The Emergence of Social Entrepreneurship: Individuals and Social Ventures as Agents of Change (Contributions to Management Science) [1st ed. 2021] 3030806340, 9783030806347

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Contributions to Management Science

Virginia Simón-Moya María Rodríguez-García

The Emergence of Social Entrepreneurship Individuals and Social Ventures as Agents of Change

Contributions to Management Science

The series Contributions to Management Science contains research publications in all fields of business and management science. These publications are primarily monographs and multiple author works containing new research results, and also feature selected conference-based publications are also considered. The focus of the series lies in presenting the development of latest theoretical and empirical research across different viewpoints. This book series is indexed in Scopus.

More information about this series at http://www.springer.com/series/1505

Virginia Simón-Moya • María Rodríguez-García

The Emergence of Social Entrepreneurship Individuals and Social Ventures as Agents of Change

Virginia Simón-Moya IUDESCOOP Universitat de València València, Spain

María Rodríguez-García Department of Business Management Universitat de València València, Spain

ISSN 1431-1941 ISSN 2197-716X (electronic) Contributions to Management Science ISBN 978-3-030-80634-7 ISBN 978-3-030-80635-4 (eBook) https://doi.org/10.1007/978-3-030-80635-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Foreword

This book analyzes the phenomenon of social entrepreneurship from a broad perspective. The mix between theory and analysis of a case study confers an integrated approach into which fit the different parts that comprise social entrepreneurship dynamics. Regarding the theory, social entrepreneurship may be seen as a prolongation of the most traditional form of entrepreneurship, namely commercial entrepreneurship, or as an independent field. The theoretical point of view considered in this book relates more to the independence of social entrepreneurship as a field of research. The phenomenon is analyzed considering that the individual who constitutes a venture with a main social mission has a particular set of features and motivations. Simultaneously, also the venture has a particular set of characteristics that are distinctive and unique. Due to this fact, the social entrepreneur experiments with idiosyncratic issues that determine the creation, consolidation, and running of this type of venture. These issues are to a large degree linked to the necessary resources to fund a social venture. The sources of finance and the way social entrepreneurs manage their resources represent the cornerstone of the challenges of social ventures. Of course, this problem is not exclusive to social ventures. Research on entrepreneurship shows the difficulty linked to the collection of funds in the early years. However, in the case of social entrepreneurship, this difficulty is even more remarkable. Under these circumstances, the myopia of the traditional financial institutions conceals the potential that social ventures have to generate benefits in the long run. In this context, new forms of financing arise, such as crowdfunding platforms. These new forms, jointly acting with an adequate management of resources, constitute a basic branch of research for academia. Moreover, related to the aforementioned benefits that social ventures may generate, the study of the value generated for society and the necessity of social ventures in the current situation becomes crucial: firstly, because they occupy a place in the institutional framework that other forms of organizations are unable to occupy, and second, because the stability of the different patterns that constitute our economic system hinders some societies in making changes, changes that are key for the v

vi

Foreword

welfare of the whole population. At the same time, the conflict of interest derived from a given situation may cause the legitimacy of any organization’s survival to be questioned. All these issues are present in this book from a theoretical perspective. The study of the social entrepreneur’s psychology and sociology guides the main results and contributions of the work. As it could not be otherwise, the empirical framework perfectly matches with the theory previously explained. The case study analysis covers the study of the entrepreneur as an individual who wants to make a change in her community, her motivations and personality features, and also the magnitude of the contextual change that she has the potential to develop. The case study selected fits with every definition of social entrepreneurship. Dr. Pilar Mateo is the creator of a paint that acts as a vector control, and she decided to apply her technology to fight against Chagas disease. She represents the values that guide the prosocial motivation of a social entrepreneur. The focus of the social mission of her venture is an almost worldwide disease, invisible due to the unequal conditions of the population suffering from it. This phenomenon itself invites the reader to reflect on the role of social entrepreneurship in today’s world. The major contribution of this book lies in the connection of all these elements: the entrepreneur, the change that she provokes, and the challenges faced in carrying out her work. Only the aggregate effect of the theoretical approach and the empirical case study could create such a holistic piece of work. Given the authors’ background, their previous research on social ventures and entrepreneurship has helped them to include the most important points. An in-depth study of the issues in the main social ventures enables the researchers to be aware of the gaps that remain unstudied and, more important, the gaps that need to be addressed. The highlighted motivation of this book is to shed light on the main voids in social entrepreneurship literature, and beyond, focusing on the issues that need more study due to their relevance for the creation of social ventures, their consolidation, and sustainability. Finally, regarding the positive impact of social entrepreneurship in the current society, this book proposes the idea that social entrepreneurship values should be spread to all organizations, addressing companies’ behaviors and actions. In other words, capital returns should not be the only goal of companies. An integrated approach in which other forms of value coexist should be present in the current business context. IUDESCOOP, Universitat de València, València, Spain

Domingo Ribeiro-Soriano

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part I 2

3

1 3

Social Entrepreneurship from a Micro Perspective

A Quick Approach to the Microfoundations of Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Understanding the Mind of the Social Entrepreneur . . . . . . . . . 2.2 The Contextual Figure of the Social Entrepreneur . . . . . . . . . . 2.3 The Spark for Social Equilibrium . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . .

7 7 8 10 11

Who Is the Social Entrepreneur? . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 The Dynamics of Social Entrepreneurship . . . . . . . . . . . . . . . . . 3.2.1 Social Entrepreneurship as a Call to Awareness . . . . . . 3.3 Extrinsic Motivations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Triple Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.1 What Is It? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.2 Origins and Development . . . . . . . . . . . . . . . . . . . . . . 3.5 Corporate Social Responsibility Trend . . . . . . . . . . . . . . . . . . . 3.5.1 Isolated Facts or Corporate Values? . . . . . . . . . . . . . . . 3.6 Technological Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 Sustainable Development Goals . . . . . . . . . . . . . . . . . . . . . . . . 3.8 Implicit Motivations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8.1 Intention of the Social Entrepreneur . . . . . . . . . . . . . . . 3.8.2 Characteristics of the Social Entrepreneur’s Personality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8.3 Leadership in Social Entrepreneurship . . . . . . . . . . . . . 3.9 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13 13 14 14 16 16 16 17 18 19 19 21 22 22 23 25 26 27 vii

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4

Sources of Financing for Social Entrepreneurship . . . . . . . . . . . . . 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Ethical Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Social Crowdfunding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Social Incubators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Subsidies, Public Aid, and Angel Investors . . . . . . . . . . . . . . . 4.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . .

29 29 30 34 35 37 37 38

5

Social Bricolage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 What Is Bricolage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Wind Turbine Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 The Netherlands: Second-Largest Exporter of Agricultural Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Definition of Bricolage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Bricolage and Social Entrepreneurship . . . . . . . . . . . . . . . . . . 5.6 Cycling Without Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . .

41 41 41

. . . . . .

44 46 47 49 50 50

Business Sectors Involved in Social Entrepreneurship . . . . . . . . . . 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Social Economy, Social Enterprise, and Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Cases of Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . 6.3.1 AUARA: Social Water . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 Mobile Dance: The Most Humane Art . . . . . . . . . . . . 6.3.3 Timpers: The Inclusive Shoe . . . . . . . . . . . . . . . . . . . 6.3.4 Brave Up: For a Healthy School Ecosystem . . . . . . . . 6.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .

53 53

. . . . . . . . .

54 57 57 60 61 63 64 65 65

Social Entrepreneurship: Where to Go Next? . . . . . . . . . . . . . . . . 7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Social Entrepreneurship as a Collective Phenomenon . . . . . . . 7.3 Main Challenges in the Path of Being a Social Entrepreneur . . 7.4 Limitations and Future Studies . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

69 69 70 71 72 73

. . . .

77 77 78 80

6

7

Part II 8

Social Entrepreneurship from a Macro Perspective

The Lineup of Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . 8.1 Aggregation of Behaviors: A Social Perspective . . . . . . . . . . . 8.2 The Sequence of Social Entrepreneurship . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contents

ix

9

The Origins of Social Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Beginning of Social Entrepreneurship . . . . . . . . . . . . . . . . . . . 9.3 Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.1 Market Failures and Externalities . . . . . . . . . . . . . . . 9.3.2 The Role of the Governments . . . . . . . . . . . . . . . . . . 9.3.3 Social Activism and Charity . . . . . . . . . . . . . . . . . . . 9.4 Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . .

10

Social Entrepreneurship as a Form of Institutional Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 What Institutions Stand for . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 Institutional Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.1 Institutional Entrepreneurship . . . . . . . . . . . . . . . . . . 10.3.2 Institutional Entrepreneurs . . . . . . . . . . . . . . . . . . . . 10.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 91 . 91 . 92 . 95 . 96 . 97 . 99 . 100 . 101

11

Legitimacy of Social Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Definition of Legitimacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 Who Cares About Legitimacy? . . . . . . . . . . . . . . . . . . . . . . . 11.4 Sources of Legitimacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5 Types of Legitimacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5.1 Joining Both Typologies . . . . . . . . . . . . . . . . . . . . . . 11.6 Legitimacies, Trade-Offs, and Social Entrepreneurship . . . . . . 11.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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12

The Contexts Where Social Ventures Develop . . . . . . . . . . . . . . . . 12.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Social Entrepreneurship Around the World . . . . . . . . . . . . . . . 12.3 Factor-Driven, Efficiency-Driven, and Innovation-Driven Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 How Context Promotes Social Entrepreneurship . . . . . . . . . . . 12.5 The Combination of Results . . . . . . . . . . . . . . . . . . . . . . . . . 12.6 Future Contexts of Social Entrepreneurship . . . . . . . . . . . . . . 12.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 113 . 113 . 114 . . . . . .

81 81 82 83 84 85 86 87 88 89 90

103 103 104 105 106 107 108 109 110 111

116 117 120 121 123 123

x

13

Contents

Institutional Issues About Social Entrepreneurship . . . . . . . . . . . . 13.1 The Unit of Analysis: Social Venture . . . . . . . . . . . . . . . . . . . 13.2 Problem-Solving Perspective . . . . . . . . . . . . . . . . . . . . . . . . . 13.3 Origins of Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . 13.4 Fostering the Change from a Social Entrepreneurial Paradigm . 13.5 The Legitimacy Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.6 The Future of Social Entrepreneurship . . . . . . . . . . . . . . . . . . 13.7 Limitations and Future Research . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

. . . . . . . . .

125 125 125 126 127 128 128 129 130

The Convergence of the Micro and Macro Perspective

14

Introduction and Empirical Framework . . . . . . . . . . . . . . . . . . . . 14.1 The Problem: The Unjust Equilibrium . . . . . . . . . . . . . . . . . . 14.2 The Solution: Paint Against Chagas . . . . . . . . . . . . . . . . . . . . 14.3 The Entrepreneur as the Actor of Change . . . . . . . . . . . . . . . . 14.4 Entrepreneurial or Prosocial Motivation? . . . . . . . . . . . . . . . . 14.4.1 Opportunity Discovery . . . . . . . . . . . . . . . . . . . . . . . 14.4.2 Opportunity Exploitation . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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135 136 136 138 139 140 141 142

15

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 Case Study and Unit of Analysis . . . . . . . . . . . . . . . . . . . . . . 15.2 Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . .

145 145 145 146 147

16

Social Bricolage as the Path to Social Entrepreneurship . . . . . . . . 16.1 The Origins of an Icon in Social Entrepreneurship . . . . . . . . . . 16.2 Social Bricolage: The Solution to Local Problems . . . . . . . . . . 16.3 The Dichotomy Between Economic and Social Value . . . . . . . 16.4 The Paint That Saves Lives . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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149 149 150 152 153 154

17

Social Constructionist and Social Engineer . . . . . . . . . . . . . . . . . . . 17.1 Social Constructionist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2 Social Engineer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2.1 Legitimacy Challenges . . . . . . . . . . . . . . . . . . . . . . . . 17.2.2 Change Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157 157 158 159 160 161

18

An Avenue to Social Equilibrium . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 INESFLY from a Micro Perspective . . . . . . . . . . . . . . . . . . . . 18.2.1 Social Entrepreneur Intention . . . . . . . . . . . . . . . . . . 18.2.2 Social Entrepreneur Personality Traits . . . . . . . . . . . . 18.2.3 Social Entrepreneurship Leadership . . . . . . . . . . . . . .

163 163 164 164 166 167

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19

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18.3 INESFLY from a Macro Perspective . . . . . . . . . . . . . . . . . . . . 18.4 Proposals for Reflection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.5 Contagious Diseases: Is There Research Beyond COVID-19? . . . 18.6 Limitations and Future Research . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168 170 171 172 173

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.1 Zahra’s Social Entrepreneurship Typology . . . . . . . . . . . . . . . 19.2 Bricolage: A Call to Solve Community’s Problems . . . . . . . . . 19.3 Social Constructionism: A Local Solution for a Global Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.4 Social Engineer Vocation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.5 The Social Exploitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.6 The Social Entrepreneurship Cycle . . . . . . . . . . . . . . . . . . . . . 19.7 Limitations and Future Research . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176 177 177 179 180 181

. 175 . 175 . 176 . . . . . .

List of Figures

Fig. 1.1 Fig. 1.2 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 3.4 Fig. 3.5 Fig. 4.1 Fig. 4.2

Fig. 4.3 Fig. 5.1

Fig. 5.2 Fig. 5.3 Fig. 5.4

Social business principles. Source: Own elaboration based on Pangriya (2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Big picture of “The emergence of the social entrepreneurship” book. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Entrepreneurship components. Source: Own elaboration based on Hu and Pang (2013) . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . Who is the social entrepreneur? Source: Own elaboration . . . . . . . . Triple bottom line concept. Source: Own elaboration, based on Tarnanidis et al. (2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Standard Development Goals: Goal 8. Source: Own elaboration, based on UN (2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Six human needs. Source: Own elaboration, inspired by Robbins (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financing sources of social entrepreneurship. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Organizational identity characteristics of ethical banks. Source: Own elaboration, based on Elmawazini et al. (2020) and Valls Martínez et al. (2020) . . . . . . . .. . . . . . .. . . . . . . .. . . . . . . .. . . . . . . .. . . . . . .. . . Principles of ethical banking. Source: Own elaboration . . . . . . . . . . . Comparison of the technology entrepreneurship approach in Denmark and the USA. Source: Own elaboration, based on Garud and Karnøe (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Keys for agriculture in the Netherlands. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Perspectives applied to bricoleur entrepreneurship. Source: Own elaboration, based on Fisher (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key notions of social bricoleur, social constructionist, and social engineer. Source: Own elaboration, based on Zahra et al. (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 3 14 15 17 21 25 30

31 32

43 45 47

48

xiii

xiv

Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 8.1 Fig. 9.1 Fig. 10.1 Fig. 12.1

Fig. 14.1 Fig. 18.1 Fig. 19.1 Fig. 19.2

List of Figures

Social ventures from a business sector perspective. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AUARA’s principles. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . Timpers’ mission, vision, and values. Source: Own elaboration . . . The sequence of social entrepreneurship analysis. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A history of social entrepreneurship. Source: Own elaboration . . . Social entrepreneurs as agents of change. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contexts in which social entrepreneurship develops. Source: Own elaboration based on Hechavarría et al. (2017) and Stephan et al. (2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Microscope image of a sample of the paint Inesfly 5AIGR. Source: Inesfly Corporation website (2021) . . . . . . . . . . . . . . . . . . . . . . . . Stages of institutional change for our case study. Source: Own elaboration based on Greenwood et al. (2002)’s model . . . . . . . . . . . The moment of exploitation divergence. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Social entrepreneurship cycle. Source: Own elaboration . . . . . . . . . .

56 57 62 78 89 100

120 137 169 179 180

List of Tables

Table 3.1 Table 6.1 Table 11.1 Table 18.1 Table 19.1

Implicit motivations of the social entrepreneur . . . . . . . . . . . . . . . . . . . 22 Common legal forms applied to social entrepreneurship . . . . . . . . 59 Typologies of legitimacies and their bases .. . . .. . . .. . . . .. . . .. . . .. . 108 The micro foundations of the social entrepreneur: Dr. Mateo’s case . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . .. . . . . . . . . .. . . . 165 Social entrepreneurship typology applied to the case of INESFLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

xv

Chapter 1

Introduction

What business entrepreneurs are to the economy; social entrepreneurs are to social change. They are the driven, creative individuals who question the status quo, exploit new opportunities, refuse to give up, and remake the world for the better. (Bornstein 2007)

Social entrepreneurship is an area of study that in recent years has considerably increased its interest not only in academia but also in the practical world. Its rise has been a consequence of a social reflection on the functioning of the economy and the functions of the actors that form part of the economic system. In this sense, social entrepreneurship is presented as a solution and a tool to address problems that until now remained unresolved by the traditional discourses of economics. Therefore, the study of social entrepreneurship advances the understanding of the new economic reality, which is complex, ambiguous and volatile, and offers tools for the achievement of a thriving economy (Di Domenico et al. 2010). In line with these arguments, Fig. 1.1 expresses the principles of social entrepreneurship, as outlined by Pangriya (2019). These principles model and adapt the intentionality of social entrepreneurship to search for other ways of doing business. As a consequence, social entrepreneurship’s main contribution is to create social wealth (Zahra et al. 2009), obtaining economic returns through this socio-economic activity. Therefore, they are entities that operate within the conventional economic system but with a different priority objective. In other words, for social entrepreneurship, being solvent and having economic-financial returns are not ends in themselves but means to achieve the priority objective: to create social value. In this scenario, Santos (2012) states the existing trade-off between value creation and value capture in his study. While conventional entrepreneurship has focused its efforts on value capture, social entrepreneurship focuses primarily on creating value for the community in which it operates. An extended discussion arises around this issue: are the two phenomena completely dichotomous? Can value creation and value capture occur in equal measure? This book aims to advance the understanding of the holistic phenomenon of social entrepreneurship using the definition and conceptualization of Santos’ model. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_1

1

2

1 Introduction

Searching for solutions to a social problem

Achieving financial solvency

Economic benefits are reinvested to further promote social value

Are aware of the environment and society

Their workers welfare is a priority

Fig. 1.1 Social business principles. Source: Own elaboration based on Pangriya (2019)

Therefore, the underlying transversal theme throughout the book will be to “reflect on the extent to which the emergence of social entrepreneurship further strengthens the dichotomy posed, or on the contrary, opens the way to new phenomenological situations with respect to the concept of value”. To this end, we have identified two perspectives from which social entrepreneurship deserves to be studied in its entirety: the micro perspective and the macro perspective. The integration of both reflects the economic reality of the twenty-first century, which is shown in the last part of the book through a case study. From the micro perspective, our intention is to understand what is inside the mind of the social entrepreneur in the process of developing the idea and putting it into practice, and what financial resources and which economic sectors are more prominent. The second part of the book, the macro perspective, comprehends the evolution of social ventures considering a succession of events. This succession of events leads to the study of social ventures from an approach related to the change in current societies as well as the vicissitudes that they have to face and the role they have in their contexts (see Fig. 1.2). Figure 1.2 includes an overview of the topics covered in the book, as well as the interaction and relationship between them. Through a journey from the origins of social entrepreneurship and its repercussions at the institutional level to the mind of the social entrepreneur and his main concerns, we invite the reader to immerse himself in the immensities of this economic phenomenon, which presents a promising future, although subject to great challenges.

References

3

Micro

Macro perspective

Social entrepreneur personality traits

Social Bricolage

Sources of financing

Eminent

business

sectors

Origins

of

social

entrepreneurship

Institutional tool

Legitimacy

Regular

business

contexts

Fig. 1.2 Big picture of “The emergence of the social entrepreneurship” book. Source: Own elaboration

References Bornstein D (2007) How to change the world: social entrepreneurs and the power of new ideas. Oxford University Press, New York Di Domenico M, Haugh H, Tracey P (2010) Social bricolage: theorizing social value creation in social enterprises. Entrep Theory Pract 34(4):681–703 Pangriya R (2019) Hidden aspects of social entrepreneurs’ life: a content analysis. J Glob Entrep Res 9(1) Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Part I

Social Entrepreneurship from a Micro Perspective

Chapter 2

A Quick Approach to the Microfoundations of Social Entrepreneurship

2.1

Understanding the Mind of the Social Entrepreneur

Like any entrepreneurial activity, the main purpose of social entrepreneurs is to offer a concise solution to an existing problem. Numerous studies have addressed the determinants of entrepreneurship as a broader concept, identifying innovation, risk taking, and proactivity as the main drivers for the phenomenon (Hu and Pang 2013; Lumpkin and Dess 1996). For the particular case of social entrepreneurship, innovation is placed at the service of a community in the search for better life standards for the group. This process is known as social innovation. Social innovation thus refers to the action of discovering new solutions to existing social problems, generally involving an institutional change (Guerrero and Urbano 2020). The social entrepreneur applies the combination of social innovation, risk-taking actions and proactivity in the resolution to a social problem. The very first section of the book deals with the phenomenon of social entrepreneurship from a microeconomics perspective. Bacq and Janssen (2011), based on the study conducted by Gartner (1985), propose four different units of analysis: the individual, the process, the organization and the context. Applying this categorization to our study, the individual represents the social entrepreneur; the process applies to the resources and tools implemented in the consolidation of the social venture; the organization stands for the social venture itself, and the context refers to the macroeconomic determinants that influence the business. In the light of our premises, the social entrepreneur will be the unit of analysis covered in this first part of the book. We have considered the fragmentation of this first section into four different subsections, diverse to each other and meanwhile complementary with the aim to ensure a complete understanding of the actor that promotes social entrepreneurship. When defining the social entrepreneur, we have decided to combine extrinsic motivations, on the one hand, and intrinsic motivations on the other, with the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_2

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2 A Quick Approach to the Microfoundations of Social Entrepreneurship

objective of obtaining a big picture of the demographic, sociological, and psychological variables that lead an entrepreneur to focus on social and sustainable issues. These conceptions will be covered in Chap. 3.

2.2

The Contextual Figure of the Social Entrepreneur

From a contextual perspective, the role of the social entrepreneur varies between countries and regions. In more developed societies, social entrepreneurs occupy the role of presenting opportunities and new solutions to problems that already existed, such as class, race, and gender inequalities. Addressing these inequalities is a priority for social entrepreneurs, who aim to eradicate them through innovative terms. On these occasions, social entrepreneurs place their previous expertise, knowledge, and personal traits at the service of social innovation with the aim of fulfilling social needs. In Europe, although the first appearance of the “social entrepreneurship” concept was in the late 1980s, it was not until 1990, when it was already advanced, that it started to become widespread within the territory (Defourney and Nyssens 2010), overlapping with the consolidation of the “Triple Bottom Line” (TBL) theory (Elkington 1997). This moment represented a paradigm shift in the perception of business and its connection to society. The TBL concept recognizes that companies are organizations that create value and transform inputs into outputs, thus adding value to primary resources through the transformation process (Rodríguez-García et al. 2019). In the line of social entrepreneurship, TBL argues that the aforementioned value creation should not be focused on economic terms but that companies should create value in three key areas: economic-financial, social, and environmental (Domańska et al. 2018; Hart and Milstein 2003). Additionally, changes in demography, liberalization of economies, and technological development have fostered an ideal scenario for social entrepreneurs to raise the creation of alternative business models focused on achieving social sustainability (Zahra et al. 2008). The current context, influenced by the worldwide health crisis provoked by COVID-19, has left fertile soil for social entrepreneurs to solve social problems through innovative means. As a consequence of the pandemic, specific communities and groups at risk of exclusion have seen their possibilities hampered. With the aim of counteracting the possible negative externalities, social entrepreneurs seek solutions to find social equilibrium. That is, where there is a global economic recession and risk of diminishing human rights, social entrepreneurs are discerning business opportunities. With the accretion of new ways of doing business, the social economy has faced an increasing rise in terminology (Cagarman et al. 2020) associated with the promotion of an economy that advocates the common good (Avila et al. 2018), including the terms of social economy, social enterprise and social entrepreneurship. Chapter 6 intends to disentangle these concepts and shed light on the determinants that characterize their uniqueness. In those less developed and emerging societies, social entrepreneurs have served generally to give voice to

2.2 The Contextual Figure of the Social Entrepreneur

9

problems that until now had been silenced and move towards a more sustainable society in social and environmental terms. Thus, they reduce the adverse effects caused by corrupt practices by the social elite, high-income inequality and a precarious public system. Ultimately, social entrepreneurship encompasses all those innovative activities that generate new ideas, with the aim of exploiting opportunities present in the market and that revert benefits to society and the community. As a consequence, the main contribution of social entrepreneurship is to create social wealth (Zahra et al. 2009). In the mind of the social entrepreneur prevails the creation of value for the society, rather than from their company. This is what Santos (2012) states in his study for the trade-off between value creation and value capture. Whereas commercial entrepreneurship bases its business premises on the appropriation of value (value capture), social entrepreneurship fosters value creation. For some authors, social entrepreneurship is an escape route from the current economic system, often encouraged by the profit motive and the purely economic benefit (Hemingway 2005). The current environment, influenced by technological progress, Sustainable Development Goals and the increasing trend of Corporate Social Responsibility practices, has motivated the social entrepreneur to align its personal traits to the contextual demands. Such personality traits have been extensively studied to determine the profile of an entrepreneur (Weerawardena and Mort 2006; Wry and York 2017). We intend to explain concisely the psychological traits of the social entrepreneur based on three axes: (1) intention of the social entrepreneur, (2) characteristics of personality, and (3) leadership in social entrepreneurship. Among these attributes, the intention of the social entrepreneur, namely place attachment, deserves special attention. It implies that the entrepreneur is close to the origin of the social problem, to which he wants to present a solution (Barendsen and Gardner 2004). When the distance from the social problem is reduced or even non-existent, the ability to feel and think like the people affected by the social problem is more accessible. In other words, the capacity to empathize with the environment is much greater (Bacq and Alt 2018). Empathy is a broader concept that can be divided into several manifestations. One concrete expression is compassion. Compassion is a key driver in the process of social entrepreneurship, since it is an incentive for action in the mitigation or palliation of a community’s suffering (Miller et al. 2012). The motivation for the social entrepreneur comes from the emotional link to the group, to which his/her actions will improve their conditions. This is simultaneously related to the act of prosocial motivation, since it implies that the costs invested for helping other people are worth investing, since the ultimate willingness is their benefit (Miller et al. 2012).

10

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2 A Quick Approach to the Microfoundations of Social Entrepreneurship

The Spark for Social Equilibrium

Social entrepreneurship usually starts by offering a solution at a small level, addressing the needs of a particular regional community. However, this gesture, although it can be considered as insignificant, shows a way to cover social issues with a broader scope. In the light of this process, Zahra et al. (2009) identified three types of social entrepreneurs: social bricoleur, social constructionist, and social engineer. The difference between the three lies mainly in the way they identify the gaps in the market and the elements used to address them. As for the intersection between bricolage and social entrepreneurship, a constructivist approach is used. This means that the bricoleurs do not set opportunity as an a priori goal but shape the reality in which they find themselves based on available resources. The shaping of these opportunities is the antecedent for the creation of value (Baker and Nelson 2005; Janssen et al. 2018). Next, social constructionists intend to incorporate an innovation (either incremental or radical) in a wider context, understood as a market, and finally, social engineers identify a structural problem (as opposed to the conjunctural elements) and introduce tools that are disruptive at the institutional level. A further discussion on this categorization will be addressed in Chap. 5. An example that disentangles the phenomenon of social entrepreneurship covering the three types stated by Zahra et al. (2009) is microfinancing. Microfinancing emerged as a local solution and has become one of the most relevant financing sources for emergent businesses mainly conducted in developing countries. In contrast to conventional financing methods (i.e., banking), where the same entity is responsible for all the capital lent, new modalities appear, in which the final amount lent is divided between a large number of individuals who respond with a small part of the total capital contributed (Martínez-Climent et al. 2018). We are referring to crowdfunding, covered in Chap 3. The term “crowdfunding” refers to the term “crowd” understood as a multitude or group of individuals. All these individuals share a common objective: to support a social entrepreneurial project with financial and economic resources. As in the phenomenon of social entrepreneurship, crowdfunding for social purposes implies a feeling of empathy on the part of the lenders, with perspectives towards society (Rey-Martí et al. 2019), implying that the higher the level of place attachment, the greater the commitment of potential lenders. Alternative financing sources, such as ethical banking and social incubators, are also addressed in this section focused on a micro perspective. After providing a robust theoretical framework about the motivations, challenges and aspirations of social entrepreneurs (Chaps. 3, 4 and 5), it is time to put into practice these conceptions through the lens of real social ventures. Chapter 6 deals with the connection of theory developed in academia to real life, through the exemplification of four cases. These cases serve as inspiration in a context where social entrepreneurship is in the ascendant. The whole section follows a thread on the topic of social entrepreneurship, covering the topics that set the foundations for a rounded understanding of the role of the social entrepreneur in society. For this reason, the themes that have been

References

11

chosen cover the main motivations of the social entrepreneur (see Chap. 3), the principal challenge they face related to financing (see Chap. 4), the origins of the social motivation (see Chap. 5), and real-life examples that put into practice all the previous theoretical understructure (see Chap. 6). We have considered that the complementarity in these themes, and not others, bring readers a well-rounded perception of who the social entrepreneur is. When analyzing the social entrepreneur from a micro perspective, the key drivers for his/her social motivation illustrate the core of the study. These principal motivations are addressed mostly in Chaps. 3 and 4 related to intrinsic and extrinsic parameters. In the path of becoming a social entrepreneur, some difficulties emerge. We intend to cover the principal challenge that risks its long-term survival in Chap. 4, namely, financing. Chapter 6 helps to consolidate the previous concepts and identify them in a real-case scenario. The remainder of the section is organized as follows. Chapter 3 covers the extrinsic and intrinsic motivations, with the objective of presenting a big picture of the demographic, sociological, and psychological variables that lead an entrepreneur to focus on social and sustainable issues. Chapter 4 deals with the main forms of financing for social entrepreneurship, highlighting social crowdfunding, ethical banking, social incubators and government aid. Chapter 5 gives a concise explanation of social bricolage and presents practical insights into the matter. Chapter 6 details insights about the characteristics at a microeconomic level of four practical examples of social ventures.

References Avila RC, Campos JLM, de Guevara RDL, Prieto AV, Blanco L, Roa E, Cáceres LS, Vargas LA, Montero PA, Pacheco ÁR (2018) The social economy facing emerging economic concepts: social innovation, social responsibility, collaborative economy, social enterprises and solidary economy. Ciriec-Espana Revista de Economia Publica Social y Cooperative:5–50 Bacq S, Alt E (2018) Feeling capable and valued: a prosocial perspective on the link between empathy and social entrepreneurial intentions. J Bus Ventur 33(3):333–350 Bacq S, Janssen F (2011) The multiple faces of social entrepreneurship: a review of definitional issues based on geographical and thematic criteria. Entrep Reg Dev 23(5–6):373–403 Baker T, Nelson RE (2005) Creating something from nothing: resource construction through entrepreneurial bricolage. Adm Sci Q 50(3):329–366 Barendsen L, Gardner H (2004) Is the social entrepreneur a new type of leader? Lead Lead 2004 (34):43–50 Cagarman K, Kratzer J, Osbelt K (2020) Social entrepreneurship: dissection of a phenomenon through a German lens. Sustainability 12(18):7764 Defourney J, Nyssens M (2010) Conceptions of social enterprise and social entrepreneurship in Europe and the United States: convergences and divergences. J Soc Entrep 1(1):32–53 Domańska A, Żukowska B, Zajkowski R (2018) Green entrepreneurship as a connector among social, environmental and economic pillars of sustainable development. Why some countries are more agile? Problemy Ekorozwoju 13(2):67–76 Elkington J (1997) The triple bottom line. In: Russo MV (ed) Environmental management: readings and cases. Sage, New York, pp 50–66

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Gartner WB (1985) A conceptual framework for describing the phenomenon of new venture creation. Acad Manag Rev 10(4):696–706 Guerrero M, Urbano D (2020) Institutional conditions and social innovations in emerging economies: insights from Mexican enterprises’ initiatives for protecting/preventing the effect of violent events. J Technol Transf 1–29 Hart SL, Milstein MB (2003) Creating sustainable value. Acad Manag Perspect 17(2):56–67 Hemingway CA (2005) Personal values as a catalyst for corporate social entrepreneurship. J Bus Ethics 60(3):233–249 Hu Y, Pang X (2013) Social entrepreneurial orientation and performance of nonprofit organizations: an empirical study in China. JApSc 13(19):3989–3994 Janssen F, Fayolle A, Wuilaume A (2018) Researching bricolage in social entrepreneurship. Entrep Reg Dev 30(3–4):450–470 Lumpkin GT, Dess GG (1996) Clarifying the entrepreneurial orientation construct and linking it to performance. Acad Manag Rev 21(1):135–172 Martínez-Climent C, Zorio-Grima A, Ribeiro-Soriano D (2018) Financial return crowdfunding: literature review and bibliometric analysis. Int Entrep Manag J 14(3):527–553 Miller TL, Grimes MG, McMullen JS, Vogus TJ (2012) Venturing for others with heart and head: how compassion encourages social entrepreneurship. Acad Manag Rev 37(4):616–640 Rey-Martí A, Mohedano-Suanes A, Simón-Moya V (2019) Crowdfunding and social entrepreneurship: spotlight on intermediaries. Sustainability 11(4):1175 Rodríguez-García M, Guijarro-García M, Carrilero-Castillo A (2019) An overview of ecopreneurship, eco-innovation, and the ecological sector. Sustainability 11(10):2909 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Weerawardena J, Mort GS (2006) Investigating social entrepreneurship: a multidimensional model. J World Bus 41(1):21–35 Wry T, York JG (2017) An identity-based approach to social enterprise. Acad Manag Rev 42 (3):437–460 Zahra SA, Rawhouser HN, Bhawe N, Neubaum DO, Hayton JC (2008) Globalization of social entrepreneurship opportunities. Strateg Entrep J 2(2):117–131 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 3

Who Is the Social Entrepreneur?

3.1

Introduction

This chapter addresses the phenomenon of social entrepreneurship from a microeconomic perspective. Thus, the phenomenon is studied at an individual level, that is, the figure of the social entrepreneur. Like any entrepreneurial activity, the main purpose is to offer a concise solution to an existing problem. Firstly, it is worth highlighting the characteristics common to all types of entrepreneurship, and then the characteristic nuances of social entrepreneurship and social entrepreneur are explained. The approach followed is, therefore, from more general perspective to more specific explanation. Figure 3.1 shows that the three main characteristics that define the phenomenon of entrepreneurship are: innovation, proactivity, and risk taking (Hu and Pang 2013). • Innovation refers to the entrepreneur’s ability to implement new ideas and foster creativity to present different solutions to existing problems (Lumpkin and Dess 1996). • Proactivity is the attitude of having its own initiative and decision (Covin and Slevin 1989). • The adoption of risks consists of investing monetary and temporary resources in the development of an idea without the assurance that the results will be as expected (Lumpkin and Dess 1996). For the particular case of social entrepreneurs, the problem they want to solve directly deals with aspects that affect the quality of life of a community. Therefore, social entrepreneurship encompasses all those innovative activities that generate new ideas (or make previous ideas pivot), with the aim of exploiting opportunities present in the market and that revert benefits to society and the community. Its main contribution is to create social wealth (Zahra et al. 2009). For some authors, social entrepreneurship is an escape route from the current economic system, often © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_3

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3 Who Is the Social Entrepreneur?

Fig. 3.1 Entrepreneurship components. Source: Own elaboration based on Hu and Pang (2013) INNOVATION PROACTIVITY

RISK TAKING

ENTREPRENEURSHIP encouraged by the profit motive and the purely economic benefit (Hemingway 2005). The outstanding social purposes are the creation of stable employment, the social insertion of the most vulnerable groups or the conservation of the environment and sustainability (Zadek and Thake 1997). Thus, social entrepreneurship is carried out in areas where the individual and work are the main things, and the business benefit is the result of well-executed work (Sanchis Palacio 2011). The entrepreneurial spirit also depends on the personal attitude, and it is a behavior that can be motivated and encouraged through different social variables. We distinguish that there are two different types of entrepreneurship: by opportunity and by necessity (Martínez-Rodriguez et al. 2020).

3.2 3.2.1

The Dynamics of Social Entrepreneurship Social Entrepreneurship as a Call to Awareness

Social entrepreneurship sometimes arises as a response to the practices carried out by companies, governments, and non-governmental organizations, which have relegated the social interests of the community to the background. On the one hand, in more developed societies, social entrepreneurs occupy the role of presenting opportunities and new solutions to problems that already existed, such as class, race, and gender inequalities. Addressing these inequalities is a priority for social entrepreneurs, which aim to address in an innovative way. Additionally, more developed

3.2 The Dynamics of Social Entrepreneurship

15

EXTRINSIC MOTIVATIONS Triple Bottom Line Corporate Social Responsability Trend Technological Advances Sustainable Development Goals

INTRINSIC MOTIVATIONS

SOCIAL ENTREPRENEUR

Attitude and intention Personality traits Leadership skills

Fig. 3.2 Who is the social entrepreneur? Source: Own elaboration

societies tend to be more individualistic and focused on economic wealth as the main indicator of global wealth. In this sense, social entrepreneurship also represents a paradigm shift in the scale of values of progress in a community. Additionally, some governments of more developed countries have reduced social aid to cover basic needs, thus representing an incentive for the private sector and entrepreneurs. That is, social entrepreneurs offer solutions to problems not solved by other institutional agents (Zahra et al. 2009). In turn, the promotion of entrepreneurship depends on the formal and informal institutions of a country and region (Lv et al. 2020). On the other hand, in those less developed and emerging societies, social entrepreneurship has served to give voice to problems that until now had been silenced and move towards a more sustainable society in social and environmental terms. Thus, reducing the adverse effects caused by practices corruption by the social elite, high-income inequality and a precarious public system. The Human Development Index synthesizes the global wealth of a nation through three indicators. These three criteria are life expectancy, education, and income per capita. In those countries where this index is low compared to others, social entrepreneurship emerges as an escape route to improve as far as possible one or more of the indicators mentioned above (Zahra et al. 2008). On the other hand, social-demographic variables have been extensively studied to determine the profile of an entrepreneur (Weerawardena and Mort 2006; Wry and York 2017). When defining the social entrepreneur, it has been considered to combine extrinsic motivations on the one hand and intrinsic motivations on the other, with the objective of obtaining a big picture of which are the demographic, sociological, and psychological variables that lead an entrepreneur to focus on social and sustainable issues, as shown in Fig. 3.2. The following sections of the chapter specifically address extrinsic and intrinsic motivations, and it is explained how the combination of both defines the figure of the social entrepreneur.

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3.3

3 Who Is the Social Entrepreneur?

Extrinsic Motivations

To analyze the extrinsic motivations of social entrepreneurs, it is necessary to understand the context and current historical moment. In the first place, it is worth highlighting the globalization of the economy worldwide as the driving force behind the entrepreneurial phenomenon. Additionally, changes in demography, liberalization of economies, and technological development have fostered the proactive creation of alternative business models focused on achieving social sustainability (Zahra et al. 2008). The structure of this subsection is as follows. First, the concept of Triple Bottom Line is presented, then the current trend regarding Corporate Social Responsibility is exposed; the role of technologies in the creation of social entrepreneurship is following, and finally, the development of the SDGs.

3.4 3.4.1

Triple Bottom Line What Is It?

Traditionally the primary purpose of entrepreneurship was to create economicfinancial benefit. However, with the passage of time, entrepreneurs, and firms have recognized the impact produced on the community, especially in environmental terms (pollution, degradation of land use, decrease in natural resources . . .), and social (corporate social responsibility, improving the quality of life of their employees and their families, etc.). From this perspective, various works (Belz and Binder 2013; Majid and Koe 2012) divide the entrepreneurship phenomenon into three large groups: 1. Conventional or normative entrepreneurship. 2. Ecological or environmental entrepreneurship, and 3. Social entrepreneurship. Sustainable entrepreneurship is a broader concept that mainly encompasses environmental and social entrepreneurship (see Fig. 3.3). In practical terms, sustainable entrepreneurship can refer to one of the phenomena mentioned above or to both as a whole. The objective is to satisfy the needs and envision new business opportunities without compromising resources to satisfy the needs of future generations. That is, being responsible and aware of the resources invested in the creation of economic activity and making responsible use of them. When we refer to resources, they are not necessarily exclusively monetary, but also temporary and social, insofar as the working conditions of the employees are dignified and increase the wealth of the community. One of the main characteristics that define social entrepreneurship, and that differentiate it from other entrepreneurship is the will, and the purpose (Bacq and Alt 2018). That is, for conventional entrepreneurship, the

3.4 Triple Bottom Line

17

Fig. 3.3 Triple bottom line concept. Source: Own elaboration, based on Tarnanidis et al. (2019)

Social Wealth

SUSTAINABILITY

Environment al Wealth

Economic Wealth

profit motive is its maximum, while for social entrepreneurship, it is a secondary fact, since the first benefit it seeks to obtain is social and not monetary. The Triple Bottom Line concept recognizes that companies are organizations that create value and transform inputs into outputs, thus adding added value to primary resources through the transformation process (Rodríguez-García et al. 2019). The aforementioned value creation should not be focused on economic terms, but companies should create value and contribute positively in three areas: economicfinancial, social, and environmental areas (Domańska et al. 2018; Hart and Milstein 2003).

3.4.2

Origins and Development

The term “Triple Bottom Line” dates back to the 1990s, although it was not until 1997 that the term was finally officially consolidated thanks to the publication of the British edition of John Elkington’s: Cannibals With Forks: The Triple Bottom Line of twenty-first Century Business. The main idea behind the term “Triple Bottom Line” is summarized concisely in understanding that the success of a company should be measured not only taking into account the conventional financial result but also by its value creation in social and environmental terms (Elkington 1997). In other words, long-term success cannot be achieved at the expense of ignoring the interests of the stakeholders of the company in question. These interests are increasingly varied, diverse, and disruptive, with a common thread running through the companies.

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3 Who Is the Social Entrepreneur?

Ultimately, customers are the most influential stakeholders for companies, since with their consumption, they are making decisions, showing their preferences and reflecting where they want the world to move. Increasingly, companies are aware that consumers (especially potential ones) have a wide variety of information available that will determine the culmination of the purchase process. Therefore, all the information available in the media to which consumers have access should encourage them to consume the products and services offered by the company in question. Direct selling as such, and the role of advertising as it has been understood so far, has no place in a world where customers have the power and capacity to inform themselves and create their own criteria through their autonomous research work. For this reason, issues of image, reputation, and corporate social responsibility are becoming increasingly important for companies, especially for their long-term relationship strengthening with customers. From this perspective, companies accept that they must satisfy the wishes and demands imposed by stakeholders, especially by consumers and customers. If social and environmental awareness is growing among society, the consumption habits of the population will actively reflect this paradigm shift. For their part, in order to survive and meet customer expectations, companies must offer solutions that are in line with society’s interests, which ultimately means providing social and environmental value. For this reason, entrepreneurs see more and more clearly the gaps in the market that are not yet filled in social terms. They have glimpsed that there is a whole market with high potential and that this is also the area in which clients are increasingly demanding innovative and disruptive solutions that increase the quality of life of the population and lessen the adverse effects that the public policies do not cover. Customer-oriented companies and entrepreneurs are in a continuous process of transformation and change as they adapt to the novelties incorporated by consumers in perspective to their competitors. Entrepreneurs recognize at all times the need to adapt to continue maintaining their competitive advantage. Therefore, the entrepreneur, who has his own personal traits and characteristics (innovation, proactivity, and risk taking), is influenced by the market environment and interests (potential customers) and is able to listen to what society expects from them. Thus, presenting a solution that meets the needs not yet covered. In this way, two different aspects that make up the social entrepreneur as a whole are brought together: their innate characteristics and the influence of the environment. At the same time, another extrinsic motivation that currently leads entrepreneurs to choose social ventures is the tendency to promote corporate social responsibility.

3.5

Corporate Social Responsibility Trend

Corporate Social Responsibility (CSR) is identified with the predisposition that companies have to contribute to the society they belong to in an active and positive way. It is based on the fact that companies are aware of their place in the community

3.6 Technological Advances

19

and the impact they have on the quality of life, economy, social life and environment. Expressed in this way, it could be understood that the Triple Bottom Line and corporate social responsibility are the same things. However, although the roots lie in the same fundamentals: the creation of social, economic, and environmental value, the motivations and origins are different. This is where the crux of the matter lies.

3.5.1

Isolated Facts or Corporate Values?

