center. SELCO also added products that provided energy solutions beyond solar. Some within the company were hoping the company would go “deeper” and look at designing solutions for even poorer members of the Indian population. Others were hoping that the company would go “wider” and expand beyond its current geographical areas in Karnataka and Gujarat. Whatever its direction, the strategic choices the company made at this point in its evolution would be crucial to determining its continued success.

360 State Street: Real Options

Andrea nagy smith and mathew spiegel.

Asset Management, Investor/Finance, Metrics & Data, Sourcing/Managing Funds

In 2010 developer Bruce Becker completed 360 State Street, a major new construction project in downtown New Haven. The building was a 32-story high-rise with 500 apartments, a parking garage, and a grocery store on the street level. In the summer of 2013, Becker had a number of alternatives to consider in regards to the open lot adjacent to his recent construction. He also had no obligation to build. He could bide his time. But Becker also worried about losing out on rents should he wait too long. Under what set of circumstances and at what time would it be most advantageous to proceed?

Achievement First

Fawzia ahmed, jaan elias, and sharon oster.

Social Enterprise, State & Society

On the edges of a warehouse district in New Haven, Connecticut, an intrepid group of educational pioneers were turning conventional theory on its head. Amistad Academy, a charter school founded by two Yale Law School graduates, was not only getting students on par with their grade levels in reading and math, but was pushing them to perform as well as the best suburban school districts too.  Five years after opening Amistad, McCurry and Toll opened an additional school in New Haven and four schools in Brooklyn, New York – all of which showed the same promise as Amistad. They dubbed their network of schools Achievement First (AF), and garnered national attention and funding from “venture philanthropists” interested in educational reform. However, in the summer of 2006, AF was facing critical questions about its future direction.

Ravi Dhar and Andrea Nagy Smith

Competitor/Strategy, Customer/Marketing, Investor/Finance, Operations

At the time of its IPO filing, Groupon held the lead among group buying sites, a 52-percent market share of revenue generated, according to the group-buying site aggregator Yipit. But many questions remained about its future. Would Groupon’s labor-intensive business model prove profitable? Would customers and merchants be loyal to Groupon? Would other companies take its business? In summer 2011 it was far from sure that the young company could maintain its lead.

Carry Trade ETF

K. geert rouwenhorst, jean w. rosenthal, and jaan elias.

Innovation & Design, Investor/Finance, Macroeconomics, Sourcing/Managing Funds

In 2006 Deutsche Bank (DB) brought a new product to market – an exchange traded fund (ETF) based on the carry trade, a strategy of buying and selling currency futures. The offering received the William F. Sharpe Indexing Achievement Award for “Most Innovative Index Fund or ETF” at the 2006 Sharpe Awards. These awards are presented annually by IndexUniverse.com and Information Management Network for innovative advances in the indexing industry. The carry trade ETF shared the award with another DB/PowerShares offering, a Commodity Index Tracking Fund. Jim Wiandt, publisher of IndexUniverse.com, said, "These innovators are shaping the course of the index industry, creating new tools and providing new insights for the benefit of all investors." What was it that made this financial innovation successful?

Governors Island

Entrepreneurship, Innovation & Design, Social Enterprise, State & Society

The political players had changed since President Clinton and Senator Moynihan’s helicopter ride. Clinton was no longer President, his wife had taken Moynihan’s seat in the Senate and Michael Bloomberg had replaced Rudolph Giuliani as New York’s Mayor. What remained the same was that the city, state, and federal government had yet to reach a deal. The question of what to do with Governors Island and who should do it remained very much open. Indeed, there were those within the new Bush administration and the Congress who believed in scrapping Clinton and Moynihan’s deal and selling the island to the highest bidder be that the local government or a private developer.

Ant Financial: Flourishing Farmer Loans at MYbank

Jingyue xu, jean rosenthal, k. sudhir, hua song, xia zhang, yuanfang song, xiaoxi liu, and jaan elias.

Competitor/Strategy, Customer/Marketing, Entrepreneurship, Innovation & Design, Investor/Finance, Leadership & Teamwork, Operations, State & Society

In 2015, Ant Financial’s MYbank (an offshoot of Jack Ma’s Alibaba company) was looking to extend services to rural areas in China through its Flourishing Farmer Loan program. MYbank relied on the internet to communicate with loan applicants and judge their credit worthiness. Initial tests of the program had proved promising, but could MYbank operate the program at scale? Would its big data and technical analysis provide an accurate measure of credit risk for loans to small customers? Could MYbank rely on its new credit-scoring system to reduce operating costs to make the program sustainable?

Module 6: Business Ethics and Corporate Social Responsibility

Case study: social entrepreneurship at tom’s shoes, learning outcomes.

• Give examples of corporate social responsibility

While there is no universally accepted definition of social entrepreneur , the term is typically applied to an individual who uses market-based ideas and practices to create “social value,” the enhanced well-being of individuals, communities, and the environment. Unlike ordinary business entrepreneurs who base their decisions solely on financial returns, social entrepreneurs incorporate the objective of creating social value into their founding business models.

Social entrepreneurship has become exceedingly popular in recent years, and a number of prestigious business schools have created specific academic programs in the field. It is often said that social entrepreneurs are changing the world. They are lauded for their ability to influence far-reaching social change through innovative solutions that disrupt existing patterns of production, distribution, and consumption. Prominent social entrepreneurs are celebrated on magazine covers, praised at the World Economic Forum in Davos, awarded millions of dollars in seed money from “angel” investors, and applauded as “harbingers of new ways of doing business.”

Social entrepreneurs are thus often hailed as heroes—but are they actually effecting positive social change?

Undeniably, social entrepreneurship can arouse a striking level of enthusiasm among consumers. Blake Mycoskie, social entrepreneur and founder of TOMS Shoes, tells the story of a young woman who accosted him in an airport, pointing at her pair of TOMS while yelling, “This is the most amazing company in the world!” Founded in 2006, TOMS Shoes immediately attracted a devoted following with its innovative use of the so-called One for One business model, in which each purchase of a pair of shoes by a consumer triggers the gift of a free pair of shoes to an impoverished child in a developing country.

The enthusiasm associated with social entrepreneurship is perhaps emblematic of increased global social awareness, which is evidenced by increased charitable giving worldwide. A 2012 study showed that 83 percent of Americans wish brands would support causes; 41 percent have bought a product because it was associated with a cause (a figure that has doubled since 1993); 94 percent said that, given the same price and quality, they were likely to switch brands to one that represented a cause; and more than 90 percent think companies should consider giving in the communities in which they do business.

Despite the eager reception from consumers, critics of social entrepreneurship have raised concerns about the creation of social value in a for-profit context. Thus, TOMS is sometimes mistaken for a charity because it donates shoes to children in developing countries, yet it is also in business to sell shoes. The company earns an estimated $300 million a year and has made Mr. Mycoskie a wealthy man. While companies are starting to look more like charities, nonprofits are also increasingly relying on business principles to survive an uncertain economy in which donors expect to see tangible results from their charitable contributions.

Our understanding of social entrepreneurship is complicated by the absence of any consensus on ways to measure social outcomes. As a result, there is little concrete statistical data available on the impact of social entrepreneurship. Indeed, there is not much agreement on a precise definition of social entrepreneurship, so it becomes difficult to say to what extent any given company is an example of social entrepreneurship. TOMS’ Chief Giving Officer, Sebastian Fries, recently told the New York Times that the company is “not in the business of poverty alleviation.”

Does this mean that increased social value is merely a happy byproduct of the business of selling shoes? If so, what makes Blake Mycoskie a social entrepreneur?

Some critics go so far as to suggest that social entrepreneurs are merely using public relations tactics to engage in social or environmental greenwashing—taking advantage of consumers’ desire to do good. In some cases, it has been argued, social entrepreneurs can even do more harm than good. Lacking a full understanding of the socioeconomic and cultural dynamic of the developing countries in which they intervene, social enterprises can undermine fragile local markets and foster dependence on foreign assista nce. But in the end, the individual impact of social entrepreneurial ventures may outweigh some of these concerns. 

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• Good Corporation, Bad Corporation: Corporate Social Responsibility in the Global Economy. Authored by : Guillermo C. Jimenez and Elizabeth Pulos. Provided by : Open SUNY Textbooks. Located at : http://pressbooks.opensuny.org/good-corporation-bad-corporation/chapter/5/ . License : CC BY-NC-SA: Attribution-NonCommercial-ShareAlike
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International Journal of Organizational Analysis

ISSN : 1934-8835

Article publication date: 27 September 2021

Issue publication date: 26 May 2023

The purpose of this study is to explore how social entrepreneurship empowers women and how it influences the existing gender based intersectionalities in the society. This paper is based on a single case study of a social entrepreneurial startup called “Pahal,” which used social entrepreneurial strategies to encourage women to engage in economic activities, which helped them in gaining economic empowerment.

