Social & Environmental Summary
Entrepreneurship & Business Innovation
Document made to be studies at zoom level 150%-180% (do this for best experience)
,SEE core Lecture 1: Understanding social & environmental entrepreneurship
Sustainable future
SDGs = Sustainable Development Goals agreed upon by the UN members.
➢ Social entrepreneurship is on the rise (100,000+ social entrepreneurs in the UK. 60billion
pounds contribution to the UK economy, grew their turnover with 44% last year)
Issues related to defining SE: Common denominators/many
definitions
➢ Entrepreneurs with a social mission, social entrepreneurship
as entrepreneurial activity with an embedded social purpose,
simultaneous pursuit of economic, social and environmental
goals by enterprising ventures (entrepreneurship + social
mission)
o Why bother (do definitions matter?) Too many
definitions?
Two value lenses
o Dichotomy of value (economic value vs. social value & profit-seeking vs. social mission)
o Holistic value (generic concept of value, increase in the utility of society’s members
(improving social welfare), value creation vs value capture)
➢ Who will act on the problems? Calls for initiatives, actions & commitments from;
▪ Government, activists, consumers, business leaders, non-governmental
organizations, scientists, etc..
➢ But overlapping & unclear boundaries regarding definitions and who is responsible?
▪ Leave it to the market, government, business, NGOs?
Social entrepreneurs prioritize social & environmental goals over financial goals
PCDO model
o People (& resources): human & financial input, internal/external, skills, attitudes, knowledge
o Context: external factors affecting outcome of opportunity, macroeconomy, tax, regulation
o Deal: exchange of value, economic benefit, social recognition, personal satisfaction
o Opportunity: desired future state, requiring investment and resources
, Most distinctive feature: missions & responses to market failure
o Market size vs. market failure
o Needs (demands) > resources
o Wide and abundant opportunity
o Fundamentally different ways to respond to adverse context
(e.g. harsh economic times)
o Seek to change the context as the social problem is
embedded in contextual factors.
Limited access to talent, fewer financial institutions, inherent strategic
rigidities
o Heavy reliance on volunteers & 3Fs
o Critical to build rich network of contacts and resources
(political and relationship management skills)
Nonmonetary value and motivation
Consumers (beneficiaries) with no or limited buying power and
consumption alternatives
o Received funds are to be spent in short time, on an ongoing
basis, with restrictions
o Complex performance measurement (multifactor,
multicausality, uncertainty)
Case: Rotterzwam
Mushrooms grown from coffee grinds (circular economy-based BM)
➢ What usually happens to the coffee grind waste, where does supply come from, where to
sell, how many cities, what do they do with their “waste”?
Case: Greyston Bakery
Open hiring
Case: Muhammad Yunus – Banker to the poor
Unemployment was not the problem in Bangladesh among the poor, it was wages.
They did not have access to capital, which could allow them to move to better neighborhoods, go to
school, to college, get better jobs/start their own business.
➢ He loaned craftsmen 27 dollars & they started their own business and paid everything back.
o He started a bank and got rid of all the requirements, but is based on trust (97% is
paid back in full)
Case: Dopper Black & White Campaign
Is about using reusable bottles, having created a sample piece of art (aquarium with plastic from the
ocean, to show people what is going on far away in the ocean).
, Reading: Social and Commercial Entrepreneurship: Same, Different, or Both?
The analysis highlights key similarities and differences between the 2 forms of entrepreneurship.
Theoretical considerations
Social entrepreneurship = innovative, social value creating activity that can occur within or across the
nonprofit, business, or government sectors.
➢ Typically refers to phenomenon: applying business expertise & market-based skills in the
nonprofit sector
o Underlying drive for social entrepreneurship: create social value, rather than
personal and shareholder wealth
▪ The activity is characterized by innovation, or the creation of something new
rather than simply the replication of existing enterprises or practices
Theoretical propositions focusing on 4 different variables to guide the comparison;
1. Market failure = a theory is that the social-purpose organizations emerge when there is a
social-market failure (commercial market forces do not meet the social need)
➢ Market failure will create differing entrepreneurial opportunities for social and
commercial entrepreneurship
2. Mission = fundamental purpose/mission of social entrepreneurship is creating social value
➢ Commercial and social dimensions within the enterprise may be a source of mission
difference-tension.
3. Resource mobilization = social entrepreneurs are restricted from tapping into the same
capital markets as commercial entrepreneurs, and to compensate staff competitively
➢ Leads to different approaches in managing financial and human resources
4. Performance measurement = measuring performance for social purpose = challenging
➢ Performance measurement of social impact will remain a fundamental differentiator,
complicating accountability and stakeholder relations.
Commercial Entrepreneurship Model (PCDO)
Model of Stevenson used, (stresses the creation of dynamic fit among 4 interrelated components)
- People = those who actively participate in the venture or who bring resources to it
- Context = the elements outside of control of the entrepreneur that influence success/failure
o Contextual factors = macroeconomy (tax, regulatory structure, sociopolitical)
▪ Specific contextual factors = economic environment, tax policies,
employment levels, technological advances & social movements
- Deal = substance of the bargain that defines who in a venture gives what, who gets what and
when those deliveries and receipts will take place
- Opportunity = any activity requiring investment of scarce resources in hopes of future return
Applying PCDO to social entrepreneurship
We can begin to explore how the PCDO framework
applies to social entrepreneurship.
o We will discuss similarities & differences
between social (SE) and commercial
entrepreneurship (CE).