In recent years, technological changes and socio-demographic variables have contributed to the fact that all stakeholders are highly informed and can make firmer and more concrete decisions regarding what they expect from companies. Large multinationals have recently been in the spotlight for ethical issues, including the conditions of the workers they employ, relocation and ultimately the unequal distribution of wealth at the global level (Zahra et al. 2008). Due to the worldwide movement to redistribute wealth and promote human rights, large corporations have been forced to adapt their list of priorities in order to gain acceptance in the community and exceed the number of subscribers (Wojtarowski Leal et al. 2016). In response, various measures have proposed that attempt to make their good practices visible in relation to society and the environment. However, it is worth asking: to what extent are these measures the result of the company’s values, or are they merely isolated practices that seek the approval of stakeholders? For Kliksberg (2006), CSR is not a passing fad but a process by which companies are increasingly aware of society’s demands. This suggests that the concept of private enterprise is constantly changing. It is therefore a transition from the capitalist enterprise model. The end result of this process would be the establishment of the theoretical Triple Bottom Line model in the company. Here lies mainly the difference between both concepts: while CSR are generally isolated practices that corporations decide to implement in response to external demands, the Triple Bottom Line derives from a reflective act of awareness of the environment by entrepreneurs and/or companies. Thus, CSR is a very powerful motivation for social entrepreneurs today. It is an added sign of what other environmental trends already announce. It is just another extrinsic motivation that consciously or unconsciously conditions entrepreneurs to develop or improve business ideas that create social value as well as economic.

3.6

Technological Advances

The world as it was known has changed, and as a consequence, the way we relate to each other too. Social networks, search engines, blogs, among many others, were created with the aim of being a tool for users. In other words, a way to reach our

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3 Who Is the Social Entrepreneur?

objectives through a different technology than the one previously established. However, in the last decades and specifically in the last few years, it has become a part of our lives. From the point of view of entrepreneurship, technological advances have led to the creation and establishment of new ideas to solve existing problems in society. Not only are the ideas innovative, but the way of presenting the solution (methodology) is on many occasions, the additional contribution. Today, companies that are not present in the networks are condemned to not survive in short to medium term. For this reason, incipient social entrepreneurs have identified a gap in the market that can be easily addressed with the use of new mobile applications (among others), which make life easier for users. The surplus of food in restaurants, supermarkets, and cafeterias that have not been consumed throughout the working day is now possible to save it through a mobile application that offers very reduced price packages to its users. Drug testing of drinks in bars and nightclubs is now possible also with a mobile application. These are just a couple of examples of the application that technology is bringing to the development of social entrepreneurship in our community. Too Good To Go 8 Under the slogan: “Save food around you,” a movement has been created at a European level with the aim of not wasting food that is not sold in food-related establishments and restaurants. This is a business model with a double target customer (establishments and end users), which belongs to the circular economy. The entrepreneurs saw a problem in society: food waste, and through a mobile app they manage to put food establishments and consumers in touch, offering them a food pack at a very affordable price. The benefit is clear: quality food at a low price, food that is not thrown away, and reduction of emissions into the atmosphere. Additionally, from a functional and cost point of view, the technology added to these business models has also favored the rapid establishment of new business creations, given that the initial capital is low and the fixed costs to be covered in the 0 period are minimal. This fact opens many doors to all those entrepreneurs who are proactive, energetic, with great enthusiasm to start their new business without the need for a wide range of financial resources. Regarding the sources of financing, Chap. 4, deals extensively with the main origins and characteristics of the methods used.

3.7 Sustainable Development Goals

3.7

21

Sustainable Development Goals

Sustainable Development Goals have as their main mission to promote the development of people, the environment and prosperity. They are composed of different points to be addressed by the member states, which establish an action plan in a time frame until 2030. Specifically, objective number 8 focuses on promoting economic development that is viable and sustainable in the long term (UN 2015), expressed in Fig. 3.4. The safety and conditions in which the employees carry out their activities are also a priority for the achievement of this objective. Traditionally the focus has always been on maximizing only economic returns. It has been considered that there are trade-offs in economic, social and environmental issues; and that the scope of one of them is exclusive to the rest. The new perspective of social entrepreneurship ensures that they are complementary and that even positive synergies are generated in the creation of value of the spheres simultaneously (Rahdari et al. 2016; Wang et al. 2020). Today’s economic development requires a balance between the creation of monetary value and, above all, social and environmental value. If societies prosper and we protect natural resources, the community as a whole wins. The purpose is to achieve decent and morally acceptable working conditions to eradicate precarious and forced labor, and ultimately slavery and human trafficking. Social entrepreneurship and business creation based on the three pillars mentioned above (Triple Bottom Line) will help the economic and sustainable development of the people and the prosperity of their lifestyles (Kassim et al. 2020). Stable and longterm economic development cannot be understood without meeting the demands of its main asset: its workforce. After this first part, we conclude the following: social entrepreneurs are individuals committed to the environment and the community in which they live, and therefore it is not possible to understand their figure completely without understanding the conditions of the environment that surround them. As stated by Ortega y Gasset (1983), I am me and my circumstances, so it is important to understand the current starting point and the context in which social entrepreneurs currently operate to obtain a global, integral, and holistic vision of their person.

GOAL 8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Fig. 3.4 Standard Development Goals: Goal 8. Source: Own elaboration, based on UN (2015)

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3.8

3 Who Is the Social Entrepreneur?

Implicit Motivations

In addition to the motivations of the environment and socio-demographic variables, social entrepreneurs are characterized by their particular personality traits and natural predispositions that are the source of their innovative and disruptive ideas. Taking as a reference the distinction made by Porcar and Soriano (2017), we will divide this section into three different sections: (1) intention of the social entrepreneur, (2) characteristics of the personality, and (3) leadership in social entrepreneurship. In summary, Table 3.1 explains the main points addressed by each of the above criteria.

3.8.1

Intention of the Social Entrepreneur

There are different social values that explain the intention of the social entrepreneur. The intention is the result of attitude before a phenomenon and of the subjective norms of behavior. For some authors (Bacq and Alt 2018; Pangriya 2019), empathy is a predecessor to entrepreneurial activity in social matters. This is mainly for two reasons: personal efficiency and social value. Individuals who are able to understand through observation, personal responsibility, and respect what the social problems currently are in our society, are those who show high levels of empathy with the community to which they belong. The word respect, as its etymological origin explains, derives from the lexical family “specere” (to look). Thus, respect for something is understood as the observation of a phenomenon absolved of value judgment. Emotional intelligence has sometimes proved to be the antecedent of empathy and as a consequence of social entrepreneurship. Additionally, the sense of belonging to a community greatly favors that the social entrepreneur feels morally responsible and, as a consequence, wants to contribute positively to the environment in which he or she is located, from which he or she receives inputs and feedback (positive and negative). The result of place attachment is manifested through activism in civic matters, protection of community interests, and responsible behavior (Wen et al. 2020). Place attachment has two different perspectives that work simultaneously: place dependence and place identity. While dependence is based on practical and functional issues, identity is related to more emotional aspects (Budruk et al. 2009). The knowledge of values, beliefs, and Table 3.1 Implicit motivations of the social entrepreneur Social entrepreneur intention • Empathy. • Prosocial motivation. • Place attachment. • “Think outside the box” Source: Own elaboration

Social entrepreneur personality traits • Trauma in the early ages. • Transformative personal experience. • Six human needs.

Social entrepreneurship leadership • Entrepreneurial orientation. • Leadership efforts in business and social entrepreneurship. • Transformational leadership.

3.8 Implicit Motivations

23

culture of the community to which he/she belongs, gives the social entrepreneur a wide range of information that can be very useful when establishing the business, meet the needs of users more specifically, and increase the quality of service provided. The place attachment implies that the entrepreneur is close to the origin of the social problem, for which he wants to present a solution (Barendsen and Gardner 2004). When the distance from the social problem is reduced, or even non-existent, the ability to feel and think like the people affected by the social problem is more accessible. In other words, the capacity to empathize with the environment is much greater (Bacq and Alt 2018). When there is a lack of knowledge about a particular phenomenon, empathy is much more difficult to achieve. On the contrary, the sum of this knowledge, plus respect and responsibility, results in high levels of empathy with the surrounding environment (Barendsen and Gardner 2004). Empathy alone (although it is an influential underlying motive) does not in itself determine social entrepreneurship. Something else is needed. This transformative turning point for the social entrepreneur is prosocial motivation. Prosocial motivation is the willingness to benefit others without financial reward (Simón Moya et al. 2015). It is the antecedent of the social entrepreneurial alert. The entrepreneurial alert defends that opportunities can be found even when they are not actively sought. The intention and objectives are found within the entrepreneur in such an intrinsic way that they become part of his essence. This essence is expressed in each of his movements, actions, and thoughts in an unconscious way, under the motto of “Thinking out of the box.” Spontaneity together with the ability to adapt are determining factors in the social entrepreneurial alert, because they do not lose sight of the objective and always find means to achieve it.

3.8.2

Characteristics of the Social Entrepreneur’s Personality

Business skills can be learned, the entrepreneurial mindset cannot. (Barendsen and Gardner 2004)

Social entrepreneurs are characterized by specific and unique personal characteristics and personality traits. These include a passion for the idea to be developed and the creation of value in the community, adaptation to change, and active listening to the environment. Specific motivations such as efficiency and achievement of medium-long-term objectives and a visionary mentality are combined. Social entrepreneurs are energetic individuals, usually with high levels of self-confidence with social skills to influence the group. Even in the economic sphere, there are intrinsic motivations of entrepreneurs that go beyond the merely economic, which different psychological parameters try to explain that not always the only motivation is economic profit. From this

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perspective, the desire to help improve the quality of life of others is not an end in itself, but a tool to achieve personal satisfaction and pleasure (Batson 1987; Simón Moya et al. 2015), because helping others is the way social entrepreneurs feel fulfilled, complete, and satisfied. Barendsen and Gardner (2004) claim that many social entrepreneurs have built themselves up due to traumas that have determined their early years. Having experienced these traumas, which have been very influential in the way they see the world, broadens and strengthens empathy with social groups that are at the same point. The need for action and problem solving is also fostered when the psychological and personal consequences are more intense. These childhood traumas sometimes place them in a different social position from the rest, so they sometimes identify themselves as “outsiders” within the social sphere. The fact of considering themselves different implies going through another path than the others. In short, to be innovative. This innovation is one of the basic premises of every entrepreneur. At the same time, many also express undergoing transforming experiences that have been a turning point in their way of conceiving life and the world. Since the realities for each entrepreneur are different, there is no single social entrepreneur. It is a wide scale of gray, with a similar order of values, but with different manifestations. In short, the way in which they define opportunity, establish mission, and address social problems varies. There are multiple paths that can be taken to reach the same objective, attending to the phenomenon of equifinality. One of the main differences between the social entrepreneur and the conventional (also called business entrepreneur) is the nature of both. The definition of the concept of nature is identified mainly by two issues: lack of transformative experiences and previous evidence of entrepreneurial activities (Barendsen and Gardner 2004). In terms of the first fact, it can be said that some conventional entrepreneurs have experienced some transformative experiences. However, the way of perceiving it and the level of integration at an emotional and personal level is lower. On the other hand, most social entrepreneurs have been involved with some kind of social activity before, such as volunteer programs, helping disadvantaged groups in hospitals, charity houses, associations of people with functional disabilities, etc. . . On the contrary, less than half of the traditional entrepreneurs show to have been involved in entrepreneurial activities before the establishment of their company (Barendsen and Gardner 2004). Through these facts, it is easy to define the “nature” that differentiates one type of entrepreneurship from another. This nature is the establishment of priorities on a scale of values shared among peers. While for social entrepreneurs, altruism and community benefit are established at the top of this list, for conventional entrepreneurs, profit-making and the generation of economic wealth take precedence. According to Robbins (2010), there are six basic human needs and shared with every individual. The six human needs are explained in Fig. 3.5: The fulfillment of these six core needs of every human are understood as the emotional food, water, of sleep of individuals. Whereas the first four are related to the needs of the personality, the last two correspond to the need of the spirit. These needs are placed on a scale of values according to the preference of each individual

3.8 Implicit Motivations

25

1. Certainty: assurance and comfort through which you can obtain pleasure 2. Uncertainty/Variety: the desire to experience new situations, curiosity 3. Significance: relevance in society, uniqueness and speciality 4. Connection/Love: feeling of closeness and atttachment to other individuals 5. Growth: enlargement of understanding, capabilities and personal resources 6. Contribution: feeling of support and help to others Fig. 3.5 Six human needs. Source: Own elaboration, inspired by Robbins (2010)

to achieve personal growth and contribution to society. Without personal growth, there can be no contribution to the environment. From the perspective of social entrepreneurs, the highest priority needs can often be identified with uncertainty and significance. Those individuals who place uncertainty within their core values will find themselves more exposed to adverse situations, where risk and innovation are higher, and as a consequence, they will find previously unseen opportunities. Creativity has also traditionally been related to entrepreneurship (Fillis and Rentschler 2010) and is a consequence of assigning high importance to the uncertainty value. They flee from the standardized model and from the state of permanent comfort, which allows them to look for new solutions for old problems. The importance applied to the value of significance refers to the need of the individual to be recognized in society because of his contribution to it, uniqueness, authenticity, and difference with the rest of the people. These characteristics define the social entrepreneur, who incorporates innovations in his creations that bring value to society, just as he differentiates himself from his present and potential competitors.

3.8.3

Leadership in Social Entrepreneurship

The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails. (John Maxwell)

According to Petrovskaya and Mirakyan (2018), the entrepreneur has to meet certain characteristics and values. The roles of negotiator, organizer, and conqueror are highlighted above all. On the other hand, an entrepreneur must be able to coordinate his team, as well as take risks and be innovative (Blind 2017). It is precisely these latter characteristics that form the entrepreneurial orientation (Basco et al. 2020).

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In terms of leadership, the differences between the social entrepreneur and the conventional entrepreneur are notorious. However, the difference is remarkable when studying the direction in which each type of entrepreneur invests his or her energy. While conventional entrepreneurs focus their efforts on generating the highest possible profit, social entrepreneurs are encouraged by more humanistic or even philanthropic characteristics. Social entrepreneurship is identified with transformational leadership. This concept was first defined in the work of Bass (1985) as the ability to motivate the team towards the achievement of global objectives that go beyond one’s own interests. The entrepreneur (e.g., leader) is in charge of increasing the awareness of all the individuals that are in charge of him/her regarding the social problem to be solved, with the objective of reaching the benefit for the community, over the workers’ own benefit, or even the organization’s benefit (Felício et al. 2013). Transformational leaders grant freedom to their subjects, because in this way, they simultaneously assign responsibilities for which workers must be held accountable as expected. At the same time, leaders provide workers with sufficient tools to achieve these objectives, guiding, advising, and encouraging them in the process. In short, transformational leaders see possibility rather than problems and opportunity rather than difficulty. They believe in the potential of change.

3.9

Summary

1. The main antecedents of the entrepreneurial phenomenon are innovation, proactivity, and risk taking. 2. The discovery of opportunities in the environment is identified with the solution to social problems sometimes generated by market failures. 3. Social entrepreneurs are those agents who seek to make a positive change in society through the implementation of a new solution to an old social problem. 4. Social entrepreneurship acts as a call for increased awareness and sensitivity to issues that affect society. This is because it has its origins in philanthropic organizations. 5. The social entrepreneur becomes himself through the influences and motivations of the environment, added to his innate and unique characteristics. 6. The aim is the creation of social value, while the organization can sustain itself autonomously and be solvent. The economic sphere is the means to achieve the ultimate goal: an increase in the quality of life of the population nearby. Social entrepreneurship is based on the theory of the Triple Bottom Line. 7. The intrinsic motivations of the social entrepreneur are based on his or her genuine personal intention, unique personality traits, and leadership skills. 8. The social entrepreneur not only relies on change, but he is the agent of change. He or she projects this mission through transformational leadership to all employees under his or her charge.

References

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Petrovskaya I, Mirakyan A (2018) A mission of service: social entrepreneur as a servant leader. Int J Entrep Behav Res 24(3):755–767 Porcar TR, Soriano DB (2017) Inside the mind of the entrepreneur. Springer, Cham Rahdari A, Sepasi S, Moradi M (2016) Achieving sustainability through Schumpeterian social entrepreneurship: the role of social enterprises. J Clean Prod 137:347–360 Robbins T (2010) Unlimited power: a black choice. Simon and Schuster, New York Rodríguez-García M, Guijarro-García M, Carrilero-Castillo A (2019) An overview of ecopreneurship, eco-innovation, and the ecological sector. Sustainability 11(10):2909 Sanchis Palacio JR (2011) Emprendimiento, economía social y empleo. Instituto Universitario de Economía Social y Cooperativa de la Universidad de Valencia, IUDESCOOP Simón Moya V, Sastre Sánchez O, Revuelto Taboada L (2015) El emprendedor social: análisis de la alerta social. Suma de Negocios 6(14):155–165 Tarnanidis T, Papathanasiou J, Subeniotis D (2019) How far the TBL concept of sustainable entrepreneurship extends beyond the various sustainability regulations: can Greek food manufacturing enterprises sustain their hybrid nature over time? J Bus Ethics 154(3):829–846 United Nations Development Goals (2015) United Nations website. https://sdgs.un.org/goals/goal8 Wang X, Yuen KF, Wong YD, Li KX (2020) How can the maritime industry meet sustainable development goals? An analysis of sustainability reports from the social entrepreneurship perspective. Transp Res Part D: Transp Environ 78:102173 Weerawardena J, Mort GS (2006) Investigating social entrepreneurship: a multidimensional model. J World Bus 41(1):21–35 Wen T, Zhang Q, Li Y (2020) Why small tourism enterprises behave responsibly: using job embeddedness and place attachment to predict corporate social responsibility activities. Curr Issue Tour:1–16 Wojtarowski Leal A, Silva Rivera E, Alvarez P, de los A, Negrete Ramírez JA (2016) La Responsabilidad Social Empresarial como pieza clave en la transición hacia el desarrollo sustentable en el sector turístico. PASOS Revista de Turismo y Patrimonio Cultural 14 (1):127–139 Wry T, York JG (2017) An identity-based approach to social enterprise. Acad Manag Rev 42 (3):437–460 Zadek S, Thake S (1997) Practical people, noble causes. How to support community-based social entrepreneurs. New Economics Foundation, London Zahra SA, Rawhouser HN, Bhawe N, Neubaum DO, Hayton JC (2008) Globalization of social entrepreneurship opportunities. Strateg Entrep J 2(2):117–131 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 4

Sources of Financing for Social Entrepreneurship

4.1

Introduction

Resources to allow the business ideas of entrepreneurial companies to develop are of vital importance for the survival of this type of organization. For the scope, consolidation, and growth of the venture, financial capital represents a necessary asset (Allison et al. 2015). Unlike NGOs, social ventures generate economic benefits to ensure the stability of the entity. It is, therefore a closed circle, since this surplus is reinvested in the consolidation of the company, whose main mission is the creation of social value in the community (Rizzi et al. 2018). This economic-financial performance is the tool to ensure the ultimate goal. Social entrepreneurship limits the appropriation of the value created (Santos 2012). Thus, all the intermediaries that are part of this chain must share the same principles in order to achieve greater coherence in the business model. This coherence is expressed at the levels of regulatory, normative, and cognitive legitimacy (Rey-Martí et al. 2019a). The legitimacy of a company is determined by the trust that customers and other stakeholders place in it. In this way, the more loyal the organization is to its mission, vision and values, the more confidence and transparency it will transmit to the environment. The level of transparency and legitimacy have a direct and proportional relation. Social entrepreneurs are sometimes reluctant to be part of the oligopoly of the financial system, where a lack of transparency and avoiding making their numbers public is predominant. Similarly, traditional sources of financing sometimes refuse to lend money to companies with social purposes because of the possible inability to repay the amount lent (as a result of the non-prioritization of the profit motive) (Rey-Martí et al. 2019b). If social entrepreneurs want to positively impact the environment, their service providers must do so as well. In response to the emergence of new business models and alternate ways of appropriating economic value, new ways of providing financial capital are finding their way into the market. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_4

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•Peer-to-peer lending for financing social projects

•Basic principles: Integrity, responsibility and affinity Ethical banking

Social crowdfunding

Social incubators

Government aid

•Organizations for the consolidation and growth of social ventures

•Focused on regional and local projects

Fig. 4.1 Financing sources of social entrepreneurship. Source: Own elaboration

The structure of this chapter is as follows: first, the phenomenon of ethical banking will be approached, then social crowdfunding platforms and social incubators will be presented. State aid and subsidies will conclude the chapter. Additionally, practical examples of every financial source are explained in detail. Figure 4.1 shows the big picture of the concepts addressed in this chapter.

4.2

Ethical Banking

As a result of the 2008 crisis and the general mistrust of conventional banking institutions, a new way of managing economic and financial resources appears with the help of ethical banking (Climent Diranzo and Escrivá Llidó 2019). The emergence of ethical banking represents the perfect breeding ground for the promotion of alternate business models to the standardized model, also known as the phenomenon of social entrepreneurship. The similarities between conventional banking and ethical banking are notorious since they share the business model (Rizzi et al. 2018). In other words, both institutions are responsible for keeping their clients’ money, charging interest on the services provided, and investing the money deposited in projects to obtain a certain return. So how do they differ, and why are they a very feasible option for social entrepreneurs?

4.2 Ethical Banking

31

Fig. 4.2 Organizational identity characteristics of ethical banks. Source: Own elaboration, based on Elmawazini et al. (2020) and Valls Martínez et al. (2020)

Purpose

Parcipaon

Interests

Ethical banking

Transparency

Investment

Among the main differences, we can highlight the following, which can also be observed in Fig. 4.2 (Elmawazini et al. 2020; Valls Martínez et al. 2020): 1. Objective to Be Pursued. While the sole objective of conventional banks is profit maximization, ethical banking bases its fundamental pillars on the creation of value in the three spheres: economic, social, and environmental (Guzmán et al. 2020). 2. Interest. Although we have mentioned that both institutions charge interest, it should be noted that interest imposed by ethical banking tends to be more modest (San-Jose et al. 2011). The interest offered by conventional banking tends to be high, especially in the current context in which the financial oligopoly is close to being considered obsolete. 3. Investment. We have specified that both institutions invest their clients’ funds in different activities, which may be speculative or not. In the case of conventional banking, the criterion to determine the projects in which to invest is economic/ financial performance, this being the driver in all decisions. For ethical banking (based on its mission, vision and values), priority is given to investments that contribute to human and sustainable development, society and the environment (Weber and Remer 2011). This also includes projects related to renewable energies, care for the elderly or disabled population, support for groups at risk of exclusion, and education. 4. Transparency. The basic foundation of ethical banking is the publication of investments and projects that are being developed (Riedl and Smeets 2017). In contrast, conventional banking is certainly opaque in making public where they invest their money.

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4 Sources of Financing for Social Entrepreneurship

Integrity • Manifestation of ethical principles on their practices • Lack of information assymetries

Responsibility

Affinity

• Interested in having a positive social effect • Control of risk deposits and increased awareness through campaigns

• Shared values among the company and customer • Entity’s investment policy and customer participation

Fig. 4.3 Principles of ethical banking. Source: Own elaboration

5. Participation. Related to the previous point, the purpose of ethical banking is to encourage its clients and stakeholders to suggest where to put their money (Cristina and Alina 2009). In contrast to unilateral decision-making by shareholders and members of the corporate governance of big enterprises in conventional banking, alternate banking wants to be inclusive and participatory. Organizational identity represents the unique and essential characteristics that define a group of organizations and that in turn differentiate them from the rest. In this particular case, the analysis of ethical banking from an organizational identity point of view set the foundations to understand its unique characteristics and differentiate it from conventional banking. According to the study by Hsu and Hannan (2005), organizational identity is generally associated with abstract and hardly palpable concepts. In practice, organizational identity is the perception that stakeholders have of these characteristics rather than the characteristics themselves. The most important asset of ethical banking is the trust of its clients. In a sector where regulatory standards in terms of ethics are scarce, ethical banking has gone beyond the regulatory and has established more demanding standards in the regulatory and cognitive framework. For the success of this strategy, the legitimacy and trust of users are essential (Guzmán et al. 2020). In the scope of such trust and legitimacy, Boatright (2010) has identified three principles that characterize ethical banking, and at the same time, differentiate it from conventional banking. Figure 4.3 shows a description of each of these principles. The creation of social value is the main principle shared by social entrepreneurs and ethical banking (De Clerck 2009; Ferreira et al. 2016). The integrity of this type of institution leads to a lack of information asymmetries fostered by high levels of transparency (Neuberger 1998). In this way, the clients and the company are knowledgeable and fully aware of the projects in which they are investing, interests,

4.2 Ethical Banking

33

and economic-financial performance. Social responsibility is shared at an individual and collective level and is specified with moderate interest and the promotion of initiatives that increase the commitment to the community. Affinity is a key element in building trust (Sasia Santos 2008). There are two determining elements on the path to maximum levels of affinity: the agreement between customers and the entity and a higher degree of participation. When social entrepreneurs become part of the investing process and have the feeling that with their intermediaries choices can also have a positive implication on the community, affinity and trust levels considerably increase (Guzmán et al. 2020). In short, ethical banking places the banking sector at the service of the community (Climent 2018). The origins of ethical banking in Europe date back to 1462, through the charity Montes de Piedad (Palacio 2014; Climent 2018). However, the emergence of microcredit was in Bangladesh in 1976 with the creation of the Grameen Bank by Muhammad Yunus (Climent 2018). The original idea was to provide microcredit to women with limited financial resources to meet their expenses and basic needs. The results were twofold: set the foundations for ethical banking and foster the empowerment of women (Bayulgen 2008). Worldwide, there are leading institutions in the field of ethical banking, such as South Shore Bank (EEUU) or Caisse Solidaire (France). The main example of good practice in ethical banking at the European level is Triodos Bank. In addition, different studies carried out in Spain have identified other institutions that share the organizational identity of ethical banking: Fiare Banca Etica and Coop57 (Sanchis 2016). Triodos Bank Triodos Bank was created under the name of Triodos Foundation in the Netherlands by various experts in the field who were inspired to create a conscientious and sustainable banking business model. It finally consolidated its position as a bank in 1980, being a pioneer in the sector and a model of good practice. By financing organizations that promote human, social, environmental, and cultural progress and development, Triodos Bank aims to have a positive impact on society, placing the integrity of people, sustainable development and quality service at the heart of its strategy. In accordance with the main values of ethical banking set out in Fig. 3.3, Triodos Bank has specialized tools which ensure and strengthen each of them (Guzmán et al. 2020), which are set out below: • Integrity: Exposure of the securities that determine its financial operations and publication of the annual accounts and social impact. • Responsibility: Existence of risk control mechanisms, adhering to the Deposit Guarantee Scheme. • Affinity: Social criteria as a priority for the choice of assets and publication of all its investment projects.

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4 Sources of Financing for Social Entrepreneurship

4.3

Social Crowdfunding

Many small people, in small places, doing small things can change the world. Eduardo Galeano

In recent years, crowdfunding has gained considerable popularity not only in academic literature (Schwienbacher and Larralde 2010; Mitra et al. 2019), but also in the business world, being a very viable option for entrepreneurs in the early stages (Gafni et al. 2020). For young entrepreneurs, financing issues are often decisive. Crowdfunding is presented as a solution to the conventional methods of financing, since it is highly accessible for social ventures. Traditionally, these types of entrepreneurs have relied on informal resources such as help from family and friends, own resources (savings), and conventional banks (Buckley 1997). Crowdfunding therefore represents an opportunity to obtain financing (Fleming and Sorenson 2016) and which allows social entrepreneurs to obtain financial resources at low interest rates and flexible conditions (Bruton et al. 2008). As a result, the barriers to entrepreneurship are reduced, promoting greater dynamism and expansion in economies (Galak et al. 2011). There are four different types of crowdfunding: equitybased, lending-based, reward-based, and donation-based (Buerger et al. 2017). The financial world is changing according to the demands of the market, and especially of stakeholders and clients. As mentioned in Chap. 3, there are extrinsic forces that influence and drive the social entrepreneur. The creation of crowdfunding has been strengthened by the appearance of new technologies (Rey-Martí et al. 2019a). As a result, the possibility of creating online platforms that act as intermediaries between those who need financing and those willing to offer it in exchange for a reward also has a growing trend. The Triple Bottom Line, motivated by the increasing concern and awareness of consumers for the environment and society, has led to the creation of movements within crowdfunding with sustainable priorities. One example is prosocial crowdfunding (Allison et al. 2015; Gafni et al. 2020). In the phenomenon of crowdfunding, the determinants of success are the entrepreneurial narrative, the venture, and other personal details (Martens et al. 2007; Allison et al. 2015). As far as prosocial crowdfunding is concerned, responses from lenders are noticeably more positive when the aim of the venture is to help others rather than the business opportunity itself. To understand this fact, it is necessary to understand the nature of the present financing route. In contrast to conventional banking, where the same entity is responsible for all the capital lent, in this new modality, the final amount lent is divided between a large number of individuals who respond with a small part of the total capital contributed (Martínez-Climent et al. 2018). The very term “crowdfunding” refers to the term “crowd” understood as a multitude or group of individuals. All these individuals share a common objective: to support a social entrepreneurial project with financial and economic resources. As in the phenomenon of social entrepreneurship, crowdfunding for social purposes implies a feeling of empathy on the part of the lenders, with perspectives towards society (Rey-Martí et al. 2019b). Thus, reducing the social distance between lenders and borrowers has a positive implication for the

4.4 Social Incubators

35

possibility of success in the operation (Galak et al. 2011). Furthermore, the higher the level of place attachment, the greater the commitment of potential lenders. A disadvantage of crowdfunding as a form of financing is the lack of confidence on the part of investors. When the perceived distance from the project and entrepreneurs is low, confidence is positively affected. In the same way, to eliminate possible barriers between agents (investor-lenders), it is very interesting to appeal to the phenomenon of transparency. The benefit that lenders contribute with their contribution is twofold: they help the community and support the consolidation of a business idea (Assenova et al. 2016). One of the most relevant platforms in the Spanish context with regard to social crowdfunding is the equity-crowding platform “La Bolsa Social.” This is the first participative financing platform authorized by the CNMV (National Stock Market Commission) in Spain, which is committed to the Sustainable Development Goals (SDG). La Bolsa Social La Bolsa Social is a collective financing platform that coined the term “crowdimpacting.” Crowdimpacting is defined as the financing of a project in a participatory way, in which all members that are part of the process (investors, and companies) make a positive impact on society. In short, La Bolsa Social supports companies and investors with social impact. The entity is aware that the world is changing and the demands from companies and investors are aligned with sustainability. Their maxim is the defense of ethical finance and the democratization of the financial system. The main defining values of this platform are impact, innovation, rigor, and transparency. The process is simple and consists of four different stages: selection, analysis, campaign, and monitoring. Some of the most outstanding projects include “TUCUVI:” a virtual assistant offering support and follow-up for chronic and elderly patients, or “ECODICTA:” monthly rental of garments as an alternate to the “fast-casual” model of using and throwing. As a result, all the projects financed through this platform are identified with social entrepreneurship.

4.4

Social Incubators

Incubators have been defined as a tool for achieving economic progress in a region. Hausberg and Korreck (2020, p. 13) defined incubators as “those organizations that support the foundation and/or growth of new businesses as a central element of their organizational goal.” Entrepreneurship incubators such as Y Combinator have made possible the creation of companies (i.e., Airbnb or Dropbox), which today report relevant benefits for the economy and society (Sansone et al. 2020). By encouraging entrepreneurship, incubators also participate in the exercise of innovation and territorial progress (Mas-Verdú et al. 2015), reducing the failure rate of new ventures (Sansone et al. 2020). In the literature, there are different classifications for the

36

4 Sources of Financing for Social Entrepreneurship

incubator phenomenon (Nicolopoulou et al. 2017). Carayannis and Von Zedtwitz (2005, p.103) identify that there are five different types of incubators: 1. 2. 3. 4. 5.

The commercial incubator. The regional incubator. The company-internal incubator. The virtual incubator. The university incubator.

The main criteria for defining the organizational identity of incubators is the mission and the type of relationships it fosters (Carayannis and Von Zedtwitz 2005). In recent years and continuing with the characteristic trend of other forms of financing analyzed in this chapter, the concept of the “social incubator” has appeared. The social incubators are intended to support startups that bring benefits to society (Pandey et al. 2017). Thus, the structure and organization of conventional and social incubators are the same, but the purpose is different (Aernoudt 2004). This chapter is defined by the inclusion of the term social in each and every one of the ingredients of the equation. Two of the best-known examples worldwide of this type of incubator are Yunus Social Business and Uncharted (Sansone et al. 2020). Muhammad Yunus was the pioneer of microcredit worldwide and set the benchmark in social entrepreneurship and education (Kickul et al. 2012). The creation of the Grameen Bank changed the lives of thousands of people, increasing their quality of life and providing them with the means to survive. Yunus wanted to go one step further and support social entrepreneurship projects around the world. To do so, he created an incubator for social projects that operates worldwide: Yunus Social Business “A charity dollar has one life—a social business dollar can be invested over and over again.” (Yunus Social Business 2020) In 2011, Muhammad Yunus, together with Saskia Bruysten and Sophie Eisenmann, directors of the Grameen Creative Lab, established the Yunus Social Business. Currently based in Germany, the objective was clear: to finance and promote the growth of social ventures around the world. Their funds help the growth and consolidation of social ventures focused on aspects of education, health, and clean energy (among others), mainly in the areas of East Africa, Latin America, and India (Yunus Social Business 2020). They convert donations into investments, long-term loans and support ventures throughout the process with the aim of scaling their social positive impact. In addition, there are mentoring programs for early stage businesses to help define the business model and establish an action plan for growth. One of their most prominent projects is Cycle Connect, developed in Uganda. In the rural areas of the country, the population is usually far away from financial institutions. The idea began in 2014 with a lease-to-own bicycles business model and (continued)

4.6 Summary

37

the result was very successful. Increasingly, they are including other material and financial assets in their portfolio, helping the rural population to escape from the poverty in which they are immersed.

4.5

Subsidies, Public Aid, and Angel Investors

Public subsidies and support for social entrepreneurship are no less important or prominent. However, they respond to conventional models of obtaining financial resources for the development of the entrepreneurial idea and are specific to each region or community. Scholarships and foundations are increasingly restricting their resources and are difficult to access at present. Parallel to this trend, new business models are appearing (i.e., crowdfunding, ethical banks, social business incubators) which aim to cover this gap in the market. The demand for available resources is also increasing, making it even more difficult to obtain this public aid. Once again, recent innovative solutions aim to address the problems of a society that is increasingly aware of social and environmental justice (Smith and Nemetz 2009). In short, there are social problems that can be solved by government aid, but others that cannot (Dees 2007). In addition to the innovative solutions discussed in this chapter, we may also mention business angels. This financing entity from a social perspective is still at its nascent stage, lacking a particular definition, but it is outstanding in the area of entrepreneurship in a broader sense. A business angel is a personal investor who decides to support an entrepreneurial project with risk capital and without any personal relationship prior to the investment (Maxwell et al. 2011). Thus, they are decisive, especially in the early stages of the project, where generally the capital injection is higher and necessary to startup the project.

4.6

Summary

1. The financial means act as intermediaries to achieve the goal pursued by social entrepreneurs: the creation of social welfare. 2. Economic profit plays no role in NGOs. Social entrepreneurship goes one step further and reinvests the economic surplus to enlarge the social impact. 3. All the intermediaries that belong to the chain of the social venture must share the same principles in order to achieve greater coherence in the business model. 4. Some of the alternative financing sources for social entrepreneurs are ethical banking, crowdfunding platforms, social incubators, government aid, and business angels.

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4 Sources of Financing for Social Entrepreneurship

5. The organizational identity of ethical banking is based on social and environmental mission, modest interests, transparency, and stakeholder participation. 6. Prosocial crowdfunding is motivated by the rise in awareness among consumers about the environment and society, which has led to the creation of movements with sustainable priorities. 7. Social incubators are organizations intended to help consolidate, support, and enhance startups that bring benefits to society. 8. The increasing demand for public aid for social entrepreneurship, added to its restrictions, brings a fertile breeding ground for other financing business models to appear.

References Aernoudt R (2004) Incubators: tool for entrepreneurship? Small Bus Econ 23(2):127–135 Allison TH, Davis BC, Short JC, Webb JW (2015) Crowdfunding in a prosocial microlending environment: examining the role of intrinsic versus extrinsic cues. Entrep Theory Pract 39 (1):53–73 Assenova V, Best J, Cagney M, Ellenoff D, Karas K, Moon J, Neiss S, Suber R, Sorenson O (2016) The present and future of crowdfunding. Calif Manag Rev 58(2):125–135 Bayulgen O (2008) Muhammad Yunus, Grameen Bank and the Nobel Peace prize: what political science can contribute to and learn from the study of microcredit. Int Stud Rev 10(3):525–547 Boatright JR (2010) Finance ethics: critical issues in theory and practice. Wiley, Chichester Bruton GD, Ahlstrom D, Obloj K (2008) Entrepreneurship in emerging economies: where are we today and where should the research go in the future? Entrep Theory Pract 32(1):1–14 Buckley G (1997) Microfinance in Africa: is it either the problem or the solution? World Dev 25 (7):1081–1093 Buerger B, Mladenow A, Strauss C (2017) Equity crowdfunding market: assets and drawbacks. In: Thirty eighth international conference on information systems (ICIS), Special Interest Group on Big Data Processing. Seoul 1–6 Carayannis EG, Von Zedtwitz M (2005) Architecting gloCal (global–local), real-virtual incubator networks (G-RVINs) as catalysts and accelerators of entrepreneurship in transitioning and developing economies: lessons learned and best practices from current development and business incubation. Technovation 25(2):95–110 Climent F (2018) Ethical versus conventional banking: a case study. Sustainability 10(7):2152 Climent Diranzo FJ, Escrivá Llidó MV (2019) Banca Ética y Banca Tradicional. Comparativa entre Triodos Bank y Banco Santander. REVESCO. Revista de Estudios Cooperativos (130):55–72 Cristina BT, Alina BI (2009) The financial crisis’s impact on ethical financial institutions. Ann Univ Oradea, Econ Sci Ser 18(3) De Clerck F (2009) Ethical banking. In: Ethical prospects. Springer, Dordrecht, pp 209–227 Dees JG (2007) Taking social entrepreneurship seriously. Society 44(3):24–31 Elmawazini K, Khiyar KA, Aydilek A (2020) Types of banking institutions and economic growth. Int J Islam Middle East Financ Manag 13(4):553–578 Ferreira FAF, Jalali MS, Ferreira JJM (2016) Experience-focused thinking and cognitive mapping in ethical banking practices: from practical intuition to theory. J Bus Res 69(11):4953–4958 Fleming L, Sorenson O (2016) Financing by and for the masses: an introduction to the special issue on crowdfunding. Calif Manag Rev 58(2):5–19 Gafni H, Hudon M, Périlleux A (2020) Business or basic needs? The impact of loan purpose on social crowdfunding platforms. J Bus Ethics:1–17

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Galak J, Small D, Stephen AT (2011) Microfinance decision making: a field study of prosocial lending. J Mark Res 48 (SPL):S130–S137 Guzmán C, Savall T, Solórzano-García M (2020) Ethical banking in Spain: does an organisational identity exist that distinguishes it from conventional banking? J Soc Entrepr:1–28 Hausberg JP, Korreck S (2020) Business incubators and accelerators: a co-citation analysis-based, systematic literature review. J Technol Transfer 45(1):151–176 Hsu G, Hannan MT (2005) Identities, genres, and organizational forms. Organ Sci 16(5):474–490 Kickul J, Terjesen S, Bacq S, Griffiths M (2012) Social business education: an interview with Nobel laureate Muhammad Yunus. Acad Manag Learn Edu 11(3):453–462 Martens ML, Jennings JE, Jennings PD (2007) Do the stories they tell get them the money they need? The role of entrepreneurial narratives in resource acquisition. Acad Manag J 50 (5):1107–1132 Martínez-Climent C, Zorio-Grima A, Ribeiro-Soriano D (2018) Financial return crowdfunding: literature review and bibliometric analysis. Int Entrep Manag J 14(3):527–553 Mas-Verdú F, Ribeiro-Soriano D, Roig-Tierno N (2015) Firm survival: the role of incubators and business characteristics. J Bus Res 68(4):793–796 Maxwell AL, Jeffrey SA, Lévesque M (2011) Business angel early stage decision making. J Bus Ventur 26(2):212–225 Mitra P, Hermans J, Janssen F, Kickul JR (2019) Social entrepreneurship and crowdfunding: the importance of rewards and prosocial motivation. Acad Manag Proc 2019(1):18159 Neuberger D (1998) Industrial organization of banking: a review. Int J Econ Bus 5(1):97–118 Nicolopoulou K, Karataş-Özkan M, Vas C, Nouman M (2017) An incubation perspective on social innovation: the London hub – a social incubator. R&D Manag 47(3):368–384 Palacio JRS (2014) La banca que necesitamos: De la crisis bancaria a la banca ética. Universitat de València, Una alternativa socialmente responsable Pandey S, Lall S, Pandey SK, Ahlawat S (2017) The appeal of social accelerators: what do social entrepreneurs value? J Soc Entrep 8(1):88–109 Rey-Martí A, Mohedano-Suanes A, Simón-Moya V (2019a) Crowdfunding and social entrepreneurship: spotlight on intermediaries. Sustainability 11(4):8–10 Rey-Martí A, Mohedano-Suanes A, Simón-Moya V (2019b) Crowdfunding and social entrepreneurship: spotlight on intermediaries. Sustainability 11(4):1175 Riedl A, Smeets P (2017) Why do investors hold socially responsible mutual funds? J Financ 72 (6):2505–2550 Rizzi F, Pellegrini C, Battaglia M (2018) The structuring of social finance: emerging approaches for supporting environmentally and socially impactful projects. J Clean Prod 170:805–817 Sanchis JR (2016) La revolución de las finanzas éticas y solidarias. Revista de economía, empresa y sociedad Oikomics 6:28–34 San-Jose L, Retolaza JL, Gutierrez-Goiria J (2011) Are ethical banks different? A comparative analysis using the radical affinity index. J Bus Ethics 100(1):151–173 Sansone G, Andreotti P, Colombelli A, Landoni P (2020) Are social incubators different from other incubators? Evidence from Italy. Technol Forecast Soc Chang 158:120132 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Sasia Santos PM (2008) Entender hoy la banca ética. Revista Internacional de los Estudios Vascos 53(2):507–532 Schwienbacher A, Larralde B (2010) Crowdfunding of small entrepreneurial ventures. Oxford University Press, Handbook of Entrepreneurial Finance Smith TC, Nemetz PL (2009) Social entrepreneurship compared to government foreign aid. J Res Mark Entrep 11(1):49–65 Valls Martínez M d C, Cruz Rambaud S, Parra Oller IM (2020) Sustainable and conventional banking in Europe. PLoS One 15(2):e0229420 Weber O, Remer S (2011) Social banks and the future of sustainable finance. Taylor & Francis, London Yunus Social Business (2020). https://www.yunussb.com/about-us. Accessed 16 Nov 2020

Chapter 5

Social Bricolage

5.1

What Is Bricolage?

Entrepreneurship is characterized by the search for new solutions to old problems and the exploitation of opportunities (Shane and Venkataraman 2000). Entrepreneurship is based on three fundamental pillars: innovation, proactivity, and risk taking (Hu and Pang 2013). According to Garud and Karnøe (2003), entrepreneurship, especially the technology entrepreneurship literature, is lacking from a resource-based view. Therefore, the reconfiguration of the resources and capabilities used for developing a business could drive entrepreneurial actions. This is subject to the condition of equifinality, which implies that different paths can lead to the same result. That is, by organizing the available resources and alternating them in different ways, the same outcome can be achieved, i.e., successful entrepreneurship. The following study conducted by Garud and Karnøe (2003) exemplifies the phenomenon of entrepreneurship from a resource perspective.

