By defining the success of social entrepreneurship as the creation of social value, this study sought to identify the factors that influence the creation of social value. Recently, the importance of social entrepreneurship has been recognized as a new potential growth engine of our society. We then build a model that tests the factors that influence the success of social entrepreneurship.
In order to define the research scope of this study, we need to consider the definition of social entrepreneurship. In this article, our definition of social entrepreneurship is derived from Dees' explanation of social entrepreneurship.
Difference between Commercial and Social Entrepreneurship
According to the narrow definition, social entrepreneurship denotes the use of market-based skills and business acumen in the nonprofit sector. Social enterprises thus share the commitment to revenue generation with private sector organizations, as well as achieving social (and environmental) goals of nonprofit organizations.” In this study, social entrepreneurship is defined as an entrepreneurial activity that aims to achieve a clear social goal or set of goals through the sale of products and/or services, while achieving financial sustainability to be independent of the government and other donors. Unlike commercial entrepreneurship, whose recognition of opportunities begins with identifying differentiated unique positions in the marketplace and creating new demands, social entrepreneurship opportunities begin with a search for new and unique ways to meet unmet demands of a community comply.
Although these social problems resulted from market failures and are obstacles to commercial enterprise, they present opportunities for social enterprise (Weisbrod, 1977). Functioning as a social agent that provides public welfare, the legitimizing process of social enterprise must include a focus on justice in identifying social issues as well as providing a service to diverse clients." (Ascigil, 2012).
Importance of Social Entrepreneurship
Common examples of such unmet community needs that social entrepreneurship addresses are low levels of education, lack of adequate vocational training, and poor health services; which, as a rule, presents difficulties for the commercial entrepreneur when performing activities in the community. Another distinctive difference is that social entrepreneurship exploits market failures to take advantage of the opportunity for the collective, which consists of both social entrepreneurship and those who are neglected in terms of social services (A. Nicholls, 2006). So networking for social entrepreneurship has a very different function than that of commercial entrepreneurship. “A commercial entrepreneur exploits networks in creating opportunities and the relevance of a network is defined by its economic value (Prashantham & Dhanaraj, 2010).
While legitimacy for a commercial entrepreneur typically rests on profitability, legitimacy for a social entrepreneur must be reconstructed. On the demand side, there are two important factors that have influenced the growth in social entrepreneurship: an increased global awareness of the inequality in wealth distribution (World Bank, 2007); and a growing recognition of the need to protect the environment.
Summary of Previous Research
This uneven reliance on a single methodological approach limits the understanding and conclusions we can draw from research contexts. We can clearly state that previous studies in the field of social entrepreneurship lacked large-scale databases and the use of quantitative data analysis (Dacin et al., 2011). From this literature review, we noticed that there are still unanswered questions about the nature of social entrepreneurship that require systematic and empirical comparison with large-scale databases.
Our aim in this study is to use existing databases to conduct empirical studies on the performance of social entrepreneurship in order to find out the factors that influence the performance and value of social entrepreneurship.
Hypotheses
- Social Value Creation
- Innovation Type
- Strategic Focus
- Accountability
Social entrepreneurship researchers believe that innovation is a key activity of social entrepreneurship (Austin et al., 2006; A. Nicholls, 2006). Based on the literature review, we hypothesize that innovation is a key aspect of social entrepreneurship and that there are different types of technological innovation that social entrepreneurship can pursue. Another factor we will discuss is the strategic focus of social entrepreneurship.
We assume that it will be more efficient if social entrepreneurship focuses on the single social value. From these literature reviews, we concluded that social entrepreneurship governance will have a positive impact on social entrepreneurship performance.
Method
Samples and Procedures
Measures
- Dependent Variable
- Independent Variables
This assessment also measures general working conditions within the company, such as manager-employee communication, job flexibility, safety practices, health care, and company culture. This category assesses the public value of the services or products the company provides and considers whether these products or services are designed to serve disadvantaged populations. Questions in this category indicate whether a company's product or service is intended to address a social and environmental problem.