Design/methodology/approach

The researcher alongside the social entrepreneur visited the field for eight months from August 2016 to March 2017 and interviewed multiple stakeholder-employees (as partners) of the social enterprise. This study was done by conducting interviews with all the stakeholders in all the three social entrepreneurial phases, i.e. pre-Pahal, during-Pahal and after-Pahal. The interviews and observations were recorded and analysed using social entrepreneurial lens and intersectionality.

“Pahal Initiative” – is a social entrepreneurial intervention that helped the women in the household to start a food delivery business with the support of the social entrepreneur. Consequently, women gained confidence and self-respect. The attitude of men in the household changed when the women in the household generated additional income. It impacted their position and status which led to an increase in their participation in decision-making in the household and economic independence. The women become more interactive and expressive in a predominantly patriarchal household. Within one year, the entrepreneur had to stop the Pahal initiative. Then, this study observed and recorded that this event curtailed the economic activities undertaken by the women in their village and their social status reverted to what it was before the initiative.

Practical implications

First, social entrepreneurial strategies lead to economic value creation and lead overall socio-economic gains. Second, social entrepreneurial strategies address the problems of patriarchy and gender discrimination. Third, economic activities undertaken by women changed the social perceptions of the family members towards women in the families.

Social implications

From this case study, one observes that social entrepreneurship has a strong potential to bring about social and economic change. This study helps policymakers and non-governmental organisations to solve poverty and gender discrimination related problems using social entrepreneurial strategies.

Originality/value

This study uses social entrepreneurial intervention to understand and bring about change in the socio-economic status of women in rural India. This study uses an intersectionality lens to make sense of the data, reality and reflects on how intersectional positions are altered when women are economically empowered either through training or through a proper organisation or both.

• Entrepreneurship
• Social entrepreneurship
• Small business
• Intersectionality

Acknowledgements

The authors would like to acknowledge the work of the social entrepreneur who started project Pahal and who willingly shared the data with our research team.

Agrawal, A. , Gandhi, P. and Khare, P. (2023), "Women empowerment through entrepreneurship: case study of a social entrepreneurial intervention in rural India", International Journal of Organizational Analysis , Vol. 31 No. 4, pp. 1122-1142. https://doi.org/10.1108/IJOA-03-2021-2659

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Stakeholder theory in social entrepreneurship: a descriptive case study

• Methodology
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• Published: 29 January 2016
• Volume 6 , article number  4 , ( 2016 )

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In this paper, a descriptive case study of a social entrepreneurial firm is used to demonstrate stakeholder salience and stakeholder social issue management valence. The methodology is to use a semi structured interview with a social entrepreneur to identify and map the firm’s stakeholders’ salience and stakeholders’ social issue management valence. The resulting map uses spheres, sized proportionally to social issue management valence, to represent the various stakeholder groups. Each map shows the positioning of stakeholders according to their salience at critical points in the life of the social entrepreneurship. This paper contributes to stakeholder theory through its use of an innovative methodology to combine and view the stakeholders and their importance to the social entrepreneur on a single map. This map incorporates the elements of stakeholder salience with stakeholder social issue management valence. This mapping approach enables us to visualize how salience and valence positions change at critical times. Social entrepreneurs applying this mapping method can balance the allocation of their time and attention to stakeholders while simultaneously keeping with their social mission.

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In the current business environment, one of enhanced social and environmental awareness, firms are expected to be profitable while promoting social responsibility and rewarding their stakeholders (Cooper and Owen, 2007 ). When an enterprise is formed as a social entrepreneurial firm, a deliberate decision is made to integrate social consciousness into the business model (Dees, 2001 ). A social entrepreneurship is one that incorporates goals of revenue-generation, social awareness and environmental considerations. Furthermore, within these firms, “the social mission is explicit and central” (Dees, 2001 , p. 3).

Social entrepreneurship is an emerging business model (Austin et al., 2006 ). Murphy and Coombes ( 2009 ) suggest that the emergence of the social entrepreneurial model results from an increased public awareness of corporate and environmental social responsibility. Social entrepreneurship has been viewed as a business model exhibiting a continuum of objectives ranging from a purely social mission through combinations of social and profit motives (Bacq and Janssen, 2011 ; Battilana et al., 2012 ; Dees and Anderson, 2003 ; Kerlin, 2006 ; Lepoutre et al., 2013 ; Zahra et al., 2009 ). The common element among social entrepreneurial firms is their primary concern with social issues (Austin et al., 2006 ; Dees, 2001 ; Mair, 2010 ).

Social entrepreneurship is often studied through the lens of stakeholder theory. A stakeholder is defined as an entity “which either: is harmed by, or benefits from the corporation: or whose rights can be violated, or have to be respected by the corporation” (Crane and Matten, 2010 , p. 62). Freeman ( 1994 ) describes one of the principles of the stakeholder concept as “the principle of who or what really counts” (p. 411). Donaldson and Preston ( 1995 ) define stakeholder considerations as normative (describing why stakeholder interests impact the firm), descriptive (describing the “how” of taking the stakeholder’s interest into account), instrumental (judging the benefits impacting stakeholder interests) and managerial (relationship management and decision-making). Schlange ( 2009 ) suggests that stakeholders need not be limited to individuals or groups of individuals but that they may also be inanimate objects (such as the earth) or animate beings such as animals.

Stakeholder theory is “a theory of organizational management and ethics” (Phillips et al., 2003 , p.480). The theory involves the consideration of stakeholders and their relationships with the firm as a series of activities leading to end results that are implicitly value and moral-laden (Phillips et al., 2003 ). In a review of the literature on stakeholder theory, Mainardes and colleagues recognize that “over the years, some academics have criticized the vagueness and ambiguity of this theory” (Mainardes et al., 2011 , p. 227). Mainardes et al. ( 2011 ) also call for more studies of stakeholder theory as it relates to organizational performance. Parmar et al. ( 2010 ) have explained that stakeholder theory is important to firms because of their focus on “ethics and moral theory” (p. 410). Stakeholder theory forms the basis for the stakeholder salience models that will be demonstrated in this descriptive case study. The two stakeholder models that will be described as important to social entrepreneurship are those described by social issue management valences (Kusyk and Lozano, 2007 ) and stakeholder salience values (Mitchell et al., 1997 ).

The social issue management valence model

Stakeholder theory accounts for all individuals who are socially impacted or who have a social impact on the firm through social drivers and barriers (Kusyk and Lozano, 2007 ). Using grounded theory, Kusyk and Lozano ( 2007 ) identify drivers and barriers to social issue management. They classify internal and external stakeholders according to their drivers and barriers to social responsibility practices and weigh these drivers and barriers in order to assign them to a category. The stakeholders are placed into categories by Kusyk and Lozano ( 2007 ) and ranked with valences of low management of social issues to high involvement and high decision-making in managing social issues. The current study defines this weighing as the stakeholder social issue management valences (SIMVs). Kusyk and Lozano ( 2007 ) conceptualize the social issue management valences exhibited by stakeholders in small and medium sized enterprises (SMEs) into a 2x2 matrix of internal and external drivers and barriers to social issue management.

The technique of using drivers and barriers to social issue management is also used within the context of corporate social responsibility (CSR) of large and small businesses by Laudal ( 2011 ). Social issues are conceptually discussed by Bhattacharya et al. ( 2008 ) from the perspective of incorporating corporate social responsibility initiatives within the framework of stakeholder salience. Empirical research on social issue management and the relationship with stakeholders in overseeing corporate social performance initiatives is described by Roy ( 2009 ). Zyglidopoulos ( 2002 ) also uses stakeholder theory to discuss the social issue management challenges that a firm must face when dealing with critical societal conflicts such as how a multinational company copes with an environmental incident.

The stakeholder salience model

The stakeholder salience model as described by Mitchell et al. ( 1997 ) identifies salience values as a result of the combination of power, urgency and legitimacy claims that the stakeholder has on a firm. The element of power defines the degree of power that the stakeholder possesses over a firm. The element of urgency is the importance of time that the stakeholder claims over a firm. The element of legitimacy defines the claim that the stakeholder has on the attention of a firm (Mitchell et al., 1997 ). Agle et al. ( 1999 ) use this model to determine the stakeholder attributes of senior management in public firms. Parent and Deephouse ( 2007 ) determine the individual effects of each of the stakeholder salience attributes through a mixed-method study of a major sporting event. They describe the relative importance of each of the power, urgency and legitimacy attributes. Currie et al. ( 2008 ) use a descriptive case study of stakeholder salience to understand the relationship between stakeholders in the tourism industry and illustrate their relative importance. Elijido-Ten et al. ( 2010 ) use the model to empirically study a firm’s response to environmental concerns and its importance to stakeholders. This stakeholder salience model is used by Key et al. ( 2013 ) to describe the changing saliences of smokers versus non-smokers and as an explanation for institutional changes (Oates, 2013 ).