5.2

Wind Turbine Technology

The study of Garud and Karnøe (2003) compares how resource management and entrepreneurial vision in two different contexts (Denmark and USA) had implications on the results obtained in the development of wind turbine technology. While the USA was characterized by a great unfolding of economic-financial and human resources, Denmark managed to innovate in terms of wind turbines by establishing a very efficient combination of the modest resources they possessed (Garud and Karnøe 2003). In this study, the number of resources invested and their quality was not a determinant of success. There is no direct proportional relationship between the amount of resources invested, and the result obtained (ceteris paribus). © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_5

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5 Social Bricolage

In the same way, it is not a symmetrical phenomenon, where the lack of success has to imply low levels of resources in quantity and quality. That is, the underlying dynamics in the exploitation of available resources is considerably more decisive than the resources themselves, coining this phenomenon as bricolage. The origins of the concept date back to 1967, when the author Levi-Strauss (1967) identified bricolage as improvization and resourcefulness (Miner et al. 2001). The anthropologist distinguished between the tasks carried out by an engineer and those developed by a handyman (or “bricoleur”) (Fisher 2012). On the one hand, the engineer focuses on obtaining the necessary resources to achieve an end; on the other hand, the bricoleur reassembles the resources available to obtain the final objective, that is, to build with what it is available. The bricoleur knows the resources that are on hand, collects, classifies, and arranges them according to his current needs, which means that “the tools not only shape their end purpose, but the purpose is also shaped by the resources available” (Di Domenico et al. 2010, p. 685). Improvization in the creation of the path that leads to the final result is essential in bricolage (Baker et al. 2003). Improvization in organizational terms consists of the reorganization of routines that are in the memory of the worker, with the aim of creating new products, services, or processes (Hatch 1998). It is comparable to the process of improvization of musicians, in which, based on previous knowledge and experience, they build a new piece of work in the present moment (Miner et al. 2001). Improvization, therefore, is not something that stems from a lack of planning but is the result of solid and sustained learning, organizational memory, and the application of present resources and capabilities. In other words, improvization is the temporary meeting point between the execution and composition of a new idea, project, or action (Moorman and Miner 1998), which not only builds on previous learning but also helps to develop short-term learning with long-term implications (Miner et al. 2001). Garud and Karnøe (2003) associate the notion of “breakthrough” with the process of product development conducted in the USA. While organizations in the USA were looking for surprising and disruptive breakthrough results, the Danish initiative was characterized by an incremental change in innovation, towards an adaptation of their resources (bricolage). The difference in the way the processes were embedded into the organization had a considerable impact on its results. The Danish wind turbine dynamics were characterized by the inclusion of all actors in the value transformation process in the system. That is, creating a collaborative network between designers, producers, and customers. They also encouraged feedback from customers on a constant and continuous basis in order to implement changes and progress gradually (Garud and Karnøe 2003). A logic of integration of diverse resources was implemented in the USA following a linear process and relying fully on technologies considered as pioneering. This linear process implied relegating the collaboration of the actors involved and constant feedback to second place. The conclusion drawn from this research is that entrepreneurship is not only about discovering opportunities in isolation and individually but also about discovering opportunities collectively (Garud and Karnøe 2003).

5.2 Wind Turbine Technology

Denmark

Bricolage

43

USA

Breakthrough

- Involvement of all the actors in the value creation process

- Isolation of the actors involved in the value creation process

- Scale up model from modest resources to incremental changes

- High efficiency technology with little improvement

- Collaborative network providing constant feedback

- Lack of a network providing informatiom about critical points

- High involvement from the ownership

- High involvement from the ownership

Fig. 5.1 Comparison of the technology entrepreneurship approach in Denmark and the USA. Source: Own elaboration, based on Garud and Karnøe (2003)

In the design and implementation of various processes, the synergic potential that exists between a set of actors who collaborate with each other provides an increase in the quality of the results obtained. It is also a matter of expectations and reality. While the Danish organizations (bricolage) carried out gradual increases in the turbines without expecting a great sudden result, the American companies (breakthrough) positioned as a priority the disruption in the market with their new incorporation (see Fig. 5.1) (Garud and Karnøe 2003). The differences in the approach that each team defended were manifested in the role that each group of actors (e.g., users, producers, designers, etc.) adopted in the process. While the US team producers had the objective of designing a turbine that was very disruptive in terms of speed, weight, and technology employed, the Danish producers progressively scaled up from a model that was slow and very heavy but were very much aware of the resources they possessed. In this way, they knew very well the applications and usefulness of all the elements within their reach, also accepting their limitations. With all this concise information, the Danish producers had the power to make incremental and gradual changes that allowed them to advance in the process towards the objective. In short, the closeness between the actors in the case of the Danish company encouraged a “hands-on” attitude, as opposed to the “hands-off” approach presented by the American group. Ownership played a key role on both sides. In Denmark, ownership and use were aligned, so ownership involvement was greater in the value creation process. In contrast, the link between ownership and use in the American case was weak, reducing the quality and quantity of constructive feedback (Garud and Karnøe 2003). All these statements offer a big picture and a more concrete understanding

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5 Social Bricolage

of social bricolage and breakthrough that goes beyond the use of media in a differential way. That is, it specifies how the involvement of the actors has an impact on the path to development. From the point of view of entrepreneurship, the capabilities that are promoted in bricolage are mainly: flexibility, adaptability, innovation, and proactivity (Barendsen and Gardner 2004). These characteristics are shared with those of the entrepreneur’s profile, so the dynamics of bricolage respond to the phenomenon of entrepreneurship. These dynamics are consolidated in the collaboration between the actors and the absence of the search for a disruptive result. Bricolage is always born in local environments, where the actors have knowledge about the available means, and thanks to their interaction they are able to combine isolated elements to increase their functionality (Gavetti and Levinthal 2000; Garud and Karnøe 2001).

5.3

The Netherlands: Second-Largest Exporter of Agricultural Products

The bricolage phenomenon is also applied to the economy at the macro level. Currently, the second-largest exporter of agricultural products after the USA is the Netherlands (CBS 2019). The economic figure of total exports in 2018 amounts to a total of 90.3 billion euros (University of Wageningen 2019). These facts are surprising since the territorial surface of the Netherlands is much smaller than that of their main national competitors in terms of exports, such as the USA or Spain (Juchniewicz and Łukiewska 2020). In fact, the surface area of the Netherlands is smaller than that of Aragon (one of the 17 regions of Spain) and amounts to a total of 17.4 million people (CBS 2020). As a consequence, the following questions arise: how can it be that the export levels of the Netherlands are much higher if there are surface limitations? What role do the available natural resources play (soil, water, wind, etc.)? What is, therefore, the role of the use and combination of the resources? All the answers to these questions come from the Wageningen University & Research (WUR), located in southeast Amsterdam. This university has gained worldwide recognition as the best agricultural research university, with numerous publications towards sustainability in the area (Long et al. 2018). It has been called The Food Valley, after Silicon Valley in California, since Wageningen encourages entrepreneurship through innovative research. Two decades ago, the Dutch government claimed a disruptive proposal on agricultural matters, but with great hopes of obtaining outstanding results. The premise was to produce twice as much food using half the resources. This translated into a reduction of water dependency for crops by up to 90% (National Geographic 2017), as well as the elimination of chemical pesticides for plant and food growth. WUR stresses that water scarcity is not the main problem, but rather the aggravating issue is poor soil (University of Wageningen 2019). This lack of nutrients in the soil can be counteracted by planting species that encourage the growth of

5.3 The Netherlands: Second-Largest Exporter of Agricultural Products Fig. 5.2 Keys for agriculture in the Netherlands. Source: Own elaboration

45

Greenhouses

Automazaon

Keys for agriculture in the Netherlands

Logiscs

LED lighng

different bacteria, which create their own natural fertilizer. Among the most outstanding innovations developed in the Netherlands are greenhouses, polytunnels (tunnels covered with plastic or glass) and LED lighting. For its part, the number of resources used to produce strawberries, onions, potatoes, and tomatoes has been reduced by almost half (CBS 2019), at the same time, production of these foods has increased. The LED lighting has been a huge advance with the aim of developing the crop 24 h a day, 7 days a week, reducing the amount of water and fertilizers used. For the conventional cultivation of one kilo of tomatoes, 60 liters of water are needed, while for one kilo of Dutch tomatoes, the amount needed is 15 liters, referring to the sustainable agriculture program promoted by the country (CBS 2019). We should not overlook the mechanization and automation of processes, since they have robots in the process of collecting and treating food. WUR also promotes education for the agricultural workforce. They believe that training in sustainable agriculture is essential for further progress in resource efficiency. Neither should we overlook the consolidated infrastructure in terms of logistics that the country has developed in recent years, which has also benefited from the fact that the Netherlands is now the second-largest food exporter in the world. As a result, Fig. 5.2 presents the big picture of all the elements that have contributed to the Netherlands producing twice as much with half the resources. From the example of the Netherlands, we can learn that the availability of resources is not as important as the combination and use of resources. Through the collaboration of different local actors (mainly WUR, the Dutch government and farmers), synergies have been created as a result of the cooperation, with outstanding results for the overall performance of the country. In this sense, the bricolage concept applies to a related country and therefore has macroeconomic implications. Once

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5 Social Bricolage

again, the gradual incorporation of innovations has meant that the country has been climbing from a position with modest resources to a performance far removed from that of other powers that adopt a linear strategy in their growth. Constant and constructive feedback, together with education by institutions, play an essential role in the consolidation of this model, which allows the country to continue innovating and promoting the development of sustainable agriculture. From this example, it can be seen that environmental bricolage is an application of bricolage as a broader concept. The incorporation of this specification will depend on the objective to be pursued. In the case of Dutch agriculture, the mission that drives the country’s long-term vision is the consolidation of a sustainable model that manages to take advantage of the available resources (land, water, natural fertilizers, etc.), having the minimum possible involvement in the environment in which they are operating. Innovation, proactivity, and the search and discovery of opportunities are essential for the effective, fair, and sustainable combination of available resources (Hart and Milstein 2003).

5.4

Definition of Bricolage

The use of the two examples above helps us to infer the definition of bricolage as a whole. Based on observation and experimentation with practical examples, added to the theoretical foundations established by Baker and Nelson (2005), the following definition for bricolage is agreed: “making do by applying combinations of resources at hand to new problems and opportunities” (Baker and Nelson 2005, p. 333). The term bricolage has been applied to many academic disciplines, such as education (Hatton 1988; Roth 2008), institutional studies (Desa 2012), technology (Ferneley and Bell 2006), or even to anthropological disciplines with the aim of understanding how the combination of myths and traditional legends has influenced the creation of new ideologies (Chao 1999). From the perspective of entrepreneurship, bricolage has mainly been used to explain the creation of new ventures (Ciborra 1996; Baker et al. 2003; Fisher 2012) from a local approach. Bricolage consists of giving different uses to the resources for which they were created (Baker and Nelson 2005; Fisher 2012) and complies with the concept of consensus building (Innes and Booher 1999), in which “individuals representing differing interests engage in longterm, face-to-face discussions, seeking agreement on strategy, plans, policies, or actions (Innes and Booher 1999, p. 11). According to Fisher’s study (Fisher 2012), there are five different perspectives in which entrepreneurs can apply bricolage to their ventures. Figure 5.3 illustrates the five different perspectives. Bricolage is related to two constructs, which are independent but have great affinity: effectuation and improvisation (Janssen et al. 2018). These perspectives are far from the traditional principle of causation traditionally applied in entrepreneurship. When causation applies, entrepreneurs follow an economic and rational logic (Fayolle et al. 2009) and select the means that will be useful to achieve their final objective (Fisher 2012). In this new paradigm, bricolage proposes another logic

5.5 Bricolage and Social Entrepreneurship

47

Physical materials: Inputs that acquire a new use

Labour elements: Actors such as suppliers and consumers that provide work

Skills: Developing own skills that can contribute to the venture

Markets: Products or services available

Regulatory framework: Trying to adopt new standards

Fig. 5.3 Perspectives applied to bricoleur entrepreneurship. Source: Own elaboration, based on Fisher (2012)

based on improvisation and effectuation. Sarasvathy (2008) developed the concept of effectuation, identifying entrepreneurship as a process that is dynamic and interactive, in which one selects among the possible consequences, taking into account the disposable resources (Fisher 2012; Janssen et al. 2018). Improvisation also shares the same basic principles with bricolage. Improvisation is the point where approach and execution coexist (Baker et al. 2003) as antecedents to an intuitive, innovative, and knowledge-building process. The entrepreneur’s own problem-solving ability (Witell et al. 2017) presents a perfect breeding ground for the development of improvisation within the framework of bricolage. Once the concept of bricolage has been defined, it is time to explain the relationship of the concept with the phenomenon of social entrepreneurship and how they interrelate.

5.5

Bricolage and Social Entrepreneurship

Bricolage and social entrepreneurship share certain characteristics. Both phenomena question the economic benefit as the main engine of entrepreneurial activity (Stinchfield et al. 2013) and in its objectives is the satisfaction of the needs of a community, which can only be understood if there is information and proximity. In this way, the levels of empathy are higher, and the address of the problem is more concise. Although social entrepreneurship has traditionally been identified as the exploitation and exploration of opportunities (Wiklund and Shepherd 2003), bricolage applies a more constructivist vision (Molecke and Pinkse 2017). This means that the

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5 Social Bricolage

Social Bricoleur Focused on the satisfaction of local needs Limited resource availability (based on local restrictions) Their scope is reduced but indicate the direction towards “social equilibrium”

Social Constructionist Social Engineer Try to address market inefficiencies uncovered by the rest of actors A provision of human and material resources is needed to fulfill its mission Its medium scale allows significant “social equilibrium” to be achieved

Consolidation of new social systems at an institutional level The scope is international, seeking the replacement of old structures The notion for “social equilibrium” is revised, implementing a new one

Fig. 5.4 Key notions of social bricoleur, social constructionist, and social engineer. Source: Own elaboration, based on Zahra et al. (2009)

bricoleurs do not set opportunity as an a priori goal but shape the reality in which they find themselves based on available resources. The shaping of these opportunities is the antecedent for the creation of value (Baker and Nelson 2005; Janssen et al. 2018). Zahra et al. (2009) identified three types of social entrepreneurs: social bricoleur, social constructionist, and social engineer. The difference between the three lies mainly in the way they identify the gaps in the market and the elements used to address them. In addition, the level of society in which the social venture is involved is also an issue. Figure 5.4 details the common characteristics for each type of social venture, and in turn, the elements that differentiate them from the rest of the typologies. Social bricoleurs aim to offer a solution for a locally generated need. Social constructionists intend to incorporate an innovation (either incremental or radical) in a wider context, understood as a market. In this way, they identify business opportunities that are not satisfied by market dynamics and address them with the aim of bringing value to the community as a whole (Shane and Venkataraman 2000), trying to address the gaps left in the market (Teegen et al. 2004; Mair and Martí 2006). Social constructionists represent, therefore, the point of union between public institutions and NGOs. They try to provide solutions to problems not solved by the former, and unlike the latter, they do seek economic and financial benefit, mainly to ensure their long-term sustainability, as observed in Chap. 4. Social engineers identify a structural problem (as opposed to the conjunctural elements) and introduce tools that are disruptive at the institutional level. These social entrepreneurs represent a paradigm shift in the system, adjusting the elements to the new demands of the environment (Zahra et al. 2009). Zahra et al. (2009) propose this distinction in social entrepreneurship (social bricoleur, social constructionist, and social engineer), based on the authors Hayek (1945), Kirzner (1973) and Schumpeter (1942), respectively. Social bricoleurs bring substantial value to society, as they are the point of contact between local needs and their satisfaction. In other words, without their existence, the rest of the chain would not be able to develop, and many opportunities would remain undiscovered. Although the problems they solve are sometimes negligible,

5.6 Cycling Without Age

49

they mark a direction towards solving social problems that are much more consistent and rooted in society. Here it is essential to bring in the term “social balance” developed by Parsons (1971). Social bricoleurs contribute to the achievement of this social balance, fostering a greater coverage of services and public guarantees (Alesina and Angeletos 2005) for every member of society. In this way, the redistribution of the resources is pretended to be equal among the actors of the community (Benabou 2000). The resources available to them are limited, so innovation in the process on finding different applications and uses is decisive (Janssen et al. 2018). Once the concepts of social bricoleur, social constructionist, and social engineer have been addressed, it is time to explain a case of social bricoleur developed in Denmark, which meets a local need and improves the quality of the community it addresses.

5.6

Cycling Without Age

Ole Kassow was responsible for creating a worldwide trend based on satisfying the bicycle riding needs of a collective whose capabilities are hampered: the elderly. He started the movement in Copenhagen, Denmark, when in 2012 he offered his assistance to a nursing home, with the purpose of giving a ride to older people to help them to get back on their bicycles. The initiative was such a success that the next day every member of the nursing home was interested in the activity, and the association was notably supported by the local institutions, expecting to expand the model to other nursing homes in Copenhagen. The first investment was carried out with the help of Dorthe Pedersen, a civil servant from the City of Copenhagen, and stood for five trishaws. Ole insists that the bicycle is considered the happiest mode of transport worldwide, so no one (even the elderly) should be prevented from enjoying a ride. The consequence of these rides has a profound positive impact on the quality of life, both on the elderly and volunteers, having an effect on both mental and physical wellbeing. At the same time, it promotes citizenship in being active for the commonwealth of the society, where people gather to enhance the trust in the local community. For Ole, it is all about creating high-quality relationships and bringing this social sector the right to feel the wind in their hair. Currently, this model is represented in 50 countries worldwide, giving the elderly the opportunity to remain active, pass down their stories to future generations and connect with the environment. The story of Ole Kassow is one of the practical examples of social bricolage, whereby establishing curiosity, improvization, and innovation as a background for the exploitation of an opportunity, a new social venture was created. The dynamic consists of “make do” by reorganizing the limited resources available at hand, inspired by improving the quality of life of the local community.

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5.7

5 Social Bricolage

Summary

1. The bricoleur knows the resources that are within his reach, collects, classifies, and orders them according to his current needs in order to take advantage of a present opportunity. 2. Bricolage bases its dynamics on improvization and effectuation in opposition to the logics of causation. 3. The improvization is the result of a solid and settled learning, organizational memory, and application of the resources and present capabilities, unifying in the same temporal space the planning and execution. 4. The term bricolage has been applied to many fields of study, such as education, institutional environment, technology, anthropology, and entrepreneurship. 5. Entrepreneurship not only refers to the discovery of opportunities in an isolated and individual perspective but also appeals to the discovery of opportunities at a collective level. 6. Bricolage applies a constructivist vision, so it does not establish opportunity as an a priori objective but shapes the reality based on available resources. 7. Bricolage and social entrepreneurship share certain characteristics: they doubt economic benefit as the main driver of entrepreneurial activity and seek the satisfaction of a community’s needs. 8. The social bricoleur, social constructionist, and social engineer are differentiated by the scope of action, the resources employed, and the degree of “social equilibrium” achieved.

References Alesina A, Angeletos G-M (2005) Fairness and redistribution. Am Econ Rev 95(4):960–980 Baker T, Nelson RE (2005) Creating something from nothing: resource construction through entrepreneurial bricolage. Adm Sci Q 50(3):329–366 Baker T, Miner AS, Eesley DT (2003) Improvising firms: bricolage, account giving and improvisational competencies in the founding process. Res Policy 32(2):255–276 Barendsen L, Gardner H (2004) Is the social entrepreneur a new type of leader? Lead Lead 2004 (34):43–50 Benabou R (2000) Unequal societies: income distribution and the social contract. Am Econ Rev 90 (1):96–129 CBS (2019) Statistics Netherlands. https://www.cbs.nl/en-gb CBS (2020) Statistics Netherlands. https://www.cbs.nl/en-gb Chao E (1999) The Maoist shaman and the madman: ritual bricolage, failed ritual, and failed ritual theory. Cult Anthropol 14(4):505–534 Ciborra CU (1996) The platform organization: recombining strategies, structures, and surprises. Organ Sci 7(2):103–118 Desa G (2012) Resource mobilization in international social entrepreneurship: bricolage as a mechanism of institutional transformation. Entrep Theory Pract 36(4):727–751 Di Domenico M, Haugh H, Tracey P (2010) Social bricolage: theorizing social value creation in social enterprises. Entrep Theory Pract 34(4):681–703

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Fayolle A, Toutain O, Conseil CAS (2009) Le créateur d’entreprise est un “bricoleur”. L’éxpansion Entrepreneuriat 1 Ferneley E, Bell F (2006) Using bricolage to integrate business and information technology innovation in SMEs. Technovation 26(2):232–241 Fisher G (2012) Effectuation, causation, and bricolage: a behavioral comparison of emerging theories in entrepreneurship research. Entrep Theory Pract 36(5):1019–1051 Garud R, Karnøe P (2001) Path creation as a process of mindful deviation. Path dependence and creation. Psychology Press, New York, p 138 Garud R, Karnøe P (2003) Bricolage versus breakthrough: distributed and embedded agency in technology entrepreneurship. Res Policy 32(2):277–300 Gavetti G, Levinthal D (2000) Looking forward and looking backward: cognitive and experiential search. Adm Sci Q 45(1):113–137 Hart SL, Milstein MB (2003) Creating sustainable value. Acad Manag Perspect 17(2):56–67 Hatch MJ (1998) The Vancouver academy of management jazz symposium—jazz as a metaphor for organizing in the 21st century. Organ Sci 9(5):556–568 Hatton EJ (1988) Teachers’ work as bricolage: implications for teacher education. Br J Sociol Educ 9(3):337–357 Hayek FA (1945) The use of knowledge in society. Am Econ Rev 35(4):519–530 Hu Y, Pang X (2013) Social entrepreneurial orientation and performance of nonprofit organizations: an empirical study in China. JApSc 13(19):3989–3994 Innes JE, Booher DE (1999) Consensus building as role playing and bricolage: toward a theory of collaborative planning. J Am Plan Assoc 65(1):9–26 Janssen F, Fayolle A, Wuilaume A (2018) Researching bricolage in social entrepreneurship. Entrep Reg Dev 30(3–4):450–470 Juchniewicz M, Łukiewska K (2020) Diversity of the international competitive performance of the food industry of the European Union member states. Agribusiness Kirzner I (1973) Competition and entrepreneurship. The University of Chicago Press, Chicago Levi-Strauss C (1967) The savage mind. Philos Q 17:69 Long TB, Looijen A, Blok V (2018) Critical success factors for the transition to business models for sustainability in the food and beverage industry in the Netherlands. J Clean Prod 175:82–95 Mair J, Martí I (2006) Social entrepreneurship research: a source of explanation, prediction, and delight. J World Bus 41(1):36–44 Miner AS, Bassof P, Moorman C (2001) Organizational improvization and learning: a field study. Adm Sci Q 46(2):304–337 Molecke G, Pinkse J (2017) Accountability for social impact: a bricolage perspective on impact measurement in social enterprises. J Bus Ventur 32(5):550–568 Moorman C, Miner AS (1998) Organizational improvization and organizational memory. Acad Manag Rev 23(4):698–723 National Geographic (2017) This tiny country feeds the world. Retrieved from https://www. nationalgeographic.com/magazine/2017/09/holland-agriculture-sustainable-farming/. Accessed 6 Dec 2020 Parsons T (1971) The system of modern societies. Prentice Hall, Englewood Cliffs Roth W-M (2008) Bricolage, métissage, hybridity, heterogeneity, diaspora: concepts for thinking science education in the 21st century. Cult Stud Sci Educ 3(4):891–916 Sarasvathy SD (2008) New horizons in entrepreneurship. Elements of entrepreneurial expertise. Northampton, MA, US, Effectuation Schumpeter JA (1942) Socialism, capitalism and democracy. Harper and Brothers, New York Shane S, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manag Rev 25(1):217–226 Stinchfield BT, Nelson RE, Wood MS (2013) Learning from Levi–Strauss’ legacy: art, craft, engineering, bricolage, and brokerage in entrepreneurship. Entrep Theory Pract 37(4):889–921

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Teegen H, Doh JP, Vachani S (2004) The importance of nongovernmental organizations (NGOs) in global governance and value creation: an international business research agenda. J Int Bus Stud 35(6):463–483 University of Wageningen (2019) Dutch export of agricultural products exceeds € 90 billion in 2018. Retrieved from https://www.wur.nl/en/newsarticle/Dutch-export-of-agricultural-prod ucts-exceeds-90-billion-in-2018.htm. Accessed 6 Aug 2021 Wiklund J, Shepherd D (2003) Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strateg Manag J 24(13):1307–1314 Witell L, Gebauer H, Jaakkola E, Hammedi W, Patricio L, Perks H (2017) A bricolage perspective on service innovation. J Bus Res 79:290–298 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 6

Business Sectors Involved in Social Entrepreneurship

6.1

Introduction

For the first time, Forbes has published an article in which a list of the “Other 100 largest fortunes in Spain” is presented (Forbes 2020). The word “other” stands for companies that pursue the creation of other value rather than merely the economic profit, that is, social and ecological value. Traditionally, the lists that have been published referring to the greatest fortunes were implicitly associated with those companies whose economic-financial returns were superior in the market. The general tendency was to place the monetary benefit as the main criterion when determining the success and/or failure of the corporation. As new paradigms appear in the current context aiming to stay in the long run, a need arises to adapt these rankings, in which other aspects play a role, such as the creation of social and environmental value. The criterion that determines these fortunes does not refer to the capital and value they possess but rather to what they disclose to the rest of society. In this way, it includes entrepreneurs who decided to create a new business because it helped to improve the quality of life of a group, community, or territory. The current context, influenced by the great health crisis caused by COVID-19, has greatly increased the number of entrepreneurs who have not hesitated to pivot their businesses or create others in favor of disadvantaged communities. In relation to social entrepreneurship, the following subsection corresponds to an explanation of the terminology related to this phenomenon—social economy, social enterprise and social entrepreneurship—which will help us lay the groundwork for addressing the rest of the chapter’s content. Subsequently, some social enterprises will be analyzed in depth, understanding their dynamics, motivations and social value generated. Finally, some shared conclusions for all the cases of social entrepreneurship are presented, as well as a small summary with the principal facts of the chapter. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_6

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6.2

6 Business Sectors Involved in Social Entrepreneurship

Social Economy, Social Enterprise, and Social Entrepreneurship

Social entrepreneurship is associated with meeting the needs of a community not covered by current agents, that is, by private companies and by the state. That is why social entrepreneurship tries to fill a market failure and address a problem that would otherwise remain unsolved (Zahra et al. 2009), capturing the value creation generated by social innovations (Guerrero et al. 2020). This type of entrepreneurship can be approached from different perspectives, depending on the unit of analysis we adopt. Bacq and Janssen (2011), based on the study conducted by Gartner (1985), propose four different units of analysis: the individual, the process, the organization and the context. In this first part of the book, a microeconomic perspective of the social entrepreneurship phenomenon is applied, so the individual (entrepreneur) is the unit of analysis taken in the first part of the book in general, and in this chapter in particular. In addition, the process refers to the mission adopted in the venture and the link between the mission and the productive transformation process (Bacq and Janssen 2011). Although secondary, this chapter will also address the issue of social entrepreneurship from a process point of view, highlighting the mission in particular. In the European context, the concept of social entrepreneurship made its first appearance around 1990 (Defourny and Nyssens 2010a), with a special presence in the third sector, since the mission of this type of company is to satisfy social needs not yet covered. For Europeans, the third sector includes all the non-profit organizations (i.e., associations, foundations, etc.) that are included in the social economy (Evers and Laville 2004). The social economy has faced an increasing rise in terminology in recent years (Cagarman et al. 2020) associated with the promotion of an economy that advocates the common good (Avila et al. 2018), including the terms of social economy, social enterprise and social entrepreneurship. Numerous studies in the literature have focused on exploring the terminology associated with the phenomenon of social entrepreneurship (Defourny and Nyssens 2010b; Nicolopoulou 2014; Forouharfar et al. 2018). The characteristics of each one of them will be explained below, as well as common elements and differentiating aspects. The social economy includes those non-profit companies that occupy the space between public institutions and private companies (Chaves and Monzón 2018). Alternatively, social enterprises can serve as a tool for the social entrepreneur to develop and implement his idea (Avila et al. 2018). From the perspective of social entrepreneurship, the social enterprise is therefore, a means to add social value and not an end in itself. Social entrepreneurs prioritize social wealth for society among the economic value for their own business. The main characteristics of this type of organization are democratic and participatory functioning of all its members (Bidet and Eum 2020), social purpose and investment of profits obtained in the company, with the aim of continuing to create social value. In addition, their contribution to the social cohesion of the community and the territory is noteworthy, which is why some

6.2 Social Economy, Social Enterprise, and Social Entrepreneurship

55

authors call them hybrid companies (Battilana and Dorado 2010; Battilana and Lee 2014). In the light of social enterprises, we can find four different types of social enterprises, depending on their legal form: non-profit entities, cooperative companies, labor integration companies, and trading companies (Sanchis Palacio 2011). The third sector and the social economy have experienced the so-called “conceptual waves” associated with key moments in the resurgence of this typology of organizations (i.e., in the oil crisis and the economic-financial crisis of recent years), in which the use of different terms such as corporate social responsibility (CSR), social venture, social entrepreneurship and social economy has increased (Chaves and Monzón 2018). Chaves and Monzón (2018) divide this typology of terms into three large groups: 1. Concepts associated with innovations and changes generated in the global system, such as social innovation, circular and collaborative economy. 2. Terminology related to CSR and the common good economy, in which the social dimension is highlighted as a priority in addition to the economic one. 3. Phenomena typical of entrepreneurship, but with a social vision. This includes terms such as social entrepreneurship and the fourth sector. While in the first two categorizations the unit of analysis can be both macro and micro, the latter only addresses the microeconomic perspective, since the unit of analysis is the entrepreneur. It is important to know that although the different concepts are used in a complementary way, the meaning varies. In this chapter, we will focus on the third type, thus continuing the thread with the rest of the book, and specifically with this first part. However, it should be noted that some of the following entrepreneurial ideas that will be explained make up a social enterprise, since the social enterprise is a tool for developing and implementing the entrepreneurial idea. Traditionally, the concepts of business and social entrepreneurship were found together in only a small number of isolated cases. However, today the number of this type of business is on the rise. The attention of public institutions has also increased in recent decades (Poledrini and Tortia 2020), which has given the sector greater viability and potential to compete with established players in the market. Moreover, thanks to the new consideration of these companies, these new forms of creating business count on a wider spectrum of legal forms, since until now there were principally the common commercial society and the non-profit associations or foundations. Despite this, many challenges remain unresolved in the establishment of social entrepreneurship and the economy of the common good in the dynamics of the general economy. Studies such as that of Lavišius et al. (2020) ensure that the existence of a wider variety of legal forms for this typology increases sustainable development. Social enterprises cannot be identified with non-profit associations, because in reality, they do seek profit (Toson 2018), and the for-profit organizations do not represent them accurately because it is explicit in their statutes to prioritize the maximization of profits to impact on dividends for shareholders (Toson 2018), relegating the interests of other stakeholders to the background (Boatright 2017; Toson 2018).

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6 Business Sectors Involved in Social Entrepreneurship

Auara

Danza Mobile

Social poverty sector

Art and entertainment sector

Mission. Twofold: reduce the environmental impact in developed regions, and bring drinking water to disadvantaged regions

Mission: combine disability and art as empowering and inclusion mechanisms

Improve the quality of life of communities with lack of access to drinking water

Timpers

Provide opportunities for free expression to disabled people at risk of exclusion

Braveup

Fashion sector

Education sector

Mission: to create shoes for blind people

Mission. Twofold: establish prevention mechanisms for school bullying and in case it exists, they present a solution to counteract the effects Improves the cohabitation in schools and emotional well-being of parents, teachers and students

Raise the visibility of the blind community and their inclusion in a professional and social sphere

Fig. 6.1 Social ventures from a business sector perspective. Source: Own elaboration

In the present chapter, we will address different practical examples of social entrepreneurship developed in various business sectors, analyzed from the entrepreneur’s motivation, the value proposal generated and the collective which benefits. We have chosen cases of social entrepreneurship that belong to sectors that at first glance have nothing in common to see that there is a dominant and shared logic underlying all cases of social entrepreneurship, despite the economic-business activity they develop. Figure 6.1 shows the main characteristics of all the cases of social entrepreneurship that will be developed in depth in future sections. It offers the big picture of the content addressed in more detail throughout the chapter.

6.3 Cases of Social Entrepreneurship

6.3 6.3.1

57

Cases of Social Entrepreneurship AUARA: Social Water

AUARA defines itself as a social enterprise, which aims to end the shortage of drinking water worldwide. Its business model consists of selling bottles of water in developed countries and investing 100% of the profits obtained in projects for access to drinking water in the regions where it is most needed (AUARA 2020). AUARA recognizes water as a necessary good for the planet, and for the human being, and identifies that there is a lack of this resource in populations on a global scale. In spite of the fact that water should be a right according to their principles, 700 million people do not have access to drinking water (1 out of every 10 people in the world), and 2 out of every 3 do not have access to sanitation. At the same time, in Europe, and more specifically in Spain, the consumption of water is constantly increasing, and with it the waste generated by its use. AUARA was born with the purpose of solving these problems, combining the needs of developed and developing countries (see Fig. 6.2). Its objective is to provide drinking water to those who do not have access to it, while reducing the negative externalities generated by bottle materials on

100% social venture

100% profit reinvestment

AUARA

100% natural mineral water

Fig. 6.2 AUARA’s principles. Source: Own elaboration

100% recycled plastic

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the environment. AUARA is identified as the first brand in Europe to manufacture bottles from 100% recycled material. In respect to their social contribution, having access to drinking water has many other positive implications for the quality of life in these communities, such as access to hygiene and sanitation, reduction of disease and reduction of famine. Moreover, providing these societies with basic resources such as safe water provides a key stability for increased child schooling, education, and independence for women. Additionally, at AUARA they advocate for transparency. Through the scanner of the QR code on their bottles, it is possible to know all the investments in the projects they are developing, to which the consumer is contributing with his purchase. Along the same lines, they make available on their website the ethical code, the results of audits, agreements and social statutes, as well as the explanation of dividends and the report on social and environmental impact. In this way, AUARA sets an example to the audience with practices that promote justice and equity at a business level. They maintain that social entrepreneurship is a way to create a company in a more conscious and environmentally friendly way. Antonio Espinosa, the founder of AUARA along with Pablo Urbano, decided to select this name because it means in the Ethiopian language a sandstorm that occurs in deserts, which represent landscapes where water shortage and high temperatures prevail. After working and traveling in some of the least resourceful countries in the world, this entrepreneur realized that the most widespread poverty is the lack of drinking water. From an unmet basic need, a gap in the market that needed to be filled was glimpsed. The promoting idea was clear: to bring potable water to those regions where this resource is scarce or even non-existent. For Antonio, the idea of starting with AUARA’s entrepreneurial project meant a turning point in both his professional career and personal life. Antonio affirms the need to find a purpose in life that makes us feel fulfilled and to contribute to the world in a positive way. In his case, when he stopped settling for partial success and started fighting for his goals, he found that he began to show his best self and highest potential. He defines this process as magic, because thanks to this fulfillment he has managed to create a better reality and ultimately contribute to a better world. One of the most outstanding challenges in the establishment of the company was the choice of a legal form that would represent his interests as accurately as possible. In an economic situation where for-profit companies or associations or foundations (non-profit organizations) are the most common legal options, it was very difficult for them to choose the figure that best suited their interests. Antonio stated that the possibility of being a foundation did not benefit them as an organization either: We could not take advantage of the special taxation, since it is necessary to receive more than 40% of income through donations or subsidies, and our income comes from sales. Also, the start-up costs of a foundation are high; the required share capital is €30,000 compared to €3000 for an S.L (limited liability company). In general, we did not find a legal figure that would adapt very well to our social business model, so we constituted an S.L. with some statutes and a special partner agreement (El Blog de la Colmena 2020).

In short, since they were not fully represented by any legal form in the legal system, they decided to opt for a limited liability company, but including their own

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Table 6.1 Common legal forms applied to social entrepreneurship Legal form Non-profit association

Advantages Possibility of access to government aid, subsidies and tax reductions

Cooperative (i.e., labor, consumer) Limited liability company

Shared principles with social entrepreneurship: Democracy, justice and equality Ability to scale up the business and seek external investors and funding sources

Disadvantages Impossibility to invest large amounts and seek external financing through banks Impossibility of incorporating an external investor with large amounts of capital Lack of access to grants and subsidies. There are no tax incentives

Source: Own elaboration

specifications in terms of environmental and social sustainability, creation of value for the community and respect for the conditions of the workers. Another legal form that a social enterprise can take is a cooperative (Costa and Carini 2016; Graikioti et al. 2020). Although this legal form is useful, it has major disadvantages, the main one being that it prevents the cooperative from growing since there cannot be a considerable investment of external capital, having negative implications on their competitiveness in an increasingly uncertain and complex market. Other companies with social purposes have finally chosen to set up as an association, since the tax incentives are greater than in other typologies. However, they are also faced with major obstacles hindering the scalability of the business, such as limited entry of external investors and financing by banks. Table 6.1 shows the advantages and disadvantages of each legal form for the establishment of a social enterprise. It should be noted that the typology is broader and ultimately depends on the particularities of the legal system of each country, so it would be necessary to analyze in depth each particular case. However, the following analysis presents a big picture of the most common legal forms, and it shows the current challenges that social enterprises are facing in the twenty-first century. Consolidation in the early stages of a social enterprise is crucial, involving several challenges. Such is the difficulty that sometimes the unemployment benefit payment is used as a source of funding by the entrepreneur at the beginning of a social business idea in Spain (Plaza-Angulo and Ciruela Lorenzo 2017). Given this situation, the solution can come from a legal formula based on the limited liability company, but which offers tax incentives for those social enterprises that generate a positive impact on a community and environment, in addition to generating economic and financial returns. Another proposal could be that a percentage of the corporate taxes paid by all companies be directed to the promotion of social enterprises. In short, the solution may come from finding a common point between the different existing legal forms and adopting a new one that combines the advantages offered by the current ones, trying to reduce the possible externalities that derive from a system that is not yet prepared to host this type of company. Studies analyzing this topic have identified low-profit limited liability companies as a feasible option (Toson 2018).

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Mobile Dance: The Most Humane Art

Danza Mobile began its journey in 1995 in Seville (Spain), with the aim of bringing together two different sectors: art and disability. It is an “entity that works for the integral development of people with disabilities through the different aspects of art” (Danza Mobile 2020). It combines experts from both sectors to provide a creative, innovative and fruitful experience for people who suffer from a certain type of disability. The founders of this association felt that it was time to increase the visibility of people who are at risk of social exclusion due to their disability and to stop offering them unequal treatment based on prejudice or paternalistic care. Their mission is to break down all possible stereotypes and to give them the tools to claim for themselves and to raise their voices. They currently have different projects underway, such as the dance school, the creation center, or the festivals, all of which are promoted with the vision of strengthening the links between culture and disability, generating social value for groups that are subject to a certain degree of exclusion. Among its values, the following stand out: – Creativity, based on inclusion and the promotion of diversity. In an artistic and cultural space, the fostering of creativity is key. In Danza Mobile, they apply this artistic creativity to the inclusion of disabled people. – Participation of all members and leadership skills. – Transparency in the management of the company, as well as in the operational execution. – All people are considered active agents in the promotion of diversity, inclusion and culture. Danza Mobile seeks integrity of the members and active listening by experts in the field. In the consolidation of Danza Mobile, the entrepreneurs found challenges common to other social ventures, that is, the lack of institutional and legislative support. In their case, a hybrid business model combined two different areas—social inclusion and culture—thus covering both social entrepreneurship and cultural entrepreneurship (Hjorth and Lars 2015). The Department of Culture and the Department of Social Services were continuously sending the proposal to each other, thus occupying a legal vacuum that at first sight remained unresolved by the government institutions. The proposal of Danza Mobile had a novel character, placing social innovations at the service of the community. In this way, the founder, Esmeralda Valderrama, wanted to create a more humane way of creating business closer to the community to whom the value is delivered (Weaver 2020). Social innovation refers to the process of discovering new solutions to existing social problems. Generally, this process involves an institutional change (Guerrero and Urbano 2020), as the example of Danza Mobile reflects. In their case, inclusive and dignified work is encouraged. Under the protection of the Special Employment Center, most of their workers have some kind of disability. In line with Danza Mobile, placing art at the service of social innovation is becoming a growing trend in other European countries

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(i.e., Italy), with the aim of improving the quality of life of a community (Tricarico et al. 2020). In this case, the organization was consolidated as a non-profit association, thus obtaining most of the income on its own, that is, from the contributions of the members and users’ fees and the economic support of the sponsors and collaborators. Due to its legal nature, Danza Mobile obtains subsidies and aid from the government, which allows them to cover expenses and be solvent. Esmeralda affirms in an interview that as can be expected from this type of organization, the income she receives is not considerable, but she recognizes that the benefits of working in this context go beyond the purely material and give her happiness and health. As the entrepreneur of the project, she saw a market niche with great potential: Art is a means of communication, it is what really normalizes and is a meeting place for all people. The word in this society has become something very important to communicate, and that limits them a lot. Instead, art opens a great channel of communication for them. For this reason, through dance or plastic arts, you find ways to contact them. It is pure magic (El País 2013).

6.3.3

Timpers: The Inclusive Shoe

Timpers is the first brand of sneakers that has been designed by people with some visual impairment. The company was founded by 30-year-old Diego Soliveres, who has been blind since birth, together with the collaboration of Aitor Carratalá and Roberto Mohedano. In the literature, entrepreneurship has been considered a form of inclusion of people with disabilities in both the labor and social spheres (MartínezLeón et al. 2019). Aitor and Roberto have a certain entrepreneurial spirit, since their first business idea was to customize wheelchairs for children. Due to the disabilities that involved these two entrepreneurs, they had spent quite a bit of time in the hospital since childhood. As a consequence, they wanted to improve the lives of those who were going through a similar experience through the customization of the wheelchair. In the end, however, the idea did not work out. Additionally, Aitor and Roberto were working for the blind soccer team in Alicante, Spain, when they decided to design and start commercializing casual shoes in 2018. It is worth mentioning that the region of Alicante is known to have a high productive capacity for footwear, so their first shoe did not manage to differentiate itself in a highly competitive market and without differentiation between the products. They selected the players of the team they were training to be testers of their product. Surprisingly, they realized that their way of verifying its quality and characteristics were different to conventional parameters; in this case, the criterion was through touch. In this point, the entrepreneurs, by placing social innovation at the service of creating a new product (Phillips et al. 2015), decided to design a model by blind people. In this way, they would be filling two big gaps: on the one hand, they would be able to differentiate themselves in the market and achieve a competitive advantage compared to the rest of the actors,

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•At the heart of the strategy is the inclusion of blind staff

Inclusion

Disability

Sneakers

Design

•Product sold by Timpers, with a differentiative element: the designers are blind

•Among its most outstanding values is the increased visibility of disabilities in society

•Blind designers made possible unique and far from conventional models

Fig. 6.3 Timpers’ mission, vision, and values. Source: Own elaboration

and on the other hand, they would be bringing social value to a disadvantaged group, that is, blind people (see Fig. 6.3). From this point of view, the shoe would bring an additional value because it was designed by touch and by the sensations it conveyed rather than by the visual experience. In addition, it became the first inclusive shoe in the world (Timpers Brand 2021). In their experimental stage, the feedback they received from experts in the sector, as well as from consultants of entrepreneurship competitions and different institutions, was very positive. This encouraged them to continue and to define their mission, vision and values, taking as a priority the turn their business had taken towards social inclusion. Below are the mission, vision and values that determined the strategy of the business, and which has brought them to where they are today. With all this, Timpers’ mission is defined as follows: The integration of disability and handicapped people in all areas of life and the elimination of barriers and stereotypes (Timpers Brand 2021).

Timpers goes beyond the proper manufacturing and marketing of casual shoes; they want to claim that even though blind people cannot use their eyes to see, they do have vision. They aim is to become an icon of inclusion for blind people and give them visibility, social entrepreneurship being a medium to achieve it (Velázquez and Bielous 2019). The goal is to empower this group through work so that they are not affected by prejudice and social exclusion, normalizing disabilities no matter what kind. Among its most prominent values are inclusion, normalization of disabilities, respect, tolerance and empowerment of blind people.

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In accordance with its mission, vision and values (see Fig. 6.3), Timpers also collaborates with associations that help the disabled, thus promoting the dissemination and popularization of a sector that has traditionally been affected by prejudice and social exclusion. Timpers considers it a social emergency to place the inclusion of these people in the workplace as a priority, advocating that their disabilities are no more than other abilities that can be used for other activities. Given the great connection with the sport that the entrepreneurs have had from the beginning of their careers, Timpers has supported different activities, competitions and sports movements, thus giving impact to people with disabilities. For example, they have accompanied Carmen López, a paralympic surfer, on her journey to demand that this sport be included in the Olympics. The Asturian surfer has been proclaimed champion of surfing in Spain and the world and will not rest until her dream of competing in the Olympics is achieved. Timpers will be with her to support her journey. In keeping with its beginnings, Timpers continues to have a presence on blind soccer teams, as they consider sport to be a means of empowerment and integration.

