I propose a theory aimed at advancing scholarly research in social entrepreneurship. By highlighting the key trade-off between value creation and value capture and explaining when situations of simultaneous market and government failure may arise, I suggest that social entrepreneurship is the pursuit of sustainable solutions to neglected problems with positive externalities. I further discuss the situations in which problems with externalities are likely to be neglected and derive the central goal and logic of action of social entrepreneurs, in contrast to commercial entrepreneurs. Overall, this article provides a conceptual framework that allows understanding the growing phenomena of social entrepreneurship and its role in the functioning of modern society.

A Positive Theory of Social Entrepreneurship

Social entrepreneurship has emerged as a complex yet promising organizational form in which market-based methods are used to address seemingly intractable social issues, but its motivations remain undertheorized. Research asserts that compassion may supplement traditional self-oriented motivations in encouraging social entrepreneurship. We draw on research on compassion and prosocial motivation to build a model of three mechanisms (integrative thinking, prosocial cost-benefit analysis, and commitment to alleviating others' suffering) that transform compassion into social entrepreneurship, and we identify the institutional conditions under which they are most likely to do so. We conclude by discussing the model's contribution to and implications for the positive organizational scholarship literature, entrepreneurship literature, and social entrepreneurship literature.

Venturing for Others with Heart and Head: How Compassion Encourages Social Entrepreneurship

I propose a theory aimed at advancing scholarly research in social entrepreneurship. By highlighting the key trade-off between value creation and value appropriation and explaining when situations of simultaneous market and government failure may arise, I suggest that social entrepreneurship is the pursuit of sustainable solutions to problems of neglected positive externalities. I further discuss when positive externalities are likely to be neglected and derive the central goal and logic of action of social entrepreneurship.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1553072_code865831.pdf?abstractid=1553072&rulid=89429&mirid=4

The sheer impact of the recent global financial turmoil and scandals (such as Enron and WorldCom) has demonstrated that unbridled commercial entrepreneurs who are allowed to pursue their short-term opportunities regardless of the consequences has led to a massive depreciation of the wealth of nations, social livelihood and environmental degradation. This article suggests that the time has come for entrepreneurs to adopt a more integrative view of business that blends economic, social and environmental values. Social entrepreneurs present such a proposition through their deep commitment towards the social vision, appreciation of sustainable practices, innovativeness, ability to build social networks and also generate viable financial returns. It could be expected that social entrepreneurs often possess certain distinct personality characteristics which define their behaviours/actions. Personality traits are partly developed by innate nurturing, socialization and education. These tacit traits are also formed values/beliefs held and play an important role in driving social entrepreneurial decision making. Thus, personality traits may influence the intentions and the manner in which the individual acts. We hold that if social entrepreneurship is to be effective and impactful, business and management education can facilitate the development of these critical personality traits. Thus, this study primes at determining the personality traits that influence social entrepreneurs’ start-up intentions. It also reinforces the findings that personality traits do influence entrepreneurship in general. This study examines the influence of the Big Five personality traits on social entrepreneurship dimensions. The findings reveal that agreeableness positively influences all dimensions of social entrepreneurship, whereas openness exerts a positive influence on social vision, innovation and financial returns. Methodologically, this study develops valid and reliable scales for social entrepreneurship and verifies the adopted Big Five personality measure of Schmit et al. (Pers Psychol 53:153–193, 2000) using the five-point Likert scale. The implication of this study is that element of appreciation of social responsibility, sustainability and character development needs to be integrated within the business education curriculum to support social entrepreneurs in realizing genuine value and impact to the causes and communities they serve. Future business leaders also need to be equipped with entrepreneurship skills, while exuding independent and reflective thinking in the pursuit life-long learning. The originality of this study lies in its focus on personality traits on social rather than commercial entrepreneurship. It is hoped that the findings will trigger a paradigm shift towards greater social entrepreneurship through education by nurturing sustainable development values in future business graduates.

The Influence of Personality Traits and Demographic Factors on Social Entrepreneurship Start Up Intentions

Social entrepreneurship has emerged as an important research topic in the literature. This interest stems from social entrepreneurs' role in addressing serious social problems on a worldwide scale while enhancing social wealth, often without regard for profits. In this article, we explain the forces contributing to the formation and rapid internationalization of social ventures. We use the behavioral theory of the firm to distill key attributes of social opportunities and show how these attributes influence the timing and geographic scope of social ventures' international operations. Copyright © 2008 Strategic Management Society.

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Globalization of social entrepreneurship opportunities

Renowned playwright George Bernard Shaw once said "The reasonable man adapts himself to the world, the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man." By this definition, some of today's entrepreneurs are decidedly unreasonable--and have even been dubbed crazy. Yet as John Elkington and Pamela Hartigan argue in The Power of Unreasonable People, our very future may hinge on their work. Through vivid stories, the authors identify the highly unconventional entrepreneurs who are solving some of the world's most pressing economic, social, and environmental problems. They also show how these pioneers are disrupting existing industries, value chains, and business models--and in the process creating fast-growing markets around the world. By understanding these entrepreneurs' mindsets and strategies, you gain vital insights into future market opportunities for your own organization. Providing a first-hand, on-the-ground look at a new breed of entrepreneur, this book reveals how apparently unreasonable innovators have built their enterprises, how their work will shape risks and opportunities in the coming years, and what tomorrow's leaders can learn from them. Start investing in, partnering with, and learning from these world-shaping change agents, and you position yourself to not only survive but also thrive in the new business landscape they're helping to define.

The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World

It is basic human nature to want less of bad things—and more of good ones. In relation to the latter challenge, the New Economy era taught us to think in terms of replication and scaling of solutions (Kelly, 1998). For even the perfect solution to a great global—or local—problem will create little or no value unless it can be scaled effectively in good time and at reasonable cost. Meanwhile, achieving systemic social change is a growing concern for governments and for social investors, although to date—with few exceptions—efforts to scale solutions to global social, environmental, and governance challenges have not had the desired impact. It is time to take a closer look at scaling and—though there will never be instant, black box recipes—to begin to build the “Scaling 101” tools needed by social and environmental entrepreneurs and intrapreneurs.

Pamela Hartigan

Papers

The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World

From Enterprise to Ecosystem: Rebooting the Scale Debate