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Journal Article

Entrepreneurship with Social Value: A Conceptual Model for Performance Measurement

01 Jul 2012-Academy of Entrepreneurship Journal (The DreamCatchers Group, LLC)-Vol. 18, Iss: 2, pp 17
TL;DR: In this article, a performance measurement framework is proposed and illustrated by archetypes of common social ventures, and a multi-disciplinary perspective of performance measurement is presented to establish the conceptual model in the following section.
Abstract: Social entrepreneurship, ventures with a self-sustaining business model and a social impact objective, is a trend gaining momentum and garnering attention for the "citizen sector:" How is the social impact measured? How might it be measured? Based on a multi-disciplinary literature review and an examination of current practice, this research attempts to address these questions. A performance measurement framework is proposed and illustrated by archetypes of common social ventures. Keywords: social entrepreneurship; performance measurement; citizen sector; social value; social value; outcome assessment; balanced scorecard MOTIVATION Performance measurement is of increasing importance, whether in industry, academia, or the public sector, as organizations are held to greater standards of accountability and transparency, especially for financial reporting. Such oversight does not extend to the outcomes of social entrepreneurial ventures, although there are some foundations and nonprofits that provide support to these entrepreneurs based on some evaluation. For example, Ashoka (www.ashoka.org) provides funding to Fellows based on five criteria: the knockout test: a new idea; creativity; entrepreneurial quality; social impact; and ethical fiber. In their annual recognition of the most accomplished social entrepreneurs around the world, the Schwab Foundation (www.schwabfound.org) uses criteria of innovation, sustainability, and direct social impact, in quantifiable results. According to Mulgan (2010), metrics to measure social impact have proliferated over the past several decades, resulting in hundreds of competing methods for calculating social value. Building on these ideas, and others found in the academic literature, this research examines the question of how social value is created and measured. The extant literature on social entrepreneurship is examined, and a multi-disciplinary perspective of performance measurement is presented to establish the conceptual model in the following section. LITERATURE REVIEW The defmition of a social entrepreneur varies. In the most general sense, a social entrepreneur is someone who starts a new organization to accomplish a social mission. What distinguishes a social entrepreneur from other leaders in the citizen sector who start or lead social impact-oriented organizations? Specifically, social entrepreneurs are able to serve this mission with a (largely) self-sustaining business model. They may start with some seed funding, they may operate partially through fund-raising, but social entrepreneurs are able to generate profits in both fmancial and social terms. They are a new model of entrepreneurship: not-for-personalprofit enterprise, and generate value for social ends and wealth to enable reinvestment and the sustainability of the business (Chell, 2007, p.18.) This business model is different from that of a nonprofit in that the entrepreneur takes on risk; for the social entrepreneur that risk is taken at the behest of others, in hopes of having social impact. As Mair and Marti (2006, p. 36) describe it, "social entrepreneurship as a process that catalyzes social change and addresses important social needs in a way that is not dominated by direct fmancial benefits for the entrepreneurs." Prieto (2011, p.77) suggests that disadvantaged communities need social entrepreneurs to generate innovative solutions to complex problems. Mother difference with nonprofits is that "a nonprofit organization is, in essence, an organization that is barred from distributing its net earnings, if any, to individuals who exercise control over it... It should be noted that a nonprofit organization is not barred from earning a profit... It is only the distribution of profits that is prohibited" (Brody, 1996, p. 458). Dees, (1998, p.60) notes the pressures on nonprofits to become sustainable through the introduction of commercial activity and suggests that it is possible to position social enterprises along a spectrum from the purely philanthropic to the purely commercial. …
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Cites background from "Entrepreneurship with Social Value:..."

  • ...The need and pressure to measure this value is growing (Clark & Brennan, 2012; Lynch-Cerullo & Cooney, 2011); however, while the nonprofit literature provides guidance about measuring nonprofit value creation (e.g., Alexander, Brundey, & Yang, 2010; Carman, 2010), guidance for hybrid organizations…...

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TL;DR: Entrepreneurship for sustainable development is a multilevel phenomenon connecting social, environmental and economic dimensions between entrepreneurial processes, market transformations, as well as well a... as discussed by the authors.
Abstract: Entrepreneurship for sustainable development is a multilevel phenomenon connecting social, environmental and economic dimensions between entrepreneurial processes, market transformations, as well a...

117 citations

Journal ArticleDOI
TL;DR: In this article, the authors consider how hybrid organizations (organizations at the interface between for-profit and non-profit sectors that address social and ecological issues) are operating at odds with beliefs embedded in strategic management and corporate sustainability literatures.
Abstract: Corporate sustainability has gone “mainstream”; reaching into all areas of business management. Yet, despite this progress, large-scale social and ecological issues continue to worsen. In this paper, we examine how corporate sustainability has been operationalized as a concept that supports the dominant beliefs of strategic management rather than challenging them to shift business beyond the unsustainable status quo. Against this backdrop, we consider how hybrid organizations (organizations at the interface between for-profit and non-profit sectors that address social and ecological issues) are operating at odds with beliefs embedded in strategic management and corporate sustainability literatures. We offer six propositions that further define hybrid organizations based on challenges they present to the assumptions embedded in these literatures, and position them as new heretics of mainstream strategic management and corporate sustainability orthodoxy. We conclude with the implications of this heretical force for theory and practice.

27 citations


Cites background from "Entrepreneurship with Social Value:..."

  • ...The need and pressure to measure this value is growing (Clark & Brennan, 2012; Lynch-Cerullo & Cooney, 2011); however, while the nonprofit literature provides guidance about measuring nonprofit value creation (e.g., Alexander, Brundey, & Yang, 2010; Carman, 2010), guidance for hybrid organizations…...

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TL;DR: In this article, the authors review literature on performance measures among international social ventures and draw interviews with 12 US social ventures to explore how the use of such measures varies depending on the type of social venture, its funding business model, and scale of operations.
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