6.3.4

Brave Up: For a Healthy School Ecosystem

Brave Up is an app born in Chile, whose main objective is to promote healthy school environments in which the absence of bullying, exclusion and other practices derived from discrimination is a priority (Brave Up 2021). The lack of self-esteem, as well as the lack of emotional education, is sometimes the starting point for generating situations of harassment and bullying (López et al. 2019). For effective learning to take place, it is necessary to create a collaborative, tolerant, and respectful environment. In this way, the results obtained will be superior. School violence is one of the most worrying issues in schools, as it is sometimes perceived as identified too late. For this reason, prevention mechanisms are decisive when it comes to contributing to this participative environment, which is the result of the collaboration of all the actors who have a role in the school. Therefore, the objective of BraveUp is twofold: on the one hand, to serve as a prevention mechanism in discrimination to promote an ecosystem that encourages learning, coexistence and participation; and on the other hand, to detect and solve cases of bullying in schools (Grupo Educar 2021). They are aware of the importance of healthy coexistence in the school, which is necessary for students, teachers and families. They have glimpsed a gap in the market, arising from a need by the school community. Their basis lies in emotional education, since they consider it key to conflict prevention and resolution. Students must be aware of their emotions in order to foster feelings such as empathy, respect, tolerance and companionship. The development of entrepreneurial activities within the school has been analyzed in the literature as an indicator of emotional competencies (Chien-Chi et al. 2020). The program has three different variations, depending on the level and grade of those in school (infant, primary and secondary school). Additionally, the Brave Up program also focuses on increasing awareness of the use of social networks. The

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organization is aware that social networks are the perfect breeding ground to trigger bullying practices. Knowing these tools and how to use them consciously is key for students to encourage a critical spirit and responsible use of them. Brave Up offers talks to both teachers and families, with the aim of prioritizing emotional well-being and working on it in the family sphere as well.

6.4

Conclusions

In conclusion, we can say that although the examples of social entrepreneurship belong to very diverse sectors, they share certain characteristics based on the premises of social entrepreneurship. As for social entrepreneurs, they all wanted to improve the quality of life of a group generally at risk of exclusion or with certain difficulties integrating into society. That is why they have not only focused their efforts on maximizing economic returns but have also prioritized the contribution of social and environmental value. In this line, they are companies that are associated with the objectives of sustainable development (Goyal et al. 2020), since they have internalized in their values the promulgation of decent working conditions and promotion of the quality of life of the community to which they are addressed, among others. In the process of establishing the social venture, some parameters were shared among the selected sample of social entrepreneurs. The consolidation and scalability of the phenomenon of social entrepreneurship was a consequence of the inherent values, past experiences, beliefs and desires of the individual initiating the business. In seeking to go beyond the conventional path, they discovered a need whose satisfaction would make a positive impact on a sector of society. That positive impact is translated to a feeling of reward, peace and happiness for the social entrepreneur. The combination of these feelings is what social entrepreneurs in our study call “magic.” Magic thus refers to the alignment between the values and life purpose of the entrepreneur and the mission, vision and values of the social venture. In other words, the social venture acts as a mechanism to fulfill the entrepreneur’s personal intentions concerning his/her contribution to society. When personal desires to help others are developed on a larger scale, “magic” occurs. With respect to challenges, some social entrepreneurs encountered common difficulties in the journey of creating a business, highlighting that it involves the selection of a legal form that accurately represents their identity. We have verified that social enterprises represent a tool to carry out social entrepreneurship and that there are different legal forms. Each social enterprise must decide, based on its interests, which of the existing forms represents them most faithfully, knowing the advantages and disadvantages that derive from each of them.

References

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65

Summary

1. While the social economy includes those non-profit companies that occupy the space between public institutions and private companies, social enterprises can act as a tool through which the social entrepreneur develops and implements his idea. 2. There are different types of social enterprises, depending on their legal form: non-profit entities, cooperative enterprises, labor integration companies and trading companies. 3. Social enterprises have difficulties in choosing a legal form that represents their identity, having to choose mainly between non-profit organizations, cooperatives and limited liability companies. 4. Values such as inclusion, empowerment of groups at risk of exclusion, and transparency are common in the social ventures studied. 5. The mission of social enterprises is generally twofold. On the one hand, to provide value to a community, and on the other hand to obtain income to ensure the scalability of the project. 6. Social entrepreneurship represents the nexus of union between the part of society that is most integrated into the system, and other actors who, for different reasons, are not so integrated. In this way, it raises the voice of these population segments and helps to increase visibility.

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Chien-Chi C, Sun B, Yang H, Zheng M, Li B (2020) Emotional competence, entrepreneurial selfefficacy, and entrepreneurial intention: a study based on China college students’ social entrepreneurship project. Front Psychol 11 Costa E, Carini C (2016) Northern and southern Italian social cooperatives during the economic crisis: a multiple factor analysis. Serv Bus 10(2):369–392 Danza Mobile (2020) Main webpage. Retrieved from https://danzamobile.es Defourny J, Nyssens M (2010a) Social enterprise in Europe: at the crossroads of market, public policies and third sector. Polic Soc 29(3):231–242 Defourny J, Nyssens M (2010b) Conceptions of social enterprise and social entrepreneurship in Europe and the United States: convergences and divergences. J Soc Entrep 1(1):32–53 El blog de la Colmena (2020) Ser emprendedor social en España: del vacío legal a la esperanza (“Being social entrepreneur in Spain: from legal vacuum to hope”). http://blog. lacolmenaquedicesi.es/ser-emprendedor-social-en-espana/. Accessed 13 Jan 2021 El País (2013) El arte abre un canal de comunicación (“The art opens a communication channel”). https://elpais.com/ccaa/2013/04/12/andalucia/1365801282_078160.html. Accessed 13 Jan 2021 Evers A, Laville JL (2004) Defining the third sector in Europe. The Third Sector in Europe 11 Forbes (2020) Las otras 100 Mayores Fortunas de España. (“The other 200 Spanish Fortunes”). Accessed: 12/01/2021. https://forbes.es/listas/84645/las-otras-100-mayores-fortunas-deespana/. Accessed 29 Apr 2021 Forouharfar A, Rowshan SA, Salarzehi H (2018) An epistemological critique of social entrepreneurship definitions. J Glob Entrep Res 8(1):11 Gartner WB (1985) A conceptual framework for describing the phenomenon of new venture creation. Acad Manag Rev 10(4):696–706 Goyal S, Agrawal A, Sergi BS (2020) Social entrepreneurship for scalable solutions addressing sustainable development goals (SDGs) at BoP in India. Qual Res Org Int J. EarlyCite, Manage. https://doi.org/10.1108/QROM-07-2020-1992 Graikioti S, Sdrali D, Klimi Kaminari O (2020) Factors determining the sustainability of social cooperative enterprises in the Greek context. J Soc Entrepr:1–22 Grupo Educar (2021) Brave Up: La app chilena que fomenta ambientes escolares sanos. (“Brave Up: the Chilean app that fosters healthy scholar atmospheres”). https://www.grupoeducar.cl/ revista/edicion-215/brave-up/. Accessed 13 Jan 2021 Guerrero M, Urbano D (2020) Institutional conditions and social innovations in emerging economies: insights from Mexican enterprises’ initiatives for protecting/preventing the effect of violent events. J Technol Transf 1–29 Guerrero M, Santamaría-Velasco CA, Mahto R (2020) Intermediaries and social entrepreneurship identity: implications for business model innovation. Int J Entrep Behav Res 27(2):520–546 Hjorth D, Lars L (2015) Organizing cultural projects through legitimising as cultural entrepreneurship. Int J Manag Proj Bus 8(4):696–714 Lavišius T, Bitė V, Andenas M (2020) Social entrepreneurship in the Baltic and Nordic countries. Would the variety of existing legal forms do more for the impact on sustainable development? Entrep Sustain Iss (8):1 López LMG, Rubio DG, Bustos JGF (2019) Emprendimiento docente en la transición de Educación Primaria a Educación Secundaria: una propuesta desde la Educación Deportiva y el Aprendizaje-Servicio. Contextos educativos: Revista de educación 24:113–121 Martínez-León I, Olmedo-Cifuentes I, Nicolás-Martínez C (2019) Entrepreneurship of people with disabilities in Spain: socioeconomic aspects. Suma de Negocios 10 (SPE22):42–50 Nicolopoulou K (2014) Social entrepreneurship between cross-currents: toward a framework for theoretical restructuring of the field. J Small Bus Manag 52(4):678–702 Phillips W, Lee H, Ghobadian A, O’Regan N, James P (2015) Social innovation and social entrepreneurship: a systematic review. Group Org Manag 40(3):428–461 Plaza-Angulo J, Ciruela Lorenzo AM (2017) Single unemployment benefit payment as a means of initial financing for social economy enterprises in Spain. Ciriec-Espana Revista de Economia Publica Social y Cooperativa 91:85–113

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Chapter 7

Social Entrepreneurship: Where to Go Next?

7.1

Introduction

The present section has addressed the issue of social entrepreneurship from a microeconomic perspective. Therefore, the unit of analysis has been the figure of the social entrepreneur as an agent of change in society. Social entrepreneurship sometimes arises as a response to the practices carried out by companies, governments, and non-governmental organizations, which have relegated the social interests of the community to the background (see Chap. 9). That is, social entrepreneurship acts as a call for increased awareness and sensitivity to issues that affect society, since this phenomenon has its origins in philanthropic organizations. Our research corroborates the heterogeneity aspect of social entrepreneurship. Specifically, since its extent and popularity are increasing, the shape it adopts is becoming more diverse. The examples shown in Chap. 6 are a clear reflection of this fact, namely, social entrepreneurship is broadening its traditional sectors, implementing its dynamics beyond conventionalisms. Although more and new sectors are applying social innovations to their business models, there are some common premises shared among all. As for the social entrepreneurs, they all wanted to improve the quality of life of a group generally at risk of exclusion or with certain difficulties in integrating into society. That is why they have not only focused their efforts on maximizing economic returns but have also prioritized the contribution of social and environmental value. In this line, they are companies that are associated with the objectives of sustainable development (Goyal et al. 2020), since they have internalized in their values the promulgation of decent working conditions and promotion of the quality of life of the community to which they are addressed, among others. When personal desires to help others are developed at a larger scale, “magic” occurs, namely, social entrepreneurship.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_7

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7.2

7 Social Entrepreneurship: Where to Go Next?

Social Entrepreneurship as a Collective Phenomenon

It deserves mentioning that although the perspective adopted in this chapter follows a microeconomic approach, it does not necessarily sustain the premise that social entrepreneurship is an individual phenomenon. In fact, social entrepreneurship does not refer exclusively to the discovery of opportunities in an isolated and individual perspective but also appeals to the discovery of opportunities at a collective level. A problem that seems to be located in one particular region can be easily found in other places, thus being addressed by the same solution. According to the terminology on which we have based Chap. 5, this solution offered to counteract the effect of a local problem is associated with the figure of the social bricoleur. When the achievement of this degree of “social equilibrium” is applied to a broader extent, we rely on another conceptualization: the social constructionist. When a solution found by a social bricoleur can also be a solution for other localities, ultimately, a whole network of social entrepreneurs working on the same cause is created. This transfer of social innovation between regions that share some particularities appeals to the collective process of social entrepreneurship, characteristic of the social constructionism and social engineers. Social constructionists intend to incorporate an innovation (either incremental or radical) in a wider context, understood as a market. In this way, they identify business opportunities that are not satisfied by market dynamics and the rest of the actors, trying to address the gaps (Teegen et al. 2004; Mair and Martí 2006). As its name indicates, the “construction” of social entrepreneurship cannot be sustained on an individual agent; it is necessary to embrace the crowd and institutions. At an institutional level, social engineers are responsible for identifying a structural problem (as opposed to the conjunctural elements) and introduce tools that are disruptive to the administration of the system. These social entrepreneurs represent a paradigm shift in institutions, adjusting the elements to the new demands of the environment (Zahra et al. 2009). Ultimately, social entrepreneurship fosters the satisfaction of traditional social problems from an innovative perspective supported by the community and institutions. The actual context advocates for new alternative ways of doing business, which also has implications on the literature and the academy. The social economy has faced an increasing rise in terminology in recent years (Cagarman et al. 2020) associated with the promotion of an economy that follows other interests rather than merely economic profit (Avila et al. 2018). This amalgamation of concepts ranges from social economy to social enterprise and social entrepreneurship. The delimitation of this terminology deserves special attention: whereas the social economy includes those non-profit companies that occupy the space between public institutions and private companies (Chaves and Monzón 2018), social enterprises can serve as a tool for the social entrepreneur to develop and implement his idea (Avila et al. 2018). That is, the social enterprise is, therefore a means to add social value to society and not an end in itself. Social entrepreneurship, on its side, represents the execution of social innovation, risk-taking, and proactivity in the

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process of ideation and consolidation of solutions to new problems. In brief, social entrepreneurs prioritize social wealth for society among the economic value for their own business. For some authors, these types of companies are called “hybrid companies.” This is so because of their double function: creating social value and capturing economic value. However, according to the trade-off between these two phenomena established by Santos (2012), organizations should choose which one of the two prevails. The following characteristics are idiosyncratic for social entrepreneurship and social ventures, which shed light on the value premise they prioritize. They usually base their principles on democratic and participatory functioning of all their members (Bidet and Eum 2020), social purpose and investment of profits obtained in the company, with the aim of prospering and escalating the creation of social welfare to a broader level. We could argue that these principles are cohesive with those of the cooperative (i.e., labor, consumer. . .) legal form. However, opting for a cooperative as the legal backup is not perfect.

7.3

Main Challenges in the Path of Being a Social Entrepreneur

The legal form selection arises as one of the main challenges that social entrepreneurs have to face, since the institutions are not yet prepared to accommodate social ventures appropriately in the system. Their accretion in our societies is relatively new in temporal terms, thus demanding a parallel adaptation from the governments and institutions at an administrative level. This is so because it certainly appears to be challenging the selection of a legal form that accurately represents social venture interests. Social enterprises cannot be identified with non-profit associations, because in reality, they do seek profit (Toson 2018), and the for-profit organizations do not represent them accurately because it is explicit in their statutes to prioritize the maximization of profits in order to impact on dividends for shareholders (Toson 2018), relegating the interests of other stakeholders to the background (Boatright 2017; Toson 2018). A determinant limitation for the cooperative and non-profit association is the impossibility to include large external investments. This prevents the company from escalating and thus hampering one of its twofold objectives. In the light of these statements: which legal form should choose a social entrepreneur? The answer is heterogeneous. That is, each social venture should decide according to its particularities which is the legal entity that better comprises their desires. Social enterprises are still business entities. This fact implies that their success is based on an offer-demand relationship with its origins on competence rules. Their resources and capabilities should be a source of competitive advantage to achieve a sustained superior position in comparison to competitors. For that purpose, their endeavors should be focused on differentiating their product or service from competence in the delivering of value to the customer and to the social community they serve. The company AUARA (Chap. 6) has identified both a market and social gap,

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thus fulfilling both needs at the same level. They identified that the most common problem at a global scale related to poverty was the lack of drinking water. They found a way to be attractive in the market belonging to developed countries to satisfy a need that is hampering communities in developing countries from benefiting from their primary human rights. “The product they thought about commercializing was a bottle of water, which at first sight can be considered as a symbol of the social cause.” Beyond the social purpose, their intention was to also bring value to the market, since ultimately, it will be the clients who will contribute benefits. As for the value for the market, they opted for a bottle made of recycled materials, thus, finding a balance in the trade-off relationship between creating and capturing value. They capture value from customers located in developed areas through the selling of water bottles made by recycled materials and create value to poor communities in developed countries, providing them with drinking water and sanitation. Social entrepreneurs face some challenges in the business arena. Since they try to cover a gap in the market, unaddressed by other actors in the market, they are demanded to measure that creation of value that is returned to society. Measuring economic value has been widely studied in the literature, providing business with several mechanisms that help to measure value capture. However, measuring the social creation of value is not that easy. Future lines of research advise on the necessity to develop measurement scales in this area to provide social enterprises with tools to evaluate their social value creation. Simultaneously, this assessment will provide investors with further insights and details about the project, increasing their willingness to contribute with capital. Information is power, so having the ability to gage the value added to social welfare can be a source of sustainable competitive advantage to social entrepreneurs and an assurance mechanism for external investors. Ultimately, social value creation monetization will bring benefits for all the actors involved in the social entrepreneurship process.

7.4

Limitations and Future Studies

The present section, focused on social entrepreneurship from the microeconomic perspective, will be complemented with Sect. 2, addressing the phenomenon from the macroeconomic perspective. The harmonizing of both perspectives offers a rounded picture of the dynamics of social entrepreneurship. As to the micro perspective, the role of the social entrepreneur is analyzed from an individual approach. From this outlook, we encourage researchers to advance further in the anthropological and psychological aspects of the social entrepreneur. If scholars did not continue to study the individual determinants that influence the social entrepreneur, academia would be failing to advance the understanding of social entrepreneurship as a phenomenon. In the light of this direction of research, case studies would be very helpful in exemplifying personal characteristics. With regard to the heterogeneous predominance of social entrepreneurship, case studies are presented as an adequate tool so as to enable the capture of idiosyncratic characteristics of each case.

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Advancing the literature on social entrepreneurship from a qualitative perspective would bring scholars and practitioners further insights into the phases of ideation and consolidation and would serve as a source of inspiration for potential entrepreneurs.

References Avila RC, Campos JLM, de Guevara RDL, Prieto AV, Blanco L, Roa E, Cáceres LS, Vargas LA, Montero PA, Pacheco ÁR (2018) The social economy facing emerging economic concepts: social innovation, social responsibility, collaborative economy, social enterprises and solidary economy. Ciriec-Espana Revista de Economia Publica Social y Cooperative:5–50 Bidet E, Eum H (2020) Une analyse socio-économique de la trajectoire institutionnelle de l’entreprise sociale : le cas dela Corée du Sud. Ann Public Cooper Econ Early view. https:// doi.org/10.1111/apce.12310 Boatright JR (2017) The corporate objective after eBay v Newmark. Bus Soc Rev 122(1):51–70 Cagarman K, Kratzer J, Osbelt K (2020) Social entrepreneurship: dissection of a phenomenon through a German lens. Sustainability 12(18):7764 Chaves R, Monzón JL (2018) The social economy facing emerging economic concepts: social innovation, social responsibility, collaborative economy, social enterprises and solidary economy. CIRIEC-España, Revista de Economía Pública, Social y Cooperativa 93:5–50 Goyal S, Agrawal A, Sergi BS (2020) Social entrepreneurship for scalable solutions addressing sustainable development goals (SDGs) at BoP in India. Qual Res Org Int J. EarlyCite, Manage. https://doi.org/10.1108/QROM-07-2020-1992 Mair J, Martí I (2006) Social entrepreneurship research: a source of explanation, prediction, and delight. J World Bus 41(1):36–44 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Teegen H, Doh JP, Vachani S (2004) The importance of nongovernmental organizations (NGOs) in global governance and value creation: an international business research agenda. J Int Bus Stud 35(6):463–483 Toson SJ (2018) Renewed hope for the low-profit limited liability company. Soc Bus Rev 13:1 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Part II

Social Entrepreneurship from a Macro Perspective

Chapter 8

The Lineup of Social Entrepreneurship

8.1

Aggregation of Behaviors: A Social Perspective

Social entrepreneurship, as well as other issues, may be analyzed considering different but complementary perspectives. This section of the book examines the phenomenon of social entrepreneurship from a macro perspective. Sociology as a science that studies the aggregation of behaviors and their results in society (ASA 2020) has been used for this purpose; that is why we called this part “the macro perspective.” The variables discussed in this part of the book are more related to the aggregated effect of population actions than to the study of individual behaviors. In this case, the population considered is made up of governments, civil society, companies, and organizations of different kinds. The connection of all these sorts of stakeholders1 will result in societies with high or low rates of social entrepreneurship. Further, it will also affect social ventures’ way of acting. Thus, the study of social ventures from this macro perspective follows a logical chronology. This part begins with the origins of social ventures and finishes with their way of operating or behavior.

The strict definition of stakeholder is “any group or individual who can affect or is affected by the achievement of the firms’s objectives” (Freeman 1984, p. 25). Freeman’s point of view is the company’s, whereas our point of view is society’s. That is the reason why we say that government, civil society, companies, and organizations of different kinds are a sort of stakeholder. The aim of using “sort of” is to preserve the original definition by Freeman. 1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_8

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8.2

The Sequence of Social Entrepreneurship

The beginning of any subject is called inception. According to the Oxford Dictionary, inception means “the start of an institution, an organization, etc.” (Oxford Learners Dictionary 2021); that is, the origins or the birth of the institution or organization. When talking about social entrepreneurship in this book, the beginning does not refer to the starting point of any social venture in particular but has a broader meaning, that is the starting point of the social venture as institution, as a way of acting, of solving current issues in society. Chronologically, after the inception comes the development. When talking about traditional ventures, their development usually refers to the way they achieve good performance in terms of financial results. In our case, the topic is a little different; we are not talking about performance in terms of financial results but in terms of solving social problems. Hence, though both types of entrepreneurship present similarities, their ways of operating are different. Regarding the macro perspective, the differences between traditional ventures, whose only aim is value acquisition (Santos 2012), and social ventures are obvious. Both of them present stakeholders with conflict that can result in issues of legitimacy. Further, both of them are affected by their context and may also affect that context in return. Most importantly, both types of organizations need a set of conditions to be established and long-lasting. This part of the book understands the evolution of social ventures by considering a succession of events. This succession of events leads to the study of social ventures from an approach related to the change in current societies as well as the vicissitudes that they have to face and the role they have in their contexts. Figure 8.1 represents graphically the aforementioned evolution, in other words, the sequence of social entrepreneurship. In addition, it should also be seen as the sequence of chapters of this part of the book, the macro perspective. First of all, the origins of social entrepreneurship, or its inception, is analyzed. In Chap. 9, social ventures are seen as forms of solving social problems. To do this, this

SOCIAL/INSTITUTIONAL ORIGIN

ENTREPRENEURSHIP

LEGITIMACY ISSUES

FUTURE

The role of social

Change as the

Conflicts of

Social

entrepreneurship

main goal of

interest

ventures

as a problem

social ventures

solver

values

shared

Fig. 8.1 The sequence of social entrepreneurship analysis. Source: Own elaboration

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chapter starts by examining the different definitions of social entrepreneurship. Through this examination, a clear conclusion can be reached: there is a great dispersion of social entrepreneurship definitions. However, all of the definitions have points in common. One of them is the role of economic value (Mair and Martí 2006) or the appropriation of value versus its creation (Santos 2012). This is intimately related to the features of markets; after all, value appropriation is basic to understand the functioning of markets. Markets, in a general sense, are a mechanism of resource allocation. This study leads us to focus on their possible weaknesses: their failures and their externalities. The rise of these two weaknesses provokes the entry of another actor, the government. In this case, the government is seen as a problem solver for market weaknesses. Nevertheless, government action also has limitations. Regarding these limitations, two more actors appear: social movements and charitable organizations. Finally, these two forms of action present diverse problems related to the boundaries of action and the sources of financing. These problems also have to be solved. This is the point at which social entrepreneurship comes into play. Chapter 10 shows another phase in the evolution. Once the social venture is created, the change may be made. As a problem solver, social entrepreneurship implies a solution, or at least an attempt to find one. That is why the creation of a social venture and its operation in a certain context entails a shift. As Austin et al. (2006, p. 5) note, a change that “is motivated by the vision of the future that is better for the decision maker.” Depending on the magnitude or scale of change, we may talk about one type of entrepreneur or another (Zahra et al. 2009). However, what seems certain is that regardless of the magnitude, a social entrepreneur always pursues a change. That is the reason why social entrepreneurs can be seen as institutional entrepreneurs. They provoke a change in the institutional context in which they are embedded (Hardy and Maguire 2008). Chapter 11 deals with the most direct consequence of the change: its approval or refusal. The approval and establishment of the new situation have been given by the population or groups that are affected. According to institutional theory, this approval is called legitimacy (Greenwood et al. 2002; Johnson et al. 2006; Suddaby and Greenwood 2005). The legitimacy concept has been defined as “a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate. . .” (Suchman 1995, p. 574). Thus, after analyzing the concept, an immediate question arises: what determines whether the change is legitimate or not? The legitimacy concept is usually seen in terms of an assessment (Aldrich and Fiol 1994; Suchman 1995). Depending on the base of the assessment, we may consider that legitimacy is pragmatic or moral (Suchman 1995). Differences on the basis of the assessment provoke conflicts of interest, which may determine the establishment and survival of a determined social venture. Lastly, Chap. 12 refers to the future trends of social entrepreneurship. To do so, a general view of social entrepreneurship around the world will be shown. Using data from the Global Entrepreneurship Monitor, the countries with the highest rates of social entrepreneurship are analyzed and compared with the countries with the lowest rates. Analyzing the data, another variable appears in the studies examined:

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post-materialism. Post-materialist countries, in the words of Inglehart (1981, p. 880) are those that have shifted “from giving top priority to physical sustenance and safety, toward heavier emphasis on belonging, self-expression and the quality of life.” Further, these values seem to be linked to the ethics of care or feminine values (Flanagan and Jackson 1987). After determining the contexts and the values that promote societies where social entrepreneurship is more present, the last section of the chapter addresses the issue of the future. This last section does not consider the future in terms of probabilities but in terms of desirability. The manifesto entitled “Work. Democratize, Decommodify, Remediate” (Ferreras et al. 2020). In it, the authors and signatories express that it is necessary to spread the values of social entrepreneurship to the rest of entrepreneurship. That is, social ventures should be the role models for other ventures, meaning that ventures should be focused not only on value appropriation but also on their creation (Santos 2012). At the end of this part, the conclusions section shows the most important remarks that can be extracted from the four chapters.

References Aldrich HE, Fiol CM (1994) Fools rush in? The institutional context of industry creation. Acad Manag Rev 19(4):645–670 ASA (2020) American sociological association main website. https://www.asanet.org Austin J, Stevenson H, Wei-Skillern J (2006) Social and commercial entrepreneurship: same, different, or both? Entrep Theory Pract 30(1):1–22 Ferreras I, Medas D, Battilana J (2020) Work. Democratize, decommodify, remediate. https:// democratizingwork.org/ Flanagan O, Jackson K (1987) Justice, care, and gender: the Kohlberg-Gilligan debate revisited. Ethics 97(3):622–637 Freeman RE (1984) Strategic management. Cambridge University Press, New York Greenwood R, Suddaby R, Hinings CR (2002) Theorizing change: the role of professional associations in the transformation of institutionalized fields. Acad Manag J 45(1):58–80 Hardy C, Maguire S (2008) Institutional entrepreneurship. In: Greenwood R, Oliver C, Sahlin K, Suddaby R (eds) The Sage handbook of organizational institutionalism. Sage, Wiltshire, pp 198–217 Inglehart R (1981) Post-materialism in an environment of insecurity. Am Polit Sci Rev 75 (4):880–900 Johnson C, Dowd TJ, Ridgeway CL (2006) Legitimacy as a social process. Annu Rev Sociol 32 (January):53–78 Mair J, Martí I (2006) Social entrepreneurship research: a source of explanation, prediction, and delight. J World Bus 41(1):36–44 Oxford Learners Dictionary (2021). https://www.oxfordlearnersdictionaries.com/ Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610 Suddaby R, Greenwood R (2005) Rhetorical strategies of legitimacy. Adm Sci Q 50:35–67 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 9

The Origins of Social Ventures

9.1

Introduction

This chapter develops the concept of social entrepreneurship from a macro perspective. It analyzes the rise of social entrepreneurship not as a personal choice but as an institution that emerges for some reason, and that has a value in society. As will be seen in this chapter, the social entrepreneurship phenomenon is born as a consequence of a set of deficiencies of other institutions—market, governments, social movements, and charities. First of all, the origins of social entrepreneurship from an etymological point of view are addressed, that is, considering the definition of the concept. Afterwards, following the dichotomy between appropriation and value creation (Santos 2012), the main elements of a market society are presented. The chapter continues by highlighting the main weaknesses of markets and the government1 as a mechanism to deal with them. Nevertheless, the governments as institutions addressing the main weaknesses of the market also present some limitations in their modes of action. Trying to overcome governments’ limitations, other forms of institutions emerge. Thus, social movements and charities rise as problem-solving organizations in market economies. Finally, these forms of organizations also have limitations, and this creates the opportunity for social entrepreneurship. The chapter follows the following structure. Firstly, it addresses the description of the institutions involved in a market society and the way in which they arise in order to solve the problems/weaknesses of other institutions. At the end of the chapter, the summary of all these ideas is embodied in a model that explains why social entrepreneurship is necessary in the current economy and its role in creating value.

1

In a broad sense. Government as a public institution, the public intervention.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_9

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Beginning of Social Entrepreneurship

Discussing the origins of social entrepreneurship requires revisiting the different definitions of the phenomenon. When defining social entrepreneurship, the concept can be seen as the addition of two different values: economic value and social value (Mair and Martí 2006; Zahra et al. 2009). That is why a proportion of the literature does not talk about social entrepreneurship but about hybrids (Battilana and Dorado 2010). The definition of economic value is clear. It refers to profit-seeking, to the acquisition of benefits by ventures’ owners or shareholders (Mair and Martí 2006). The problem arises when we have to define social value. Social value has been defined as a value that allows a change, and the “change is motivated by the vision of the future that is better for the decision maker” (Austin et al. 2006, p. 5). In other words, current societies present a set of problems–e. g., poverty, illiteracy, human trafficking, violence (Dees 2007)– which can be dealt with through the creation of social value (Mair and Martí 2006). However, this definition presents two problems that Santos well described in his positive theory (Santos 2012). The first problem is obvious; it is related to the repetition of the adjective “social.” Indeed, we can say that social entrepreneurship is focused on the venture’s social mission or that it seeks a social change. Hence, using the adjective “social” in the definition and in the defined concept results in a tautology. On the other hand, the second problem is that the term “social” can fall into subjectivity. Dees explains that “[w]e may not all agree on our visions for an ideal world, but we can generally agree that the gap between reality and our notions of the ideal is still enormous” (Dees 2007, p. 24). So, what the author means is that everybody agrees that poverty, illiteracy, etc. are problems that need a solution. Nevertheless, the conceptualization of the term requires a continuous search for an agreement, which can be inconvenient and impractical for developing a concept. Regardless of the problem of the conceptualization of social value, building the definition of social entrepreneurship as the combination of two different values— economic and social—creates an implicit distinction between them, as they were opposites. Nevertheless, in a market-based economy, this is not so clear–who can deny that “all economic value creation is inherently social in the sense that actions that create economic value also improve society’s welfare through a better allocation of resources” (Santos 2012, p. 337)? By using these liabilities of the definition of social entrepreneurship as the mix of the two aforementioned values, Santos (2012) establishes a new one. In his explanation, the term social entrepreneurship is defined as a comparison with traditional or commercial entrepreneurship. Thus, the author argues that while the traditional model of business is focused on the appropriation of the value generated by the business in itself, the social entrepreneurship model focuses on the creation of value instead of the taking of it. Hence, the creation of value is related to the increase in utility of a society’s members. Both definitions of social entrepreneurship have an element in common. That is, the economic value in the definition before the positive theory of Santos is

9.3 Markets

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equivalent to the appropriation of value in Santo’s definition. Thus, when talking about the value captured by the owners of the ventures, we are talking about markets. That is how ventures work, through the appropriation of the value generated.

9.3

Markets

If we want to study the origins of the value captured, we have to talk about the story of capitalism. However, talking about the story of capitalism is not an easy thing. The story of markets as we know them can be marked by a set of essential elements. These are some of the most important: • The Rise of Private Property. In Terrence Malick’s movie The New World, when captain John Smith (Colin Farrell) arrives on the coast of Virginia and gets to know the people from the Powhatan tribe, he tells the spectator “. . .the words denoting lying, deceit, greed, envy, slander and forgiveness have never been heard. They (Powhatan people) have no jealousy, no sense of possession.” This is the main element of capitalism: private property. In Malick’s film, the sense of possession seems to be linked to the rest of the elements, lies, deceit, greed, envy and of course, jealousy. However, in the old world, private property was an unquestionable value. Almost two thousand years before the discovery of America, Aristotle wrote in his work Politics: “Property is a part of the household, and the art of acquiring property is a part of the art of managing the household; for no man can live well, or indeed live at all, unless he be provided with necessaries” (Aristotle 1999, p. 7). The issue of private property is the basis of capitalist society. In fact, private property has usually been seen as the source of class distinction since the ownership of the means of production or land implies the existence of an owner and a proletarian, which was the starting point for the Russian socialist revolt (Galbraith 1989). • The Rise of the Merchants. Following Galbraith (1989, p. 33) “Much of their (merchants) influence. . ., came from the fact that, to survive, the merchants had to be more intelligent than the inheriting members of the old landowning classes, and this intelligence extended to a very clear view of how the state could serve their interests.” The rise of mercantilism is dated from the XV to the XVIII century. Although the fragment from Galbraith’s book is contextualized in that era, it explains perfectly the two main ways to accumulate wealth—even nowadays—merit and inheritance (Piketty 2014). The expertise and skills of entrepreneurs, business owners or managers make some ventures more profitable than others, that is, intelligence named by Galbraith, is a fundamental characteristic to compete in a market economy. • The Money Becomes an End in Itself. In Politics, Aristotle wrote: “. . .the avarice of mankind is insatiable; at one time two obols was pay enough; but now, when the sum has become customary, men always want more and more without end” (Aristotle 1999, p. 36). The accumulation of obols, the currency of Ancient

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Greece, was seen in this fragment as the main goal of the greedy individual. Money as an end instead of as a means also becomes a crucial element in markets’ history. As Galbraith (1989, p. 42) explains in relation to the Dutch East India Company, “capital was no longer committed for a voyage or particular activity, it was, instead, a permanent support to operations.” This denotes the role of money not just as a bill of exchange. • The Industrial Revolution. The Industrial Revolution was one of the main elements in the rise of capitalism. It supposed a change of mentality: the merchant is relegated to the background when the industrialist takes command of the economy (Galbraith 1989). This brought the growth of new forms of job organization. While mercantilism had as its principal figure the artisan, the industrial age brought a division of the work in which the work of the artisan is executed in factories and done it by a multitude of workers who each produce one part of the product. This change is characterized by a growth of productivity through mass manufacturing. • Current Markets. Obviously, we are not in the age of the Industrial Revolution. The world has totally changed since then. Nowadays, part of our economy continues to depend on factories that were born in the Industrial Revolution. However, the rise of the service sector and especially of the internet define the world trends today. The rise of other business models, linked to social networks, characterizes our economy. Furthermore, information travels from one part of the world to the other in milliseconds. At the same time, this means the breaking of the knowledge monopoly (Hong and Rowell 2019).

9.3.1

Market Failures and Externalities

Although the market is the main institution of a capitalist society, it is not perfect. It presents a set of weaknesses. One of these weaknesses is presented by Austin et al. (2006) as market failures. These failures are the result of social needs that are neglected. The reason for this lies in the high price of some goods or services and the unaffordability for a part of the population. That is natural in a market society; the market is created by commercial relationships, that is, by relationships of exchange. If an individual wants to be part of this relationship, he/she has to have something to give in exchange for something else. Some people have money, others have plants, machinery, information, skills, etc. and all these resources can be exchanged. However, there are people who apparently have nothing or who have some sort of resource that nobody values (Cortina 2017). These people who are outside the market are the cornerstone of market failure for Austin et al. (2006). Nevertheless, Austin et al. (2006) write a footnote in which they clarify that market failure is independent of market externalities. Externalities are the impacts that business activity has on third parties (Santos 2012). The third parties are agents that are not necessarily implicated in the business but who, in some way, have been negatively affected by the business activity. This happens because companies cannot

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totally control all their outcomes. In this way, a venture dedicated to a polluting sector—like chemicals, oil and gas energy or motor vehicles (Freedman and Jaggi 2005)—do not have as a goal the contribution to pollution of the environment but nevertheless this one of its outcomes. This is an externality, the outcome of pollution affects the population, which does not have a direct relationship with industry. In fact, research shows that an externality like this one does not affect everybody in the same way, since the effects of pollution are more present in some groups of populations (Freedman and Jaggi 2005; Mohai et al. 2009). Further, the decisions taken by the companies operating in these sectors can neglect the impact that their decisions may have on others. Trying to explain this phenomenon, research has elaborated the stakeholder theory (Ackermann and Eden 2011; Freeman and Reed 1983), in which the analysis is focused on the power of population groups in business decisions. Therefore, after seeing two possible weaknesses of a system based on markets as a main institution, studying the possible solutions to deal with them becomes crucial.

9.3.2

The Role of the Governments

Both market failures (Austin et al. 2006) and externalities (Freedman and Jaggi 2005) represent weaknesses of the market as an institution. The solutions to these weaknesses may come from a self-regulation of the companies (Santos 2012), that is, through Corporate Social Responsibility (see Chap. 3). This has been demonstrated to have a positive effect on stakeholders’ demands (Ackermann and Eden 2011). Nevertheless, trusting in just the CSR to solve market weaknesses may not be “fully effective given their (companies) focus on value capture” (Santos 2012, p. 341). At this point, government action becomes the possible solution. We have multiple examples of it. The most paradigmatic externality of companies, pollution as an undesirable outcome of some industries, has been addressed by governments in several ways through the adoption of treaties like the Kyoto Protocol or the extra taxation to the most polluting companies. On the other hand, the great market failure named by Austin et al. (2006), the unaffordability of some basic goods or services, is also addressed by the majority of democratic governments. They do it through subsidies, promotion of employment and entrepreneurship, among others. However, the options for government action are limited. Neither all the neglected needs nor externalities can be dealt with by government action. The reasons why are presented by Santos (2012), and they can be summarized as follows: • Locality of Needs. The action of governments is conceived to be global. That is, the different policies, guidelines, rules, etc., of the governments are applied to the population in the same way, in part due to the great expense of resources that need to be examined on a case-by-case basis. Further, applying very local policies could cause inequality issues among the governed population. Nonetheless, there are some needs that can be local due to context characteristics or differences in

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initial resource endowment. Therefore, “the visible hand of the government is blunt and favors general solutions not customized actions” (Santos 2012, p. 341). • Scarcity of Resources. Obviously, resources are scarce for everybody, including for the government. It could be impossible to address all the needs, all the neglected populations and all the externalities as if we had unlimited resources. Given this fact, the government has to scrutinize the different needs, which is linked to the following reason. • Legitimation of Action. Which are the criteria that determine that an action should be scrutinized? The answer is greater or lesser legitimation of the action. The lesser legitimate actions are those not easily justified to citizens, that is, voters. This can be done because the population in need does not have power—the small size of population, low ability to cluster and so on—or because government actions are not well seen due to the Convenient Social Virtue (Galbraith 1973), that is, the prevailing ethical judgments of the population. • Lack of Recognition. The last reason is linked to the lack of information or information asymmetries. It could happen that neither the government nor the society is aware of some externality or market failure. In this sense, the viewpoint of the stakeholders on the social problems plays a fundamental role. Given the reasons that constrain government action, there are other forms of action carried out by civil society that also try to address market weaknesses. The most important ones are analyzed in the following section.

9.3.3

Social Activism and Charity

The story of social activism and social movements has been comprehensively studied by the critical mass theory (Oliver and Gerald 2018). Critical mass theory shows how social action can be articulated as an issue of rational choice. Moreover, whatever the triggers of social activism, the dominant logic of action is political action (Santos 2012). That is, social activism aims to effect a change and to do so, it uses political action to try to influence government decisions and actions. In the case of market externalities or market failures, social activism tries to shift legislation in support of the causes they follow. Thus, the last goal is an institutional change, a change in the social system (Santos 2012). Taking into account the reasons why government action is restricted, social movements try to overcome these limitations seeking to introduce awareness in people and government about social problems, which at the same time will give more legitimacy to government policies towards the cause (Schneiberg and Lounsbury 2008). That is, social activism means the coercion of politics and markets. However, the restriction of social activism is clear: social activists do not take the decisions, but they pressure others to take them. Charity is the other element that tries to avoid market weaknesses and government limitations. Through charity, civil society tries to address market weaknesses, especially those that affect disadvantaged minorities. Charity could be a good

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solution to market failure when it affects neglected minorities. However, it also presents some problems. • They are traditional organizations that depend on people’s donations. This implies that donors need to have extra resources and goodwill. It is very common that people with a great surplus of resources and goodwill decide to contribute to any cause. Nevertheless, in crisis times, the desire to save can lead to donations decreasing. • The second limitation is linked to the probable lack of independence of the charitable organization. If the donor is important, that is, he or she invests a large amount of resources or capital in the organization, this donor may exercise an undesirable power in an organization. As mentioned in the context of market failures, in a market society exchange is predominant, therefore individuals who have nothing to exchange are excluded from market relationships (Cortina 2017). The same may happen in the relationship between a charitable organization and its donors: the resources only flow in one direction, from the contributor to the organization. • On the other hand, charity usually means an attitude of solidarity at a timely moment in the life of the person in need. For example, food donation, the provision of some basic goods or services, etc. Charitable organizations are not usually conceived to empower (Santos 2012) the neglected parts of the population they help. That is, people need to eat every day, so a plate of food merely solves the problem for 4 or 5 h, maybe one day at the most, thus, leading to the person in need becoming dependent on the charity to survive. So, through social movements and charities seek to address the issues that governments may face in solving market weaknesses, they also present some problems. Thus, could addressing all these issues be the motive for the rise of social entrepreneurship?

9.4

Social Entrepreneurship

At this point in the chapter, the reader can imagine that the previous one is just a rhetorical question. The main limitations of the aforementioned institutions, markets, governments, social movements and charities can be addressed by another form of organization. This is the precise moment at which social ventures come into play, as organizations acting to solve these weaknesses and limitations. Social ventures arise when markets provoke important externalities or cannot cover all the population requirements because of a failure; when the governments’ action cannot totally address these weaknesses, and neither can social movements nor charitable organizations. Let us imagine the most paradigmatic case of social entrepreneurship: Grameen Bank. In the 1970s, Muhamad Yunnus created a bank that gave microcredits to impoverished populations, mainly women. By doing so, Yunnus founded an

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organization capable of making decisions in order to solve the problem of poverty. This poverty was due, in part, to a financial system that excluded people with scarce resources, the example that Austin et al. (2006) gave when talking about market failure. Grameen Bank addressed the issue in a fundamentally new way, radically different from government, social movements or charities. Yunnus constituted a financial organization, namely an organization that followed the logics of the market. The consequence of this was a sustainable organization in which the benefits obtained from the interest on loans were reinvested. Thus, using market mechanisms, the bank avoided resorting to donations. Finally, what the bank was looking for, that is, its main mission, was to take conventional bank customers out of poverty. This mission was an attempt at a long-term solution. This is the most paradigmatic case because of the perfection of the planning; because despite the perfection of the planning, its execution generated many problems. Moreover, the model theoretically works, and that is the first step to engaging in social ventures.

9.5

Conclusion

The term social entrepreneurship is subject to debate; the big problem is how to define the term. Just delineating what is social entrepreneurship and what is not, we may think about its origins. As explained, academia usually opts to define social entrepreneurship as a mix of two different values: economic and social (Zahra et al. 2009). In this way, we can conceptualize the meaning of economic value going to the roots of capitalism; and the meaning of social value, which sometimes makes us fall into tautology and subjectivity (Santos 2012). Basing our argumentation on the positive theory of Santos (2012), we begin our conceptualization believing that the best way to define the phenomenon is in the dichotomy between value appropriation and value creation, instead of between economic and social value. Arriving at this point, the issue is that in a capitalist society, the market is supposed to create value for the society at the same time, that value is appropriated by shareholders or business owners. However, in reality, the main emphasis of business shareholders on value appropriation provokes weaknesses in the system. The first weakness is called market failure (Austin et al. 2006), and it is linked to the lack of resources of part of the population, which excludes it from taking part in business transactions. The second weakness is the creation of negative externalities (Santos 2012). Companies may have a set of undesirable outcomes, and these outcomes can have negative effects on third parties not directly related to the companies. Doing this, we describe social entrepreneurship as the rise of agents to solve the weaknesses or limits of other agents. The emergence of social entrepreneurship cannot be studied from a chronological perspective. Reality is much more complex: we cannot say that the first step was the market, then government action, then social movements and charities, and finally, social entrepreneurship. The institutions within in which we live are chaotic and

9.6 Summary

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Governement

Social

action

movements

Market Limitations: Locality

- Inability to

Weaknesses:

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of

- Failures

needs

- Externalities

- Scarcity of

make decisions

Social entrepreneurship

resources - Legitimation

Charity

of action -

Lack

recognition

of

-

Donation

issues

Fig. 9.1 A history of social entrepreneurship. Source: Own elaboration

subject to feedback processes that continually change them. Nevertheless, the conceptualization of social entrepreneurship presented in this book should be taken as a model (see Fig. 9.1), and as with every model, it represents a simplification of reality.