The social entrepreneurship context

Even though stakeholder theory is used extensively for explaining who or what is important for a business and for a social enterprise, few descriptive studies of the theory in social entrepreneurship were found. A literature search of peer-reviewed articles encompassing stakeholders, social entrepreneurship and case study methodology using ProQuest’s search of academic databases resulted in peer-reviewed articles by Faminow et al. ( 2009 ), Kumar ( 2013 ), Spitzeck et al. ( 2013 ) and Thompson ( 2012 ). None of these articles combined stakeholder attributes of salience with social issue management valences. A descriptive case study of stakeholders and their impact on the operation and social consciousness of any social entrepreneurship is important because it provides insight into how stakeholder theory works in practice.

The research objective of this paper is to use a single case study to develop a mapping methodology that can integrate important aspects of stakeholder theory; those of salience and social issue management.

Given that the objective is to use the results from a descriptive case study to develop a mapping methodology, the case study method described by Yin ( 2003 ) is adopted as the most appropriate research methodology. Yin ( 2003 ) describes three types of case studies; explanatory, exploratory and descriptive. A single descriptive case study was chosen as it is structured to help identify emerging patterns based on a solid theoretical framework (Tobin, 2010 ). Reliability of the data is enhanced by following Yin’s ( 2003 ) recommendation to design and follow a strict case study protocol. This protocol includes providing an overview of the case, detailing data collection procedures, detailing the interview format and questions, and formatting the resulting information (Yin, 2003 ). As with other qualitative research methods, validation of the data is critical (Berg and Lune, 2012 ). This will be achieved by triangulating the data in the case study with third party external sources.

The case of Fifth Town Artisan Cheese Company (FTACC) is described, which was formed and operated in Prince Edward County, a rural part of Ontario, Canada. This case characterizes a social entrepreneurial company which by definition has a central social mission (Dees and Anderson, 2003 ) and so needs to effectively manage its stakeholders. A social entrepreneurial firm provides a good empirical case for describing how stakeholder theory works. The context of this social entrepreneurship is used to analyze the entrepreneur’s perception of the salience values and social issue management valences of the stakeholders in the firm. A rich body of data on the operation of the firm was uncovered through third party reports and case studies (DesRoches et al., 2009 ; Donald, 2009 ). The richness and availability of information fulfills one of Yin’s requirements ( 2003 ) when discussing the validity of descriptive case study research.

One external data source consists of a working paper published by the University of Toronto’s Martin Prosperity Institute (Donald, 2009 ) which describes FTACC as an innovative and environmentally conscious artisanal cheese factory, as well as its impact on the surrounding community. A second external data source is a case study developed by Queens University’s Monieson Centre (DesRoches et al., 2009 ) that reviewed FTACC’s operations from a business viewpoint, detailing critical points in the life of the firm and identifying some of the stakeholders. A peer-reviewed research paper was also reviewed that described the events surrounding one of the identified critical events, the Listeria crisis at FTACC (Charlebois, 2015 ), to validate the events at that critical time.

The protocol of this paper consists of a semi structured interview with FTACC’s founding entrepreneur. The opportunity to obtain rich data from a narrative supported by externally sourced information provides relevance to this descriptive case study (Yin, 2003 ).

The semi structured interview was conducted with the founder of FTACC in a single session. The protocol consisted of questions that were submitted to the founder prior to the interview. However, in keeping with the methodology of a semi structured interview (Berg and Lune, 2012 ) the authors began the interview with a pre-defined question and then adjusted the subsequent questions according to the flow of the interviewee’s narrative. Questions were improvised based on the protocol, helping to elaborate the questions or problems that the founder found important and how she resolved them, her description of the business challenges as a social entrepreneur and the involvement of stakeholders. Some of the questions in the formal protocol are listed in Table  1 . The two-hour interview was recorded, resulting in 45 pages of transcribed narrative.

The authors used their protocol questions to identify key decision points that were subsequently validated by the founding entrepreneur. Having a variety of alternatives and choosing one of them defines decision-making in a narrative (Schwenk, 1985 ). Three major decision points were identified by the founding entrepreneur; the epiphany of choosing to run an artisanal cheese company and the subsequent development of a social entrepreneurial firm, a Listeria outbreak at the firm and its resolution, and finally the decision to exit the company.

This study’s methodological approach integrates how the founding entrepreneur perceives her stakeholders based on two salience models and maps these two models as a single graphical representation. Mapping in the social sciences is a useful method to explore patterns and frameworks (Trochim, 1989 ). Stakeholder salience positions are mapped based on a modification of the Venn diagrams described by Mitchell et al. ( 1997 ) and the social issue management valences according to the typology described by Kusyk and Lozano ( 2007 ). Mapping of stakeholders according to their stakeholder salience has been performed previously in the management literature. Mitchell et al. ( 1997 ) used Venn diagrams to illustrate possible stakeholder positions. Rowley ( 1997 ) used a different type of mapping technique based on principles of network theory to identify salient stakeholders. In her study of stakeholder influences, Bourne ( 2011 ) created an integrative mapping technique, “the Stakeholder Circle TM ” to determine the salience of stakeholders in the management of projects (Bourne and Walker, 2008 ; Bourne, 2011 ).

In the present case, two key stakeholder models are examined: stakeholder saliences based on power, urgency and legitimacy and a stakeholder model based on social issue management valences. Stakeholders based on those models are positioned on a single map that visualizes them at key points in time. Stakeholder salience is mapped using concentric circles identifying the integration of power, urgency and legitimacy (PUL) attributes from the stakeholder salience model (Mitchell et al., 1997 ). Stakeholders are then identified by spheres sized according to their coded values of social issue management valences (SIMVs) based on the work by Kusyk and Lozano ( 2007 ).

Stakeholder salience: methodology of a descriptive view

Mitchell et al. ( 1997 ) illustrate the inter-relation of the power, legitimacy and urgency attributes through the use of Venn diagrams. In the present case, the idea of using Venn diagrams is extended by summing the presence or absence of the three PUL salience values, each either having a 0 or 1 value into a single cumulative value ranging from 0-3. This resulted in an orbiting diagram where stakeholders orbit in a space of stakeholder salience. The central clustering is at the nexus of salience where Mitchell et al. ( 1997 ) defines the stakeholder salience as definitive (where all three factors have a value of 1 and cumulatively a value of 3), through the next orbit of expectant stakeholders (where two of the factors sum to cumulative values of 2), and the final orbit of salience (where only one of the factors is valued as 1). Where the stakeholder does not have power, legitimacy or urgency in the stakeholder salience model described by Mitchell et al. ( 1997 ), then the stakeholder is not considered and falls out of the orbit. Table  2 lists the stakeholders according to the sum of their power, legitimacy and urgency values. Throughout the stages defined by key “decision points”, stakeholders are positioned by the entrepreneur in the concentric circles of influence.

It is acknowledged that through the coding technique employed in this study, the identification of key stakeholders assumes that each of the stakeholder power, urgency and legitimacy claims has equal importance and that they will each have a value of 0 or 1 only. This assumption has been disputed by Parent and Deephouse ( 2007 ) who claim that power has a more important value than urgency and legitimacy. Currie et al. ( 2008 ) in the context of the tourism industry, examining the legitimacy component of stakeholder salience, claim a definitional confusion over the term and measurement issues compared to the other stakeholder saliences defined by Mitchell et al. ( 1997 ). Nevertheless, Key et al. ( 2013 ) and Agle et al. ( 1999 ) use the Mitchell et al. ( 1997 ) stakeholder model with its assumptions to empirically describe stakeholder salience and identify key stakeholders based on the three attributes of power, urgency and legitimacy.

Social issue management valences: methodology of a descriptive view

In keeping with the intention to view the Venn diagram and the social issue management valences typology model in one graphical representation, spheres were created to identify the stakeholder and their social issue management valences. The size of the spheres that define the stakeholders is determined by the perception of the founding entrepreneur. This perception is categorized into one of the ordinal values on the four position grid in Fig.  1 . Kusyk and Lozano ( 2007 ) use this grid categorization technique to record the social issue management valence (SIMV) of stakeholders. This report contributes to this type of stakeholder evaluation by assigning ordinal values to each quadrant of the typology as shown in Fig.  1 based on the social entrepreneur’s perception. On the orbiting diagrams, the size of the spheres corresponds to their SIMVs. Quadrants are ordered from 0 to 3. An ordinal value of 0 corresponds to a stakeholder non-participant status; a value of 1 corresponds to an observer status; a value of 2 corresponds to a moral dependence status; and a value of 3 corresponds to a moral leadership status. This categorization aligns with the typology suggested by Kusyk and Lozano ( 2007 ). In this way, changes in stakeholder SIMVs can be assessed from one critical decision point to another. Table  3 provides a complete description of the stakeholders and their weighting according to the Kusyk and Lozano ( 2007 ) SIMVs at key decision points based on the founding entrepreneur’s perception.