The community category weighs a company's relationship with its distribution channels and involvement in their local community. This section of assessment also examines whether a company's products/services are composed to deal with a social issue such as basic services, health, education, economic opportunities and increasing the flow of capital to other social entrepreneurships. The Environmental category of the survey assesses a company's environmental commitment across its various business processes.
Where possible, it also evaluates a company's distribution channels to monitor the environmental protection practices of its supply chain. This category also considers whether the products or services a company provides are aimed at delivering environmental values, such as renewable energy, resource conservation, waste reduction, land and wildlife conservation, prevention of toxic material or contamination, and whether consultations are conducted to resolve environmental problems. . The independent variables we used for the analysis are Accountability, Type of Innovation and Strategic Focus.
This category considers the company's commitment to the stakeholders, general transparency of the company's accounting and management policies. When a company had a high standard deviation, we assumed that the company had a stronger strategic focus on certain social values. To calculate firm age, we subtracted the established year of the firm from 2013 the year we collected data from www.bcorporation.net.
Results
Strategic focus was calculated by calculating the proportions of each social value variable in the B Score assessment, using the standard deviation of these proportions as the strategic focus variable. We included a company's age as a control variable, since older social entrepreneurs will have more experience and more knowledge about social value creation in their fields, it is likely that company age will have a positive influence on social value creation by social entrepreneurs. For hypothesis 1, we expected that Hi-Tech innovation type social entrepreneurship will negatively affect the social value creation of the organization.
We proposed the positive influence of accountability of social entrepreneurship on its social value creation in Hypothesis 2. Surprisingly, the result shows that accountability has a negative impact on social value creation with standardized coefficient β of -0.248 and a t-value of -4.588 (p) =0.000). To understand the underlying causes for this result, we looked at the accountability assessment questionnaire.
In the governance and accountability section, we specifically focused on the Transparency and Governance Measures section of the questionnaire. Questions in this section asked what kind of financial reporting standard the company used, who audited or reviewed the financial statements of the company and how much of that financial reporting is available to the public. From this review of the questionnaire, we could see that the accountability section of assessment measures how well the company follows traditional accounting practices and how well the company performs in relation to those traditional accounting reports.
But several studies on social sector accounting practices point out the limitations of traditional accounting reports in reflecting the actual social value creation status of social sector organizations, and social entrepreneurs should not only use the annual report of audited financial accounts, but they should also strategically use social impact reporting, such as SROI, CIC34 and Trustee's Report, to improve their performance from both an internal and external perspective (Alex Nicholls, 2009; SOCIAL & RETURNS, 2003). Based on Hypothesis 3, we argued that the strategic focus of social entrepreneurship will positively influence the social value creation of social entrepreneurship. This result implies that it is better for social entrepreneurship to focus on delivering a single social value than trying to solve several social problems simultaneously.
Discussion
First, due to the nature of the data source www.bcorporation.net, the social entrepreneurship sample comes largely from developed countries such as the US or EU Member States. When we think about the fact that the role of social entrepreneurship varies quite a bit from developing to developed countries (Ascigil, 2012; A. Nicholls, 2006; Alex Nicholls, 2009), this skew in the sample raises some questions, such as whether certain insights are universally applicable. For example, our conclusion that there is no significant impact of appropriate technological innovation on social value creation may not apply to social entrepreneurship in developing countries.
Second, since the analysis was performed on the data sample already assessed by other organization, we were not able to get direct information from samples and therefore we could not get valuable information that could provide more rigorous analyzes of the relationship. between variables such as actual net profit, number of employees and actual business models. Finally, although this study showed the inadequacy of traditional accounting practices on social entrepreneurship, we were not able to provide a single alternative accounting measure for social entrepreneurship that can ensure a more holistic view on the process of social value creation and which the transparency of social entrepreneurships and can also consider the creation of social value.
REFEFENCES
What do we know about social entrepreneurship: an analysis of empirical research: ERIM Report Series Research in Management. Social Entrepreneurship: The Structure of a Field in Alex Nicholls (ed.) Social Entrepreneurship: Oxford University Press, at.