9.6

Summary

1. The definition of social entrepreneurship can be seen as a mix of two different values: economic value and social value. 2. The positive theory of social entrepreneurship comprehends the two values in every business, so it makes a distinction between appropriation and creation of value. 3. Explaining the origins of social entrepreneurship means analyzing the basis of markets. 4. Government action, social movements and charities arise to solve market weaknesses. 5. Social entrepreneurship is the last link of the chain; its emergence is the result of trying to avoid market weaknesses and the limitations of governments, social movements and charities.

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References Ackermann F, Eden C (2011) Strategic management of stakeholders: theory and practice. Long Range Plan 44(3):179–196 Aristotle (1999) Politics. Batoche Books, Ontario Austin J, Stevenson H, Wei-Skillern J (2006) Social and commercial entrepreneurship: same, different, or both? Entrep Theory Pract 30(1):1–22 Battilana J, Dorado S (2010) Building sustainable hybrid organizations: the case of commercial microfinance organizations. Acad Manag J 53(6):1419–1440 Cortina A (2017) Aporofobia, el rechazo al pobre. Un desafío para la democracia. Ediciones Paidós, Barcelona Dees JG (2007) Taking social entrepreneurship seriously. Society 44(3):24–31 Freedman M, Jaggi B (2005) Global warming, commitment to the Kyoto protocol, and accounting disclosures by the largest global public firms from polluting industries. Int J Account 40 (3):215–232 Freeman RE, Reed DL (1983) Stockholders and stakeholders: a new perspective on corporate governance. Calif Manage Rev XXV(3):88–106 Galbraith JK (1973) Economics and the public purpose. Houghton Mifflin, Boston Galbraith JK (1989) A history of economics. Penguin Books, London Hong E, Rowell L (2019) Challenging knowledge monopoly in education in the U.S. through democratizing knowledge production and dissemination. Educ Action Res 27(1):125–143 Mair J, Martí I (2006) Social entrepreneurship research: a source of explanation, prediction, and delight. J World Bus 41(1):36–44 Mohai P, Pellow D, Roberts JT (2009) Environmental justice. Annu Rev Environ Resour 34:405–430 Oliver PE, Gerald M (2018) Whatever happened to critical mass theory? A retrospective and assessment. Sociol Theory 19(3):292–311 Piketty T (2014) Capital in the twenty-first century. Belknap Press, Cambridge Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Schneiberg M, Lounsbury M (2008) Social movements and institutional analysis. In: Greenwood R, Oliver C, Sahlin K, Suddaby R (eds) The Sage handbook of organizational institutionalism. Sage, Thousand Oaks, pp 650–672 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 10

Social Entrepreneurship as a Form of Institutional Entrepreneurship

10.1

Introduction

This chapter analyzes the role of social entrepreneurs as agents of change (Greenwood and Hinings 1993). To do this, it is necessary to review the main insights of institutional theory. Institutional theory, as part of sociological science, studies the homogenization of organizational behavior. For institutionalists, the convergence of practices, management, and internal functioning of organizations has its basis in legitimacy or takenfor-grantedness (DiMaggio and Powell 1983; Dorado 2005; Greenwood et al. 2008, 2011; Tolbert and Zucker 1983), that is, the condition “in which actors unwittingly accept the prevailing template as appropriate, right, and the proper way of doing things” (Greenwood and Hinings 1996, p. 1027). The establishment of norms, procedures, and legitimated ways of acting relates to the concept of bureaucracy (Meyer and Rowan 1977). Thus, we can understand that the spread of bureaucracy is just the result of the convergence of organizational behavior. If we understand that this is the explanation of the spread of bureaucracy, the mimetic behaviors of organizations, we are close to institutional theory. Nevertheless, the institutional view, though representing the majority (Greenwood et al. 2008), is not the only justification of bureaucracy expansion. Weber (2005) explained that organizations in the search for efficiency find that bureaucracy is the appropriate way of becoming efficient and that this is due to the economic rationalism that Protestant ethic projects into markets. Following, on the one hand, the study trends of organizational behavior (Greenwood et al. 2008) and on the other, our personal point of view, this chapter takes as a baseline the institutional view. Understanding that the institutional view is our starting point is basic to conceptualize the figure of the social entrepreneur as an agent of change. Indeed, the study of institutions focuses on convergence, homogenization, and similarity (Greenwood and Hinings 1996). Thus, studying why some © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_10

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agents decide to change the context, that is, break with previous values, taken-forgrantedness, and legitimate ways of doing things becomes a crucial issue. That is the main goal of this chapter: analyzing the change, the agents involved in it, the context and circumstances under which it occurs, and the resources necessary to carry it out. The chapter is structured as follows. First of all, a theoretical review of the spread of bureaucracy is analyzed. In this part, the two main theories are explained, that is, the Weberian and the institutionalist. Afterward, a section dedicated to institutional changes is addressed. This is the part where the social entrepreneur is studied. Lastly, the conclusion and summary sections are presented.

10.2

What Institutions Stand for

The study of institutions belongs to sociology. According to the American Sociological Association (ASA), this science studies the “social life, social change, and the social causes and consequences of human behavior.” Hence, sociology analyzes different human behaviors which may become social problems, like racial inequality (Wodtke 2018), gender differences (Raabe et al. 2019), income segregation (Owens 2018), or crime (Papachristos et al. 2011). Further, when analyzing human behavior, “[s]ociologists [also] investigate the structure of groups, organizations, and societies and how people interact within these contexts” (ASA webpage 2020). Talking about the structure of organizations means talking about companies since companies are organizations with the ultimate goal of maximizing benefits and hence sociology studies the phenomenon of entrepreneurship (Thornton 1999). That is why, in order to study how companies work, it is necessary to visit sociology. One of the most important contemporary sociologists is Max Weber; the studies of the German academician comprehend different issues such as economy, religion, or politics. Moreover, Weber was also interested in organizations’ functioning, especially organizations’ internal structure. In his book “The Protestant Ethic and the Spirit of Capitalism,” the author studies the influence of Protestant logic on the spirit of capitalism: . . .it is a fact that the Protestants (. . .) both as ruling classes and as ruled, both as majority and as minority, have shown a special tendency to develop economic rationalism which cannot be observed to the same extent among Catholics either in the one situation or in the other (Weber 2005, p. 7).

As one of the main issues in the book, Weber highlights the rationalization principles that drive capitalism as a result of the influence of Protestant values on markets. Thus, one important concern of the author was how societies and organizations structure themselves. For him, the key is rationalization and it is in search for rationalization when bureaucracy arises. That is, it is rationalism as a value that drives more efficient organizations and, for the author, the most important way of achieving efficiency is through bureaucracy (Weber 1968). So, bureaucracy, namely the establishment of norms, procedures, policies, or professions (Meyer and Rowan

10.2

What Institutions Stand for

93

1977), is created in organizations to assure efficiency in its operations. For Weber, this is the reason why bureaucratic systems are totally ubiquitous among modern companies. Thus, the functioning of companies can be seen as a cost-benefit analysis in which efficiency always wins. Nevertheless, although there is no doubt that efficiency is a value that should be present in companies, some years after the publication of Weber’s work, the neo-institutionalist view began to become popular when studying organizations (Greenwood et al. 2008). The evolution of the institutionalist approach after the study by Meyer and Rowan was published in the American Journal of Sociology in 1977, shows their predominance in the field (Greenwood et al. 2008). This new view looks for a different cause for the spread of bureaucracy among companies. Institutionalists do not deny the search for efficiency in companies but they see this search as only one variable in companies’ internal working equation. The spread of bureaucracy for institutionalists is more a product of mimetic behaviors in companies than a product of the search for efficiency. Hence, what institutionalists support is the idea that things are done in companies because there is a consensus—implicit and/or explicit—about the way in which companies should operate: . . .structural change in organizations seems less and less driven by competition or by the need for efficiency. Instead, we will contend, bureaucratization and other forms of organizational change occur as the result of processes that make organizations more similar without necessarily making them more efficient. Bureaucratization and other forms of homogenization emerge, we argue, out of the structuration [. . .] of organizational fields (DiMaggio and Powell 1983, p. 147).

Thus, for institutionalists, somewhere in time organizations began to work in a similar way, what can be opposed to efficiency. Seeking efficiency means looking outside of the organization to compete but also looking inside and taking into consideration the organization’s idiosyncrasy (DiMaggio and Powell 1983). The forces that drive organizations to organize themselves seeking closeness with other similar organizations are called institutions. On this subject, Meyer and Rowan explain (1977) that “the formal structures of many organizations in postindustrial society [. . .] dramatically reflect the myths of their institutional environments instead of the demands of their work activities” (Meyer and Rowan 1977, p. 341). Institutional theory is related to the convergence of organizations’ practices (Greenwood and Hinings 1996). For institutionalists, this fact of convergence is named isomorphism (DiMaggio and Powell 1983; Greenwood et al. 2008, 2011; Greenwood and Hinings 1996; Meyer and Rowan 1977). Isomorphism means the absence of diversity or variation, that is, the homogenization of practices in organizations (DiMaggio and Powell 1983). This can be seen in the everyday life of different organizations and it is usually seen in templates or archetypes that organizations follow (Greenwood and Hinings 1993, 1996). Tolbert and Zucker (1983), for example, show how civil service reforms are spread by cities when they are required by the state. In the same way, Meyer and Rowan (1977) talk about the employment of external criteria of worth, and they exemplify it with the Nobel Prize. Nobody questions its value; it is assumed to be awarded for the best contributions in a set of disciplines. In the same study, the authors explain:

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10 Social Entrepreneurship as a Form of Institutional Entrepreneurship A sick worker must be treated by a doctor using accepted medical procedures; whether the worker is treated effectively is less important. A bus company must service required routes whether or not there are many passengers. A university must maintain appropriate departments independently of the departments’ enrollments (Meyer and Rowan 1977, p. 355).

Institutionalism comprehends the establishment and continuance of these practices (Zucker 1977). That is, research on institutions focuses on the legitimacy of practices, templates, archetypes, criteria of worth, and so on (DiMaggio and Powell 1983; Greenwood et al. 2008; Greenwood and Hinings 1996; Meyer and Rowan 1977). So, we can say that an organization will have more or less legitimacy depending on the degree to which it follows the values and norms that have a predominance in the society in which it operates. Related to this, let us imagine the birth of Fordism. It brought great growth in efficiency and productivity for companies due to the change in production methods. That is, passing from a more artisanal way of producing to mass production was broadly legitimated. The direct effect of mass production, from a utilitarian point of view, was an increment of the demand due to the low price of the Ford T, at the same time due to the cheapening of production costs. Thus, let us change the context to India in 2008. When the Tata Chairman, Ratan Tata, announced the commercialization of the cheapest car in the world, the Tata Nano, great growth of demand for Tata cars was expected. Then, Anumita Roychoudhury, of the Centre for Science and Environment in Delhi made the following declarations: There is this mad rush towards lowering the prices to achieve mass affordability, . . . If vehicle ownership increases very rapidly, we’ll have a timebomb ticking away. When you lower the price that drastically, how will you be able to meet the safety and emissions standards? There are no clear answers yet (Attewill 2008).

The Tata Nano never had the legitimacy of the Ford T, neither in the USA nor in Europe. Though the main problems were associated with security issues and even some incidents of burning, the lack of legitimacy in occidental markets did not help its commercialization. The awareness of climate change and the sensitivity of the population to such problems in contemporary society draws a totally different scenario for the Tata Nano and the Ford T. The reasons why institutions and isomorphism among organizations occur are among the most important determinants of institutional theory. DiMaggio and Powell (1983) talk about these reasons as mechanisms to implement isomorphism. Through the study of the mechanisms, the authors comment on the antecedents and procedures of spreading institutions. These mechanisms are presented as different types of isomorphism: • Coercive isomorphism. This type of isomorphism is the result of the demands applied to organizations by other more powerful organizations. Coercive isomorphism is usually linked to cultural assumptions in society. An example of coercive isomorphism is the pressures of stakeholders on companies. It is also related to Galbraith’s concept of “convenient social virtue” (Galbraith 1973), that is, the predominant ethical values of the population in a certain place and time. This is the isomorphism that relates more to the concept of legitimacy.

10.3

Institutional Changes

95

• Mimetic isomorphism. This isomorphism derives from the desire of organizations to avoid risk. That is, in uncertain environments, organizations tend to mimic in order to find a proper solution to possible problems. To do so, companies look at similar companies to apply the right practices. • Normative isomorphism. This isomorphism comes from the fact of professionalization. In this case, the sources of institutionalized norms are the procedures, norms, and guidelines previously learned as a consequence of acquiring the necessary knowledge to perform a job.

10.3

Institutional Changes

Due to the fact that institutional theory is focused on organizations’ convergence, studying the conditions in which divergence occurs becomes a relevant issue to analyze. So, what should happen for an institutional change? And what are the actors that can change institutions? Which are the proper conditions for institutional change to occur? Zucker (1977) studies cultural persistence due to institutionalization. The author designs three experiments to analyze three different factors of culture from an institutional point of view: its transmission, maintenance, and resistance to change. Zucker explains the importance of studying the continuity of day-to-day practices, assumptions, ideas, values, and culture because this continuity brings a sense of objectivity. As Zucker (1977, p. 726) explains: [S]ocial knowledge once institutionalized exists as a fact, as part of objective reality, and can be transmitted directly on that basis. For highly institutionalized acts, it is sufficient for one person simply to tell another that this is how things are done.

The most interesting experiment from the point of view of this chapter is the one that analyzes the resistance to change. The proposition before the experiment was conducted was that highly institutionalized contexts are more difficult to change than less institutionalized ones. To prove the proposition, the author created three different contexts, called personal influence, organizational context, and office. The former context is the least institutionalized, the latter context is the most institutionalized. To carry out the experiment, the subjects had to answer questions about the distance in inches that a light moved. The diversity of responses shows that subjects in the personal sphere influence context (the least institutionalized one) are also the subjects that present the least resistance to change, that is, the subjects who are more likely to change their responses about the distance that the light ran.

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10.3.1 Institutional Entrepreneurship The experiment by Zucker (1977) proves how the degree of institutionalization influences the ease or difficulty of change. Nevertheless, the study does not distinguish between the different types of change. Regarding this, the change can be seen in terms of its magnitude. That is, a change can be based on traditional schemas and taken-for-granted ideas or it can break with all the traditional assumptions. Depending on this, the change can be convergent or radical (Greenwood and Hinings 1996). Let us imagine the change in production methods at the beginning of the twentieth century. Taylorism separated the different parts of the process of production. That was an example of radical change. The conception of artisanal work was replaced by the scientific management of production. In this way, a good which was traditionally produced by just one person was divided, allowing a team of very specialized workers to produce a set of goods. By doing this, the trained worker who was the only person capable of producing the product was substituted by a team of workers who did not need training, only the ability of replicating simple tasks— specialized workers. As a direct consequence, workers’ salaries decreased and productivity increased. What later occurred, that is, Fordism, was a convergent change. The new method of production, mass production, was based on Taylorism. The changes incorporated by Taylor’s scientific management theory generated mass production of the aforementioned Ford T. The moving assembly line and the standardization of products were changes applied to Taylor’s baseline. We can also analyze changes in terms of their speed and disruption in the process of being newly institutionalized (Greenwood and Hinings 1996). In this case, urgency is in most cases the driving force of fast or slow change, called revolutionary and evolutionary change, respectively (Greenwood et al. 2008; Greenwood and Hinings 1996). Let us now imagine a crisis situation in which the immediate taking of decisions and changing of paradigms can save a crisis situation, or at least alleviate it. The COVID-19 crisis may be a good example of revolutionary change. Strong recommendations or even regulations by governments of some behaviors can make us introduce changes in our lives from one day to the next, e.g., the use of surgical masks, the adoption of social distance, etc. In this case, let us think in another context, in which a new virus is discovered, in which the consequences and mortality rates are similar to COVID-19 but its infection rate is minor. In that case, the changes could probably have been slower and could lead to evolutionary ones. Obviously, in both typologies—radical versus convergent and evolutionary versus revolutionary—the type of change depends very much on the context. There are contexts that offer more or less opportunities for change (Dorado 2005; Greenwood and Hinings 1996). Indeed, there are sectors of activity that are more open, that is, which allow better interchange of ideas and the inclusion of new practices among organizations. The main features of these fields are openness and complexity. For organizations in these sectors, the complexity of ideas brings uncertainty and a lack of predictability. The necessity to avoid this means that new arrangements arise.

10.3

Institutional Changes

97

These new arrangements restructure the situation and create new institutional scenarios (Dorado 2005), which is in line with the permeability hypothesis that predicts an association between impermeable sectors and evolutionary change, that is, slow changes in routines and new accommodation to new paradigms and arenas (Dorado 2005). We can find an example of evolution versus revolution in the activity performed by B Lab. B Lab is a corporation that certifies that companies meet a set of objectives related to the positive effect of the company in the context. The corporation, by awarding its certification, pursues an evolution in economics, namely, creating little changes that restructure the market institutions to address negative issues. B Lab states the following on its website: A historic global culture shift is underway to harness the power of business to help address society’s greatest challenges. B Lab’s goal is to accelerate this culture shift and make it meaningful and lasting. Our vision is of an inclusive, equitable and regenerative economic system for all people and the planet (B Corporation 2020)

10.3.2 Institutional Entrepreneurs Though the study of institutions focuses on isomorphism, that is, homogeneity and similarity among organizations, studying the agents that lead to change the change becomes one of the main issues (Dorado 2005). Indeed, we have seen in the previous section just a small part of the literature that analyzes institutional change. In this sense, when we talk about institutional entrepreneurs, we are referring to the agents that address the shift from one scenario to the other. Namely, “institutional entrepreneurs are those actors to whom the responsibility for new or changed institutions is attributed” (Hardy and Maguire 2008, p. 198). At this point, one of the main motivations for institutionalizing a field must be recalled. Institutions are instruments for avoiding the taking of risks; they make the context more predictable, less uncertain. The imitation of others’ behavior creates a convergence of practices, what is known as mimetic isomorphism (DiMaggio and Powell 1983). Thus, we can say that what institutional entrepreneurs do is to shift from one institutional scenario to another. Related to this, one of the main definitions of social entrepreneurs is stated by Martin and Osberg (2007)—see, for example, Santos (2012) or Zahra et al. (2009). The authors explain that social entrepreneurs have to include the following three components (p. 35): • “[I]dentifying a stable but inherently unjust equilibrium” • “Identifying an opportunity in this unjust equilibrium” • “Forging a new, stable equilibrium”. So, we are talking about changing the established institutions to a new situation where new institutions arise, that is, in Martin and Osberg’s terminology, to a new and stable equilibrium. And further, the new equilibrium situation will be possible through the spreading of new practices, values, taken-for-granted behaviors, and in

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general, new legitimated forms of carrying out the actions. In the authors’ wording, “[t]he new equilibrium [. . .] did not depend on the creation of a single venture [. . .] but on the appropriation and replication of the model and the spawning of a host of other related businesses” (Martin and Osberg 2007, p. 34). That is, the new situation will be replicated through imitation, namely, mimetic isomorphism. Now let us visit a paradigmatic case of social entrepreneurship. The entrepreneur Hasina Kharbhih is the creator of the Meghalaya strategy. This strategy has as its main goal to fight against slavery and human trafficking. Kharbhih, in an interview for The New York Times, explained: The Meghalaya Model is a comprehensive, holistic approach to address child trafficking and it works within the five P’s (Prevention, Protection, Policing, Press and Prosecution) and the three R’s (Rescue, Rehabilitation and Repatriation). It is a model that brings together various stakeholders such as the law enforcement, social welfare, labor department, education, civil society, media and judiciary. They pull in their resources in addressing the issue in the absence of funding. The Meghalaya Model has been replicated in the eight states of the northeast (The New York Times 2012)

That is, in this case, what the entrepreneur looks for is a situation in which slavery is institutionalized and, hence, in some contexts, legitimated. However, individuals who want the change also have to be legitimated to carry it out. According to the Ashoka website1: “Hasina’s biggest impact, however, comes from building a system as big and powerful . . . as the slavery system she is fighting.” In other words, individuals who want the change also have to be legitimated to implement it and have to use the right—and legitimated—tools. When talking about the legitimation of actors to implement the change, we are really discussing who the actors are and what is their position in a determined institutional field (Hardy and Maguire 2008). Thus, we are talking here about the degree of embeddedness that an actor has in the institutional field that he/she wants to change (Fligstein 2001). In this sense, to simplify, an actor can be totally embedded or totally unembedded. When the actor is totally embedded, he/she is likely to be a central actor; and when totally unembedded, is likely to be a peripheral one. This becomes a crucial issue for institutional change since depending on their situation, actors present a set of differences that ultimately determine their legitimacy. A central actor, that is, a very embedded one, usually has power in the institutional field; as a consequence, he/she may spread the change more easily than a peripheral one, and his/her power position will allow the actor to access more resources. However, also as a consequence of his/her power position, he/she is likely to be less motivated to implement a radical change than a peripheral actor, and also this lack of motivation may lead to less creativity in designing the change. On the other side, there is the peripheral actor, who has no power and no facility to spread a change but, he/she may be motivated and so be creative in change designing. Though the theory is clear, research shows what may happen in certain contexts.

Ashoka is one of the major associations of support for social entrepreneurs. It gives financial and knowledge support to more than 3500 leaders in 93 countries.

1

10.4

Conclusion

99

Hardy and Maguire (2008) provide a useful collection of research cases proving that institutional change can come from power elites, namely, central actors. In order to do so, they highlight cases such as those studied by Sherer and Lee (2016), who analyzed the origin of changes in a sample of 261 law firms in the USA. They determined that the most prestigious ones were the first in implementing new human resource practices. Or the case studied by Greenwood et al. (2002), who analyzed the job done by the largest Canadian professional associations in promoting multidisciplinary practices in accounting fields. Hence, what is very clear in theory is not always applicable to practice, leading to the paradox of embedded agency (Hardy and Maguire 2008). The case of the Meghalaya Model can be another example of this paradox. In this case, the Ashoka website states: Hasina Kharbhih is the daughter of a Khasi (who are matrilineal) mother and a Bangladeshi immigrant father. She grew up in Meghalaya, a small state in India’s deeply divided, conflict-scarred, and therefore, extremely poor Northeast. For all these reasons and because it borders so many countries, the Northeast is a slavery system epicenter. When she was a young student, Hasina went to help a nearby village of craft artisans. There, she heard stories about slaves and felt the pain. (Ashoka website)

In this way, although the actor was not a central one, her geographical position allows her to have a valuable resource: information. Further, the Meghalaya strategy shows that, in the case of social entrepreneurs, the study of motivation becomes crucial since mere feelings such as compassion or empathy can lead an actor, as Hasina Kharbhih, to connect “an individual with a suffering community” (Miller et al. 2012, p. 621). In addition, the case of the Meghalaya strategy shows that through motivation as a driving force, the institutional entrepreneur can bring other important resources and access to power elites—two important factors related to central actors. The New York Times (2012) reveals that the aforementioned strategy is already applied to eight Indian states and it is supported by the United Nations Office on Drugs and Crime. Further, the Ashoka website states that “Hasina recently brokered an agreement whereby INTERPOL acts as host for each country’s database and all parties commit to upgrading and harmonizing their systems,” evidence of access to power and resources.

10.4

Conclusion

The study of institutions focuses on the convergence of organizational behavior. However, in recent years, a large body of literature is making an effort to explain institutional change (Dorado 2005; Greenwood et al. 2002; Greenwood and Hinings 1993, 1996; Hardy and Maguire 2008). Joining this line of research to social entrepreneurship produces a meeting between both literatures: institutional theory and social entrepreneurship theory. Thus, the study by Martin and Osberg (2007)

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Bridging reources Motivation

Creativity

Access power

Institutional change

Designing change strategy

Fig. 10.1 Social entrepreneurs as agents of change. Source: Own elaboration

shows that social entrepreneurs can be seen as agents of change. The justification comes from the fact that social entrepreneurship finds opportunity in a stable but unjust equilibrium. Later, after the discovery of the opportunity, the solution will change the unjust equilibrium to a fair or just situation. The study of the Meghalaya strategy and its creator offers an example of this. The stable equilibrium of slavery and human trafficking in India is shifting thanks to initiatives like the one designed by Hasina Kharbhih. Hasina has not been a victim of slavery or human trafficking but she had a resource that allows her to know unjust equilibrium: information. This access to information was key in designing the strategy. However, her motivation and subsequent creativity were also two important variables in change implementation (see Fig. 10.1). At this point, the factor of motivation links to social entrepreneurship literature (Miller et al. 2012) which leads us to conclude that the important role that motivation plays in institutional change is through the design of strategies of change but also the strategies to access power and bring in other necessary resources.

10.5

Summary

1. Institutional theory focuses on the convergence of organizational behavior. 2. Divergence, instead of convergence, in organizations deals with the identification of different types of institutional change. 3. Actors who promote institutional change can occupy different positions in an institutional field. 4. The analysis of social entrepreneurship literature addresses the issue of social entrepreneurs as agents that promote change in institutions. 5. Although social entrepreneurs are agents with neither power nor the necessary resources, they can lead to institutional change. 6. The study of motivation becomes crucial to understand social entrepreneurship via institutional theory, that is, as agents of change.

References

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References Attewill F (2008) The Guardian. World’s cheapest car upsets environmentalists. https://www. theguardian.com/world/2008/jan/10/india.climatechange ASA (2020) American Sociological Association main webpage. https://www.asanet.org B Corporation (2020). https://bcorporation.net/about-b-lab DiMaggio PJ, Powell WW (1983) The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev 48(2):147 Dorado S (2005) Institutional entrepreneurship, partaking, and convening. Organ Stud 26 (3):385–414 Fligstein N (2001) Social skill and the theory of fields. Sociol Theory 19(2):105–125 Galbraith JK (1973) Economics and the public purpose. Houghton Mifflin, Boston Greenwood R, Hinings CR (1993) Understanding strategic change: the contribution of archetypes. Acad Manag J 36(5):1052–1081 Greenwood R, Hinings CR (1996) Understanding radical organizational change: bringing together the old and the new institutionalism. Acad Manag Rev 21(4):1022–1054 Greenwood R, Suddaby R, Hinings CR (2002) Theorizing change: the role of professional associations in the transformation of institutionalized fields. Acad Manag J 45(1):58–80 Greenwood R, Oliver C, Sahlin K, Suddaby R (2008) The Sage handbook of organizational institutionalism. Sage, London Greenwood R, Raynard M, Kodeih F, Micelotta ER, Lounsbury M (2011) Institutional complexity and organizational responses. Acad Manag Ann 5(1):317–371 Hardy C, Maguire S (2008) Institutional entrepreneurship. In: Greenwood R, Oliver C, Sahlin K, Suddaby R (eds) The Sage handbook of organizational institutionalism. Sage, Wiltshire, pp 198–217 Martin R, Osberg S (2007) Social entrepreneurship: the case for definition. Stanf Soc Innov Rev:1–18 Meyer JW, Rowan B (1977) Institutionalized organizations: formal structure as myth and ceremony. Am J Sociol 83(2):340–363 Miller TL, Grimes MG, McMullen JS, Vogus TJ (2012) Venturing for others with heart and head: how compassion encourages social entrepreneurship. Acad Manag Rev 37(4):616–640 Owens A (2018) Income segregation between school districts and inequality in students’ achievement. Sociol Educ 91(1):1–27 Papachristos AV, Smith CM, Scherer ML, Fugiero MA (2011) More coffee, less crime? The relationship between gentrification and neighborhood crime rates in Chicago, 1991 to 2005. City Community 10(3):215–240 Raabe IJ, Boda Z, Stadtfeld C (2019) The social pipeline: how friend influence and peer exposure widen the STEM gender gap. Sociol Educ 92(2):105–123 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Sherer PD, Lee K (2016) Institutional change in large law firms: a resource dependency and institutional perspective. Acad Manage J 45(1):102–119 Thornton PH (1999) The sociology of entrepreneurship. Annu Rev Sociol 25(1):19–46 Times TNY (2012) Hasina Kharbhih: raising the stakes against child trafficking. The New York Times. https://india.blogs.nytimes.com/2012/01/17/hasina-kharbhih-raising-the-stakes-againstchild-trafficking/ Tolbert PS, Zucker LG (1983) Institutional sources of change in the formal structure of organizations: the diffusion of civil service reform, 1880-1935. Adm Sci Q 28(1):22 Weber M (1968) Economy and society: an outline of interpretive sociology. University of California Press, Berkeley Weber M (2005) The protestant ethic and the spirit of capitalism. Taylor & Francis, London Wodtke GT (2018) The effects of education on beliefs about racial inequality. Soc Psychol Q 81 (4):273–294 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532 Zucker LG (1977) The role of institutionalization in cultural persistence. Am Sociol Rev 42 (5):726–743

Chapter 11

Legitimacy of Social Ventures

11.1

Introduction

Legitimacy as a concept has been largely studied by institutional theory (Aldrich and Fiol 1994; Bitektine 2011; Deephouse 1996, 1999; Deephouse and Suchman 2008; Suchman 1995; Suddaby and Greenwood 2005). The reason why lies in the fact that, for a company, to be legitimated depends on the institutional context in which it operates. In this sense, a company may be legitimated or not. If it is not, it will not be able to compete. That is, legitimacy is a necessary resource for companies (Scott 1995). Indeed, part of the literature about legitimacy studies the strategies that companies carry out in order to gain it (Greenwood et al. 2002; Johnson et al. 2006; Suddaby and Greenwood 2005). The main goal of this chapter is to show the most important issues that literature about institutional theory has studied. By doing this, a review of the general concepts involved in the field of legitimacy is highlighted. As will be seen, institutional theory has considered the legitimacy topic as a very relevant one; however, little is known about the problems that some types of entrepreneurships may have with this. As Aldrich and Fiol (1994) explain, legitimacy is always a hard problem to solve for new ventures. If legitimacy problems are also joined with other issues related to the liability of newness (Bruderl et al. 1992; Bruderl and Schussler 1990; Stinchcombe 1965), startups present great difficulties to compete with established ones. When talking about social entrepreneurships, the problems may be aggravated due to the lack of pragmatic legitimacy, namely the lack of an economic value or benefit for some stakeholders. The chapter is structured as follows. First of all, the definition of legitimacy is presented. Afterward, two important figures related to it are shown: firstly, the subject of legitimacy and secondly, the source. Later, the typology of legitimacies is exposed to finally present how conflicts among the different types of legitimacies

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_11

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can slow down the growth of a social company. The case of legitimacy conflict is illustrated with the case of a real company.

11.2

Definition of Legitimacy

Studying legitimacy requires placing the analyzed organization in a determined context. If we consider a venture as an isolated entity, just taking into consideration its internal resources and capabilities, it will always act efficiently and effectively, that is, taking into consideration the client needs and the least costly way of producing. However, organizations move in a complex context affected by several factors (Porter 1979). In this way, companies are connected with other actors and compete with similar companies for clients but also for resources and suppliers (Brooks 1995; Chen 1996; Deephouse 1999). In the process of competition, the company is always subjected to tensions between its differentiation from competitors but also its similarity (Deephouse 1999; Deephouse and Suchman 2008). The reason why this tension exists is explained perfectly by Deephouse (1999). The author shows in his study that being different from competitors helps companies to increase their performance through the following consideration: A firm that conforms to the strategies of others has many similar competitors that limit the performance of the firm and increase failure rates [. . .] The firm targets similar market resources using similar competencies. This situation approaches perfect economic competition where economic rents equal zero (p. 151).

Thus, the previous idea takes into consideration the strategic point of view developed by management literature (Barney 1991; Hambrick and Fredrickson 2005; Porter 1979, 1991), namely, that the strategic use of a company’s idiosyncrasy can be translated into superior performance. Though the previous idea is unquestionable, the same study by Deephouse highlights that: A second perspective on strategic similarity is that a firm should be same as others in order to achieve superior performance. This is called the conformity proposition, and it is derived primarily from resource dependence and new institutional theories. The basic argument is that a firm which is similar to other firms avoids legitimacy challenges that hinder resource acquisition, ceteris paribus. (pp. 151–152)

Thus, for a company, being different can be positive to a certain extent. If differences are very pronounced, the company may be questioned by some of its stakeholders. In this sense, the institutional context in which the company operates exerts a force that in some way limits the freedom of action (Deephouse and Suchman 2008). One of the most consensual definitions to explain this phenomenon is that of Suchman (1995). The author, basing his reasoning on others’ ideas, explains that:

11.3

Who Cares About Legitimacy?

105

Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions. (p. 574)

Then, we revisit the concept of Convenient Social Virtue (Galbraith 1973), understood as the set of ethical values and beliefs shared by the population in a certain period of time and place, a concept that has been related many times to actors’ judgment and perception about the entity in question (Bitektine 2011; Pfeffer 1981). Whatever the concept, what seems to be clear is that organizations, in general, should take into account some norms when they are operating. Any change, however small, that means the organization differs from other organizations may prompt questioning, that is, a legitimacy challenge (Deephouse 1999).

11.3

Who Cares About Legitimacy?

The establishment of the concept of legitimacy as a necessary factor to compete (Deephouse 1999) stresses the importance of determining who cares about it. The answer is obvious: everybody. Erving Goffman, in his Presentation of self in everyday life (1959), explains, from a psychological point of view, how we act when interacting with others. The reason for acting in one way or another is to show an image that is good, or at least acceptable, for others. When talking about companies, psychology is substituted by sociology. The unit of analysis shifts from the person to the organization. Nevertheless, the object of study is the same: the behavior of the unit of analysis. The reason why a person or an organization behaves in a particular way is the same: to project a desirable image, that is, looking for legitimacy. Focusing the attention on companies and the sociology to study legitimacy, the organization that cares about its self-image is the subject of legitimation or simply the subject (Deephouse and Suchman 2008). For companies, legitimacy is always important. Only a legitimate company has the necessary support to compete (Deephouse 1999; Suchman 1995). However, legitimacy is not always easy to achieve. The reasons for the difficulty in achieving legitimacy may be due to the company itself or the context in which it operates. Regarding the company itself, the age of the company is a determining factor to obtain legitimacy. The fact that a company has been in the market for a long time gives it a sense of continuity in legitimacy (Suchman 1995). On the contrary, a new venture has not yet generated this sense of continuity. It has to earn the credibility that consolidated companies already have. Furthermore, this lack of credibility or legitimacy is not only important in order to get clients but also to get suppliers and financing, this missing legitimacy being an important factor of the liability of newness (Bruderl et al. 1992; Bruderl and Schussler 1990; Richard et al. 2016; Stinchcombe 1965; Suchman 1995). Moreover, if the new venture is operating in a new sector or market, it has to deal with an added difficulty derived from an

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institutional vacuum (Aldrich and Fiol 1994). In this respect, it is obvious to think that new ventures are subjects that really care about legitimacy due to the lack of it impeding competition with older companies.

11.4

Sources of Legitimacy

In the same way that the subject of legitimacy is the response of who cares about legitimacy, the source of legitimacy is the response of who legitimates. Ruef and Scott (1998, p. 880) establish that the sources of legitimacy are “those observers of the organization who assess its conformity to a specific standard or model.” However, the word observer should be understood in a broad sense; an observer does not just observe but is affected by the subject and also exercises an influence on it. Namely, a subject is legitimated when someone gives him/her legitimacy, that is, the source of legitimacy. The study by Deephouse and Suchman (2008) highlights the most important sources of legitimacy; they can be divided into five different groups: • State: that is, the entity with legal status to give support to the company. The name state is just a common way of naming it; others can include the public administration or the political body. • Collective authority: both this source and the previous one are enunciated by Meyer and Scott (1983). As the previous one delimits the entity giving legitimacy, this source is more blurred. Who is the collective authority? According to Deephouse and Suchman (2008), an example of collective authority could be the intellectuals that comprise the audience of the organization. • Media: this is one of the most important sources of legitimacy. Further, the media has two important roles when talking about legitimacy: as a reflector of a society’s view and as an influencer (Deephouse 1996). Whatever the role, the media also acts through the spreading of legitimate—or illegitimate—ways a company behaves. • Other similar organizations: organizations that compete with the subject of legitimacy may also be a source of legitimacy. Through equal behavior or the adoption of some practices by other similar organizations, a company can gain legitimacy (Deephouse 1996, 1999). By doing this, isomorphism becomes a source of legitimacy. • Legitimate others: based on the work by Galaskiewicz (1985), Deephouse and Suchman (2008) explain that a subject is legitimated when it establishes connections or relationships with others who are already legitimated. In this way, the different actors of the company’s value chain may act as sources of legitimacy.

11.5

11.5

Types of Legitimacy

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Types of Legitimacy

Studies by both Aldrich and Fiol (1994) and Suchman (1995) establish that according to the different dynamics of behavior and the fit with institutional rules, legitimacy can be divided into different categories. Aldrich and Fiol (1994) distinguish between sociopolitical and cognitive legitimacy. Suchman (1995) also shows the existence of cognitive legitimacy. Furthermore, he divides sociopolitical legitimacy into pragmatic and moral legitimacy. Regarding the common point of both studies—cognitive legitimacy—some aspects should be emphasized. First of all, both cognitive legitimacies are defined as the absence of an evaluation of the activity. For Aldrich and Fiol (1994), “the highest form of cognitive legitimation is achieved when a new product, process, or service is taken for granted” (p. 648). The definition of this type of legitimacy by Suchman (1995) is broader. The author explains that cognitive legitimacy may be manifested through two possible population behaviors: an “affirmative backing” or an “acceptance of the organization as necessary or inevitable based on some takenfor-granted cultural accounts” (Suchman 1995, p. 582). The first subtype or behavior is based on a more comprehensible point of view. That is, the type of activity that the company is carrying out is supported by the different and diverse beliefs present in the context. In this way, the company in itself becomes a plausible one. On the contrary, the second type of cognitive legitimacy stated by Suchman (1995) fits with Aldrich and Fiol’s definition, i.e., the taken-for-grantedness as the main factor of non-questioning and non-evaluation of a company’s activity. In addition to cognitive legitimacy, the aforementioned studies describe other types of legitimacy. Aldrich and Fiol (1994) highlight the main role of the key stakeholders, namely the government, opinion leaders, or public in general. The support of the most important stakeholders gives the necessary legitimacy to operate (Mitchell et al. 1997). The authors show that the base of stakeholder support lies in the convergence of the company with the existing regulations and norms (Aldrich and Fiol 1994). For Suchman (1995), the legitimacy concept is more complex. The author distinguishes, aside from cognitive legitimacy, between moral and pragmatic legitimacy. These two types of legitimacy are the result of support by the key stakeholders, as stated by Aldrich and Fiol (1994). That is, for Aldrich and Fiol (1994), sociopolitical legitimacy is in the hands of governments, opinion leaders, etc. Suchman’s settlement of pragmatic and moral legitimacy does not conflict with sociopolitical legitimacy but complements it by establishing the steps before the stakeholders’ support. Through the study of legitimacy, Suchman (1995) provides a map of the different reasons why key stakeholders decide to back companies. The study of pragmatic and moral legitimacy relates more to the decisionmaking process or the study of heuristics than to results, sociopolitical support, or legitimacy. On the one hand, “the moral legitimacy reflects a positive normative evaluation of the organization and its activities” (Suchman 1995, p. 579). Particularly, the literal definition shows a process in which the stakeholders assess the

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companies’ behavior or activities in favor of the rest of the population, i.e., the societal benefit. On the other, the “pragmatic legitimacy rests on [. . .] selfinterested calculations [. . .]” (Suchman 1995, p. 578), a literal definition that also implies another assessment, in this case, not in favor of societal benefit but for the evaluator’s benefit. Indeed, the author uses two synonyms: in the case of moral legitimacy, evaluation, and when talking about pragmatic legitimacy, calculations; terms that involve an assessment.

11.5.1 Joining Both Typologies As a consequence of the study of both theories, legitimacy may have two different bases: taken-for-grantedness and/or comprehensibility and assessment of the company’s behavior. If the base is on taken-for-grantedness and/or comprehensibility, cognitive legitimacy arises (Aldrich and Fiol 1994; Suchman 1995). On the contrary, if the assessment is the base, sociopolitical legitimacy arises (see Table 11.1). Further, sociopolitical legitimacy is the consequence of two different assessments: the self-interested and the interest of others. Nevertheless, although both theories are understandable and seem to involve the totality of human behavior in giving legitimacy to any organization, Scott (1995) also shows an interesting typology of legitimacy. This typology divides Aldrich and Fiol’s (1994) sociopolitical dimension into three subdivisions: regulative, normative, and cognitive. Nevertheless, we have used Suchman’s (1995) typology in order to highlight the chronological sense of the decision-making process in which key actors—or stakeholders—decide to support the company according to a set of assessments. Further, the normative legitimacy stated by Scott may present a misunderstanding of terminology in which the definitions of normative legitimacy (Scott 1995) and normative isomorphism (DiMaggio and Powell 1983) can be blurred, and confused (Deephouse and Suchman 2008).

Table 11.1 Typologies of legitimacies and their bases Base Legitimacy

Taken-for-grantedness/comprehensibility Cognitive

Source: Own elaboration

Assessment Self-interested Pragmatic Sociopolitical

Others interested Moral

11.6

11.6

Legitimacies, Trade-Offs, and Social Entrepreneurship

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Legitimacy can also be changed, that is, a company can have legitimacy in a period of time or space and not have it in others. Shifts in legitimacy are due to institutional changes (Deephouse and Suchman 2008). Following this line of thought, Greenwood et al. (2002) elaborate a model in which the institutional change comprehends a process of legitimation or delegitimation, namely, a legitimacy shift. In the model proposed by the authors, pragmatic and moral legitimacy precedes cognitive legitimacy. Between the moral and pragmatic legitimacy stage and the cognitive legitimacy stage lies a stage of diffusion. By doing this, after the change has been adopted by the legitimacy sources with moral and pragmatic legitimacy, the diffusion generates a sense of objectivity (Tolbert and Zucker 1983; Zucker 1977) in which we all assume the activity as appropriate in our cognition. Even so, the problem arises when the activity does not get the necessary pragmatic or moral legitimacy, in particular, when moral and pragmatic legitimacy conflict with each other. As Suchman (1995, p. 585) explains, “crass pragmatic appeals may debase lofty moral claims, and hollow moral platitudes may signal shirking in pragmatic exchanges.” Namely, in a zero-sum society (Thurow 1980), it is not strange that the gain of pragmatic legitimacy, based on self-interested calculations, implies a loose or simply a disregard of moral legitimacy, inducing in this way a trade-off between both legitimacies. This may be the case with some social ventures, which as institutional entrepreneurs (see Chap. 10) imply a change in which some of them have difficulty gaining pragmatic legitimacy, though they have moral legitimacy. This may be true of Jeanología, a Spanish company that describes itself as “an innovative and multicultural company with over 20 years of experience in the development of sustainable and eco-efficient technologies for the finishing industry” (Jeanología Website 2020). The company is dedicated to providing technologies for the finishing details of jeans; these technologies are different from the competition in the fact that they are more efficient in terms of water and energy and reduce the amount of polluting emissions and waste (Castelló 2019). The company is 26 years old and has a presence in more than 60 countries, according to its website. It has been considered as a case of social entrepreneurship due to its disruptive character and the special mission of change in the textile industry. According to an interview for the journal El País, its CEO stated: Implanting an improvement of 10% was not the objective but the disruptive change and improvement of 10 or 20 times. In this way, we wanted to become a less harmful industry, in which the waste of water or chemical products is nil [. . .] We offer changing technologies which break with the established model, showing an innovative and transformative way of doing things. We believe that companies can transform the world. There is a new way of doing business in which the final goal is not only economic benefit. (Silla 2019)

The moral legitimacy is clear, the textile sector is responsible for 20% of water pollution and also the second cause of the pollution of rivers after the agricultural

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sector (Castelló 2019). In a context such as this, a change in the direction of depollution is necessary and, of course, moral. When talking about the beginning of the company, the marketing director says “at the beginning we were the voice in the desert” (Pastor 2019), explaining in this way the lack of environmental awareness of jeans brands. The comfortable situation of the most important jeans producers with their providers generated a situation of passive support (Suchman 1995) for the old production methods for finishing details. However, Jeanología needed more than passive support to enter the market; it needed active support. The difference between active and passive support is crucial in this case. Passive support just needs an avoidance of questioning, in Suchman’s terms: “an organization need [s] only ‘make sense’.” On the contrary, “[t]o mobilize affirmative commitments, however, it must also ‘have value’” (Suchman 1995, p. 575). That is, having value means exiting from the comfort, negotiating again, and assuming new transaction costs (Williamson 1981). Entering a new market and gaining market share needs an “evaluative approval” (Suchman 1995, p. 575) by clients. The case of Jeanología shows the paradigm of a hard beginning. The fact of being a startup adds difficulty regarding the established companies due to the lack of legitimacy (Aldrich and Fiol 1994) and other factors related to the liability of newness (Bruderl et al. 1992; Bruderl and Schussler 1990; Richard et al. 2016). In this case, the moral legitimacy has gained, the textile industry is changing, technologies like that of Jeanología are growing, the moral legitimacy is opening the textile sector to new ways of producing. In the interview with the marketing director, she says: In the next years, [. . .] the brands which do not make the change to efficient processes and sustainable will suffer [. . .] We are in the age of information transparency and the brand has to know how its product has been made. (Pastor 2019)

The above is crucial for the process of legitimation. The access to information may mean that moral legitimacy overlaps pragmatic legitimacy, and information is the best weapon of social entrepreneurs. Information will move the focus from the most pragmatic legitimacy to the most moral legitimacy.