Modified Kusyk and Lozano Typology (Kusyk and Lozano, 2007 )

Results and discussion

A descriptive case study requires focus and depth (Yin, 2003 ). This section details through a narrative the founding entrepreneur’s perception of stakeholder PUL salience values and SIMVs at each decision point of the firm’s life. Three critical decision points were identified by the founding entrepreneur of FTACC.

The creation of FTACC and its development as a social entrepreneurial firm.

The handling of a Listeria crisis.

The decision to exit the social entrepreneurship.

Narrative background

In 2003, the founding entrepreneur (P), was at a crossroads and was considering the transition from a corporate environment to an entrepreneurial environment. The entrepreneur believed that for family reasons she would relocate to the Prince Edward County region of Ontario, Canada. At this stage, the stakeholders in this narrative are limited to the immediate individuals who both affect and are affected by the decision. This includes a supportive family group already residing in the geographical area of Prince Edward County, Ontario, Canada, where she believes she will relocate with her spouse (S) and her child (C).

After making the decision to become an entrepreneur and then deciding where to locate her business, the entrepreneur needed to decide on the type of business to establish. In this case, the choice was made after thorough research into the needs of the local market where they were physically moving in Ontario, Canada. The entrepreneur contacted information sources within the region to determine the needs of the region. Stakeholders in the local area such as the local councilman (CM) and the local economic development officer (ED) were influential in highlighting the needs of the region. The selection of the type of business to establish happened through what the entrepreneur described as an epiphany. This paradigm change was described by the entrepreneur as occurring in her car soon after moving, during a conversation with a key stakeholder, her spouse. The entrepreneurial ‘idea’ at this point was to establish an artisanal cheese-making farm in Prince Edward County, governed by principles of environmental sustainability. The entrepreneur described her own personal value system as a culmination of being a new parent and her personal belief that goods should be made by following environmentally sustainable practices and principles.

With supportive peers from a cheese-making class at a local university, the entrepreneur created the Ontario Cheese Society (OCS) to promote knowledge creation and transfer in the area of artisanal cheese-making. Through a process of lobbying government contacts at the Agricultural Adaptation Council (AA) and the Ontario Ministry of Agriculture, Food, and Rural Affairs (O), she was able to spark an interest in her entrepreneurial idea. Furthermore, she was able to obtain financial backing to complete a feasibility study of the artisanal cheese market potential in Ontario. She also met with the Dairy Farmers of Ontario (DFO) (the provincial milk marketing board) to investigate the logistics of her supply chain.

The narrative illustrates stakeholder theory (Freeman, 1994 ) in the life of the social entrepreneurial firm. Another lens which frames this narrative is that of contingency theory (Van de Ven and Drazin, 1985 ). The founding entrepreneur’s decisions about organizational structure were contingent on environmental conditions. She adjusted her decisions according to changing conditions to optimize her operations. However, the focus of this narrative is on the process of selecting and prioritizing the important stakeholders for the social entrepreneurial firm. Consequently, stakeholder theory is used in this research to frame the methodology of prioritizing stakeholders.

First decision point

What type of infrastructure should govern the creation of this artisanal cheese social entrepreneurship? The entrepreneur incorporated her new social entrepreneurship as the Fifth Town Artisan Cheese Company. She arrived at a critical decision point, realizing that existing stakeholder needs should be balanced with the identification and addition of new stakeholders. According to the founding entrepreneur’s narrative, existing stakeholders such as her child (C), the local councilman (CM), the economic development officer (ED), her local family (F), and the Agricultural Adaptation Council (AA) had low power and urgency claims but retained legitimacy. Other new stakeholders providing the knowledge and expertise required to create a sustainable firm were introduced; the architect and contractors (AC) who designed the geothermal caves, the solar panels, and the wind turbines; the Canada Green Building Council (L) who administered the certifications for environmental sustainability; the local farms (LF) who provided the goat milk; the local services (LS) who provided infrastructure support; the additional institutional investors (I) who provided the funding and interest in promoting sustainability; and the Ontario Cheese Society (OCS) who continued to provide knowledge transfer to enable the realization of artisanal cheese-making.

The stakeholders described here have varying degrees of interest in social issues. Using the valences identified through the Kusyk and Lozano ( 2007 ) grid of social drivers and barriers, most of the stakeholders identified within the highest circle of salience for FTACC are also the most socially conscious stakeholders identified. The institutional stakeholders such as the DFO or focused organizations like the Canada Green Building Council (L) have stable social issue management valences while some of the emerging stakeholders such as the contractors, the local farms and the local services begin this stage with a level of social consciousness that they (the contractors) acquire from FTACC or that they (local farms) enhance by exposure to FTACC.

The situation is mapped according to the founding entrepreneur’s perception. In this case, the stakeholders with the highest PUL salience values have a high SIMV. This map illustrates an environment where a social entrepreneurship can function within the locus of social consciousness, environmental sustainability and economic convergence. The relationships described by the founding entrepreneur are dyadic between the stakeholders and herself but it is also understood that the relationships may also involve multiple linkages and networking among the stakeholders (Bhattacharya and Korschun, 2008 ; Rowley, 1997 ). Figure  2 describes each of the stakeholder’s salience and stakeholder’s social issue management valence at this decision point.

Stakeholder’s salience and social issue management valence at the first critical time

Second decision point

Another critical decision point occurred during a Listeria outbreak at FTACC. At this decision point, there was a shift in the salience values among stakeholders. A Listeria outbreak is not uncommon in the dairy food industry (Carpentier and Cerf, 2011 ) and the specific manner in which this particular outbreak at FTACC was handled has been documented (Charlebois, 2015 ). Nonetheless, the founding entrepreneur stated that “common opinion was that we would not survive this crisis” (founding entrepreneur, personal communication). Various stakeholders needed to be addressed and their concerns assuaged in order to return the company to profitability; “we didn’t lose any sales, in fact they increased…we never lost a customer because we were so tied in with the community that we could talk about it openly” (founding entrepreneur, personal communication). The satisfying of stakeholder claims and the SIMVs at this point was not perceived to be as important as satisfying the concerns of Health Canada (HC) and returning the company to operating and marketing capacity. Figure  3 shows the fluctuating positions of the stakeholders during this crisis.

Stakeholder’s salience and social issue management valence at the second critical time. (This time frame deals with a Listeria outbreak. Blue avatars are new stakeholders since the previous event)

Third decision point

The final decision point in this case study was the divestment of the firm by the founding entrepreneur. The decision to exit the social entrepreneurship developed due to differences of opinion between the key investors (I) and (S), and the entrepreneur. Although the social entrepreneurial firm was operating successfully, half of the investors were willing to continue funding and operating the firm while the other half desired an exit strategy and to “cash in their chips” (founding entrepreneur, personal communication). The stakeholder salience model (Mitchell et al., 1997 ) describes how a manager’s consideration of shifting saliences determines decision-making based on paying attention to definitive stakeholders. The investors (I), spouse (S), and the entrepreneur (P) remain as key stakeholders but only the founding entrepreneur retains her high level of social issue concern. An additional stakeholder, an investment bank (B) was brought in to run the business while the company looked for an acquiring firm. The bank became a key definitive stakeholder with high power, urgency and legitimacy salience but little concern about social issues. All suppliers (LF), (LS) and even customers (CU) lost their sense of urgency as priorities were shifted by the bank acting as the decision maker in lieu of the founding entrepreneur. The bank made certain decisions about other stakeholders along economic imperatives rather than considering the social principles of environmental sustainability, social impact, and economic impact upon which the founding entrepreneur had created the firm. When it came down to the exit strategies, the social entrepreneurship’s founding principles and social mission were put aside as these could not be legally enforced through the current legislative regulations. In Ontario, Canada there are no provisions for protecting social and environmental provisions described in an incorporated firm after the firm has been sold. Figure  4 describes each of the stakeholder’s PUL values and SIMV values at this critical time.

Stakeholder’s salience and social issue management valence at the third critical time. (The founding entrepreneur exits the firm. Black avatar is the new stakeholder since the last event)

In the end, the social entrepreneurship was successfully sold to a company that retained its name and operations in Prince Edward County and continues to leverage its brand but does not strictly function within the framework of social entrepreneurship discussed in this paper.

