Good Dark Side Of Social Entrepreneurship Research Paper Example

Business

Social entrepreneurship is a relatively new and trendy concept referring to a wide variety of projects, initiatives and processes that help to create and develop social value through innovative approaches and innovative technologies (Lundstrom et al., 2013.) Recent researches see a social entrepreneur as a multi-faceted construct, proactive, risk-taking, creative and innovative. Along with these characteristics of modern economy businessmen (today’s tech startup founders often match this definition perfectly), social entrepreneurs “recognize social value, face moral complexity, purpose of coherent unity, having social mission and virtuous behavior” (Mort, Weerawarden, & Carnegie, as cited in Hussain, 2014.)
Social business is primarily aimed at solving social issues and at creating value for those categories of consumers that the traditional markets don’t reach (Williams & Kadamawe, 2012.) The social benefits can be achieved through non-profit organizations, but social entrepreneurship is the synthesis between social goals and values (that are core for this kind of business) and market based approaches, where economic value is mainly considered as a by-product that enables social businesses to maximize social profits with achieving self-sustainability (repayment of investments or even profitability, Hussain, 2014.) Some scholars argue that social entrepreneurs balance social economic value creation as two equally important set of priorities (Dacin et al., 2011,) while other, such as apologists of “triple bottom line” concept, believe that social business may target maximizing outcomes in different dimensions - social, economic or environmental (Santos, 2009.)
Social entrepreneurship is a vibrant trend in both developing and developed countries, addressing such acute social and ecological issues as, for example, access to water, waste management, access to medical services, micro-lending resources or facilitating small business creation. These issues have “a local expression but global relevance” (Santos, 2009) and mostly address basic human needs, employing new models, technologies and organizational structures to find solutions for the issues that traditional businesses, international organizations or social institutions don’t cover. For entrepreneurs, social business allows to find a balance between the intention to make a social contribution and the need to receive an economic return (Seelos & Mair, 2005.)
Like many relatively new domains, social entrepreneurship faces many challenges, such as a rather small number of significant market players (not taking into consideration a large number of small local social startups), local embedded context of social innovations and complex interrelations between corporate social initiatives (so called social intrapreneurship) and organizations where such initiatives arise (Dacin et al., 2011.)
The boundaries between entrepreneurship and social entrepreneurship are unclear. Many questions arise like, for example, what should be a priority for social enterprise – social value or income generation? What is more appropriate for a social venture – to sacrifice financial performance to meet its social mission or to accept underperformance in social goals as a consequence of pursuit of financial sustainability? (Peredo & McLean, 2006.)
Apart from numerous benefits, social entrepreneurship has its “dark side”. Social entrepreneurs are often being criticized for being driven by self-serving interests such as improving or recovering public image, increasing popularity, increasing incomes in direct or indirect ways or leaving a legacy. Socially oriented enterprises are criticized for too narrow focus, for misrepresentation of their goals or activities (Kaufman, 2012.) Many of social enterprises are forming, but only a few of them are capable to introduce positive systemic changes (Dacin, 2013.)
Apart from the mentioned problems, the critics of social entrepreneurship emphasize the negative influence of unintended consequences of social business activities. An innovative social initiative, driven by good intentions, can exacerbate a problem or have negative impact on related domain (Kaufman, 2012.) In some cases, a conflict of interests may arise in the process of trade-offs between economic value creation and social value appropriation (Santos, 2009.)
Tina Dacin (2013) in her QSB Insight TALKS speech said that she feels cynical about social enterprises that are believed to emerge due to altruistic motives, but in reality are driven by private gain rather than public benefits and social good; she also criticizes social businesses as “having a little or no impact on the societal problems they’re attempting to address; offer governments an excuse not to act; and undermine traditional charities.” Often, introducing models of social businesses, entrepreneurs ignore the complex embeddedness of tradition, culture and history that can produce questionable motives.
Next, many social enterprises, as they grow in size, fail to maintain their social mission and tend toward market benefits. So, many initiatives, arising under the auspices of good intentions, lose their way, like, for example, social housing project in Jamaica or micro-finance in developing countries like India, which has been “exploited for private financial gain” (Dacin, 2013.) Social organizations, with their growth, become more like traditional commercial corporations; initially fueled by energy and passion of the enthusiasts, later these businesses ended in “exploitation of social entrepreneurship to privilege the profits and power of private interests over social needs and justice” (Rheannon, 2013.) While scaling, initial motives like, for example, providing affordable housing, means such as involving public or private funds, and outcomes can enter a conflict with each other (Levenson Keohane, as cited in Rheannon, 2013.) This is how social enterprises may violate socially constructed norms, beliefs, values, and expectations and how they lose public trust and enter the legitimacy crisis (Ko, 2011.)
For example, in the pursue to maintain high performance and to implement the social mission, some social organizations enter a legitimacy dilemma, if they face a necessity to lay of a part of their underperforming staff, like it happened in the UK to Remploy, a social enterprise, helping the people with barriers to work, to get employed (Ko, 2011.)
There may be severe unintended negative consequences of a social business: unforeseen results (for example, escalation of crime); compromises between the social and for-profit missions resulting in rather questionable outcomes; risks of governments ignoring their responsibilities to provide social goods or services; traditional charities becoming more business-like. Dacin (2013) cites the results of the research concluding that people feel the freedom to do bad after some act of philanthropy, so, in practice, the unethical behaviors often rise following “green” consumption.
Some scholars, like, for example, Sherzod Abdukadirov, argue that criminal gangs and terrorist organizations fit perfectly in with the concept of social entrepreneurship, being motivated by social outcomes (2010.) Abdukadirov shows a lot of similarities between terrorist organizations and social enterprises, who both exhibit entrepreneurial and managerial behaviors in their leadership models, strategies, resource management, and also are similar in pursuing ideological and social goals.
Stakeholders’ negative perception of social enterprise facing a legitimacy crisis or unable to meet its social or financial goals is likely to threaten this organization’s viability and also is likely to be extrapolated to other social enterprises and to social entrepreneurship as a whole (Ko, 2011) undermining the very idea of socially-oriented business.
Not every social initiative should be undertaken as a social enterprise rather than a non-profit organization. Leimsider (2014) gives several “bad reasons” to build a social enterprise: business discipline, attributed by mistake only to business entities; misunderstanding the ability of non-profits to sell their goods and services; common bias that only for-profit status gives an opportunity to pay proper compensation to the organization’s employees and, finally, misconception regarding social venture’s sustainability of revenue model.
In the future, the phenomenon of social entrepreneurship as a “society change agent” 9Eppler, 2012), having risen from a shift from “the welfare-state model of resource redistribution to a neo-liberal one based on market mechanisms”, from a transition of socially-oriented organizations from a grant- and donation-oriented leadership model to performance- and also innovation-oriented one (Ko, 2011,) will grow substantially and gain importance. Social entrepreneurship can be an important source “of unbalanced progress making social and economic development vulnerable” (Mair, 2010.)
As the balance between financial benefits and altruistic goals is very delicate; and finding and maintaining this balance is a key challenge for those social enterprises that enjoy growth and intend to introduce systematic changes in their target areas, the practice of social entrepreneurship becomes an art involving effective leadership, responsibility to all the stakeholders including employees, accountability and transparency. The approach to social entrepreneurship should be holistic, learning from current success stories and failures and taking into consideration the complex interrelations of history, traditions, economy and culture, as well as newest globalization and technology trends.