11.7

Summary

1. The legitimacy of an entity implies an assumption that its actions are appropriate. 2. The subject of legitimacy in the case of this chapter is the company. 3. The sources of legitimacy are the observers who pass judgment about the company. 4. The base of cognitive legitimacy is the taken-for-grantedness or the comprehensibility of the company. 5. The base of sociopolitical legitimacy involves an assessment. 6. Pragmatic and moral legitimacy can conflict with each other, and this can be the case for some social entrepreneurships.

References

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References Aldrich HE, Fiol CM (1994) Fools rush in? The institutional context of industry creation. Acad Manag Rev 19(4):645–670 Barney J (1991) Firm resources and sustained competitive advantage. J Manag 17(1):99–120 Bitektine A (2011) Toward a theory of social judgments of organizations: the case of legitimacy, reputation, and status. Acad Manag Rev 36(1):151–179 Brooks GR (1995) Defining market boundaries. Strateg Manag J 16(7):535–549 Bruderl J, Schussler R (1990) Organizational mortality: the liabilities of newness and adolescence. Adm Sci Q 35(3):530 Bruderl J, Preisendorfer P, Ziegler R (1992) Survival chances of newly founded business organizations. Am Sociol Rev 57(2):227 Castelló V (2019) Jeanologia, el reto de hacer vaqueros con un vaso de agua. Cinco Días. https:// cincodias.elpais.com/cincodias/2019/08/05/companias/1565020823_138247.html. Accessed 29 Apr 2021 Chen M (1996) Competitor analysis and interfirm rivalry: toward a theoretical integration. Acad Manag Rev 21(1):100–134 Deephouse DL (1996) Does isomorphism legitimate? Acad Manag J 39(4):1024–1039 Deephouse DL (1999) To be different, or to be the same? It’s a question (and theory) of strategic balance. Strateg Manag J 20(2):147–166 Deephouse DL, Suchman M (2008) Legitimacy in organizational institutionalism. In: The Sage handbook of organizational institutionalism, pp 49–77 DiMaggio PJ, Powell WW (1983) The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev 48(2):147 Galaskiewicz J (1985) Interorganizational relations. Annu Rev Sociol 11:281–304 Galbraith JK (1973) Economics and the public purpose. Houghton Mifflin, Boston Goffman E (1959) The presentation of self in everyday life. Doubleday Greenwood R, Suddaby R, Hinings CR (2002) Theorizing change: the role of professional associations in the transformation of institutionalized fields. Acad Manag J 45(1):58–80 Hambrick DC, Fredrickson JW (2005) Are you sure you have a strategy? Acad Manage Perspect 19 (4):51–62 Jeanología website (2020). https://www.jeanologia.com/es/ Johnson C, Dowd TJ, Ridgeway CL (2006) Legitimacy as a social process. Annu Rev Sociol 32 (January):53–78 Meyer JW, Scott WR (1983) Centralization and the legitimacy problems of local government. In: Meyer JW, Scott WR (eds) Organizational environments: ritual and rationality. Sage, Thousand Oaks, pp 199–215 Mitchell RK, Agle BR, Wood DJ (1997) Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts. Acad Manag Rev 22(4):853–886 Pastor E (2019) Jeanologia, la multinacional valenciana en la que confían Uniqlo o Levi’s, mira más allá del “jean.” Valenciaplaza Pfeffer J (1981) Power in organizations. Harper & Row, New York Porter ME (1979) The structure within industries and companies’ performance. Rev Econ Stat 61 (2):214–227 Porter ME (1991) Towards a dynamic theory of strategy. Strateg Manage J 12:95–117 Richard D, Miller JC, Freeman J, Carroll GR, Hannan MT (2016) The liability of newness: age dependence in organizational death rates. Am Sociol Assoc 48(5):692–710 Ruef M, Scott WR (1998) A multidimensional model of organizational legitimacy: hospital survival in changing institutional environments. Adm Sci Q 43(4):877–904 Scott WR (1995) Institutions and organizations. Ideas, interests and Identities. Sage, Thousand Oaks Silla E (2019) Quoted in CincoDías. Jeanologia, el reto de hacer vaqueros con un vaso de agua. https://cincodias.elpais.com/cincodias/2019/08/05/companias/1565020823_138247.html. Accessed 6 Aug 2019

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Stinchcombe AL (1965) Social structure and organizations. In: Handbook of organizations. RandMcNally, pp 142–193 Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610 Suddaby R, Greenwood R (2005) Rhetorical strategies of legitimacy. Adm Sci Q 50:35–67 Thurow LC (1980) The zero-sum society. Basic Books, New York Tolbert PS, Zucker LG (1983) Institutional sources of change in the formal structure of organizations: the diffusion of civil service reform, 1880-1935. Adm Sci Q 28(1):22 Williamson OE (1981) The economic of the organization: the transaction cost approach. Am J Sociol 87(3):548–577 Zucker LG (1977) The role of institutionalization in cultural persistence. Am Sociol Rev 42 (5):726–743

Chapter 12

The Contexts Where Social Ventures Develop

12.1

Introduction

The importance of defining any phenomenon lies in the fact that it is through definitions that we can understand the phenomenon in itself. The Professor of Philosophy Adela Cortina (2018) begins her Ted Talk with a reference to the novel One Hundred Years of Solitude: Many years later as he faced the firing squad, Colonel Aureliano Buendía was to remember that distant afternoon when his father took him to discover ice. At that time Macondo was a village of twenty adobe houses, built on the bank of a river of clear water that ran along a bed of polished stones, which were white and enormous, like prehistoric eggs. The world was so recent that many things lacked names, and in order to indicate them it was necessary to point. (García Márquez, 1970, as cited in Cortina 2018)

The importance of this quote for Cortina not only lies in its beauty but also in the crucial role of definitions. Cortina follows her argumentation with the following quote from García Márquez: We can point to the stones and the houses. But there is a great quantity of human and social circumstances that we cannot point to because they do not have a physical body. We cannot point to the justice, the beauty, the democracy,. . .they are all circumstances that we have to name because we cannot point to them. And when we name them, we can recognize them, identify them. . .in this way, we can think if we want to promote them or contrarily, disable them. (Cortina 2018)

Following this line of thought, a phenomenon such as social entrepreneurship does not have a physical body. It should have a clear definition, but unfortunately, it does not have it yet. Throughout the different chapters of the book, different definitions of social entrepreneurship have been provided. In Chap. 3, social entrepreneurship is defined through its main actor, the social entrepreneur. In this way, social entrepreneurship is defined as the organizations created by individuals who want to solve some © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_12

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problems that affect the interests of a community (see Chap. 3). In Chap. 5, social entrepreneurship is seen as a way of doing bricolage, that is, using the resources at hand to solve some social problems (Di Domenico et al. 2010). In Chap. 6, social entrepreneurship is presented from a holistic point of view in which it covers the so-called third sector, related to the economy of the common good (Avila et al. 2018). By carrying out an analysis of the moment in which social entrepreneurship arises, Chap. 9 defines social entrepreneurship as organizations that solve the problems that markets, governments, and NGOs cannot solve or sometimes even directly cause in their operations. Through different forms of defining the same phenomenon, all the definitions focus on the same issue: the solution of social problems as the main basis of social entrepreneurship (Austin et al. 2006; Dees 2007; Mair and Martí 2006). However, Santos (2012) makes a relevant contribution that changes the form of defining social entrepreneurship. Social entrepreneurship is, from the author’s point of view, that form of entrepreneurship that is addressed to the creation of value over its appropriation. In this chapter, the importance of defining social entrepreneurship is linked with the role of definitions given by Cortina. Through definitions, we can identify the different phenomena and, more importantly, enhance them or not. Thus, to all these applications of definitions, we can add another one: definitions allow us to measure the phenomena. This is the role of defining social entrepreneurship in this chapter. The main goal is to analyze the contexts most prone to develop social entrepreneurship. As will be seen, each one of the cited studies uses a different definition of social entrepreneurship. However, as will also be seen, they are very much related to each other and this fact allows us to establish insightful conclusions. The first part of this chapter starts with the analysis of the study undertaken by the Global Entrepreneurship Monitor (GEM) in 2005 about social entrepreneurship. Afterward, the analysis of Lepoutre et al. (2013) is cited. This study establishes an open definition of social entrepreneurship to measure its incidence in a set of countries. Later, two more studies are discussed, Hechavarría et al. (2017) and Stephan et al. (2015). These two studies present an important commonality when measuring social entrepreneurship. The common point is not the definition of social entrepreneurship but the same independent variable, post-materialism. The last point of the chapter is not an analysis of the past but of the rates of social entrepreneurship in different countries and of the role of social entrepreneurship in the current society.

12.2

Social Entrepreneurship Around the World

Literature usually considers that the goal of social entrepreneurship is twofold: the creation of both economic and social value (Mair and Martí 2006). This definition agrees with the broad definition of the Global Entrepreneurship Monitor (GEM). Bosma et al. (2015), writers of the GEM report on social entrepreneurship, define the phenomenon with these words:

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Social Entrepreneurship Around the World

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[A]ny kind of activity, organisation or initiative that has a particularly social, environmental or community objective. This might include providing services or training to socially deprived or disabled persons, activities aimed at reducing pollution or food-waste, organising self-help groups for community action, etc. (Bosma et al. 2015: 9)

According to this definition, the most recent report on social entrepreneurship from the GEM was carried out through interviews in 58 countries collected in 2015. This report shows that social entrepreneurship is a rare phenomenon; the average rate of nascent social entrepreneurship activity (SEA) for the set of countries considered is 3.2%. Although the GEM broad definition is used to determine the rate of SEA, the report also highlights a second measure, the operational phase of social entrepreneurship, that is, the phase following nascent social entrepreneurship. Regarding both phases, nascent and operational, GEM calculates the conversion rate. This rate establishes the extent to which nascent social entrepreneurs follow their projects and manage to carry them out. The countries that score highest in terms of conversation rates are western European countries, Australia, and the USA. The interpretation of the GEM relates to higher government support in these countries. Furthermore, they are all countries that present high levels of economic development. But, as mentioned, according to the GEM this was the broad definition. Thus, if this is the broad definition, which one is the narrow? The GEM considers the dichotomy creation/appropriation of value to define social entrepreneurship in its narrow definition. For GEM, this dilemma between value creation/appropriation is crucial. This is due to the fact that many social entrepreneurs acknowledge that there exists a trade-off between both actions, that is, the appropriation and the creation of value. However, GEM’s broad definition can be narrowed further. Another controversial feature in the literature is the possible use of the market. GEM’s broad definition does not consider the use of markets to be relevant. On the contrary, GEM’s narrow definition does. It considers that it is important due to the efforts of international institutions, such as the European Commission and the Organisation for Economic Co-operation and Development, to consider that the use of markets is critical when speaking about social entrepreneurship. Thus, to be included in the narrow definition of social entrepreneurship, entrepreneurs should agree with two statements: “For my organisation, generating value to society and the environment is more important than generating financial value for the company” (Bosma et al. 2015: 14); and “[m]y organisation operates in the market by producing goods and services” (Bosma et al. 2015: 15). In addition, the first statement, referring to the predominance of value creation, does not present a dichotomous answer but rather a continuous one. Entrepreneurs have five possibilities to choose from ranging from strongly disagree to strongly agree on a Likert scale, which suggests that there are different degrees of value creation. Nonetheless, whatever the degree of value creation, the combination of the two answers identifies both perspectives: “The ‘social value’ creation captures the social side, while the ‘market-based’ refers to the entrepreneurial side—hence the term social entrepreneurship,” emphasizing the hybrid nature of social ventures which is highlighted by a great number of studies (Battilana and Dorado 2010; Dorado 2006; Mair et al.

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2012; Mair and Marti 2009; Wry and York 2017). According to the GEM 2015 report on social entrepreneurship, the broad definition of SEA shows low rates of social entrepreneurship, and the narrow definition shows that social entrepreneurship is even rarer than we thought. According to the report, just 1% of the adult population can be defined as social entrepreneur.

12.3

Factor-Driven, Efficiency-Driven, and Innovation-Driven Economies

Following the previous line of thought, Lepoutre et al. (2013) establish another definition of social entrepreneurship. Further, they do it in order to offer an alternative way to measure SEA for GEM. The study explains that social entrepreneurship is a phenomenon that involves a set of initiatives, that is, there is no single way of doing social entrepreneurship; the options are diverse. Using three variables that may determine the type of social entrepreneurship, the authors develop what they call “the social entrepreneurship spectrum” (p. 703). The three variables considered are the social mission, the revenue model and innovativeness. The first variable was measured by asking the following: Are you alone or with others, currently trying to start or currently owning and managing any kind of activity, organization or initiative that has a particularly social, environmental or community objective? (p. 697)

In this case, the possible answer involves a dichotomous variable, yes or no. If the answer is yes, the entrepreneur is considered explicitly social. If so, a second question is asked. In this question, interviewees are asked to allocate 100 points among three possible goals: economic, social or environmental. In this case, the entrepreneur may answer no to the first question but allocate the 100 points in a way in which social and environmental goals score more than economic ones. If this happens, this entrepreneur is reported as an implicit social entrepreneur. Apart from the social mission, the revenue model determines if the social activity depends on the market as a source of financing. In this case, one question was asked to the nascent explicit social entrepreneurs: Will any of the revenue for this activity, organization or initiative come from income, for example, through sales of products or charging for services? (p. 701)

In case of new and established entrepreneurs, that is, in case the venture is already operating, the question was: Does any of the revenue for this activity, organization or initiative come from income, for example, through sales of products or charging for services? (p. 701)

If the answer of the first or second question is yes, a question is asked to determine the percentage of dependence on sales and revenues to sustain the venture.

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How Context Promotes Social Entrepreneurship

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Finally, to determine the type of innovation that the venture carries out, six questions related to it are asked. In this way, the answers will reveal if the entrepreneurship is based on some type of innovation. Thus, asking the different questions mentioned, the spectrum of social entrepreneurship is collected in different forms of ventures. After establishing the definition, the analysis of the results is shown. The study uses the sample of 150,000 individuals belonging to 49 countries. The interviews were carried out in 2009. After collecting the data, the authors divided the sample into countries using the criteria established by the GEM. Namely, they differentiated among three group of countries: factordriven economies, efficiency-driven economies and innovation-driven economies. In the case of the first group, it refers to economies “based on the exploitation of natural resources,” the second group comprehends “economies based on large-scale manufacturing” and the last one “economies based on services and innovation.” After defining the three groups, the authors explain that there are differences in social entrepreneurship behavior among them. The group that presents higher rates of social entrepreneurship is “innovation-driven economies,” and the group that presents the lowest rates is “factor-driven economies.” The innovation-driven group includes the more economically developed group of countries. According to the authors, the higher rates of social entrepreneurship in the most developed countries are due to opportunity cost assessments: the opportunity-cost of social entrepreneurship is higher in developing countries, because other objectives related to fundamental self-interest (such as survival) need to be satisfied first, whereas such self-interests may be less of an issue in developed countries and in fact be picked up by national institutions. (Lepoutre et al. 2013: 708)

Opportunity cost, understood as “the value of the next-best alternative to the current choice” (Kurzban et al. 2013: 6) has been related to entrepreneurship in different studies about entrepreneurs’ behavior (Bosma and Schutjens 2011; SimónMoya et al. 2016; Stuetzer et al. 2014). Though there is dispersion in the ways this cost is measured and the behavior considered, there is a consensus on the effect of opportunity cost on entrepreneurship. The consensus is based on the fact that in countries that present low levels of unemployment and a high degree of social security, entrepreneurship is lower (Bosma and Schutjens 2011). This consensus may be extrapolated to social entrepreneurship, as reflected in the results presented in Lepoutre et al. (2013). The self-interest highlighted in the study shows a trade-off between both actions, as commented on in this book: the creation and appropriation of value.

12.4

How Context Promotes Social Entrepreneurship

The issue of differentiating between value appropriation and value creation is more important than it seems. This distinction not only determines the division of social and commercial entrepreneurship, the narrow or broad definition that GEM

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establishes for social entrepreneurship or the relationship between opportunity costs and entrepreneurship behavior. It is something more, following Santos (2012: 337): Value creation from an activity happens when the aggregate utility of society’s members increases after accounting for the opportunity cost of all the resources used in that activity. Value capture from an activity happens when the focal actor is able to appropriate a portion of the value created by the activity after accounting for the cost of resources that he/she mobilized.

That is, we are again talking about assessment (see Chap. 11) and opportunity costs. As in the case of pragmatic and moral legitimacy (Suchman 1995), the difference between one and the other is the way in which assessments are done. If the calculations are done on a self-interested base, we are talking about pragmatic legitimacy or value appropriation; if the assessment is done in terms of “the aggregate utility of society’s members” (Santos 2012: 337), we are talking about moral legitimacy or value creation. In other words, value appropriation is more focused on self-interest and value creation on others’ interests. When Santos (2012) explains the dichotomy between value appropriation and value creation, he does it in terms of economic value: [A]ll economic value creation is inherently social in the sense that actions that create economic value also improve society’s welfare through a better allocation of resources. (Santos 2012: 337)

However, he does so with the goal of creating a way of measuring the value generated by social entrepreneurship. That is, he does not deny the existence of other types of value that are not purely economic: [S]ome may argue that economic value is narrower than social value and only applies to benefits that can be measured monetarily, while social value includes intangible benefits that defy measurement. This argument, however, creates methodological difficulties for a positive theory because its logical implication is the need to develop a theory based on elements that, by definition, are not measurable, making the theory difficult to test empirically. (Santos 2012: 337)

This idea of organizations pursuing values beyond economic ones links with the “blended value framework” (Hechavarría et al. 2017: 226). The study by Hechavarría et al. (2017) starts from this idea to define social entrepreneurship and, more importantly, to determine which societies present higher rates of social entrepreneurship. The blended value refers to a combination of economic, social, and environmental values, which can also be understood as the triple bottom line (Elkington 1997). In addition to this study, the analysis done by Stephan et al. (2015) also looks for the societies that present higher rates of social entrepreneurship. In this case, the blended value framework is not taken into consideration but rather the definition of social entrepreneurship as the creation of organizations in which social wealth prevails over economic wealth. Regardless of the terminology, both studies are talking about organizations created in the framework of social entrepreneurship. However, this is not the only similarity; they also incorporate the same independent variable in post-materialism. In this way, post-materialism refers to a set of values shared by advanced industrial societies (Inglehart 2000). The shift from a materialist

12.4

How Context Promotes Social Entrepreneurship

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society to a post-materialist one is defined as the transition “from giving top priority to physical sustenance and safety, toward heavier emphasis on belonging, selfexpression and the quality of life” (Inglehart 1981: 880). Post-materialist values have also been related to goals such as more voice at work and, in political life, freedom of expression and less impersonality in institutions or the predominance of ideas over money. In contrast, materialist values have been related to maintaining order in the nation, a stable economy, strong defense force or fighting against crime (Inglehart 1981). Thus, considering the definition of post-materialism by Inglehart (1981), studies by both Hechavarría et al. (2017) and Stephan et al. (2015) prove that societies that score more on post-materialist values present higher rates of social entrepreneurship. Further, each of the studies checks the effect of a different variable on the rate of social entrepreneurship. Stephan et al. (2015) based their study on the premise that variable “government activism” is defined as “the ability of the government to address social issues as a function of progressive taxation and overall spending” (Stephan et al. 2015: 315). The support of the hypothesis takes two different perspectives. The first perspective is that of the institutional void, which determines that less active governments will result in higher rates of social entrepreneurship. The reason for this lies in the greater amount of social necessities that are uncovered. The other point of view is called the institutional support perspective; it represents the opposite of the institutional void. The basis in this case is that “government and social enterprises could be regarded as natural partners to achieve social goals” (p. 311). The validated hypothesis is the latter, the institutional support perspective, proving in this way the great joint effect of government and public sector in performing social goals. The independent variable of the study by Hechavarría et al. (2017) is gender. By considering this variable, the authors appeal to the ethics of justice and the ethics of care. Supporting their argumentation in Flanagan and Jackson (1987) study, Hechavarría et al. (2017: 226) show the idea that the “[e]thics of justice is a masculine-oriented value system prioritizing fairness, rights, and obligations,” while the “[e]thics of care, a feminine-oriented value system, focuses on the interconnectedness among parties involved, and nurturing.” The study shows that women are more likely to constitute ventures that create a blended value, which supports the hypothesis of the ethics of justice and the ethics of care. Regardless of demographics, both studies prove the connection between postmaterialist values in societies and the high rates of social entrepreneurship. Figure 12.1 presents this connection and also the link between government activism and social entrepreneurship hypothesized by Stephan et al. (2015). In order to study the contexts that favor social entrepreneurship, it is important to analyze the commonalities among the different post-materialist countries. When explaining the rise of post-materialism, Inglehart and Welzel (2005) explain two possible hypotheses that can be considered: a scarcity hypothesis and a socialization hypothesis. The scarcity hypothesis works similarly to Maslow’s pyramid at a collective level (Inglehart 1981). In this way, a society that has not covered a set of material issues cannot shift to a post-materialist one. To pass from one to the

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Post-materialism

Social

values

entrepreneurship / Blended value

Government activism Fig. 12.1 Contexts in which social entrepreneurship develops. Source: Own elaboration based on Hechavarría et al. (2017) and Stephan et al. (2015)

other, a certain level of economic development is needed. However, the studies of post-materialism show that this relationship is not totally and perfectly proportional (Inglehart 1981). At this moment is when the socialization hypothesis arises. This hypothesis is related to the time factor. In this way, depending on the moment when economic development has been established, the values have shifted. Thus, the first generations living through the economic development do not leave materialist values. The second generations are influenced by the first ones, so they have two sources of influence, i.e., the first generation and the level of economic development. The following generations experiment with the same two sources of influence. Nevertheless, as time goes by, the influence of the economic development gains force, and the effect of previous generations’ values decreases.

12.5

The Combination of Results

In order to study the contexts more likely to create social entrepreneurship, we have analyzed four studies to clarify which countries present the highest rates of social entrepreneurship. The first study is the one by GEM. GEM, as an institution that studies and measures the rates of entrepreneurship, is followed by a large proportion of researchers studying startups. Although commercial or traditional entrepreneurship is the main focus of the GEM, it offers interesting results about social entrepreneurship. By measuring not just the rates of social entrepreneurship but also the rates of operational social entrepreneurship, GEM establishes that there are countries whose main institutions support social entrepreneurship. This interpretation leads to the conclusion that government and public institutions play a fundamental role in helping social entrepreneurs to carry out their projects. The second study conducted by Lepoutre et al. (2013) offers a new way to measure social entrepreneurship through a new definition that comprehends a spectrum of social alternatives that the authors advocate to be understood as different forms of social entrepreneurship. Lastly, the third and fourth study, by Hechavarría et al. (2017) and Stephan et al.

12.6

Future Contexts of Social Entrepreneurship

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(2015), respectively, include post-materialist values into the social entrepreneurship equation. By analyzing the four studies, we can conclude general results. As stated at the beginning, each one of the studies uses a different definition of social entrepreneurship, which makes it difficult to standardize the results. However, it seems that there are commonalities among the countries that score higher in the four studies. The most important factor seems to be the development of the economy. This fits with the scarcity hypothesis of post-materialism. Nevertheless, reducing the high rates of social entrepreneurship to the development of the economy is, as the socialization hypothesis of post-materialism shows, a somewhat simplistic view. Other factors more related to modern societies should be considered. The link of post-materialism, feminine values, or the driven sectors in an economy are the first attempts to look deeply into societies.

12.6

Future Contexts of Social Entrepreneurship

Studying the contexts where social entrepreneurship develops implies studying the past. All of the studies that measure any phenomenon are studying past data or, at best, the present. But what about the future? What about the contexts where social entrepreneurship will develop? More than studying econometric formulae that lead us to extrapolate the results to the future, this last section of Chap. 9 is addressed to studying social entrepreneurship from another point of view. Where should social entrepreneurship develop? Meaning, which contexts are more in need of social entrepreneurship? On May 16, 2020, 43 newspapers in 36 countries published a manifesto signed by more than 5000 scholars from more than 700 universities around the world. The promoters were three scholars: Isabelle Ferreras, Dominique Méda, and Julie Battilana. The manifest was entitled “Work. Democratize, Decommodify, Remediate” (2020). The main point in the manifesto was support for a way of doing business that does not only focus on economic gain. Regarding the democratize element, the initiative advocates increasing the voice of workers. Workers “are not one type of stakeholder among many.” The letter sustains this democratization of work in the fact that “a personal investment of labor; that is, of one’s mind and body, one’s health—one’s very life—ought to come with the collective right to validate or veto (. . .) decisions.” The decommodify part aims to show that there are sectors that cannot be subject to market rule. In the authors’ words “[d]ecommodifying work means preserving certain sectors from the laws of the so-called free market; it also means ensuring that all people have access to work and the dignity it brings.” The last part calls for a type of business that considers the preservation of the environment. One of the final arguments of the manifesto says that:

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Despite the challenges of this transition, certain socially-minded or cooperatively run businesses—pursuing hybrid goals that take financial, social, and environmental considerations into account, and developing democratic internal governments—have already shown the potential of such positive impact.

That is, the scholars that signed the letter did so with the goal of promoting a type of business that seeks blended value (Stephan et al. 2015), or value creation over a value appropriation (Santos 2012), that is, a type of business in which social and environmental goals should be included. The decommodify section is the part most linked with the definition of social entrepreneurship and the dichotomy between value appropriation and creation. The predominance of value appropriation is the cornerstone of the market system. Let us think of the current context, which is similar to that in which the manifesto was published. A virus is spreading through the world. According to the data offered by the World Health Organization in February 2020, more than 102,817,500 people globally have been infected by COVID-19. This rapid spread of the virus has provoked many laboratories across the world to invest large amounts in research to find treatments and vaccines for COVID-19. On December 12, 2020, the WHO published the following on its website: In the past, vaccines have been developed through a series of steps that can take many years. Now, given the urgent need for COVID-19 vaccines, unprecedented financial investments and scientific collaborations are changing how vaccines are developed. This means that some of the steps in the research and development process have been happening in parallel, while still maintaining strict clinical and safety standards.

This has led to the commercialization of different vaccines in a period of less than 1 year since the WHO declared the pandemic. On the contrary, as we will see in the last part of this book, there are other illnesses with no treatment nor vaccine, and most importantly, no information about research. Gary Kobinger, one of the most important researchers involved in the Ebola vaccine, was interviewed by Wired magazine. When he was asked about COVID-19, the answer was: Well, [COVID-19 is] on a global scale of course, so it’s more widespread than Ebola. But it’s also important to remember that this virus has a less than five percent fatality rate, versus 80 percent for Ebola before vaccines. (Wired magazine 2020)

Following data from the WHO, Ebola was discovered in 1976. Since then, the greatest outbreaks have been in West Africa and the Democratic Republic of Congo. On the contrary, COVID-19 presents a major incidence in the Americas and the European continent. As Dr. Kobinger notes, COVID-19 is affecting more people so the great worry to get a vaccine is understandable. However, the fact that COVID-19 is mainly affecting the most economically developed world may also have an important influence on research efforts. In this case, however, research to find a vaccine for COVID-19 creates an undeniable value: the race of laboratories to find a vaccine is also linked to the appropriation of value coming from its commercialization.

References

12.7

123

Summary

1. There is a dispersion in the definition of social entrepreneurship which hinders the standardization of the results of different studies. 2. The comparison of the conversion rates in countries shows a correlation between economic development and the sustaining of social entrepreneurship projects. 3. Innovation-driven economies present higher rates of social entrepreneurship. 4. Post-institutionalism values in societies are linked to greater rates of social entrepreneurship. 5. Part of academia advocates a change in businesses: future businesses should look to democratize work and decommodify it.

References Austin J, Stevenson H, Wei-Skillern J (2006) Social and commercial entrepreneurship: same, different, or both? Entrep Theory Pract 30(1):1–22 Avila RC, Campos JLM, de Guevara RDL, Prieto AV, Blanco L, Roa E, Cáceres LS, Vargas LA, Montero PA, Pacheco ÁR (2018) The social economy facing emerging economic concepts: social innovation, social responsibility, collaborative economy, social enterprises and solidary economy. Ciriec-Espana Revista de Economia Publica Social y Cooperative:5–50 Battilana J, Dorado S (2010) Building sustainable hybrid organizations: the case of commercial microfinance organizations. Acad Manag J 53(6):1419–1440 Bosma N, Schutjens V (2011) Understanding regional variation in entrepreneurial activity and entrepreneurial attitude in Europe. Ann Reg Sci 47(3):711–742 Bosma N, Schott T, Terjesen S, Kew P (2015) Global entrepreneurship monitor special topic report on social entrepreneurship Cortina A (2018) Aporofobia, el miedo a las personas pobres. https://www.youtube.com/watch? v¼ZODPxP68zT0&t¼293s. Accessed 29 Apr 2021 Dees JG (2007) Taking social entrepreneurship seriously. Society 44(3):24–31 Di Domenico M, Haugh H, Tracey P (2010) Social bricolage: theorizing social value creation in social enterprises. Entrep Theory Pract 34(4):681–703 Dorado S (2006) Social entrepreneurial ventures: different values so different process of creation, no? J Dev Entrep 11(04):319–343 Elkington J (1997) The triple bottom line. In: Russo MV (ed) Environmental management: readings and cases. Sage, New York, pp 50–66 Ferreras I, Medas D, Battilana J (2020) Work. Democratize, decommodify, remediate. https:// democratizingwork.org/ Flanagan O, Jackson K (1987) Justice, care, and gender: the Kohlberg-Gilligan debate revisited. Ethics 97(3):622–637 Hechavarría DM, Terjesen SA, Ingram AE, Renko M, Justo R, Elam A (2017) Taking care of business: the impact of culture and gender on entrepreneurs’ blended value creation goals. Small Bus Econ 48(1):225–257 Inglehart R (1981) Post-materialism in an environment of insecurity. Am Polit Sci Rev 75 (4):880–900 Inglehart R (2000) Globalization and postmodern values. Washington Q 23(1):215–228 Inglehart R, Welzel C (2005) Modernization, cultural change, and democracy: the human development sequence. Cambridge University Press, New York

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Kurzban R, Duckworth A, Kable JW, Myers J (2013) Cost-benefit models as the next, best option for understanding subjective effort. Behav Brain Sci 36(6):707–726 Lepoutre J, Justo R, Terjesen S, Bosma N (2013) Designing a global standardized methodology for measuring social entrepreneurship activity: the global entrepreneurship monitor social entrepreneurship study. Small Bus Econ 40(3):693–714 Mair J, Martí I (2006) Social entrepreneurship research: a source of explanation, prediction, and delight. J World Bus 41(1):36–44 Mair J, Marti I (2009) Entrepreneurship in and around institutional voids: a case study from Bangladesh. J Bus Ventur 24(5):419–435 Mair J, Battilana J, Cardenas J (2012) Organizing for society: a typology of social entrepreneuring models. J Bus Ethics 111(3):353–373 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Simón-Moya V, Revuelto-Taboada L, Ribeiro-Soriano D (2016) Influence of economic crisis on new SME survival: reality or fiction? Entrep Reg Dev 28(1–2) Stephan U, Uhlaner LM, Stride C (2015) Institutions and social entrepreneurship: the role of institutional voids, institutional support, and institutional configurations. J Int Bus Stud 46 (3):308–331 Stuetzer M, Obschonka M, Brixy U, Sternberg R, Cantner U (2014) Regional characteristics, opportunity perception and entrepreneurial activities. Small Bus Econ 42(2):221–244 Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610 Wired magazine (2020) A creator of the Ebola vaccine has hope for slowing covid-19, 31 March 2020 Wry T, York JG (2017) An identity-based approach to social enterprise. Acad Manag Rev 42 (3):437–460

Chapter 13

Institutional Issues About Social Entrepreneurship

13.1

The Unit of Analysis: Social Venture

This part of the book offers a perspective of the social entrepreneur as a figure that arises to solve problems that other institutions cannot solve. The unit of analysis is the social venture, but instead of analyzing its interior, it has been studied from an exterior perspective, that is, what social ventures add to their contexts. When talking about contexts we are referring to the institutional framework in which the social venture is created and developed. Although some individuals are considered in this part, their figure is not analyzed to focus on their motivations, ways of acting, resources, relationships, etc. but on the value they create to the context in which they move.

13.2

Problem-Solving Perspective

Through the analysis of the different definitions that the literature provides to the concept of social entrepreneurship, some points should be highlighted. The first one is a double dichotomy, one between economic and social value and a second between value capture and value creation. This is one of the most important debates when talking about social entrepreneurship. There are authors for whom there is a clear distinction between economic and social value. Economic value means what we understand by money, capital resources, returns, etc. On the other hand, social value implies a very different issue. Social value creation implies a shift in which a “stable but inherently unjust equilibrium” turns into a “stable equilibrium that. . .alleviates the suffering of the targeted group” (Martin and Osberg 2007: 35). The main problem with this dichotomy lies in the definition of social value. The categorization of the “unjust equilibrium” implies a value judgment, which is a © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_13

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subjective categorization that makes difficult the conceptualization of the adjective “social” in social value. This weakness in the definition of social value is based on the definition of social entrepreneurship as a way of entrepreneurship that pursues the creation of value instead of its appropriation (Santos 2012). According to Santos (2012: 337) “all economic value creation is inherently social in the sense that actions that create economic value also improve society’s welfare through a better allocation of resources.” In this way, the author proposes a holistic definition of value, in which economic and social values should not be distinguished from one another. Instead of this, it is proposed that the definition of social entrepreneurship should be in terms of the value it creates for the society, that is, in utilitarian terms. By doing so, subjective assessments about the social value definition are avoided. Both dichotomies and definitions deal with the topic of the value contributed to the context in which they move; that is because both of them are considering macro variables, namely, the social entrepreneurship’s institutional context.

13.3

Origins of Social Entrepreneurship

Whatever the definition of social entrepreneurship, it seems that the adjective “social” makes it different from traditional entrepreneurship. In fact, traditional entrepreneurship has never had an adjective; it has always just been called “entrepreneurship.” In Chap. 9 we visit the origins of traditional entrepreneurship in order to look into those of social entrepreneurship. For doing so, the main characteristics of markets, that is, the economic system or capitalism, have been highlighted. Markets, as the manifestation of traditional entrepreneurship, consist of the interchange of two or more private properties. This interchange can cause some weaknesses that may result in population damage. The first weakness is called failure. The failure of the market reflects those goods and/or services that are not provided by the market to some part of the population. The interchange done in markets requires that one part of the relationship, the client, pays for the good or service bought. If the client cannot afford to pay for it and if the good or service is basic, there is a market failure. The second weakness of the market is negative externality. That is, the impacts that the business operation may have on the context where they operate. One paradigmatic externality is the pollution emitted by some businesses. Polluting the environment is not the goal of any business; however, it is the result of some operations of production. It is at this moment when governments enter the framework. The goals upon entering are to prevent, avoid or minimize market weaknesses. Nevertheless, governments have limited options for acting. In other words, governments cannot do anything to prevent market weaknesses. The reasons why this happens are summarized in Chap. 6: the locality of needs, the scarcity of resources, the legitimation of action, and the lack of recognition. Attempts are made to face the different limitations by means of two ways of acting or population mobilization: social activism and charity. On the one hand, social activism also presents great limitations. Social movements can influence politics

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Fostering the Change from a Social Entrepreneurial Paradigm

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but they do not have the ability and competence to make decisions. They are not legitimated for legislating; they just can guide decisions and bring a voice or visibility to certain people or neglected social problems. On the other hand, charity also presents some issues concerning donations. When capital resources or money come from one major source, this source can influence the decisions the organization makes according to its benefit. So, these four institutions—market, government, social movements, and charity—are also stated in Santos (2012: 348) as “institutional actors in modern capitalist economies.” The author, also from a perspective that approaches these actors according to their role in the context they develop, does not see them as solutions to weaknesses, limitations, or issues of each other but as actors that pursue different roles. The role of social entrepreneurship is empowering people. Although there is a great diversity in social entrepreneurship definitions, this is a common point of most of the conceptualizations of social entrepreneurship, offering a solution to people in need that can be sustainable in the long run (Dees 2007; Fowler 2000; Zahra et al. 2009).

13.4

Fostering the Change from a Social Entrepreneurial Paradigm

If the definition of social entrepreneurship considered is that related to the change, it is necessary to focus on the nature of the change. That is what Chap. 10 does. Institutional theory, as the most important approach of this part of the book, is one of the theories that has most to say about the change in current societies; the reason being that institutions have a basic role of perpetuating the structures and the norms that are applicable in a certain context. Thus, studying the conditions in which these structures and norms are not followed by actors is a great challenge for institutionalists (Dorado 2005). Regarding this, the study by Zucker (1977) offers clarifying results. The study does not look at the change directly but at the resistance, that is, the continuity: [S]ocial knowledge once institutionalized exists as a fact, as part of objective reality, and can be transmitted directly on that basis. For highly institutionalized acts, it is sufficient for one person simply to tell another that this is how things are done. (Zucker 1977: 726)

The results of the experiment carried out by the author show that there are contexts where resistance is high and contexts where change arises more easily. The difference between one and another context is the degree of institutionalization. For this reason, individuals that are capable of introducing a change in a very institutionalized context are called institutional entrepreneurs (Hardy and Maguire 2008). This is when social entrepreneurs enter into play. According to Martin and Osberg (2007), social entrepreneurship implies the establishment of a new equilibrium. This new equilibrium is the result of a social entrepreneur, that is, an institutional one.

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The Legitimacy Concept

Institutional theory shows the resistance to change that very institutionalized contexts experience. In this way, institutional entrepreneurs, as initiators of the change, have usually face challenges related to this resistance. The challenges are usually manifested in the low performance of new ventures, which translates into higher failure rates of new business in comparison with established ones (Bruderl et al. 1992; Bruderl and Schussler 1990; Headd 2003; Knaup 2005; Phillips and Kirchhoff 1989). One of the main reasons why this happens is that very institutionalized contexts present resistance to change, related to legitimacy. When ventures or organizations in general are similar to one another, there is a sort of “conformity” (Deephouse 1999: 148), that is, its operation, behaviors, and actions are not called into question. Thus, similar ventures can avoid legitimacy challenges more easily (Deephouse 1996). Social ventures, trying to affect the change, may have to deal with legitimacy challenges. These challenges will be easier or more difficult to overcome depending on the type of legitimacy that is at stake. Legitimacy, as a concept, is defined as: a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions. (Suchman 1995: 574)

Thus, the type of legitimacy depends on to whom the actions of the venture have to be desirable, proper, or appropriate. Depending on this fact, the population involved makes an evaluation of the new venture. The process ends with the venture’s operations being taken-for-granted.

13.6

The Future of Social Entrepreneurship

The last chapter of this part of the book is focused on the differences between countries that present the highest and the lowest rates of social entrepreneurship. For doing so, the report on social entrepreneurship by the Global Entrepreneurship Monitor (GEM) has been analyzed. Following GEM, the data about social entrepreneurship can be interpreted according to different definitions of the phenomenon of social entrepreneurship. That is why the GEM presents two definitions: a broad and a narrow one. The broad definition considers that the phenomenon of social entrepreneurship can be measured in terms of the social or environmental goal that any kind of organization pursues. Taking into account this definition, the measurement of the rates of social entrepreneurship by countries results in differences among the different economies considered in the study, being the western European countries, USA and Australia, the group of countries that present the highest rates of social entrepreneurship. More importantly, they present the highest conversion rates, meaning

13.7

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129

nascent social entrepreneurs that follow their projects and go on to carry them out (Bosma et al. 2015). After that, the chapter follows with the analysis of Lepoutre et al. (2013). This analysis shows similar results to those of Bosma et al. (2015). The more developed countries present the highest rates of social entrepreneurship. The explanation, according to the authors of the study, is in the opportunity cost: the opportunity-cost of social entrepreneurship is higher in developing countries, because other objectives related to fundamental self-interest (such as survival) need to be satisfied first, whereas such self-interests may be less of an issue in developed countries and in fact be picked up by national institutions. (Lepoutre et al. 2013: 708)

Finally, the last two studies considered in Chap. 9 present a great similarity: the introduction of the values of post-materialism. Both studies reach the same conclusion, that post-materialist values are related to higher rates of social entrepreneurship (Hechavarría et al. 2017; Stephan et al. 2015). After analyzing the studies, the last part of the chapter presents an attempted future for social entrepreneurship values. Through the manifesto of Ferreras et al. (2020), the main values of social ventures are intended to be spread through other businesses.

13.7

Limitations and Future Research

Considering that this part of the book and the first part are theoretical, the main limitation is in the lack of theories in explaining the phenomenon of social entrepreneurship. For example, when considering the institutional framework, the studies by Hofstede (2003) and North (1981) are a really important source of explanation. In the same way, the stakeholder theory (Freeman 1984; Freeman and Reed 1983) could add great value to the notion of social entrepreneurship and its legitimacy issues. The reason lies in the connection of stakeholders and the sources of legitimacy: “Stakeholder” connotes “legitimacy,” and while managers may not think that certain groups are “legitimate” in the sense that their demands on the firm are inappropriate, they have better give “legitimacy” to these groups in terms of their ability to affect the direction of the firm. Hence, “legitimacy” can be understood in a managerial sense implying that it is “legitimate to spend time and resources” on stakeholders, regardless of the appropriateness of their demands. (Freeman 1984: 45)

Further, another limitation of the study could be the consideration of multiple definitions of the term “social entrepreneurship.” The reason for not choosing a single definition is that this book attempts to pursue a general perspective. Focusing on just one definition would have narrowed the analysis to just one approach of the phenomenon. Thus, considering different definitions has the limitation of offering ambiguity, however, we think it is worthwhile in order to add a comprehensive view of the term.

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Finally, although this part of the book considers different definitions of the term, that of Santos (2012) has been the reference definition for this part. This definition, in turn, also has some limitations, since it follows a utilitarian perspective of the phenomenon. Hence, it falls into the main limitation of utilitarianism, namely the imperfection of cost-benefit analysis (Kelman 1981) and the necessary normative or categorical classifications of the value generated (Posner 1979). Nevertheless, although it has this limitation, it is a good approach for explaining the concept. In addition to these limitations, future research lines should consider the analysis of the change carried out by social entrepreneurs. Studying case by case the type of social entrepreneurship and the change they develop according to their contexts could be an interesting topic of research. For example, research about the issue shows that post-materialism is related to higher rates of social entrepreneurship. However, just focusing on the specific cases in each country can lead to establishing relevant conclusions about how the context shapes the type of entrepreneurship. On the other hand, although social entrepreneurship can be seen as a type of entrepreneurship, there are authors who think that social entrepreneurship values should be spread among other organizations (Ferreras et al. 2020). It would be interesting to know if this is already happening. Moreover, the study by Hechavarría et al. (2017) shows a first attempt to relate social entrepreneurship values with the ethics of care. Following this line of thought can address the phenomenon of social entrepreneurship from a more philosophical approach, which could add a more holistic point of view of the issue as well as complete it. Social entrepreneurship, as a field of research, is in its first phase. Because of this, it is necessary to develop theories that try to explain the phenomenon. Nevertheless, the research in empirical terms can help to shed light on the field.