The objective of this study was to use a descriptive case study of stakeholder theory in the context of social entrepreneurship to demonstrate the application of the stakeholder salience model and the stakeholder social issue management model. A mapping methodology was designed to describe the application of this theory within a social entrepreneurial firm, FTACC. Key stakeholders were identified and positioned in the first circle of concentric orbits, characterized by their integrated power, urgency and legitimacy (PUL) values. As defined by Mitchell et al. ( 1997 ), these were “definitive stakeholders” (p. 878). The integration of the Kusyk and Lozano ( 2007 ) typology model identified the founding entrepreneur’s perception of the social issue management valences (SIMVs) towards these key stakeholders. Since the founding entrepreneur’s attention to her stakeholders influences her managing and planning of tasks, it is important and convenient for the entrepreneur to reflect on her positioning of stakeholder salience and social issue management valences on a map to see who is receiving more attention. Mapping and the management of stakeholders based on these factors can directly relate to the operation and performance of a social entrepreneurial firm.

The mapping and integration of these two stakeholder salience models into a single graphical representation is a methodological contribution to stakeholder theory. The map represents the perceptual location of stakeholders according to their PUL values and SIMVs and identifies key stakeholders (those with highest PUL values or highest SIMVs). Ideally stakeholders should occupy PUL positions and SIMVs based on their importance to both the social and commercial mission of the firm. Independently, each stakeholder model depicts the importance of a stakeholder, but mapping both models in one figure allows a richer depiction of salience derived from Mitchell et al.’s ( 1997 ) model of power, urgency and legitimacy attributes and the social issue management model described by Kusyk and Lozano ( 2007 ).

This mapping method also allows the integration of the founding entrepreneur’s perception of her stakeholders at various points in time described by her as critical decision points. It was shown that throughout three critical decision points in the life of FTACC that the founding entrepreneur’s perception of her stakeholders changed. This was demonstrated by depicting changes in the graphical representations of PUL values (their movement within the concentric circles) and SIMV (size of the spheres). Therefore, additional evidence was provided, indicating that stakeholder salience is dynamic (Mitchell et al., 1997 ; Windsor, 2010 ). The ability to view the shift in both stakeholder PUL values and SIMVs at different critical points in time is an important contribution to stakeholder theory.

Applied implications

The mapping methodology employed here enables the social entrepreneur to visualize their own current perception of stakeholder PUL values and SIMVs and compare it to an ideal map based on the social entrepreneurship’s mission. As an entrepreneur’s attention is a limited resource, the mapping exercise enables the social entrepreneur to visualize their stakeholders’ positioning from the viewpoint of stakeholder saliences and decide how to balance the attention that should be paid to them to attain the firm’s mission.

Viewing the deviation between stakeholder salience values against an ideal model can cause discomfort for the social entrepreneur. Viewing what should be with what actually is can be described as an example of self-discrepancy theory (Higgins, 1987 ). Aligning the positioning of stakeholders with the social entrepreneur’s perception of ideal values can help the social entrepreneurs manage this discrepancy (Clarke and Holt, 2010 ). If the primary goal of the social entrepreneurship is achievement of its social mission, then this map can be used to signal to social entrepreneurs the need to balance the attention they pay to their stakeholders. When misalignment occurs, social entrepreneurs can implement training, engagement or other necessary action to reach the social entrepreneur’s desired mission.

As a temporal mapping technique, this paper’s methodology illustrates the dynamic nature of a social entrepreneur’s perceptions during critical events. It also serves as a visual reflection of the importance of stakeholders at these times. Reflexive thinking by the entrepreneur is important for maintaining an alignment of social values (Clarke and Holt, 2010 ). The methodology allows social entrepreneurs to visually understand and acknowledge that shifting perceptions of stakeholder PUL values and SIMVs can impact the decision-making of the social entrepreneur and hence her efforts at managing the business.

Limitations and future research directions

This research showed that in this particular case, the methodology of mapping stakeholder salience as described by Mitchell et al. ( 1997 ) combined with a modified typology of Kusyk and Lozano ( 2007 ) for categorizing social issue management valences, is a useful way to describe stakeholder theory in a social entrepreneurship. An innovative methodology is provided that integrates two stakeholder models and shows dynamic changes in those values as perceived by the founding social entrepreneur throughout critical decision points. The mapping of the two stakeholder models as a holistic view offers an innovative way of applying stakeholder theory to improve the management and planning activities in a social entrepreneurship. We highlight that social entrepreneurs can benefit from the use of this methodology to identify key stakeholders, why they matter to the firm and manage their social concerns within a commercial business model and still maintain their primary social mission.

Future research could explore other social entrepreneurial firms in different settings or markets and replicate the descriptive case study and the mapping exercise. For example, FTACC evolved in a rural setting and so it would be interesting to map the PUL values and SIMVs for any similar social entrepreneurship in an urban setting. FTACC was a for-profit social entrepreneurial firm. It would be interesting to compare the shifts in PUL values and SIMVs with a social entrepreneurial firm that was established as a non-profit venture.

The mapping methodology described in this paper illustrates a useful visualization technique to integrate stakeholder salience values with stakeholder social issue management valences.

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Home > Books > Entrepreneurship - Trends and Challenges

Social Entrepreneurship: Case Study in Unilever Food Solutions’ Trusted Hands Food Safety Online Training Program

Submitted: 06 April 2017 Reviewed: 12 September 2017 Published: 20 December 2017

DOI: 10.5772/intechopen.70955

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The social entrepreneurship is important in meso (organizational) and macro (policy-making) levels. This paper focuses on a case study in Turkey. “Trusted Hands Food Safety Online Training Program” by Unilever Food Solutions is examined as an example of social entrepreneurship. It is aimed to support food safety awareness in the industry to create and certificate the chefs. Unilever Food Solutions has received the Food Security Special Award, a project developed and implemented by the Food Safety Association. In the first year, 5000 chefs in Turkey intended to complete the education of this field and to have a certificate. It started with the support of professional associations. The sustainability and private sector involvement plays an essential role in this case, which is such an important issue such as health and hygiene.

• social entrepreneurship
• social value
• business models
• sustainability
• social impact
• bottom or base of the pyramid (BOP)
• growing inclusive markets (GIM)
• business opportunities

Author Information

Pınar başar *.

• Istanbul Commerce University, Istanbul, Turkey

*Address all correspondence to: [email protected]

1. Introduction

Social entrepreneurship offers opportunities to improve society using practical, innovative, and sustainable ways. A social entrepreneur is an individual or organization who seeks out to find solutions surrounding social issues environment fair trade, education, health, and human rights. Social concerns are conducting more than financial or market opportunities. It has to be financially sustainable. Entrepreneurship and social entrepreneurship also maintain employment opportunities. A social enterprise also facilitates employment for disadvantaged groups. There are niche opportunities for social entrepreneurs which are not suitable for entrepreneurs. Social initiatives represent a concept for the access to services for disadvantaged groups and protection for the environment.

Current fiscal regulations dissuade social enterprises. The tax regulations make it harder to operate social actions. On account of this, the maintenance of nonprofit economical enterprises is risky, while they are treated the same as commercial enterprises.

2. Differences between business and social entrepreneurs

The entrepreneurs emphasize innovation and creativity. They seek new ways to define existing needs. Social entrepreneurs are those who take responsibility and risk for civil society needs.

The authors Say, Schumpeter, Drucker, and Stevenson have important contributions to the issue of the entrepreneurship. Other researches also indicate the connection of the subjects’ entrepreneurship and social entrepreneurship [ 8 ]. The social entrepreneurs challenge some unique problems [ 11 ].

Business entrepreneurs tend to focus on new needs, while social entrepreneurs tend to focus on existing environmental and social problems more effectively on long-term goals through new approaches. Social entrepreneurs are those who take responsibility for civil society needs. While traditional entrepreneurs take risks on behalf of shareholders, social entrepreneurs take risks on behalf of stakeholders. The objectives of social entrepreneurs differ from those of business entrepreneurs. The social entrepreneurs are motivated in different ways than commercial entrepreneurs. The entrepreneurs and social entrepreneurs face similar problems such as establishing and institutionalizing their enterprises. Social entrepreneurs can also experience problems such as defining opportunities and needs, planning, support, obtaining information and resources, creating marketing and demand, and creating organizational structure. Since social entrepreneurs have different motivation and aim from commercial entrepreneurs, they differentiate from commercial entrepreneurs in the way of leadership style also. The leader focuses on change and processes, is a part of the group, and controls group structure and processes. Social entrepreneurs are not a part of the group that is affected by the group or working in the group ( Table 1 ) [ 28 ].

Table 1.

The differences between entrepreneurship and social entrepreneurship.

Source: Özdevecioğlu and Cingöz [ 31 ].