Works cited

Dacin, M.T. Dacin,P.A. and Tracey, P. 2011. “Social Entrepreneurship: A Critique and Future Directions”. Organization Science 22(5): 1203–1213. Web. <http://www.academia.edu/2835029/Social_entrepreneurship_A_critique_and_future_directions > Accessed 18 Feb 2015
Lundstrom, A., Zhou, Ch., von Friedrichs, Y. and Sundin, E., 2013. Social Entrepreneurship: Leveraging Economic, Political, and Cultural Dimensions. Springer Science & Business Media
Kaufman, Z.D., 2012. Social Entrepreneurship in the Age of Atrocities: Changing Our World. Edward Elgar Publishing
Santos, F.M., 2009. A Positive Theory of Social Entrepreneurship. Web. <http://www.insead.edu/facultyresearch/research/doc.cfm?did=41727> Accessed 18 Feb 2015
Williams, Densil A.& Kadamawe A. K., 2012. The Dark Side of Social Entrepreneurship. International Journal of Entrepreneurship , Vol. 16 , Annual 2012 Web. <http://www.alliedacademies.org/public/proceedings/Proceedings28/AE%20Proceedings%20Spring%202011.pdf > Accessed 18 Feb 2015
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Abdukadirov, Sh., 2010. Terrorism: The Dark Side of Social Entrepreneurship. International Journal of Entrepreneurship , Vol. 16 , Annual 2012
Peredo, A & M. McLean, 2006. Social entrepreneurship: A critical review of the concept. Journal of World Business. 41(1), pp 56-65.
Hussain, N.M., 2014. Assessing Social Entrepreneurship Initiatives: Journey of Past, Present and Future. Advances in Social Science Research Journal, Vol 1, No. 3, May 15, 2014. Web. <http://scholarpublishing.org/index.php/ASSRJ/article/view/207/131> Accessed 18 Feb 2015
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Rheannon, F., 2013. The Light And Dark of Social Entrepreneurship. Web. < http://www.csrwire.com/blog/posts/977-the-light-and-dark-of-social-entrepreneurship> Accessed 18 Feb 2012
Mair, J., 2010. Social Entrepreneurship: Taking Stock and Looking Ahead. Web. < http://www.iese.edu/research/pdfs/DI-0888-E.pdf> Accessed 18 Feb 2015
Leimsider, R., 2014. 5 Bad Reasons to Start a For-Profit Social Enterprise. Web. < https://hbr.org/2014/07/5-bad-reasons-to-start-a-for-profit-social-enterprise> Accessed 18 Feb 2015
Seelos, Ch., Mair, J., 2005. Social entrepreneurship: Creating new business models to serve the poor. Business Horizons, 2005, 48: 241—246. Web. < http://www.2008.sofimun.org/SOFIMUN2008-CM-UNECOSOC-Topic-A-extra_info-2.pdf > Accessed 18 Feb 2015
Eppler, I., 2012. The Problem with “Social Entrepreneurship”: A Student’s Perspective. Web. < http://www.ssireview.org/blog/entry/the_problem_with_social_entrepreneurship_a_students_perspective > Accessed 18 Feb 2015