References Bosma N, Schott T, Terjesen S, Kew P (2015) Global entrepreneurship monitor special topic report on social entrepreneurship Bruderl J, Schussler R (1990) Organizational mortality: the liabilities of newness and adolescence. Adm Sci Q 35(3):530 Bruderl J, Preisendorfer P, Ziegler R (1992) Survival chances of newly founded business organizations. Am Sociol Rev 57(2):227 Deephouse DL (1996) Does isomorphism legitimate? Acad Manag J 39(4):1024–1039 Deephouse DL (1999) To be different, or to be the same? It’s a question (and theory) of strategic balance. Strateg Manag J 20(2):147–166 Dees JG (2007) Taking social entrepreneurship seriously. Society 44(3):24–31 Dorado S (2005) Institutional entrepreneurship, partaking, and convening. Organ Stud 26 (3):385–414 Ferreras I, Medas D, Battilana J (2020) Work. Democratize, decommodify, remediate. https:// democratizingwork.org/ Fowler A (2000) NGDOS as a moment in history: beyond aid to social entrepreneurship or civic innovation? Third World Q 21(4):637–654

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Freeman RE (1984) Strategic management. Cambridge University Press, New York Freeman RE, Reed DL (1983) Stockholders and stakeholders: a new perspective on corporate governance. Calif Manage Rev XXV(3):88–106 Hardy C, Maguire S (2008) Institutional entrepreneurship. In: Greenwood R, Oliver C, Sahlin K, Suddaby R (eds) The Sage handbook of organizational institutionalism. Sage, Wiltshire, pp 198–217 Headd B (2003) Redefining business success: distinguishing between closure and failure. Small Bus Econ 21(1):51–61 Hechavarría DM, Terjesen SA, Ingram AE, Renko M, Justo R, Elam A (2017) Taking care of business: the impact of culture and gender on entrepreneurs’ blended value creation goals. Small Bus Econ 48(1):225–257 Hofstede G (2003) Culture’s consequences. Sage, Thousand Oaks Kelman S (1981) Cost-benefit analysis: an ethical critique. Regulation 5:33 Knaup AE (2005) Survival and longevity in the business employment dynamics data. Monthly Labor Review, May, 50–56 Lepoutre J, Justo R, Terjesen S, Bosma N (2013) Designing a global standardized methodology for measuring social entrepreneurship activity: the global entrepreneurship monitor social entrepreneurship study. Small Bus Econ 40(3):693–714 Martin R, Osberg S (2007) Social entrepreneurship: the case for definition. Stanf Soc Innov Rev:1–18 North D (1981) Structure and change in economic history. Norton, New York Phillips BD, Kirchhoff BA (1989) Formation, growth and survival; Small firm dynamics in the U.S. Economy. Small Bus Econ 1(1):65–74 Posner RA (1979) Utilitarianism, economics, and legal theory. J Leg Stud 8(1):103–140 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Stephan U, Uhlaner LM, Stride C (2015) Institutions and social entrepreneurship: the role of institutional voids, institutional support, and institutional configurations. J Int Bus Stud 46 (3):308–331 Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532 Zucker LG (1977) The role of institutionalization in cultural persistence. Am Sociol Rev 42 (5):726–743

Part III

The Convergence of the Micro and Macro Perspective

Chapter 14

Introduction and Empirical Framework

This book addresses the topic of the dynamics of social entrepreneurship. The first part, the micro perspective, analyzes the figure of the social entrepreneur, his/her personality, sources of financing, and ways of operating. The second part focuses on the macro perspective, the value that social entrepreneurs add to the context in which they operate as well as the legitimation issues and limitations that they have to face. The third part shows a paradigmatic case of the social entrepreneur. Through the case study selected, that of the Spanish scientist Pilar Mateo Herrero, the main topics addressed in the theoretical literature are studied from an empirical point of view; the dynamics of social entrepreneurship and the fight against the unjust equilibrium (Martin and Osberg 2007) caused by poverty are also studied. Furthermore, the dilemmas and ethical issues derived from the trade-off between economic and social value (Zahra et al. 2009) are also analyzed. The use of a case study to explain the vicissitudes of the social entrepreneur has been necessary due to two factors. First, the purpose of the study—to understand the break of institutions—is a very general question. It cannot be solved with an experiment, archival analysis, or survey (Yin 1994). Further, the choice of case study as a research strategy fits perfectly with its definition: A case study is an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident. (Yin 1994: 13)

Throughout the analysis of the case, the phenomenon of illnesses spread mainly by vectors in some poor populations is scrutinized as a systemic problem. The phenomenon, in this case, is totally embedded in a determined context (Hartley 2014), that of underdeveloped economic areas in which the lack of knowledge about the spread of disease amongst its population may be the main cause of the problem. In this train of thought, the context and the phenomenon are analyzed as a joint and inseparable factor.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_14

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The structure of this part of the book is as follows. First, the empirical framework is exposed, presenting the explanation of the case study, the entrepreneur, and the social problem. Subsequently, the application of the theory with the case study is analyzed following time-series and pattern-matching analyzes. Finally, the main conclusions and future lines of research are discussed.

14.1

The Problem: The Unjust Equilibrium

Chagas disease is an illness mainly affecting areas of continental Latin America. The World Health Organization estimates that between six and seven million people worldwide are infected, mostly in Latin America. The disease has four different forms of transmission: blood transfusion, congenital, organ transplantation, and by an insect bite called the triatomine bug or “vinchuca” (Macián Arcas 2011; WHO 2021), this latter being the main route of transmission. The origin of the disease dates back 10,000 years. The increase in agricultural activities and the domestication of animals were the causes of the birth and spread of the disease. However, it was only 200 or 300 years ago that Chagas disease became zoonotic. The vast deforestation for agriculture and the rearing of livestock, together with the openness of new routes in the form of highways meant that the vector of the disease lost its most important food source, wild-animal blood, also provoking its spread (Rodrigues Cuora and Albajar Viñas 2010). The symptomatology is different depending on the phase of the illness. In the first phase, symptoms can be diverse. Among them, victims can present fever, headache, muscle pain, or difficulty in breathing. In the next phase, patients may suffer cardiac, neurological, or mixed disorders. The latest phase finishes with patient death, mainly due to heart arrhythmia or heart failure, which may be caused by the destruction of the nervous and heart muscle system (WHO 2021). The vector process of infestation—by the vinchuca—occurs when the insect bites its victim while asleep. After that, it defecates on the bite. If the vinchuca is infected, its excrement contains the parasite Trypanosoma Cruzi, which provokes Chagas disease. After the insect bite, when the person scratches his/her skin, the parasite enters the victim’s body through the wound caused by the scratch. The vinchucas use animals such as chickens or rabbits as reservoirs (González Casas 2009).

14.2

The Solution: Paint Against Chagas

Stopping the main form of transmission of Chagas disease implies controlling the vector, this being important to avoid the vinchuca bite. The technological solution for blocking the transmission in this case has a singular name: polymeric microencapsulation. As González Casas (2009: 39) states about this technology, “the most important from the formula [is] not the what but, the how.”

14.2

The Solution: Paint Against Chagas

137

Polymeric microcapsule

Active ingredient Fig. 14.1 Microscope image of a sample of the paint Inesfly 5AIGR. Source: Inesfly Corporation website (2021)

Polymeric microencapsulation, the how, consists of enveloping low doses of biocides and insect growth regulators in microcapsules. The microcapsules, subjected to external agents, such as high temperatures or humidity and to the outdoors, will progressively open. When they open, the insecticide is released. This technology of microencapsulation applied to the paint constitutes a perfect solution for vector control. This technology was patented in 1996 with the name Pinturas Inhibidoras de la Síntesis de la quitina de los artrópodos para el control de plagas y alérgenos (Paints that inhibit the chitin synthesis of the arthropods to control plagues and allergens). It was known as Inesfly I, and the product derived from this patent was Inesfly 5A IGR. The insecticide and repellent actions of Inesfly 5A IGR work through two methods. The first method that the insect lands on the wall coated with the paint and the insect sniffs the insecticide during the vapor phase, which leads to its death (Inesfly Report 2017). Polymeric microencapsulation, in Dr. Mateo’s words, “is a technology that allows applying specific functionalities—such as the progressive release over time—to different materials. We have applied this technology to the paint to eradicate diseases that are transmitted by insects. A method that is very different to conventional insecticides, which are really toxic to mammals and with a low persistence” (Mateo 2021; Diari d’Andorra). As explained by Dr. Mateo, conventional insecticides present a set of issues. One of them is that they are harmful to mammals. During its application, the molecules of conventional insecticides are free and in high concentrations. At the same time, the freedom of the insecticide molecules provokes the low persistence of the insecticide due to its volatility. By contrast, Inesfly 5AIGR does not work in this way. The insecticide is enclosed in low doses in microcapsules (see Fig. 14.1). The

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microcapsules are formed by biopolymers, like VeoVa type, on a watery basis. The joining effect of these two sets of molecules gives some properties to the microcapsule that are special in terms of insecticide release and conservation (Mateo 2009). Due to the slow insecticide release allowed by the polymeric microencapsulation, the paint has been demonstrated to be longer lasting than other products of vector control and less toxic. Further, encapsulation means that the insecticide does not react with water, avoiding the loss of its properties (Inesfly Report 2017). Its longer lasting nature and effectivity against the triatoma bug—vinchuca—has been checked and verified by empirical studies using experimental and control groups (Amelotti et al. 2009; Gorla et al. 2015; Maloney et al. 2013). However, the triatoma bug is not the only vector that this technology can control. It is also effective against leishmaniosis, dengue, and malaria vectors (GCPN 2021; Holguín 2018; Mosqueira et al. 2010a, b, 2015; Oropeza et al. 2013; Poda et al. 2018; Ratti et al. 2018). Research shows not only the effectivity of Inesfly paint but also its long residual efficacy after 12 months of paint application (Mosqueira et al. 2015).

14.3

The Entrepreneur as the Actor of Change

The creator of this technology is Dr. Pilar Mateo. Pilar is the daughter of an entrepreneur. Her father, Santiago Mateo, founded a furniture varnish factory, a company called Inesba.1 When Dr. Mateo’s father ran his business in the factory, there was a small room in the factory where she did her research and experiments. The origin of the technology of polymeric microencapsulation began in 1990. A news item in the local newspaper caught Pilar’s attention. It said that an important Spanish hospital had had to close its surgeries due to fungus on its walls. At that moment, Pilar had an idea: if she could invent a paint that acted as a fungus repellent, these types of issues could be avoided. After that, she was the director of a PhD thesis using this idea. However, the creation of the insecticide paint was not so easy. The mix of paint with insecticide was used for insects and arthropods but it presented two main problems: the insecticide was toxic and, thus, harmful to human life, and it created resistance (González Casas 2009). Through the study of entomology, Pilar learned that chitin inhibitors were necessary to eradicate insects and arthropods. The great challenge was to design a system to maintain chitin inhibitors in some strategic place. When it was necessary, the chitin inhibitor should be released and, hence, begin to act against the insect. The idea was not created to prevent a disease, nor even to control a specific vector. Nevertheless, some months before the granting of the patent, Pilar received a visit from an Argentinean businessman. He was interested in the insecticide paint. The goal of such a visit was to test the validity of Pilar’s paint. Some days after that

1

Industria Española de Barnices.

14.4

Entrepreneurial or Prosocial Motivation?

139

visit, the Valencian government2 and Eduardo Menem, brother of Carlos Menem, then president of Argentina, signed a contract to try to control Chagas disease; the tool to do it was to be the paint created by Dr. Mateo. The goal of that contract was mainly political and Inesba was to provide the paint. That contract between the Valencian government and Eduardo Menem was published in a variety of newspapers and thus the information about Dr. Mateo’s technology came to the attention of Cleto Cáceres, a Bolivian doctor dedicated to the research of Chagas disease. After a phone call between them, Pilar and Cleto met each other. In their first meeting, Cleto told Pilar about the magnitude of the Chagas problem in some indigenous regions of Bolivia. Pilar’s technology of polymeric microencapsulation could save lives. Some months after that first meeting with Dr. Cáceres, Pilar traveled to one of the most affected zones in Camiri, Bolivia. In the interview that Pilar granted us to do this study, she told us: That was the moment when my adventure began, the moment when I took the decision to address my technology to the poorest. That was the moment when my big dreams and also my big problems appeared. (min. 28 of the interview)

After that visit to one of the poorest zones of the Bolivian Chaco, Pilar began work to eradicate Chagas disease and to change the living conditions of its victims.

14.4

Entrepreneurial or Prosocial Motivation?

As noted, there are two differentiated parts in Dr. Mateo’s professional life. In the first phase, she is mainly moved by an entrepreneurial motivation; in the second phase, by a prosocial motivation. In the following two sections, evidence of this is shown. Although both motivations are important for constituting a social venture, prosocial motivation is analyzed in more detail because it has received less attention in the literature (Jayawarna et al. 2013; Johnson 1990; Raza et al. 2018; Segal et al. 2005; Shane et al. 2003). The purpose followed is to contribute to the research of the social values that lead some people to create a social venture. The explanation of the two phases is divided into different sections. To show the matching between the literature and the case study and the contributions of the study, the findings are presented with fragments of the interview inserted in the theory explanation.

2

The government of the region where Pilar Mateo lives and works.

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14.4.1 Opportunity Discovery Entrepreneurship has been largely studied from different points of view. Its positive effect on the economy and on innovation is the cornerstone for analyzing why some people decide to start a venture. Among others, some of the most important characteristics that are supposed to be present in entrepreneurs’ nature are the need for achievement, risk-taking, tolerance for ambiguity, internal locus of control, or selfefficacy (Shane et al. 2003). That is, there are some individuals who have a sort of alertness that gives them the main component to discover opportunities where others do not see them (Kirzner 1973). Furthermore, the context in which the entrepreneur moves is another factor to consider (Aldrich 1990; Aldrich and Fiol 1994; Singh and Lumsden 1990). Regarding entrepreneurs’ personal characteristics, it is important to highlight that being an entrepreneur is a long-lasting characteristic, that is to say, it is not only the eureka moment when the entrepreneur’s characteristics arise. Entrepreneurs’ life may be full of entrepreneurial moments: I was always inventing things. I had a time in my life that I made my own gasoline, the problem was that my gasoline passed the octane rating and broke the car (min. 9 of interview) I saw that the paint used to paint the crosswalk was dangerous for motorbikes. Paints were very slippery. And also, they were very toxic because they were made with organic toxic solvents. Then, I invented a non-slip water-based paint (min. 10 of interview). Later, I was also researching into intumescent paint. My goal was to create a paint that can avoid the spread of fires. I was always looking for problems and considering possible solutions (min. 12 of the interview)

As can be seen in Pilar’s interview, the eureka or entrepreneurial moments were basic features of her personality. The process of entrepreneurship is related to a trialand-error mechanism which only ends at the moment of finding an idea that can be viable. That was the moment when Pilar read the item in the newspaper reporting that an important Spanish hospital had had to close its surgery rooms because of a problem with fungus. I thought: there are pathogens on the walls and I make paints. If I put insecticide in the paint, I can eradicate this. (min. 17 of the interview)

After that moment, Pilar began to develop her idea. She directed a PhD on that basis. The PhD was well qualified, and she continued developing the insecticide paint on a larger scale. Some years later, while she was working in Israel on a chemical project, she received a phone call. Someone called me. Queen Noor of Jordan had a problem of flies in the stables. I said: yes. I can solve this issue; I have directed a PhD on it. I can do it. But instead, it was a disaster. Six months after the paint was applied there were more flies than at the beginning. (min. 21 of the interview)

Then, another eureka or entrepreneurial moment came.

14.4

Entrepreneurial or Prosocial Motivation?

141

That was the moment when I realized that the paint I created was not really a technology. I began to think about polymeric microencapsulation. How I could work with microcapsules for the capacity of a nanoparticle. Just with this we could create residuality and persistence using a small quantity of insecticide. In 1996, my first patent was granted. (min. 23 of the interview)

The entrepreneurial moment crystallized. The patent was the award for all the efforts. The phases of discovery (Shane and Venkataraman 2000) and exploration had ended3 (March 1991). After that, the next phase was exploitation.

14.4.2 Opportunity Exploitation Although the case study selected is a paradigm of the social entrepreneurship phenomenon, it presents a characteristic that is not so ordinary: the possibility for double exploitation. The technology created by Pilar could be applied to two different contexts: the developed and the developing world. Individuals in the developed world can afford to buy a paint that allows their homes to be free of insects. About this, Pilar told: I talked to my father and I said: dad, I’m going to make you rich. I have invented a paint to kill cockroaches. At that time, I had no idea about malaria or any other disease. (min. 23 of the interview)

Indeed, in the beginning, this was probably Pilar’s main purpose. Some months before the patent, an Argentinean businessman went to see her. He wanted to test her paint. After taking a sample of paint away with him, the businessman called her: “Your paint works. You are going to become rich” (González Casas 2009: 43). Pilar accepted his offer. A contract was signed between the public administrations of Argentina and Spain. The paint was going to be commercialized to eradicate vinchucas. Pilar went to Argentina to establish contract terms; when she came back to Spain, Cleto Caceres was waiting for her. That was the moment when my life changed. Dr Cleto Caceres told me “my people are dying, 85% of us have Chagas disease.” (min. 26 of the interview)

In the same way that Pilar listened to the Argentinean businessman and went to Argentina to establish contract conditions, she also went to Bolivia to see the living conditions of the people suffering from Chagas disease. Cleto did not tell me that the community of people was in the middle of the rainforest. There were no highways to use and getting to the community took us 20 hours...When we arrived, I realized that there were no walls to be painted. I had invented a paint and there were no walls. (min. 26 of the interview)

3

The case of Pilar in a comprehensive approach is very much related to organizational learning literature. She has seven different families of patents all over the world. Thus, the exploration phase has no end for her. However, we are talking in this case about the first of her patents.

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Hence, after inventing an insecticide paint, there were two ways of exploiting it: taking profit from it, namely a value appropriation approach, or trying to help others with it. Pilar’s choice was the latter, value creation instead of value capture (Santos 2012). The dynamics addressing this value creation are developed in the next subsections.

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Mosqueira B, Soma DD, Namountougou M, Poda S, Diabaté A, Ali O, Fournet F, Baldet T, Carnevale P, Dabiré RK, Mas-Coma S (2015) Pilot study on the combination of an organophosphate-based insecticide paint and pyrethroid-treated long lasting nets against pyrethroid resistant malaria vectors in Burkina Faso. Acta Trop 148:162–169 Oropeza V, Pinal R, Mateo P, Delacour Estrella S, Alcarcón Elbal PM, Ruiz Arrondo I, Muñoz A, Lucientes J (2013) La eficacia residual de tres formulaciones de pinturas insecticidas (Tecnología Inesfly) sobre distintos tipos de superficies, para el control de Aedes (Stegomya) albopictus, en condiciones de laboratorio Poda SB, Soma DD, Hien A, Namountougou M, Gnankiné O, Diabaté A, Fournet F, Baldet T, Mas-Coma S, Mosqueira B, Dabiré RK (2018) Targeted application of an organophosphatebased paint applied on windows and doors against Anopheles coluzzii resistant to pyrethroids under real life conditions in Vallée du Kou, Burkina Faso (West Africa). Malar J 17(1):1–9 Ratti V, Rheingold E, Wallace D (2018) Reduction of mosquito abundance via indoor wall treatments: a mathematical model. J Med Entomol 55(4):833–845 Raza SA, Qazi W, Shah N (2018) Factors affecting the motivation and intention to become an entrepreneur among business university students. Int J Knowl Learn 12(3):221–241 Rodrigues Cuora J, Albajar Viñas P (2010) Chagas disease: a new worldwide challenge. Nature 465:6–7 Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Segal G, Borgia D, Schoenfeld J (2005) The motivation to become an entrepreneur. Int J Entrep Behav Res 11(1):42–57 Shane S, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manag Rev 25(1):217–226 Shane S, Locke EA, Collins CJ (2003) Entrepreneurial motivation. Hum Resour Manag Rev 13 (2):257–279 Singh JV, Lumsden CJ (1990) Theory and research in organizational ecology. Annu Rev Sociol 16 (1):161–195 WHO (2021) World Health Organization. https://www.who.int/health-topics/chagasdisease#tab¼tab_1 Yin RK (1994) Case study research. Design and methods. California, Sage Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 15

Methodology

15.1

Case Study and Unit of Analysis

Our unit of study in this part is the entrepreneur. Dr. Pilar Mateo is the social entrepreneur we have chosen to analyze. She has a PhD in chemistry. Her idea was patented in 1996. Ashoka (2021) describes her as follows: Pilar Mateo Herrero breaks the link between poverty and disease through a communitybased approach that creates sustained change in communities and living environments in developing countries. Accelerated by a new painting technology that effectively eradicates diseases like Chagas, dengue fever, and malaria, Pilar combines methodologies and local development efforts to improve health, economic development, and community mobilization. (Ashoka.org 2021)

15.2

Data Collection

The data has been collected progressively. The first data collected was basically archival. The Inesfly website provided the authors with relevant information to understand the constituent parts of the technology created by Dr. Mateo. Further, the WHO has been a basic source to understand Chagas disease. Its website has plenty of reports and data about the scope and dimensions of the disease, symptomatology, and transmission. After reading and studying the archival data about the current situation of Chagas disease and its possible solution, an online interview with Dr. Mateo was conducted. The interview was conducted by both authors in December 2020. The interview lasted 2 h and 15 min and was conducted in Spanish. The platform used for the meeting was BlackBoard Collaborate, using the license from the University of Valencia. The interview was recorded, and it was later transcribed.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_15

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After the interview, Dr. Mateo sent the authors the documentary Tierra sin mal, directed by Ricardo Macián Arcas (2011) and the book El Vampiro de los Pobres, written by Charo González Casas (2009). These two sources of data were basic to triangulate the information collected and to add robustness and validity to the empirical work (Hartley 2014). Added to these sources, the media, especially newspapers of national and international scope, have been consulted. In them, the authors could access to media explanation of Dr. Mateo’s technology and her figure in the current context (Aceituno 2019; Carchano 2020; Guerrero 2020; Jiménez 2019; Mansergas 2020; Reynal 2021; Taberner 2020; Tejerina 2020a, b, c), as well as some of the most important results of the paint that have been communicated to the newspapers (Friedman-Rudovsky 2012a, b; Teutsch 2014) and to international institutions (GCPN 2019).

15.3

Data Analysis

After the collection, all the data was combined by both authors. By doing this, the analytic strategy and the mode of analysis were selected. The study of the literature of social entrepreneurship from an institutional point of view shows that social entrepreneurs face different challenges when they decide to operate in a determined context. In fact, the second part of the book is ordered in this way. For this reason, the analysis of the case study has been done with this approach, the chronology. In this way, all the documents and archival data selected to analyze the case were put in chronological order, as well as dividing the interview into the different phases which Dr. Mateo went through to put her technology into practice. Once the analytic strategy was established, the mode of analysis selected followed the same reasoning that was used to order the data, i.e., sequentially; hence, the mode of analysis used was time-series analysis. The main goal for using this technique was to follow the condition that “some events must always occur before other events, with the reverse sequence being impossible” (Yin 1994: 117). In that way, the starting premise was that Dr. Mateo’s educational background, life experiences and motivations, and family networks determine her character as a social entrepreneur and her way of acting to solve social problem. Related to this, although it was not the primary purpose, the analysis of the process and the phases of the social entrepreneur sequence led us to conduct the analysis as a sort of patternmatching. In this sense, the case study was addressed to match an “empirically based pattern with a predicted one” (Yin 1994: 106). In the case study presented in this part of the book, two different periods in Dr. Mateo’s life can be observed. The first period fits with the typical motivations of the entrepreneur (Shane et al. 2003; Shane and Venkataraman 2000). The second period fits with a more prosocial motivation (Miller et al. 2012). Related to the second period, we have found that Pilar’s case fits with the different types of social entrepreneurs shown in the study by Zahra et al. (2009), i.e., social bricoleur, social constructionist and social engineer. Although

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the study names the entrepreneurs as different figures, the case study of Pilar is related to some extent with all three of them. Thus, a flexible pattern-matching approach (Sinkovics 2018) has helped to form a base that supports the findings and to which the main contributions of this case study can be added.

References Aceituno NF (2019) Pilar Mateo, la química que dejó el laboratorio para salvar vidas con pintura. sLa Vanguardia. https://www.lavanguardia.com/vida/20191012/47915773836/pilar-mateo-laquimica-que-dejo-el-laboratorio-para-salvar-vidas-con-pintura.html. Accessed 29 Apr 2021 Ashoka.org (2021) Ashoka main webpage. https://www.ashoka.org/en/fellow/pilar-mateo-herrero Carchano MJ (2020) No me planteo una fecha de caducidad; la creatividad no se jubila. Las Provincias. https://www.lasprovincias.es/revista-valencia/pilar-mateo-cientifica20200423122131-nt.html. Accessed 29 Apr 2021 Friedman-Rudovsky J (2012a) New paint wipes out infestation in a village. The New York Times Friedman-Rudovsky J (2012b) With novel paint, chemist aims to vanquish the. Vinchuca, Science Magazine GCPN (2019) Improved case detection and vector control for visceral leishmaniasis. Good clinical practice network. https://ichgcp.net/clinical-trials-registry/NCT03269006 González Casas C (2009) El Vampiro de los Pobres La Esfera de los Libros Guerrero JA (2020) Pilar Mateo: “En Monrovia el ébola se erradicó con el continuo lavado de manos y sin tocarse” Hoy Hartley J (2014) Case study research. In: Casell C, Symon G (eds) Essential guide to qualitative methods in organizational research. Sage, Gateshead Jiménez P (2019) La científica que combate la pobreza con pintura El País Macián Arcas R (2011) Tierra sin mal TvOn and General Video Producciones Mansergas A (2020) La científica Pilar Mateo: “esta pandemia de la COVID-19 estaba anunciada.” Cadena Ser Miller TL, Grimes MG, McMullen JS, Vogus TJ (2012) Venturing for others with heart and head: how compassion encourages social entrepreneurship. Acad Manag Rev 37(4):616–640 Reynal M (2021) Podríem dir que hem creat la vacuna de les cases Diari d’Andorra Shane S, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manag Rev 25(1):217–226 Shane S, Locke EA, Collins CJ (2003) Entrepreneurial motivation. Hum Resour Manag Rev 13 (2):257–279 Sinkovics N (2018) Pattern matching in qualitative analysis. In: Casell C, Cunliffe AL, Grandy G (eds) The Sage handbook of qualitative business and management research methods: methods and challenges. Sage, Thousand Oaks Taberner K (2020) Pilar Mateo: “Va a ser muy difícil retomar las cosas tal y como las dejamos.” Valencia Plaza. https://valenciaplaza.com/pilar-mateo-va-a-ser-muy-dificil-retomar-las-cosastal-y-como-las-dejamos. Accessed 29 Apr 2021 Tejerina C (2020a) Pilar Mateo: “El primer fallo fue llamar “nueva normalidad” a la desescalada” Las Provincias Tejerina C (2020b) Pilar Mateo: “Es casi seguro que el virus del Nilo está en más zonas de España.” Levante

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Tejerina C (2020c) Pilar Mateo: “Va a ser muy difícil retomar las cosas tal y como las dejamos.” La Razón Teutsch B (2014) The house paint that can prevent diseases. The Atlantic Yin RK (1994) Case study research. Design and methods. California, Sage Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 16

Social Bricolage as the Path to Social Entrepreneurship

16.1

The Origins of an Icon in Social Entrepreneurship

In the course of her professional career, Pilar Mateo Herrero, a Spanish scientist with a degree in Chemistry from the University of Valencia, has created a paint that acts as an insecticide against Chagas disease, a disease that most affected communities in South America. Her attitude, determination, and courage have been decisive in ensuring that the indigenous population has a dignified, healthy life, free of fatal diseases. Her story is strongly influenced by the social, cultural, and family context in which she grew up, strongly conditioned by her father and his business, as well as the desire for knowledge and knowledge transmitted by her maternal grandfather. As we saw in Chap. 3, the social entrepreneur is determined by external variables (environmental influences), and internal variables (characteristics of the individual). The context in which Pilar grew up gave her the opportunity to innovate and be creative with the resources available to her, also known as bricolage, as applied to the phenomenon of entrepreneurship, and Pilar defines herself as an “inventor” (min. 8 of the interview) rather than a scientist. Pilar tells us in the interview that her life has consisted of finding solutions to existing problems: “I see a problem, and I need to find a solution” (min. 12 of the interview). From the perspective of the internal characteristics of the individual, the maxim of her professional career, also extended to the personal sphere, has its foundations in the entrepreneurial spirit, widely recognized in the literature as the exploration and exploitation of opportunities (Shane and Venkataraman 2000). For the particular case of social entrepreneurs, the problem they want to solve deals directly with aspects that affect the quality of life of a community. Therefore, this particular case has been chosen as it represents a clear example of social entrepreneurship. We will then explain the origins of her professional career as a chemist and researcher, as well as how her individual characteristics and environmental influences shaped the social entrepreneur. To do so, we will base ourselves on the phases © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_16

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of social entrepreneurship developed by Zahra et al. (2009) as if it were a continuum, and we will apply them to the particular case of Pilar Mateo. In the contextualization of her environment, we will begin by describing her main influences, which trace the beginnings of her career. Her father had a varnish company in Paiporta (Valencia, Spain) called INESBA (Industria Española de Barnices). This name would be decisive in the creation of patents for future products developed by Pilar, as will be seen below. In the Valencian environment, the furniture sector was predominant, so her product was complementary to the industry. Apart from her father, her maternal grandfather was a great source of inspiration for Pilar, and a prime example of overcoming the vicissitudes experienced during the post-war period. Her grandfather, despite not having received formal training, was considered a wise man who had dedicated his life to the cult of knowledge and its promulgation. As a consequence, Pilar’s mother, despite the lack of institutional education, was a cultured and highly educated woman, thanks to the knowledge that her father had passed on to her. In Pilar’s home, education played a very important role, complementary to the critical spirit, reasoning, and prosocial motivation.

16.2

Social Bricolage: The Solution to Local Problems

In 1983, Pilar finished her degree in Chemistry and her father supported her to start work in the family business but with the condition of starting from the lowest position in the organizational hierarchy. Pilar’s interest and intellectual curiosity provided a perfect breeding ground for the company to diversify and start manufacturing complementary products to the ones they currently made. Thus, Pilar specialized in metallic corrosion, specifically in atmospheric corrosion. In the following years, Pilar obtained a PhD Cum Laude from CSIC (Consejo Superior de Investigaciones Científicas) specializing in anticorrosive paints that had elements that were non-toxic to the environment. Corrosion generated millions of losses in the industry, so her contribution to science presented a much-needed solution. From the beginning, Pilar always sought to find solutions that were socially and environmentally sustainable, as a consequence of a high degree of environmental commitment. Without knowing it, Pilar’s solutions were the salvation for others. Individuals who are able to understand through observation, personal responsibility, and respect what the social problems currently are in our society, are those who show high levels of empathy with the community to which they belong. For some authors (Bacq and Alt 2018; Pangriya 2019), empathy is a precursor to entrepreneurial activity in social matters. In addition to bringing new technology to the company and producing anticorrosion paints, Pilar decided to specialize in surface diseases, also complementary to paint manufacturing. Pilar states in the interview that she “made a living by inventing things.” Here, the distinction between necessity and opportunity entrepreneurship can be utilized (Martínez-Rodriguez et al. 2020), as it refers to the purpose pursued by the act of entrepreneurship. Among the most outstanding

16.2

Social Bricolage: The Solution to Local Problems

151

examples, we find that she manufactured her own gasoline by mixing different solvents. However, the consequences were unexpected: all the car’s pipes burst (min. 9 of the interview). Pilar was brave, resilient, and nothing frightened her. She had Oscar Wilde’s idea very much in mind, which states that “experience is the name we give to our mistakes.” Through her creativity, Pilar continued inventing different products, with greater or lesser acceptance, but with proactivity. Among the most outstanding are: – Hydroponically grown vegetables, such as tomatoes, imported from Holland. – Anti-slip water-based traffic paints. – Intumescent paints. All the paints that Pilar created were named after her father’s company: INESBA. A few examples are: INESFIRE (intumescent paints), INESTRAFFIC (paints for crosswalks). All these inventions presented a solution to problems that Pilar had identified in her community and nearby towns. The sense of belonging to a community often causes the social entrepreneur to feel morally responsible and, consequently, to want to contribute positively to the environment in which she finds herself, from which she receives input and feedback (positive and negative). The result of attachment to place is manifested through activism in civic affairs, protection of the community’s interests, and responsible behavior (Wen et al. 2020). Thanks to her successes, and also her mistakes, she was able to refine his inventions, but always from a perspective of contribution to the community. This is what in theory is meant by the term of social bricolage. From the perspective of entrepreneurship, bricolage has mainly been used to explain the creation of new ventures (Ciborra 1996; Baker et al. 2003; Fisher 2012) initiated locally. Bricolage consists of giving different uses to the resources for which they were created (Baker and Nelson 2005; Fisher 2012) and complies with the concept of consensus-building (Innes and Booher 1999), in which “individuals representing differing interests engage in longterm, face-to-face discussions, seeking agreement on strategy, plans, policies, or actions” (Innes and Booher 1999, p. 11). Pilar developed new instruments and technologies through the combination and configuration of the resources she possessed. According to Fisher’s study (2012), there are five different dimensions in which entrepreneurs can apply bricolage to their ventures: physical materials, labor elements, skills, markets, and regulatory framework. In its most incipient stages, the social entrepreneur focused mainly on the dimensions related to the physical resources she possessed, and her previous knowledge and experience. Simultaneously, bricolage is related to two constructs, which are independent but with great affinity: effectuation and improvisation (Janssen et al. 2018). These perspectives are far from the principle of causation traditionally applied in entrepreneurship. When causation applies, entrepreneurs follow an economic and rational logic (Fayolle et al. 2009), and select the means that will be useful to achieve its final objective (Fisher 2012). In this new paradigm, bricolage proposes another logic, based on improvisation and effectuation. Sarasvathy (2008) developed the concept of effectuation, identifying entrepreneurship as a process that is dynamic and interactive, in which one selects among the possible consequences, taking into

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account the disposable resources (Fisher 2012; Janssen et al. 2018). This phenomenon of causation is precisely the one that predominates in Pilar’s specific case. The search for solutions comes from the incessant observation of the environment and, therefore, the creation of ideas is expressed in a temporal continuum which has little to do with the fixed and immovable selection of resources to achieve the end. Rather, it is a process of exploration and experimentation. Improvisation also shares the same basic principles with bricolage. Improvisation is the point where approach and execution coexist (Baker et al. 2003), as an antecedent to an intuitive, innovative, and knowledge-building process. The entrepreneur’s own problem-solving ability (Witell et al. 2017) presents a perfect breeding ground for the development of improvisation within the framework of bricolage. This means that the bricoleurs do not set opportunity as an a priori goal but shape the reality in which they find themselves based on available resources (solvents, paints, previous knowledge, experiences, etc.). The shaping of these opportunities is the antecedent for the creation of value (Baker and Nelson 2005; Janssen et al. 2018) according to a constructivist vision. Improvisation does not imply a lack of planning and organization, but rather the opposite. For improvisation to be successful, the meeting point between ideation and execution must be consolidated on very solid foundations, determined by the innate characteristics of the social entrepreneur. In Pilar’s case, her actions always applied the theory “I want to, I can, and I do.” And it is precisely this motto that works for her even in the most adverse circumstances, exemplifying how, with the combination of the resources she possesses, she can obtain everything she sets out to do.

16.3

The Dichotomy Between Economic and Social Value

In 1986, Pilar went to Panama to work in the area of corrosion prevention and set up a small laboratory in her father’s company where she continued in the same line of research. Thanks to the Valencia Innovation Award, she was able to buy her first chromatograph (a technical device used to separate the different chemical components in a mixture), with which she developed her new research. Pilar’s scientific interest led her to co-direct a doctoral thesis on the creation of an insecticide paint, motivated by an article she had read in the newspaper. What she did not know at the time was how many lives this discovery would save. Pilar always combined her proactivity, social innovation, and risk-taking in favor of the creation of a technology that would benefit a particular sector and the community as a whole, which encapsulates the theoretic definition of social entrepreneurship. The main contribution of Pilar, that is, the social entrepreneur, is to create social wealth (Zahra et al. 2009). Pilar had invented her paint by being focused initially on solving insect problems in the developed world. Naturally, she had heard about the diseases affecting South American countries, such as dengue fever or malaria, but they were not part of her initial plans. Later, she visited Argentina with her new technology, met Eduardo Menem, brother of the president of Argentina,

16.4

The Paint That Saves Lives

153

businessman and president of the Senate, and signed a contract, for which the economic benefit was going to be very remarkable. At the same time, the Bolivian physician Cleto Caceres was in the last phase of his Master’s studies at the Valencian Institute of Public Health Studies (Valencia, Spain) when he discovered in a newspaper that there was a lady living in the same town who could save the lives of thousands of people in her town with her painting. Upon returning from Argentina, Pilar and Cleto met and Cleto confessed to her: “My people are dying.” Cleto explained to her that the conditions in which the Guarani Indians lived were unhealthy, causing the vinchucas (an insect that transmits Chagas disease) to kill around 80% of the population. Her town was Camiri, in the oil-producing area of Bolivia. At these words, Pilar could not help but take action, and rejected the idea of turning a disease of the poor into a business that would make her rich, with underlying political interests, and decided instead to help save lives. Cleto warned her about the invisibility of this disease, since it only affected the poor, and that the policymakers were indifferent. Social entrepreneurship sometimes arises as a response to the practices carried out by companies, governments, and nongovernmental organizations, which have relegated the social interests of the community to the background. Specifically, in those less developed and emerging societies, social entrepreneurship has served to give voice to problems that until now had been silenced and move toward a more sustainable society in social and environmental terms. “It’s not that our people don’t have a voice, but they are not allowed to speak,” says Cleto Caceres. Social agents, such as Pilar, have been a loudspeaker for the areas under development, in this case for the indigenous population of Camiri. Thus, social entrepreneurship is an escape route from the current economic system, often encouraged by the profit motive and purely economic benefit (Hemingway 2005). Social entrepreneurs are agents who intend to make a positive change in society, in such a way that their solution presents a tool to improve the quality of life of the segment of the population they want to target. Pilar says, “I made the decision that my technology had to reach the poorest. Here began my great illusions, my great dreams, and my great problems.” Within a year, Pilar was in Camiri.

16.4

The Paint That Saves Lives

Throughout Latin America, regardless of the country, there is an insect whose bite leaves lifelong sequelae in its victims, normally leading to death. It is a slow death, practically imperceptible to the eyes of the affected person, since during the latent stage of the disease no symptoms are manifested. It is a hematophagous bedbug; that is, it feeds on blood. Given the hygiene and sanitary conditions prevailing in these countries, it is a disease that mainly affects poor populations, without resources, and living in “houses” that are far from the concept of home established in the West. Their homes are mainly made of mud and wooden sticks, where cracks predominate. It is precisely in these cracks that the vinchucas, as these bugs are colloquially

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known, hide, sleep, reproduce and live. The scientific name of the species is Triatoma infestans and they act only at night, when their prey sleeps and does not perceive that the vinchuca is biting it and releasing its lethal venom. The remarkable fact about the painting formula is not what, but how. The procedure is as follows: Pilar included a system with microcapsules, which contain a very small dose of the chitin inhibitor. When the paint covers the walls and nooks and crannies of the indigenous people’s houses, each small capsule gradually makes its appearance, thus preventing the vinchucas from growing and reproducing. With the paint, the plague is over. The difference compared to other previous solutions, such as fumigation, is that the period of protection is much longer (2 years, compared to about 6 months), and the effectiveness is also greater. In addition, the effects of the application of the paint on the populations’ quality of life went beyond medical and hygiene issues. The indigenous people had the feeling of living in a home, and of being aware that they deserved a dignified and humane dwelling. This action represented an advance in the social and cultural development of the people. Social bricoleurs bring substantial value to society, as they are the point of contact between local needs and their satisfaction. In other words, without their existence, the rest of the chain would not be able to develop, and many opportunities would remain undiscovered. Although the problems they solve are sometimes negligible, they mark a direction toward solving social problems that are much more consistent and rooted in society. Here it is essential to use the term “social balance” developed by Parsons (1971). Social bricoleurs foster the achievement of this social balance, in which the redistribution of the resources is equal among the members of the society (Benabou 2000), and the coverage of services and public guarantees is greater (Alesina and Angeletos 2005). The resources available to social bricoleurs are limited, so innovation in the process of finding different applications and uses is decisive (Janssen et al. 2018), as Pilar found throughout her experimental studies on her miraculous life-saving paint.

References Alesina A, Angeletos G-M (2005) Fairness and redistribution. Am Econ Rev 95(4):960–980 Bacq S, Alt E (2018) Feeling capable and valued: a prosocial perspective on the link between empathy and social entrepreneurial intentions. J Bus Ventur 33(3):333–350 Baker T, Nelson RE (2005) Creating something from nothing: resource construction through entrepreneurial bricolage. Adm Sci Q 50(3):329–366 Baker T, Miner AS, Eesley DT (2003) Improvising firms: bricolage, account giving and improvisational competencies in the founding process. Res Policy 32(2):255–276 Benabou R (2000) Unequal societies: income distribution and the social contract. Am Econ Rev 90 (1):96–129 Ciborra CU (1996) The platform organization: recombining strategies, structures, and surprises. Organ Sci 7(2):103–118 Fayolle A, Toutain O, Conseil CAS (2009) Le créateur d’entreprise est un “bricoleur”. L’éxpansion Entrepreneuriat 1

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Fisher G (2012) Effectuation, causation, and bricolage: a behavioral comparison of emerging theories in entrepreneurship research. Entrep Theory Pract 36(5):1019–1051 Hemingway CA (2005) Personal values as a catalyst for corporate social entrepreneurship. J Bus Ethics 60(3):233–249 Innes JE, Booher DE (1999) Consensus building as role playing and bricolage: toward a theory of collaborative planning. J Am Plan Assoc 65(1):9–26 Janssen F, Fayolle A, Wuilaume A (2018) Researching bricolage in social entrepreneurship. Entrep Reg Dev 30(3–4):450–470 Martínez-Rodriguez I, Callejas-Albiñana FE, Callejas-Albiñana AI (2020) Economic and sociocultural drivers of necessity and opportunity entrepreneurship depending on the business cycle phase. J Bus Econ Manag 21(2):373–394 Pangriya R (2019) Hidden aspects of social entrepreneurs’ life: a content analysis. J Glob Entrep Res 9(1) Parsons T (1971) The system of modern societies. Prentice Hall, Englewood Cliffs Sarasvathy SD (2008) New horizons in entrepreneurship. Elements of entrepreneurial expertise. Northampton, MA, US, Effectuation Shane S, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manag Rev 25(1):217–226 Wen T, Zhang Q, Li Y (2020) Why small tourism enterprises behave responsibly: using job embeddedness and place attachment to predict corporate social responsibility activities. Curr Issue Tour:1–16 Witell L, Gebauer H, Jaakkola E, Hammedi W, Patricio L, Perks H (2017) A bricolage perspective on service innovation. J Bus Res 79:290–298 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532

Chapter 17

Social Constructionist and Social Engineer

17.1

Social Constructionist

The definition of this type of entrepreneur fits perfectly with the history of social entrepreneurship in Chap. 9. Here, we show that the origins of social entrepreneurship lie in the overcoming of conventional institutions’ weaknesses and limitations. In this train of thought, and as Santos (2012: 348) also shows, “institutional actors in modern capitalist economies” have different roles; the role of social constructionists for Zahra et al. (2009: 525) is “[f]illing such holes in the fabric of social systems”. On the same page, the authors show that such entrepreneurs “build, launch and operate ventures which tackle those social needs that are inadequately addressed by existing institutions, business, NGOs and government agencies.” Further, this role conferred to social entrepreneurs is also highlighted in other studies (Austin et al. 2006; Bornstein 2010; Leadbeater 1997). Namely, social constructionists are a kind of social entrepreneur that covers the gap that the aforementioned institutions cannot address. Compared to social entrepreneurship in the bricolage phase, the social constructionist identifies that their local solutions can also be useful in other parts of the world, given that the problems to be solved are shared. In the case of Dr. Mateo, the first solution was created with the objective of eliminating insect pests mainly in Western countries—that is, Spain and Germany. However, thanks to the connection with experts from Latin American countries, she discovered that her solution could not only provide an answer in the West, but even more importantly, it could save lives in developing countries. Considering these circumstances, the purpose of the social constructionist is to reduce market asymmetries on a global scale. In the case study of this book, Chagas disease, affecting a part of the Latin American population, is the gap not covered by any institution. In the documentary “Tierra sin Mal” about Chagas disease, Margot Segovia, the director of the Movimiento Mujeres Indígenas del Mundo (MoMIM), can be seen writing a letter © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_17

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to Bill Gates. The documentary reports the content of the letter using the woman’s voice: Mr. Bill Gates, after reading the news, I have realized about your interest in the diseases that affect the underdeveloped world. I’m writing from Camiri, Bolivia, to call your attention to a disease that affects us. It is spread to 15 million people throughout the world. Chagas disease in this region is forgotten. (min. 7 of the documentary)

The reason for this is stated by González Casas (2009: 25): Because of their living conditions and subhuman dwellings, there are 100 million people at risk of getting the disease. They are 100 million poor people.