Another proposal is that the two entrepreneurial types will have different requirements, especially in terms of access to financial markets and risk capital. Finally, in terms of performance management, it has been emphasized that commercial entrepreneurs can develop and use concrete and quantitative metrics more easily and that social entrepreneurship is a front line for nonmaterial elements (and therefore more difficult to measure). The social value opportunity in social entrepreneurship arises at the intersection of human resources and financial resources. Social entrepreneurs must have the ability to bring these internal resources together in an external context. The components of social entrepreneurship are to produce social value, being innovative, and creating resources and sustainability. The social organization mentioned at this point can be a new constitution, or it emerges in the form of joint projects of the existing social institutions in order to increase the scope of influence [ 7 ].

Social enterprises are separated from ethical or socially responsible companies precisely at this point. In contrast to companies, the measure of success in social enterprises is not the profits that are achieved, but the positive impact created on society. Another point that distinguishes social enterprises from these companies is that they should be accountable not to their shareholders but to the communities they serve [ 28 ].

It is suggested by Schwab Foundation for Social Entrepreneurship to establish a board for managing the social enterprises effectively. The corporate governance assures the credibility, complies with social values, and presents the enterprise responsibilities against stakeholders [ 2 ].

Another study presents scale of four dimensions about the measurement of social entrepreneurship orientation with a two-stage design with Delphi study. It indicates the combination of entrepreneurship and social entrepreneurship aspects together [ 24 ].

As a result of the case studies, it is understood that the predetermined dimensions of social entrepreneurship are examined extensively. The researches have focused on conceptualizing and not developing a mass-interaction measurement tool that SCALERS gave to name their social entrepreneurship. In traditional entrepreneurial countries, meaningful interventional activities tend to have more social entrepreneurial activities [ 3 ]. Social entrepreneurship is built and works for a social purpose. The profits are used for social purposes [ 10 ].

The difficulty of the performance measurement conducts the social investor to quest for the control and monitor. The research Rosenzweig [ 30 ] shows “impact value chain” first. The main antecedents of the measurement are figured as inputs, which are resources put directly into the venture (e.g., assets, volunteering, or money), outputs, which are consequences of the project managers’ measurement, and outcomes, which are the intended global changes. After the comparison of the desired outcomes with internal output, measures can show an accomplishment [ 30 ].

Garrigós, Lapiedra, and Narangajavana researched social entrepreneurship and social value measurement in the Colombian construction industry. The social value rise with the leakage reduction is assumed. The policy aims the effectiveness and economic multiplier [ 11 ].

3. Social entrepreneurship and social value

Most of the movements can be seen as small and extent worldwide, but they are interconnected and mutually strengthening each other. When all these things are taken together, it means more than the sum of their components. There is a synergy of these movements. Through social missions and entrepreneurial approaches, all social enterprises create and disseminate social, economic, and environmental values. Whatever the type or sector of the pioneering organization is, “creating value for all” is a precondition for the growth of more inclusive markets [ 7 ]. The concept of “sociality” includes adapting the principles of entrepreneurship to social problems instead of profit maximization. Thus, social enterprises are emerging as entrepreneurial or free market-based organizations in solving social problems.

There are many definitions of social entrepreneurship. Social enterprises aim social impact. Social entrepreneurship involves corporate initiatives that invest in individual, or in the form of the profit generated by a new entity, which is planned to be opened by the individual, within the framework of social objectives [ 7 ].

According to the definition of GEM, the economic expectations of social entrepreneurship projects are determined according to the costs of the strategies to be implemented. Corporate social project practices, which have become an important part of corporate strategies, have made it possible to achieve common achievements within this understanding. The difference of social entrepreneurship and commercial entrepreneurship mentions entrepreneurship as a context, actor (people/resources), deal, and opportunity together: as the PCO equilibrium. The first proposition here is that market failure creates different opportunities for social and business entrepreneurs. The second factor is that the understanding of economic success and social value creation differs between the two concepts.

Social entrepreneurs are individuals who realize social transformation in an innovative way. These individuals are making social enterprise “with the enthusiasm of entrepreneurship, the methods of business, the creation of innovation, and the courage to abandon general practices” [ 7 ].

The entrepreneurs create innovations in different ways like “product or process innovation, or a new product or a changed product, or a combination of any” according to the definition of OSLO MANUAL. Product innovations are made through “the use of new materials; use of new intermediate products; new functional parts; use of radically new technology; fundamental new functions (fundamental new products) and process” and the process innovations through “the new production techniques; new organizational features (introduction of new technologies); new professional software” [ 25 ]. The social and/or ecological value creation motivates the social entrepreneurs. The social entrepreneurs also aim innovation in a new product, a new service, or a new method like entrepreneurs. Social entrepreneurs transform the society in economic and social ways.

They may be in the form of cooperative or hybrid models, legally organized as nonprofit-making institutions. Although social initiatives are not yet defined as separate entities in most countries, there are some steps taken in this direction [ 7 ]. In the United States, there is differentiation between the Community Interest Company and the Low-Profit Limited Liability Company because of the focus of profitability [ 1 , 24 ]. Benefit corporation (BC) is another definition according to United States law, which describes a new legal for-profit business entity. It contains the responsibility to return profits to shareholders [ 33 ].

The aims of projects that are realized by companies and social organizations are based on three themes. First, identifying the social, cultural, and environmental objectives that are deployed as the basis of the project, second prioritizing the social objectives identified during the project, and third going for profit for the purpose of ensuring the continuation of project implementation.

Social entrepreneur targets to find solutions for the environment, the youth, and various socioeconomic indexed social problem areas. It accentuates that providing employment and income-generating activities for religious, ethnic, economically marginalized groups emphasize the self-sufficiency of individuals. They aim to increase their visibility within the community they live in and to reduce their commitment to social safety nets in a rational way.

The access in long-term capital and the lack of strategic planning, especially in developing countries, constitute the biggest obstacle in front of entrepreneurs. The talent, money, and interest in social enterprises around the world are increasing recently. There are debates about what social initiatives are and what they do in various national and international platforms.

Systematic change is the most important objective. Social entrepreneurs aim to create systematic change, disseminate their solutions, and gain support from the community in the long run, eliminating the problem, while improving similar cases in the areas they deal with. To describe the difference between the social intervention approach and others is that social initiatives are not for to teach only fish or fishing, but instead aim to radically change the fish industry [ 9 ].

It is considered that there is a big difference between entrepreneurship and social entrepreneurship also in the implementation process. They are so connected like the parts of a whole system. The partnerships like universities and other stakeholders contribute to the efficiency and the innovation. Social entrepreneurs aim to reach two different goals under the roof of a single establishment: to provide social benefit and profit [ 8 ].

Social enterprises that function as a commercial enterprise by producing goods and services in free market conditions also direct the income they derive from these activities to social purposes. In this method, the business activity may be directly related to the social problem, but it is also possible that there is no direct connection between them. CSOs adopting such an approach perceive social enterprise activities as an alternative to reduce their dependence on donations and grants and to increase their fiscal sustainability.

Another way social enterprises pursue is the empowerment and capacity building of individuals and communities by creating employment and income-generating activities for disadvantaged groups (women, youth, people with disabilities, minorities, and so on).

Contrary to the first approach, commercial activity itself is seen as an effective tool for social change in this method.

Another approach that is observed in social enterprises is to act in a creative, bold, and entrepreneurial spirit in their commercial activities. Solution-focused, experiential transformations of barriers can be much more profitable than traditional methods of business ventures.

Another common point is that most social enterprises are initiated and maintained by social entrepreneurs. Like entrepreneurs who change the face of the business world, social entrepreneurs are also important tools of social change [ 10 ].

The Schwab Foundation for Social Entrepreneurship offers “models of sustainable social innovation.” The global, regional, and industry transformation and the association with the other stakeholders of the World Economic Forum is in the focal point of The Schwab Foundation for Social Entrepreneurship [ 18 ].

Social entrepreneurship is a concept, which needs awareness and development in Turkey. Social support of universities, associations, and foundations through awards, courses, and studies and governmental support through tax regulations are expected to raise the awareness and interest in social entrepreneurship. The attainment of consumer markets is easier through the internet access and popularity of social media. Additionally, entrepreneurship is the period for innovation development and application. Economic development and also social development are not only evolved through innovation [ 32 ].

Entrepreneurship is a combination of production resources and aims the profit. Social entrepreneurs do not focus on profits, mostly the social benefits. The development of social entrepreneurship must be accentuated in the society.

Increasing knowledge-based economies promote entrepreneurship. Social inclusion and economic development constitute synergy for social entrepreneurship. Social enterprise can be defined as “businesses that trade for social purposes.” They are nonprofit entities, which are implementing commercial methods to accomplish their social objectives. The concept is summarized as “mission-driven business approach” [ 23 ].

The researches execute the antecedents and the consequences of social entrepreneurship in social constructionist approach [ 23 ].

Social capital can be defined as the assets that have as a consequence of the relations of one with others and (in a correlated way) of the participation in organizations: these relations facilitate the access to other resources [ 5 ].

Social enterprise must be constructed as a social organizational identity [ 23 ]. The social capital is an important determinant for business support. The concept of social entrepreneurship technology is affected through rapid technological change. The changes are adapted for creating social value. New methods are internalized [ 14 ].

Social capital is the feature of commercial conglomerates, which have shared values, trust, and culture. So trust is an important dimension of social capital [ 6 ]. Entrepreneurs use their connections for funding or receiving credit from suppliers without any formal contract, which is very crucial for the sustainability. Social capital is crucial for equalization and continuance for human development. German and Japanese cooperative and long-term oriented cultures induce them for innovation and industrial development. So the social capital is remarkable in these countries ( Table 2 ) [ 32 ].

The Different Organizational Models of Social Enterprises are examined in Table 2 . The entrepreneurial approach and social focus are their common point.

There is a “traditional NGO” managed by volunteerism, income-based donations, and social services, while at the other end there is a commercial enterprise which is the main goal of profit. Social enterprises are in the midst of these two extremes as commercialized institutions at various levels in their functioning. For example, many social enterprises employ professional staff, receive consultancy services, and make income-generating investments. However, social enterprises also provide employment and social services to disadvantaged groups, advocate, and thus interfere with various social problems. No social initiative is the same as another (in terms of purpose, target mass, methods, and institutional structures). However, no matter how diverse the commercialization, the approaches, and the environments in which they function, it is possible to find some common interests between social enterprises in terms of purposes and methods [ 10 ].

“A leveraged nonprofit enterprise” is not working through an income-earning strategy. The sustainability is maintained through partnerships and funding of traditional donor-dependent model. Its sustainability strategy constitutes dependent independent resources [ 1 ]. Leveraged nonprofit ventures’ sustainability is influenced by the partners’ attention.

“Hybrid enterprise” conglomerates features of the for-profit and nonprofit legal models. The various legal structures are used in different countries. In the United States, the low-profit entities are structured as Limited Liability Company. In the United Kingdom, the sustainability of the social activities is afforded by a profit subsidiary in the form of “Community Interest Company.” The entrepreneur establishes numerous legal entities to sustain it financially. It is financed with grants, loans and/or own resources [ 24 ].

“Social entrepreneurs” aim to create social change in education, health, environment, and enterprise improvement. A social entrepreneur accomplishes major and sustainable social change through innovations [ 18 ]. The entrepreneur establishes a for-profit entity or business which is social or ecological driven. The social entrepreneurs’ main objectives are social and then profit [ 22 ].

Entrepreneurs and social entrepreneurs are using the same tools and endeavor in market principles and forces for driving change. Social entrepreneurs provide opportunities for marginalized and poor. They find solutions for social issues like education, health, welfare reform, human rights, workers’ rights, environment, economic development, agriculture, and so on [ 18 ].

Social entrepreneurship is tried to be encouraged with educational programs and competitions. The financial returns are low, and it complicates the presence of these organizations [ 10 ].

A strong financial system is a requirement of entrepreneurship. The entrepreneurs create jobs, and so they help to reduce the unemployment rate. Turkey’s economy is growing. The collaborations with international organizations promote economic progress through entrepreneurship. Table 1 summarizes the differences between entrepreneurship and social entrepreneurship.

There are many suggestions for the improvement of social entrepreneurship [ 23 ]. One of the problems they face is institutionalization which is difficult because the social initiatives are dependent on the social entrepreneurs and it is not easy to survive [ 3 , 4 ].

The institutionalization of social entrepreneurship education is impeded through limited presidential support, a clear and well-defined vision, and financial problem [ 27 ].

The strategies to simplify the increase of social enterprises are legal recognition and regulation; combination of the most innovative organizational solutions; replication process; protection of consumer’s rights; and avoidance of isomorphism. Quasi-market strategies require unusual mix of resources and conformance to local dimension. The network plays important role to accomplish this. It is recommended to change the implementation of employment subventions for long-term unemployed to reduce labor costs. It can be used to lower productivity [ 4 ].

3.1. The concepts of new business models

The competiveness forces the companies for a search of new business opportunities. Growing Inclusive Markets (GIM) and Base of the Pyramid (BOP) can be taken into account as important concepts when considering the size of the population.

3.1.1. Growing Inclusive Markets (GIM)

The macro-level approach is based on the creation of opportunities and innovation through defining the markets in another way. There are important aspects of social entrepreneurship. The concepts aim at taking “business for poor” and raise prosperity of the society. Social entrepreneurship operates in a global structure with many stakeholders. The growing inclusive markets (GIM) Initiative is a stakeholder of UNDP. The aim is to find solutions for the global development with inclusive business models. They try to create new chances for better lives of poor people. GIM endeavors for the millennium development goals (MDGs). This initiative creates a big network [ 19 ].

UNDP Private Sector Division is working toward the inclusive market policies and projects with sections The GIM Initiative and the Business call to action (Cat). The Inclusive Markets Development (IMD) program is for the advancement of new opportunities. The Growing Inclusive Markets Initiative has two purposes. The enhancement of the recognition includes business models and finds solutions for sustainable human development. The other purpose is structuring market environment improvements with taking actions with stakeholders and changing the policies [ 16 ].

As the empirical research conducted by the GIM Initiative reveals, these constraints include limited market information, problems about the infrastructure, reaching the knowledge and skills, difficulties by compensating the financial needs, and ineffective regulatory environments. In addition to the potentially unnecessary bureaucratic processes that can be undertaken in general by interventional efforts, many laws do not recognize social enterprises as separate legal structures. Conditions, laws and regulations may limit their capacity to seek financial and social returns, and force such organizations to merge into profit-oriented or non-profitable legal entities. Social entrepreneurs need to ensure financial stability [ 1 ].

Social entrepreneurship encompasses three main types of inclusive business models, as documented in the final report of the Social Entrepreneurship Information Network and shaped in many GIM case studies. First, they can get members to come together and get more value; for example, strong bargaining power, efficiency and volume develop, value chain, and product development increase [ 29 ]. The business model is based on the production of handcrafts that are low cost, require intensive labor, consume little energy, and perform with low technology. Table 3 summarizes the Socially Inclusive Business Model according to the social value and the economic value [ 5 ]. The initiatives analyzed found business opportunities in low-income sectors. Socially Inclusive Businesses produce economic and social values [ 26 ].

Table 2.

The Spectrum of social enterprises (arranged by legal form and revenue source).

Source: Abdou and Fahmy [ 1 ].

Table 3.

Profits and Social Impact in Socially Inclusive Business.

Source: Marquez [ 23 , 26 ].

3.1.2. Base of the Pyramid (BOP)

The base of the pyramid (BOP) approach can be explained as creating and distributing goods and services for poor people. There are not many companies using the opportunity to supply goods to this group. The international finance corporation reveals that purchasing power is annually $5000 billion of this 4 billion people. The transformation is aimed of this people to customers. The multinational companies have to look from a different window to find out the opportunities in the market of four billion people and assure the capital efficiency.

Prahalad and Hart [ 13 ] explained the BOP approach in their study “The Fortune at the Bottom of the Pyramid” as “The aspiring poor present a prodigious opportunity for the world’s wealthiest companies. But it requires a radical new approach to business strategy” [ 13 ]. Prahalad (2004), Hart (2005) and London (2007) are the authors, which have mentioned the base (bottom) of the pyramid (BOP) theory first. The poor society, which is living on less than US$ 1.25 per day, is defined as “resilient and creative entrepreneurs” and “value-conscious consumers” (Prahalad 2004: 1). The concept suggests to create economic openings with collaboration of multinational corporations. It recommends the strategic association with persons at the base of the world’s income pyramid. It assumes to the radical change in the business model. The poor is presented as solution itself and as a resource. In that way can be a win-win position created. The demand of the over three billion poor people is attracting the entrepreneurs and social entrepreneurs. The financing and social value has to be balanced with low-cost consumer goods. It is contrasting to the mission-driven corporate social responsibility approach [ 26 ]. The BOP concept brings “mutually beneficial economic and social incentives” together. It is purposed to produce the own revenues. It is revealing that the partner’s involvement depends on the potential of venturing the needs of the poor people [ 26 ].

Based on the study of the famous Indian economist Amartya Sen (1999), which sees the rise of freedom as including the economic possibilities as “a fundamental solution to a basic solution and development” to provide sustainable human development, UNDP considers the markets to be more inclusive. This means that the poor people can buy his needs at affordable prices, meaning that venture capitalization is an opportunity rather than a necessity, access to decent business opportunities, and the ability to contribute to companies’ value chains as suppliers and distributors. Social enterprises contribute to the development of “containment markets” either by supporting development and can change the role of the disadvantaged groups. They are able to demand the products and services as customer and buyers or supply as employees, producers, and entrepreneurs. Such initiatives can be developed by all types of institutions (social enterprises, multinational corporations, large public entities, or SMEs), and these business models carry a number of common characteristics as outlined below [ 7 ].