And in the aforementioned documentary: In 1909, the Brazilian Carlos Chagas, specialist in infectious diseases, discovered that the vinchuca transported a unicellular parasite that was responsible for the death of thousands of people. He called the parasite Tripanosoma Cruzi. But beyond that, he dared to report the evidence that the disease affected mainly poor people. (min. 17 of the documentary)

All of these fragments show evidence that Chagas disease is a disease of poor people. As such, people who cannot afford to pay for a vaccine or even for treatment: There is a drug that could be particularly good for Chagas but the lab that is working on it does not want to prove it. If this cures the disease, the lab will have to reduce the price of the drug, and that is not interesting. (min. 55 of the documentary, talking Joao Carlos Pinto, Chagas disease)

Different studies about areas where Chagas is endemic show a link between poverty, low socioeconomic conditions, and political power with the disease (Alonso-Vega et al. 2019; Guhl 2021; Tarleton et al. 2008). The relationship of all these factors with Chagas disease opens an “opportunity” to act for social entrepreneurs. As seen in Chap. 9, poverty, that is, the inability of a part of the population to buy certain goods or services, causes market failure. The market, as an institution that consists of commercial relationships, that is, relationships of exchange, makes it necessary to have something exchangeable. If the population in need does not have anything, the commercial relationship cannot exist (Cortina 2018). In addition to this, low political power is also associated with limited government action. The lack of action legitimation, caused by a forgotten population who neither votes nor interferes in political life in any sense, means that Chagas disease is left unattended by governmental institutions. In this case, Dr. Mateo, acting as a social constructionist, tries to fill the gap for a neglected population in need.

17.2

Social Engineer

The role of the social engineer is “identify[ing] systemic problems within the social system and structures and address[ing] them by bringing about revolutionary change” (Zahra et al. 2009: 526). The scale of this type of social entrepreneur is bigger than in the two previous types. The problem here is not a neglected population

17.2

Social Engineer

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but something that goes beyond this. The problem is so established in the context that the unjust equilibrium is taken for granted, thus making the problem invisible. That is, the situation has acquired a level of objectivity that makes change almost impossible due to the high degree of institutionalization (Zucker 1977). The work done by Dr. Mateo tries to alter this type of situation, a situation in which the way of doing things perpetuates the unjust equilibrium. González Casas shows, in a revealing fragment, how this change is promoted by Pilar: In the Bolivian Chaco, the application of Inesfly did not consist only in pulverizing it on the wall. People needed education and self-confidence. Pilar Mateo established a methodology applied with discipline. Before painting, there was hygiene and cleanliness training. Knowledge of indigenous people about the consequences of the vector bite was basic. Awareness and involvement in the project was necessary amongst the active participation. . .The paint was not only a tool but an opportunity to a cleaner way of living. (González Casas 2009: 94–95)

Moreover, Pilar’s action is not only focused on Chagas prevention. Her view of the change comprehends a holistic point of view. Evidence of that is the creation of the Movimiento de Mujeres Indígenas del Mundo (MoMIM), a nongovernmental organization for development. The main purpose of the organization is the empowerment of women taking into consideration the diversity among them. It carries out a set of projects such as the creation of a soccer championship in Camiri, Bolivia; weekly meetings for Guarani women or a radio show. Further, she was also the creator of Filmántropo, a film production company dedicated to the production of documentaries about social problems. The website of the company gives the following description: Filmántropo develops, produces and distributes TV projects and other film creations that contribute to reveal social realities that are little known or badly explained. Filmántropo tries to give a voice to important people whose story has to be told. (Filmántropo Website 2021)

That is, Dr. Mateo’s actions are always focused in one direction: change. Not change on a small scale, but an institutional shift. The first step is to show the problems of populations in need. After that, movements like MoMIM try to empower those populations, which is changing the context.

17.2.1 Legitimacy Challenges However, for a social engineer to change a situation so embedded in a context like that of Chagas disease among the Guarani community, it is necessary to face great legitimacy challenges (Deephouse 1996, 1999); most importantly, challenges related to pragmatic legitimacy, more than with moral legitimacy. In that case, pragmatic legitimacy, namely, that which arises from self-interest assessments, is often represented by political and economic elites. From Guarani people all the sources point out that they are forgotten by the state. That is, they do not have any political influence; hence, the government does not

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consider them to be a priority. In this case, for a public administration to conduct politics in a way that does not give them votes does not make any sense. Legitimacy, in this case, comes from the fact that conventional practices are perpetuated simply because it is the easier way to proceed; just let injustice remain implanted in the system. Joao Carlos Pinto, a Chagas researcher, was also interviewed by González Casas. He stated the following: From the Chagas, it is affirmed that it is a silent disease for two reasons: because once a person is bitten by this insect, the most serious effects appear 30 or 40 years later. And because it is a disease of the poor, of isolated farmers, most of them are illiterate people who live from their hands and are not considered by the market. Since they do not appear in the statistics, nobody listens to them. The political effects are invisible. (p. 116–117)

Nevertheless, the legitimacy challenges not only come from political elites, which fits with the pragmatic legitimacy concept. Legitimacy challenges also come from the Guarani people. In this case, there were also challenges that come from a takenfor-granted mindset from Guaranis, which represents a challenge related to cognitive legitimacy: For the population, they [Pilar and her team] were not emigrants but descendants of the colonizers. Although most of the poor indigenes, those barefoot and thatched roofs, accepted their arrival from the first moment, a sector of the population looked at them with mistrust. (González Casas 2009: 95)

Further, despite the invisibility of Chagas disease, the change to a better life for Guaranis also has a cost. Pilar said in the interview that she has received anonymous death threats on various occasions, evidence that a part of the society does not want to change the status quo.

17.2.2 Change Transition For an institutional entrepreneur, the change has a process. As stated previously, the more institutionalized a context, the more difficult it is to change it (Zucker 1977). Guarani people still suffer from Chagas disease. However, this is changing. The path to the change may be long mainly because of legitimacy challenges. However, the main input for the change to be established is motivation (see Chap. 10). The rest of the ingredients necessary for the change are becoming progressively available thanks to people who are moved by the desire to improve the living conditions of the Guarani people. At that moment, the change is in a moment of transition. Ten years after that [Pilar’s arrival at Camiri], the Panamericano continues to be the most miserable area of Camiri but, with a great difference: houses are painted. From afar, you can see that houses are white, yellow, blue, pink,. . . (González Casas 2009: 99)

References

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References Alonso-Vega C, Losada Galván I, Pinazo M-J, Mas J, Gascón J, Alonso-Padilla J (2019) The senseless orphanage of Chagas disease. Expert Opin Orphan Drugs 7(12):535–545 Austin J, Stevenson H, Wei-Skillern J (2006) Social and commercial entrepreneurship: same, different, or both? Entrep Theory Pract 30(1):1–22 Bornstein DS (2010) Social entrepreneurship. What everyone needs to know. New York, Oxford University Press Cortina A (2018) Aporofobia, el miedo a las personas pobres. https://www.youtube.com/watch? v¼ZODPxP68zT0&t¼293s. Accessed 29 Apr 2021 Deephouse DL (1996) Does isomorphism legitimate? Acad Manag J 39(4):1024–1039 Deephouse DL (1999) To be different, or to be the same? It’s a question (and theory) of strategic balance. Strateg Manag J 20(2):147–166 Filmántropo website (2021). https://filmantropomedia.com/ González Casas C (2009) El Vampiro de los Pobres La Esfera de los Libros Guhl F (2021) Poverty, migration, and chagas disease. Soc Impact Pov Trop Dis 8:52–58 Leadbeater C (1997) The rise of the social entrepreneur. Demos Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Tarleton RL, Reithinger R, Urbina JA, Kitron U, Gürtler RE (2008) The challenges of chagas disease – grim outlook or glimmer of hope? PLoS Med 4(12):1852–1857 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532 Zucker LG (1977) The role of institutionalization in cultural persistence. Am Sociol Rev 42 (5):726–743

Chapter 18

An Avenue to Social Equilibrium

18.1

Introduction

The purpose of this part of the book is to understand the dynamics of an entrepreneur who tries to break with institutions, namely, with an unjust equilibrium (Martin and Osberg 2007), as well as the main obstacles for introducing the changes in a context impacted by poverty. The different dilemmas and ethical issues derived from the trade-off between economic and social value (Zahra et al. 2009) are highlighted. For this purpose, we have conducted an in-depth analysis of a case which brings together all the concepts and theories explained above from the micro and macro perspective of social entrepreneurship. Specifically, we have based our study on the typology proposed by Zahra et al. (2009), understanding the phenomenon of social entrepreneurship as a continuum in the period of exploitation of the technology patented by the entrepreneur Pilar Mateo, which is divided into the stages of bricolage, constructionist and engineer. According to this typology, we have explained the most identifying characteristics of each one, and the evolution in which Pilar was immersed, from a social entrepreneurship perspective. This theory proposed by Zahra et al. (2009) has been considered the most appropriate for the study of this case, since it addresses aspects more related to the individual (first phase of bricolage), as well as those that are more connected with the impact and influence on society (constructionist and engineer). This last section, therefore, combines the micro and macro perspectives, to understand holistically what were the personal motivations that led the entrepreneur to create social value, what have been the responses of the environment, and how in the long term Pilar has managed to create a whole social movement worldwide. We emphasize, therefore, that although the phenomenon of social entrepreneurship has been addressed from two different perspectives—macro and micro—it is relevant to understand both as an integral phenomenon, since only through their joint understanding can we understand social entrepreneurship in depth. Therefore, this last © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_18

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section of the book shows the symbiosis between the theories that have been concerned with understanding the phenomenon of social entrepreneurship, and a case study that exemplifies them. In this section of conclusions, the final remarks drawn from the analysis of the case study will be addressed, more specifically, from the interview conducted with Dr. Pilar Mateo, and the following analysis of the results. However, we have considered it interesting to add a final section presenting various proposals for reflection on social entrepreneurship, its future, and its relationship with society in general. Finally, the limitations and future lines of research are presented.

18.2

INESFLY from a Micro Perspective

In the first part of this section, the particular case of the researcher Pilar Mateo was approached from the point of view of bricolage, applied to social entrepreneurship. From this perspective, we analyze how Pilar went through the phases of entrepreneurship by necessity and by opportunity (Martínez-Rodriguez et al. 2020). In the early stages of her professional career, Pilar worked in her father’s company. At that time, she needed to earn enough money to live, making use of the materials and resources at her disposal. In Chap. 3, we addressed the personality traits and natural predispositions of social entrepreneurs that are the source of their innovative and disruptive ideas. According to the classification we have followed, we can divide these intrinsic determinants into three categories: (1) intention of the social entrepreneur, (2) characteristics of the personality, and (3) leadership in social entrepreneurship. Each of the dimensions will be presented below according to the analysis obtained in the interview with Dr. Pilar Mateo (see Table 18.1).

18.2.1 Social Entrepreneur Intention The intention is the result of attitude before a phenomenon and of the subjective norms of behavior. In this sense, empathy is a predecessor to entrepreneurial activity in social matters expressed in terms of personal efficiency, and social value (Bacq and Alt 2018). In line with what the theory sustains, Pilar tells us in the interview that her life has consisted of finding solutions to existing problems: “I was always looking for problems and ideating possible solutions” (min. 12 of the interview). This problem-solving intention has always had a constructive approach. In other words, she has focused on offering solutions to her community, trying to maximize the social value created and minimizing the possible negative externalities produced. Pilar understood what society needed through the observation of reality, personal responsibility, and respect. Through these dynamics, the social entrepreneur obtains in his mind the big picture of reality and develops higher levels of empathy. Associated with empathy is the concept of emotional intelligence. It has sometimes

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Table 18.1 The micro foundations of the social entrepreneur: Dr. Mateo’s case

Social entrepreneur intention

Social entrepreneur personality traits

Social entrepreneurship leadership

Motivations that foster a behavior – Empathy with the Bolivian society – Prosocial orientation – Identification with the community – Self-determination. – Previous experiences and personal background – Priority given to uncertainty and significance – Transformational leadership – Delegation for the empowerment of the individuals – Believe in action for change

Behavior “I was always looking for problems and ideating possible solutions”

Consequences of the behavior – Improvement of the quality of life and education of the Bolivian communities – Increase in awareness of Chagas disease

“I want to, I can, and I do it”

– Creation of associations, such as MoMIM – Call for the attention of governmental and institutional forces

“Ideas lead to action, and action leads to change”

– Group of locals working for the improvement of their communities – Cooperation among peers

Source: Own elaboration

proved to be the antecedent of empathy, and of social entrepreneurship. Pilar’s partner was interviewed in the book published by Spanish journalist Charo González Casas (2010). In this interview, she states that his most outstanding ability is that of relating to people. Pilar manages to connect with humans, through the great empathy that characterizes her. This is the background to create solutions tailored to the needs that communities require. Additionally, the sense of belonging to a community greatly favors that the social entrepreneur feels morally responsible and, as a consequence, wants to contribute positively to the environment in which the entrepreneur is located. In the early stages, her inventions consisted of improving the conditions of the communities around her. Through intumescent paint, she tried to improve the quality of crosswalks in a town near his own. Later, when he received the news that a hospital in his town (Valencia) had problems with a plague, she co-directed a doctoral thesis to present a solution to this problem. In short, the result of place attachment is manifested in Pilar’s case through activism in civic matters, protection of community interests, and responsible behavior (Wen et al. 2020). Furthermore, knowledge of the values, beliefs, and culture of the community to which Pilar belongs has given her a wide range of information that can be very useful when establishing the business, meeting the needs of users more specifically, and increasing the quality of service provided.

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Place attachment implies that the entrepreneur is close to the origin of the social problem for which she wants to present a solution (Barendsen and Gardner 2004). When the distance from the social problem is reduced, or even nonexistent, the ability to feel and think like the people affected by the social problem is more accessible (Harsanyi 1969). For this reason, when Dr. Cleto Cáceres proposed to Dr. Mateo to travel to the Bolivian tribes in order to analyze their situation in depth and find a solution together, Pilar agreed. Only when she got there did she realize that the houses they were living in were unhealthy and the structures that supported them were unstable. She recognized that there was much more work to be done. Before applying paint to the houses, they had to build them. This is how Pilar’s story in Bolivia began, spreading values and education that go far beyond her scientific technique. Pilar affirms that this was not exclusively a health or hygiene problem, but that Chagas disease is a social-political problem, in which the villages that suffer from this disease are invisible to the eyes of the country’s rulers. When there is a lack of knowledge about a particular phenomenon, empathy is much more difficult to achieve. The invisibility of these villages and their conditions contributed to institutional neglect, and consequently to very low levels of empathy. However, empathy alone (although it is an influential underlying motive) does not in itself determine social entrepreneurship. Something else is needed. This transformative turning point for the social entrepreneur is prosocial motivation. Prosocial motivation is the willingness to benefit others without financial reward (Grant 2008; Simón Moya et al. 2015).

18.2.2 Social Entrepreneur Personality Traits Dr. Pilar’s life experience is an example of resilience and courage. The different decisions that the researcher has made throughout her professional and personal career have defined her personality traits, which identify her as a social entrepreneur. These include a passion for the idea to be developed and the creation of value in the community, adaptation to change, and active listening to the environment. Pilar had to make an important decision, choosing between the dichotomy of putting her technology at the service of the Argentinean government on the one hand, and improving the lives of thousands of villagers in Bolivia on the other. For Pilar, people’s lives were a priority, beyond the economic benefits she could achieve by working in Argentina (González Casas 2010). According to the literature, while for social entrepreneurs altruism and community benefit are established at the top of this list, for conventional entrepreneurs, profit-making and the generation of economic wealth take precedence. In light of this situation, specific motivations, such as efficiency and achievement of medium- to long-term objectives, and a visionary mentality are combined. This achievement of long-term objectives is far from having material connotations, as Pilar insists on the need to have a global mentality in order to achieve the

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sustainability of the planet. This issue will be addressed more concretely in the section on proposals for reflection in this same section. The energy and high levels of self-confidence that characterize social entrepreneurs is a determining factor in the pursuit of medium- and long-term goals. Their determination and tenacity are what differentiates them from other entrepreneurially oriented individuals. While the latter also have yearnings, desires, and innovative ideas, social entrepreneurs are the ones who finally decide to implement and materialize the ideas. In Dr. Mateo’s mind, the following phrase always surfaced: “I want to, I can, and I do it” (González Casas 2010, p.70), being a manifestation of the determination and entrepreneurial spirit and leadership that characterizes her. In relation to personality traits, according to Robbins (2010), there are six basic human needs, shared by every individual: certainty and uncertainty, significance, connection, growth, and contribution. Whereas the first four are related to the needs of the personality, the last two correspond to the needs of the spirit. These needs are placed on a scale of values according to the preference of each individual to achieve personal growth and contribution to society. From the perspective of social entrepreneurs, the highest priority needs can often be identified with uncertainty and significance. This is because those individuals who place uncertainty within their core values will find themselves more exposed to adverse situations, where risk and innovation are higher, and as a consequence, they will find previously unseen opportunities. In Pilar’s case, traveling and getting into the culture, conditions, and dynamics of the Bolivian tribes was a big challenge and an expansion outside her comfort zone. However, it was the way her technology could offer a solution to the people there, and to meet that need in a more refined way, she needed to know her target audience in depth. The importance applied to the value of significance refers to the need of the individual to be recognized in society, because of his contribution to it, uniqueness, authenticity, and difference with other people. In Pilar’s case, she motivated institutions, governments, and the political class to take part in the matter specifically when she found herself in the social constructionist and engineer theoretical perspectives. She also created an association—MoMIM—in defense of the rights and freedoms of indigenous women. This reinforced the idea that social entrepreneurs contribute to social change in a structural sense, not a conjunctural one.

18.2.3 Social Entrepreneurship Leadership An entrepreneur must be able to coordinate his team, as well as take risks and be innovative (Blind 2017). For the particular case of social entrepreneurship, the form that prevails is transformational leadership. This concept was first defined in the work of Bass (1985) as the ability to motivate the team toward the achievement of global objectives that go beyond one’s own interests. In Pilar’s case, she created a team of indigenous people in Bolivia, and she was in charge of coordination. She did not want professionals from other regions to build their houses but was aware that

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education was a necessary first step to improve their quality of life. The Guarani were the best people who knew their population and constructions, and therefore the ones who had the best access to subsequently educate the rest of the community. The social leader is in charge of increasing the awareness of all the individuals that are in charge of her regarding the social problem to be solved, with the objective of reaching the benefit for the community, over the workers’ own benefit, or even the organization’s benefit (Felício et al. 2013). The Guarani were the way to the healing of the people, for, without their work and commitment to Pilar’s technology, the results would have been impossible to achieve. At the same time, leaders provide workers with sufficient tools to achieve these objectives, guiding, advising, and encouraging them in the process. Pilar was in charge of instructing them in the construction of houses that were dignified and stable, and also of providing them with the material (paint, brushes, paintbrushes, etc.) to insulate the houses from the vinchucas. Pilar’s work was not limited to material aspects, but she also spread awareness about the disease, its causes, consequences, and prevention mechanisms. The leaders that Pilar assigned in each region placed hope in change, since it is precisely this hope that is the driving force behind the action. In turn, they demanded social responsibility for their people from governments and institutions, with a focus on social improvement. In short, transformational leaders see possibility rather than problems, and opportunity rather than difficulty. They believe in the potential of change achieved through action. For Pilar, “ideas lead to action, and action leads to change” (González Casas 2010, p. 261).

18.3

INESFLY from a Macro Perspective

The macro approach of the case study is linked to the problems that Pilar had to face to implement its technology in a community basically characterized by poverty. There are contexts more prone to create a high amount of value and others in which the value creation does not have to be so great. In the case of the Bolivian communities suffering from Chagas disease, the context needs great social value creation in order to overcome the unjust equilibrium (Martin and Osberg 2007). The work of Pilar is being addressed1 to break with that equilibrium. This means working on improving the lives of millions of people regarding endemic diseases and systemic inequalities. The problem arises when the unjust situation, namely, the equilibrium situation, is difficult to change. The reason for this is that to achieve an equilibrium, an institutional framework has to be established. When a context is very institutionalized, change presents a high degree of difficulty (Zucker 1977). The first reason for that is cognitive (Scott 1995). The taken-for-grantedness that institutions confer to a determined situation is not easy to move. It is linked to mental schemes

1 The tense of the verb is present because Pilar continues to address the issues caused by spread of diseases in impoverished communities.

18.3

INESFLY from a Macro Perspective

169

I. Precipitating

II. Deinstitutionalization:

III. Preinstitutionlization:

jolt:

Institutional

Independent innovation.

Dr. Cáceres

entrepreneurship.

Polymeric

research

Dr. Mateo action

Microencapsulation

V. Theorization.

IV. Theorization. Moral

Increasing objectification

and pragmatic legitimacy

VI. Diffusion. Cognitive legitimacy

and pragmatic legitimacy

Fig. 18.1 Stages of institutional change for our case study. Source: Own elaboration based on Greenwood et al. (2002)’s model

that need to be changed to establish new ones; this represents cognitive legitimacy (Greenwood et al. 2002; Scott 1995). However, before the taken-for-grantedness, organizations have to pass other types of legitimacy, namely, pragmatic and moral. The study by Greenwood et al. (2002) establishes that the institutional change process follows six different stages: precipitating jolts, deinstitutionalization, preinstitutionalization, theorization, diffusion, and reinstitutionalization. The last stage, reinstitutionalization, is the one that includes cognitive legitimacy. Hence, the five preceding stages comprehend a process in which social entrepreneurs’ work consists of creating a new context. Figure 18.1 shows the stages of institutional change based on Greenwood et al. (2002)’s model. Applying the model of Greenwood et al. (2002) to the case study of this book leads us to determine that the precipitating jolt was Dr. Cáceres’ research about Chagas disease. Moreover, his determination and compromise with the Guarani people led to the first meeting with Pilar in which he told Pilar about the big problem of Chagas disease. The second stage, called deinstitutionalization, meant breaking with the existing unjust situation. That is when Dr. Mateo enters. Her action at the very beginning, in building the houses so walls could be painted, was crucial in deinstitutionalization: I arrived with my occidental arrogance, thinking that my technology was going to solve the problem of a hundred years in one month. (min. 13 of the documentary)

Preinstitutionalization came at the moment when houses began to be painted, trying thus to control the vector that means that Chagas disease continues to spread. After that, a critical moment came: the legitimacy process. As seen in Chap. 11, pragmatic and moral legitimacy, as assessments of others’ interests and selfinterests, acquire a critical role. Regarding this, Pilar said in the interview that no one believed in the project’s viability: I did not receive funds from any institution. Banks do not lend money if you do not have a profitable activity. Further, I was not a university neither a research center nor an NGO. I could not apply for financial projects to public administrations. (min. 32 of the interview)

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Legitimacy and isomorphism are basic for the life of a venture. The lack of a profit goal meant that institutions did not want to lend money for such a project. Although the paint created by Pilar was patented in 1996 and since then she has worked to improve the lives of people at risk of being infected by Chagas, the change is not entirely finished. The struggle between interests causes the lack of pragmatic legitimacy, which generates a long change process.

18.4

Proposals for Reflection

Based on Dr. Mateo’s case study, this section provides a space for reflection on the main challenges that the researcher has addressed during the different stages of her professional development and the future of social entrepreneurship. In the interview, Pilar Mateo repeatedly repeats the loneliness and lack of help she received, especially in her early stages as a researcher. In this way, she refers to the needs that social entrepreneurs address with their idea, and the lack of institutional support that this sometimes implies. Literally, Pilar states: I lived in the tribe with the indigenous people, but it was not an NGO. I had the will to dedicate my technology to the poor, but nobody helped me. (min. 33 of the interview) Banks only invest in those projects that not only give profitability, but also have to give it quickly. (min. 34 of the interview)

The main challenge was therefore to choose the legal form that best identified them. Pilar did not consider herself an NGO, so could not benefit from the grants and subsidies that this group receives. On the other hand, as a private company, she also lacked financial support. Pilar talks about the banking conditions in which it is necessary to have a considerable return within 3 years to be able to count on the provision of its resources; otherwise, the project in question is not interesting. Under these circumstances, social entrepreneurs have little room for action, and solutions such as crowdfunding, ethical banking, and incubators for social entrepreneurs are some of the most feasible options (see Chap. 4). In short, “The word enterprise was incompatible with development aid” (min. 33 of the interview). This phrase affirms the existing disruption between the concept of the conventional company, associated with the appropriation of value (Santos 2012), and social entrepreneurship as the creation of social and environmental value. From this perspective, the existing dichotomy between appropriation and value creation, as mutually exclusive elements, is reinforced. Given the new economic-social paradigm, and the increasing naturalization and dissemination of other business models, this traditionally dichotomous relationship is being modified. Dr. Mateo not only lacked financial support from banking institutions but also lacked academic and research cooperation from university institutions, among others. Dr. Mateo needed evaluation and corroboration by other researchers in order to advance the development of her paintings and certify that her invention had value to science. However, there were no researchers who were willing to travel

18.5

Contagious Diseases: Is There Research Beyond COVID-19?

171

to the tribes where Pilar worked in order to do the corresponding peer review. As a consequence, the advances that Pilar was contributing to science could not be published, since she did not get certification and evaluation by other researchers, and her value was not recognized. Faced with these economic and academic challenges, in 2012, Dr. Mateo was on the verge of abandoning the project due to the scarcity of her own resources and the lack of external resources, when an investor from Ghana provided INESFLY with a continued investment that has enabled its sustainability and continuity until the present day. It is specifically at this moment that Dr. Mateo extended her operations to Ghana.

18.5

Contagious Diseases: Is There Research Beyond COVID-19?

When it affects the richest of us, the world has mobilized. But we are talking about half the planet dying of diseases that have solutions, and one of them is mine. I don’t know if it’s the best, but at least it’s a solution. But these diseases don’t matter. (min. 1 of the interview).

In relation to the current Western context, Dr. Mateo is skeptical about the fact that “170 research groups dedicated to the search for a vaccine.” (min. 1:58). According to Dr. Mateo, a percentage (10, 20, . . . %) of these investments could be devoted to research into other diseases such as dengue or leishmaniasis. However, there is a very pronounced imbalance in investment in resources for diseases affecting different social classes and areas of the world: The world does not play in the same league. (. . .) There are diseases linked to poverty. The world must be seen from a global perspective. In other words, we should not see only one disease that affects us all, but many diseases that are yet to come. (min. 2:00 of the interview)

In short, this virus has brought to the surface the world’s structural problems (min. 2:06 of the interview), increasing socioeconomic inequalities between countries and communities. People are not aware that the earth is a ship sailing through the universe, that it is not static. When the stern of a ship sinks, it drags the whole ship with it. And this is what has happened now. It worries me that there are so many research groups studying the same thing (COVID19 vaccine). (min 2:05 of the interview)

As a consequence, Dr. Mateo invites the research community to advance in studies of other diseases that also affect a high population of the world, and that their mortality rates are even higher than those of COVID-19, such as malaria, dengue, leishmania among other diseases that are still to be investigated (min. 2:04 of the interview).

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An Avenue to Social Equilibrium

Limitations and Future Research

Despite the contribution to the social entrepreneurship literature through the present case study, this qualitative study is subject to several limitations, which open avenues for new lines of research in the area. First, our study advances the understanding of the exploitation and exploration phases within the phenomenon of social entrepreneurship. While this division has been studied extensively in conventional entrepreneurship, there are many research opportunities in application to social entrepreneurship. For the particular case of Dr. Mateo, we have identified that the exploration phase is manifested early in her professional career. Her proactive character, innovation, and entrepreneurial orientation are signs of this. However, the exploitation phase in social terms is the distinctive feature of her professional career. For Pilar, the meeting with Dr. Cleto Cáceres was a turning point, which focused Pilar’s professional career toward the exploitation of social value. As a consequence, the following question arises: what is the moment and the motivation that leads social entrepreneurs to develop prosocial orientation? We have already seen that the phases of exploration and exploitation do not develop in the same temporal space, so we warn about the interest of advancing in the literature on the moment of manifestation and convergence of both spheres. Secondly, the restrictions on mobility and face-to-face meetings caused as a result of COVID-19 led to the limited personal contact with Dr. Mateo and the immediate vicinity of the company, as well as direct contact with other employees and staff of the organization. We have tried to counteract the negative effects of this limitation through triangulation of official documents, documentaries, and bibliographic books. Third, two complementary units of analysis have been taken in the qualitative case study, that is, the micro and macro perspectives. If we were to continue with the study of social entrepreneurship from the INESFLY perspective, it would be interesting to add the meso level, i.e., the company level. In line with the most important limitations of social entrepreneurship, it is worth mentioning the difficulty in measuring the results obtained. The technological advancement itself and the construction and maintenance of the houses could be more easily quantifiable. However, Pilar’s mission goes beyond visible and quantifiable improvements, as she has worked on the education, empowerment, and self-value of indigenous peoples. Despite the difficulty of measuring these issues, it would be interesting for future studies to include empirically observable measurements. In this sense, the complementarity of methodologies in the area of sociology and anthropology can be very useful and can contribute to the observation of the same phenomenon in a holistic way. Finally, the fact that the social entrepreneur is a woman adds another potential variable of the study. Especially in her early years of activity, Dr. Mateo points out the additional difficulties she faced as a consequence of her gender. From the study of the context from the materialistic perspective, emphasis is placed on financial and economic success and accumulation of goods and prestige, while post-materialistic

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cultures prioritize self-actualization, humanistic values, and quality of life. These societies, in turn, encourage women to freely express their orientations, which leads to greater equality and egalitarianism (Hayes et al. 2000). In light of this postmaterialistic culture, women entrepreneurs tend to emphasize a greater creation of social value rather than economic value, so it is very interesting for the academy to advance in how post-materialistic societies have a positive influence on the consolidation of social entrepreneurship in the system, and how women are contributing to it.

References Bacq S, Alt E (2018) Feeling capable and valued: a prosocial perspective on the link between empathy and social entrepreneurial intentions. J Bus Ventur 33(3):333–350 Barendsen L, Gardner H (2004) Is the social entrepreneur a new type of leader? Lead Lead 2004 (34):43–50 Bass BM (1985) Leadership and performance beyond expectations. Collier Macmillan Blind GD (2017) The rule-based economy and the function of the entrepreneur. In: The entrepreneur in rule-based economics. Springer, New York, pp 21–26 Felício JA, Martins Gonçalves H, da Conceição Gonçalves V (2013) Social value and organizational performance in non-profit social organizations: social entrepreneurship, leadership, and socioeconomic context effects. J Bus Res 66(10):2139–2146 González Casas C (2010) El Vampiro de los Pobres La Esfera de los Libros Grant AM (2008) Does intrinsic motivation fuel the prosocial fire? Motivational synergy in predicting persistence, performance, and productivity. J Appl Psychol 93(1):48–58 Greenwood R, Suddaby R, Hinings CR (2002) Theorizing change: the role of professional associations in the transformation of institutionalized fields. Acad Manag J 45(1):58–80 Harsanyi JC (1969) Rational-choice models of political behavior vs. functionalist and conformist theories. World Polit 21(4):513–538 Hayes BC, McAllister I, Studlar DT (2000) Gender, postmaterialism, and feminism in comparative perspective. Int Polit Sci Rev 21(4):425–439 Martin R, Osberg S (2007) Social entrepreneurship: the case for definition. Stanf Soc Innov Rev:1–18 Martínez-Rodriguez I, Callejas-Albiñana FE, Callejas-Albiñana AI (2020) Economic and sociocultural drivers of necessity and opportunity entrepreneurship depending on the business cycle phase. J Bus Econ Manag 21(2):373–394 Robbins T (2010) Unlimited power: a black choice. Simon and Schuster, New York Santos FM (2012) A positive theory of social entrepreneurship. J Bus Ethics 111(3):335–351 Scott WR (1995) Institutions and organizations. Ideas, interests and Identities. Sage, Thousand Oaks Simón Moya V, Sastre Sánchez O, Revuelto Taboada L (2015) El emprendedor social: análisis de la alerta social. Suma de Negocios 6(14):155–165 Wen T, Zhang Q, Li Y (2020) Why small tourism enterprises behave responsibly: using job embeddedness and place attachment to predict corporate social responsibility activities. Curr Issue Tour:1–16 Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532 Zucker LG (1977) The role of institutionalization in cultural persistence. Am Sociol Rev 42 (5):726–743

Chapter 19

Conclusions

19.1

Zahra’s Social Entrepreneurship Typology

The aim of this book is to deepen the understanding of the phenomenon of social entrepreneurship from two different but complementary perspectives. The micro perspective approach provides knowledge about the intrinsic motivations, psychological traits, and innate conditions of the social entrepreneur as an agent of change in society. From the macro perspective, the institutional environment represents the frame of reference on which the foundations of social entrepreneurship are consolidated, so it is of great theoretical and practical interest to understand this sphere. The combination of both perspectives provides the reader with a holistic understanding of the phenomenon, understanding how the individual unit of analysis interacts with the institutional level of study. To exemplify this interaction, an in-depth case study analysis has been carried out using qualitative methodology. In light of this study, Dr. Mateo tells us in the interview about the beginnings of her entrepreneurial orientation and prosocial motivation, as well as about the main present and future challenges of social entrepreneurship. In the correlation of theoretical foundations and practical implications, in the preceding book, we have chosen to take as a reference the model of Zahra’s typology of social entrepreneurship as a continuum applied to Dr. Mateo’s professional career. It distinguishes the different phases of social entrepreneurship (bricolage, constructionist, and engineer) according to the spatial and temporal criteria and the evolution of the business. Pilar’s case is just one more example of social entrepreneurs who identify a problem in their community and provide a solution (bricolage), and over time realize that this same problem also exists in other territories. Under these circumstances, therefore, it is not exclusively a local solution but can address a market failure not covered by other actors. This process culminates in the social engineer. In this phase the entrepreneur manages to consolidate new social systems

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 V. Simón-Moya, M. Rodríguez-García, The Emergence of Social Entrepreneurship, Contributions to Management Science, https://doi.org/10.1007/978-3-030-80635-4_19

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Conclusions

at the institutional level, revising the terminology of “social equilibrium” in international terms.

19.2

Bricolage: A Call to Solve Community’s Problems

From the beginning, Pilar always sought to find solutions that were socially and environmentally sustainable, as a consequence of a high degree of environmental commitment. Without knowing it, Pilar’s solutions were the salvation for others. Individuals who are able to understand through observation, personal responsibility, and respect what the social problems currently are in our society, are those who offer a solution to a community’s existing problem. In Pilar’s case, the phenomenon of entrepreneurship began as an act of seeking economic solvency and survival through her ingenuity, creativity, and innovation. The sense of belonging to a community often causes the social entrepreneur to feel morally responsible and, consequently, to want to contribute positively to the environment in which she finds herself. The result of attachment to place is manifested through activism in civic affairs, protection of the community’s interests, and responsible behavior (Wen et al. 2020). Thanks to her successes, and also her mistakes, she was able to refine her inventions, but always from a perspective of contribution to the community. This is what in theory is meant by the term social bricolage. In other words, she applied the concept of social entrepreneurship from a bricolage perspective. This means that she fostered an innovation management of the disposable resources, mainly owned by her father’s company. This innovation was later transferred as a solution to the community.

19.3

Social Constructionism: A Local Solution for a Global Problem

Social constructionists intend to incorporate an innovation (either incremental or radical) in a wider context, understood as a market. In this way, they identify business opportunities that are not satisfied by market dynamics and address them with the aim of bringing value to the community as a whole (Shane and Venkataraman 2000), trying to address the gaps left in the market (Teegen et al. 2004; Mair and Martí 2006). They try to provide solutions to problems not solved by other actors. In the case study of this book, Chagas disease affecting a part of the Latin American population is the gap not covered by any institution. In fact, the lack of action legitimation, caused by a forgotten population with no political voice, means that Chagas disease is unattended by governmental institutions. Different studies about Chagas endemic areas show a link between poverty, low socioeconomic conditions and political power and the disease (Alonso-Vega et al. 2019; Guhl

19.5

The Social Exploitation

177

2021; Tarleton et al. 2008). The relationship of all these factors with Chagas disease opens an “opportunity” to act for social entrepreneurs. In this case, Dr. Mateo, acting as a social constructionist, tries to cover that gap caused by a neglected population in need.

19.4

Social Engineer Vocation

The main concern of Dr. Pilar Mateo is fighting against a disease that affects mainly the poor. As some studies highlight, Chagas disease is linked to poverty (AlonsoVega et al. 2019; Guhl 2021; Tarleton et al. 2008). The systemic problems of some poor areas in Latin America mean that Chagas disease cannot be eradicated. As a social entrepreneur, Pilar Mateo has not stopped fighting against a system that perpetuates the inequalities of the population. That is, she tries to change the context, to bring about a shift in the institutions. Nevertheless, her vocation as a social engineer does not stop with Chagas disease. If we look at the COVID-19 pandemic, which is different from Chagas yet also a disease, Dr. Mateo also reports her movement against the established situation. As quoted in an interview with El País, a leading Spanish newspaper: What COVID-19 has done is make the reality of an unequal world apparent. In the Occident, we are worried but we are not seeing what is going to happen with silenced communities that are going suffer from COVID-19. This disease is going to affect them more because of hunger and lack of resources. Due to the lockdown they are not going to go out. . . for indigenous people that live in the jungle, without fridges nor supermarkets, the issue of hunger can exceed COVID. (Mateo 2009)

In the light of the social entrepreneurship typology developed by Zahra et al. (2009), the professional life of Dr. Mateo can be observed as a continuum, following a chronological order. As for Table 19.1, synergies between the theoretical framework and the case study can be found.

19.5

The Social Exploitation

Social entrepreneurship, as a phenomenon, may be seen as the action carried out by an individual (or various) with a determined motivation. When talking about entrepreneurship, literature highlights that the motivation of the entrepreneur is key for the action. In this sense, entrepreneurship motivation encompasses such factors as the need for achievement, risk-taking, tolerance for ambiguity, locus of control, selfefficacy or goal setting, independence, drive, or egoistic passion (Shane et al. 2003). However, when talking about social entrepreneurship, entrepreneurship motivation should be complemented. Miller et al. (2012) talk about compassion, seen by the authors as the driving force that encourages social entrepreneurs to create a social venture. It is defined as “a prosocial motivator characterized by other-orientation and

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Conclusions

Table 19.1 Social entrepreneurship typology applied to the case of INESFLY Social Bricoleur

Social Constructionist

Social Engineer

Theoretical foundations • Focused on the satisfaction of local needs • Limited resource availability (based on local restrictions) • Their scope is reduced but indicates the direction toward “social equilibrium” • Belonging to the community fosters prosocial motivation • Try to address market inefficiencies uncovered by other actors • A provision of human and material resources is needed to fulfill its mission • Its medium scale allows significant “social equilibrium” to be achieved • Consolidation of new social systems at an institutional level • The scope is international, seeking the replacement of old structures • The notion of “social equilibrium” is revised, implementing a new one

Applications to the case of INESFLY • Pilar created different paints to solve problems in her nearby areas • She counted on her father’s company resources • “Social equilibrium” direction: Eradication of plagues and illnesses on surfaces with her paint

• Her local paint was a solution for a high lethal illness in South America • She counted on a supportive team in Bolivia to apply the paint • Construction of the path to achieve “social equilibrium” in deprived areas • Chagas disease reflects a socioeconomic problem • Aim: fighting against a system that perpetuates the inequalities • Consolidation of worldwide movements such as MOVIM

Source: Own elaboration

an emotional connection to others in suffering” (Miller et al. 2012: 620). Thus, it is expected that a social entrepreneur joins the two motivations together. The case study considered in this book shows that it is indeed like this. The multiple attempts to create something to solve any problem, as seen in the interview with Dr. Mateo, demonstrate that entrepreneurship motivation is present in her personality. Nevertheless, at some moment in time, she discovers that the creation of polymeric microencapsulation could be applied to solve a social problem linked to the conditions of poverty in which some people live. The case study brought to this book tells us that entrepreneurial motivation, in some cases, could not be linked to self-utility maximization (Licht 2010). Revisiting the classical literature about entrepreneurship leads us to think that entrepreneurship requires an opportunity discovery and its exploitation (Shane and Venkataraman 2000). The opportunity discovery is the process that “occurs when someone makes the conjecture that a set of resources is not put to its ‘best use’” (Shane and Venkataraman 2000: 220). Hence, according to the definition, the discovery process has nothing to do with profit-seeking. In other words, it is the exploitation of opportunities that differentiates the social entrepreneur. In this way, it seems that we can talk about two types of exploitation: economic and social. If opportunity discovery and opportunity exploitation are analyzed as processes that occur through

19.6

The Social Entrepreneurship Cycle

179 Economic exploitation

Opportunity discovery and exploration

Social exploitation

Fig. 19.1 The moment of exploitation divergence. Source: Own elaboration

time, there is a moment when there is a divergence in the exploitation (see Fig. 19.1). This moment of divergence conforms to the main difference between the social entrepreneur and the most traditional or commercial entrepreneur. In this way, through the case study presented, there is a moment in which Dr. Mateo discovers the opportunity, the possibility to create an insecticide paint. After that moment comes a process of exploration (March 1991) to make possible the creation of the paint. After that, social exploitation addresses the patented technology to a part of the population.

19.6

The Social Entrepreneurship Cycle

Social entrepreneurship will always be necessary, in the same way as will be the institutions of the market, the state, charity, or social movements. The current economic system is based on self-interest and profit-seeking. New businesses can try to achieve a blended value, can try to internalize externalities, or even can address a part of the surplus to a population in need. However, the cost-benefit analysis in self-assessment terms will prevail over the rest of the factors. The market, as an institution, has worked like this since its inception and, in fact, this is part of its idiosyncrasy. In this context, other institutions will always arise to scrutinize, evaluate, and solve the problems derived from self-interest choices. The state, charities, and social movements are part of the capitalist system. The role of these institutions is to solve market failures. The problem comes when these institutions also present failures or limitations in their actions. That is why social entrepreneurship and social ventures will be necessary for a long period of time, in the same way as the other institutions (see Fig. 19.2). And further, re-institutionalization changes our mental schemes when analyzing reality. The cognitive legitimacy of a society is achieved when its population loses its reasoning capacity and critique, and this may provoke the rise of elites that profit from the population’s lack of reasoning and taken-for-grantedness. In other words, new institutional systems’ accommodation can lead to new unjust equilibriums, which at the same time will drive individuals’ mobilization in different forms (e.g., social entrepreneurship).

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Conclusions

SOCIAL Institutions’

Entrepreneurial and

weaknesses

prosocial motivation

ENTREPRENEURSHIP

Unjust equilibrium

New institutional systems Fig. 19.2 Social entrepreneurship cycle. Source: Own elaboration

Nonetheless, there is still a way to quit this cycle, making moral legitimacy prevail over pragmatism. The question is whether this is compatible with the current economic system.

19.7

Limitations and Future Research

As with any theoretical or empirical work, the reality is much more complex than a research document. This piece of work presents this main limitation. The reality of social entrepreneurs is full of issues, details, and features that cannot be collected in this book. Of course, this book addresses these issues from a comprehensive approach, trying to analyze any factor that can be linked to social entrepreneurship, but this is not enough. And beyond, the phenomenon of social entrepreneurship is so broad that it is almost impossible to talk just about one set of problems. Each social venture is different from another. Thus, each social venture presents a set of circumstances that makes it different. However, as with every study factor in the social sciences, the construction of models that simplify a complex reality can be useful to understand society and, more importantly, to empathize with others’ problems. This is what this book tries to do, showing a simplified scheme of the possible issues that social entrepreneurs have to face. This, as a main limitation, tries to be resolved by way of the analysis of a case study in which a part of the problematic that is present in the phenomenon of social entrepreneurship is shown. Nevertheless, as has been said, the case study analyzed has its own features that make it different. This presents another limitation, i.e., the short extrapolation of results to other social ventures.

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Future studies about social entrepreneurship should focus more on individual aspects of social ventures, that is, its financing problem, its legitimation, etc. Doing this can help to analyze social entrepreneurs’ reality in a more reliable way. Finally, the use of case studies can show issues that have not been considered previously. In the case study considered in this book, for example, the moment in which prosocial motivation arises is a remarkable point. The moment in which an individual realizes that he/she can help others with their problems, and decides to do it, deserves much attention. The choice between economic or social exploitation may be key for the study of social entrepreneurship. In our case study, the awareness and realization of others’ problems with a disease almost invisible provoked Dr. Pilar Mateo to choose the moral legitimacy to prevail over the pragmatic one.

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