Some firms like Nirma have implemented solutions with product innovation and new manufacturing process. Of course, in this business model, it is not possible to aim the traditional high margins. A different perspective is needed for the competitiveness [ 29 ]. It is expensive to research for the development of products and services sustainability and enter and continue in distribution channels and communication networks. MNCs have know-how to bring together a global knowledge rather to local entrepreneurs. Leaders can use the interpersonal and intercultural skills to customize the products and services to local BOP markets [ 29 ].

The economically sustainability and generation of social and environmental benefits are important to define the inclusive businesses [ 26 , 31 ]. Despite the significant benefits of the social enterprise model, such as increasing financial capacity and independence from donors, increasing scale of operations resulting from income strategies is achieved, and thus greater social impact, and social enterprises also faced some potential difficulties. First, while social enterprises are developing market models of pyramid-based coverage, they face market constraints that are similar to traditional markets. Social enterprises use solutions like organizations operating in low-income markets adopt according to formulate products and processes for BOP markets, which has different conditions, increasing the buying power and bringing the potential resources with other partners. The researchers indicate that the success of the business models is dependent on the organization’s main mission, capacities, and the segment it addresses and when it reaches a suitable scale.

4. Methodology

Methodology of the research is case study. Case study approach is an effective way to build solid ground to make positive argument on subject where it is rather easy to compare theoretical information and arguments with applied cases. It is also aimed to encourage other social entrepreneurship initiatives by mentioning good examples like Trusted Hands Food Safety Program Online. This case provides opportunity for awakening the social interest. This case is appropriate for the use of the subject matter covered which includes concepts that are globally discussed. However, various examples determine the value.

5. Unilever food solutions and trusted hands food safety online training program

The study researches “Food Safety” training of Unilever Food Solutions. An independent company conducted the Turkey Chief Survey, and 80% of the chiefs identified as the most important need Food Safety training. The “Trustworthy Hands” Food Safety Training Program is prepared online in order to reach all kitchen teams throughout Turkey. The project aims to complete 5000 chief trainings in the first year. It is planned to have a food safety certificate by participating in trainings of 30,000 chiefs in 3 years.

Trustworthy Hands Food Safety Training consists of five separate sections, cross contamination, physical and chemical hazards, cleaning, production safety, and HACCP applications. In order to meet the lack of knowledge and development needs of the chefs in the field of food safety, the Food Security Association organized an introductory meeting with the participation of sector representatives for the “Trustworthy Hands” Food Safety Training Program. Food Security Association, Food Industry Association, Tourism Restaurant Investors and Businesses Association (TURYİD), and the Union of the Cooks supported the project. Turkey emphasized that they have launched the first and only comprehensive food safety training program. It is to launch the online training modules in other countries too.

It is declared that 350,000 people are working in the catering sector. In 77,000 restaurants in Turkey, millions of meals are eaten every day. More than 30,000 of the restaurants are located in Istanbul. TURYİD serves 165 brands in 480 points. It creates an industry of two billion endorsements annually. It is 10% of the general food and beverage sector. The associations increase their strength in the direction of goals through cooperation with the sectorial knowledge, communication, and training issues [ 20 , 21 ].

It is stated that 325,000 are hospitalized and 5000 people died because of food poisoning every year in the world. In 2013, the number of people who lost their lives due to “external injuries and poisonings” in Turkey is 20,000,409, but this number has decreased to 16,000,018 in 2014. According to the World Health Organization, in 2010, a total of 582 million people were poisoned from 22 different food items in the world. Interestingly, 40% of the 582 million people are under 5 years old. The bacterial cause of food is found in raw poultry, unpasteurized milk, red meat, and untreated water which are the most common factors of poisoning with Campylobacter. Unpasteurized milk, eggs and raw egg products, raw meat, and poultry have to be controlled carefully because of the Salmonella. Listeria, nigella (traveler’s diarrhea), and clostridia are other dangerous factors for food poisoning [ 15 ].

It is stated that Unilever Food Solutions reached to one of the two businesses in the nonhouse food sector. Food Safety Association has indicated that 50% of the chefs have completed five videography trainings in the “Trustworthy Eller” food safety training. Unilever Food Solution has launched a training course for the kitchen teams [ 17 ].

The chefs are able to see the article “Get Your Food Safety Training and Certificate Now” on Knorr products and access training videos prepared with the passwords on the product packages by entering the Food Security section where it also can be reached via ufs.com . Training program consist of five short videos produced by the Food Safety Association as an education, and at the end of each training video, questions about that section must be answered in order chefs to be entitled to receive special certificates for the names of Food Safety Association certified ones. It is emphasized that there are plans to reach the chefs through not only digital channels but also product packages because of the presence of Unilever Food Solutions products at every one of them. They also note that they are taking care to be part of Unilever Food Solutions products.

The main objective is to ensure that food is healthy and maintains its nutritive properties and continues. Food safety involves the processing, preparation, transport, storage, and disposal of foodstuffs to prevent biological, physical, and chemical agents that cause food-borne illnesses. It is an approach that addresses the process of submitting to consumers. Safe food is defined as food that has been made suitable for consumption by eliminating all kinds of deterioration and contagious factors, and everything that is done to achieve this is the technical direction of the business. “He added that Food Safety Inspections in Turkey are done by the Ministry of Agriculture and Livestock. Many countries, including Turkey, are developing and implementing standards and management systems related to food safety.” The latest method to ensure food safety is published as national standards in countries with the HACCP system. Many countries have accepted that “ISO 22000: Food Safety Management Systems Standard,” which was prepared by ISO in 2005, is included in Turkey in order to ensure the use of a common system of accreditation in international trade and a common system of food safety standards all over the world. In Turkey, TS EN ISO 22000, which was put into practice in 2006 by TS 13001-HACCP Standard, has been applied in food and food-related enterprises.“HACCP plan for the establishments identifies and monitors biological, chemical, and physical properties that are food-borne hazards. It is preventive, rather than reactive, and is an effective risk management tool [ 23 ].

Taking the risk factors into consideration, necessary precautions must be taken before delivering to the customer. “Trusted Hands” Trainings is a project that aims to raise awareness about food safety in the chiefs and close the information gap. The Turkish Food Safety Association prepares and sends the certificates to the chefs who have completed the training.

6. Conclusion

The social considerations in Turkey are rising in recent years. The society’s consciousness is increasing and also became aware of social, environmental, and health issues. The number of successful social entrepreneurs increases trends and behaviors through social actions.

Social entrepreneurs produce services and products. The disadvantaged groups can use the employment opportunities. Social entrepreneurship implements similar tools like entrepreneurs. They face the same problems and take the same risks also. The existence is dependent on the support mechanisms. In this case, the public and private support for social entrepreneurship plays an important role. The legal arrangements are needed for the financial continuance. Consultancy, knowledge sharing through awards, courses, and studies builds a net. The youth and children can be elaborated in education system. People in lower segments of society can also be informed about the social issues.

In this study is examined the project of Unilever Food Solution in the framework of the awakening consciousness in society and in the sector about food safety which is an important issue of health. It is also a good example of the collaboration of publıc and private sectors.

The suggestions made in the literature can be summarized in three points: first highlighting success stories and case studies; second accumulating the best practices; and third forming a High-Impact Entrepreneurship Index and planning exercise. These efforts will guide the new actions also [ 12 ].

There are many difficulties of continuance and establishment of social enterprises but also many advantages like the technological, financial, and human resources. Internet facilitates communication and cooperation. The definition of legal form and other problems are waiting solutions from governments [ 12 ].

The other problem is that the short-term approach will complicate the existence of the social enterprises. Tax exemptions are needed for the maintenance. The long-term focus can facilitate the partnerships. These resources can be used more effectively, and the social impact can be enhanced [ 10 ].

Private sector is an important project partner and also creates financial sources. The material contribution or sponsorship builds a synergy and a win-win position to public and private sector also. The public benefit can be taken in terms of its scope and coverage, because the society’s awareness and purchasing power will be enhanced. The wealth arises [ 10 ].

The improvements are promising for the future of social entrepreneurship. The society, the companies, and the government are more aware of the social, environmental, and health issues. It is expected to raise the interest about the research topic. This case intends to show key points in its successful implementations can be followed. The results of this research enlighten social entrepreneurial form that is likely to become much more extensive in new economy. Tables and definitions aim to present the understanding of business model and its importance. The most important contribution is intended to observe a good practice. The research enables to open the horizons in the business start-ups and explore a new way of thinking for win-win. The outlined phenomenon in an exploratory approach involves an in-depth analysis of a case for the guidance of new cases.

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© 2017 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution 3.0 License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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