Int. J. Social Entrepreneurship and Innovation, Vol. x, No.

x, xxxx 1
Copyright 200x Inderscience Enterprises Ltd.











Social entrepreneurship: an overview of its
theoretical evolution and proposed research model
John O. Okpara
College of Business,
Bloomsburg University of Pennsylvania,
266 Sutliff Hall, 400 East Second Street,
Bloomsburg, PA 17815, USA
E-mail: jokpara@bloomu.edu
Daphne Halkias*
Center for Family and Youth Enterprise (CYFE),
University of Bergamo,
Giannitson 11A, Holargos, Athens 15562, Greece
E-mail: daphne_halkias@yahoo.com
*Corresponding author
Abstract: Social entrepreneurship is an emerging area of research in the
entrepreneurship and related disciplines. Social entrepreneurship is seen as
differing from other forms of entrepreneurship because of the higher priority
given to promoting social and development economic values. A review of the
literature emerging from a number of disciplines reveals that the definition
of the concept of social entrepreneurship is fragmented and confusing. Current
conceptualisations of social entrepreneurship fail to effectively consider the
unique characteristics of social entrepreneurs and the context within which
they must operate. The purpose of this paper, therefore, is to advance
the conceptualisation of the concept by adding some clarity to the debate.
Keywords: social entrepreneurship; theoretical evolution; social values;
innovation.
Reference to this paper should be made as follows: Okpara, J.O.,
and Halkias, D. (xxxx) Social entrepreneurship: an overview of its theoretical
evolution and proposed research model, Int. J. Social Entrepreneurship and
Innovation, Vol. x, No. x, pp.xxxxxx.
Biographical notes: John O. Okpara, PhD, is a Professor in the Department
of Management at Bloomsburg University of Pennsylvania, USA. He gained
his BSc at the University of London (Birbeck College), MS at SUNY
(Maritime College), MA at CUNY (City College) and PhD at New York
University. He has been on the Faculties of New York Institute of Technology
and the Universities of Phoenix (US) and Warsaw (Poland). He is a business
consultant, and has published numerous papers, articles and book chapters and
authored two of his own. He is Editor-in-Chief of International Journal
of Social Entrepreneurship and Innovation.











2 J.O. Okpara and D. Halkias












Daphne Halkias, PhD, is a distinguished academic, cross-cultural researcher,
consulting psychologist and executive coach. Publications carry her name in
research on entrepreneurship, womens issues, family business, organizational
behaviour, education and clinical psychology. She is currently a Senior
Research Fellow at The Center for Young and Family Entrepreneurship
(CYFE) at the University of Bergamo, Italy, Research Affiliate at the Institute
for Social Sciences at Cornell University and Affiliate at Institute of Coaching
at McLean Hospital of Harvard Medical School. Her forthcoming applied
research books are in the areas of international management, immigrant
entrepreneurship and sustainability, fatherdaughter succession in family
businesses and cross-cultural e-negotiation. She is Editor of International
Journal of Social Entrepreneurship and Innovation.

1 Introduction
Despite the rapid increase in social entrepreneurship as a field of research and practice
and increasing interest within the policy-making authorities (Roper and Cheney, 2005;
Peattie and Morley, 2008), research on social entrepreneurship still falls far behind the
practice (Johnson, 2000). The different concepts used by the literature are often ill
defined and can take on a variety of meanings with little consensus so far reached
among scholars (Weerawardena and Sullivan Mort, 2006). The concept of social
entrepreneurship continues to mean different things to different people and there is no
clear understanding on where to locate it and on how to qualify social entrepreneurs.
The same can be said for the term social enterprise, which is either used to refer to an
activity carried out or to particular organisations and institutions. It can be said that
definitions of social entrepreneurship and social enterprise vary to a great extent at the
international level with a number of authors using the two interchangeably (Peredo and
McLean, 2006).
Social entrepreneurship is not an entirely new concept because social entrepreneurs
have been around for decades. However, the term and its interpretation may be fairly
new, the concept is not new to social entrepreneur who have been promoting social
entrepreneurial strategies that deal with social issues for decades (Barendsen and
Gardner, 2004). For instance, William Lloyd Garrison, founder of the Anti-Slavery
Society (ASS) in 1833 and publisher of the first anti-slavery newspaper, the Liberator,
fought vigorously to end slave trade and slavery throughout his life. Jane Addams,
a social worker, humanitarian and reformist, founded the social settlement Hull House
in Chicago in 1889. Hull House provided shelter and welfare to people who were
poor and offered a new model that was later replicated throughout the USA.
Social histories are filled with many similar examples throughout the world. Only in
recent years have these change-makers become known as social entrepreneurs
(Okpara and Ohn, 2008).
The emergence of social entrepreneurship as an identifiable field is most likely due to
several factors, including present discontent with the speed and management of typical
charities, foundations and government administration of social services to the
disadvantaged, disabled and those who have been displaced due to catastrophic events
such as the hurricane Katrina in Louisiana, the 2004 tsunami in Asia, the recent
earthquake in China, cyclone in Burma, drought in Ethiopia and HIV/AIDS in Africa.









Social entrepreneurship: an overview of its theoretical evolution 3












Undeniably, one of the main reasons behind the recognition of the social
entrepreneurship movement is William Draytons elevation of the concept. Drayton
introduced the term social entrepreneur when he founded Ashoka in 1980 with the belief
that social entrepreneurs have the most potential for solving social problems. Ashoka is
one of the very first ventures designed explicitly to fund social entrepreneurs. Its purpose
was and still is to empower social entrepreneurs with financial resources and a
professional network within which they are able to disseminate the ideas and solutions
of social entrepreneurship.
While entrepreneurial phenomena aimed at economic development have received a
great deal of scholarly and practitioners interest, entrepreneurship as a means to foster
social progress has only recently attracted the attention of researchers (Alvord et al.,
2004; Dees and Elias, 1998). Similar to entrepreneurship in its early days as a field of
scholarly endeavour, social entrepreneurship research is still largely phenomenon-driven.
Existing most studies are typically based on anecdotal evidence or case studies, applying
diverse research designs and methods and introducing insights from other disciplines.
Like entrepreneurship, which even today lacks a unifying paradigm (Shane and
Venkataraman, 2000), the term social entrepreneurship has taken on a variety of
meanings (Dees, 1998).
Social entrepreneurship seems to be one of the most misunderstood concepts in
entrepreneurship literature. Everyone, it seems, has a particular definition of what the
term means. Yet, the concept is still poorly defined and its boundaries to other fields
of study remain vague. To enhance our understanding of social entrepreneurship as a
field of study and practice, it is necessary to define and clarify the key concepts and
constructs of social entrepreneurship. This paper aims to clarify the core concept of social
entrepreneurship and develop a model to guide future research.
The paper is organised as follows. First, we examine the meaning of the terms social
entrepreneurship, which constitute the essence of the phenomenon. We offer a working
definition of social entrepreneurship and elaborate on its distinctive characteristics.
In a next step, we developed a social entrepreneurship model based on the existing
literature. We conclude the paper with some propositions for future research that could
define the future of social entrepreneurship as an area of research.
2 Evolution of entrepreneurship
Entrepreneurship has been described as a relatively young academic discipline.
This seems to create problems in defining and developing a consensus definition of the
concept. For example, there is a lack of a unifying framework that distinguishes
entrepreneurship from other management disciplines such as strategic management,
human resource management and operations management (Zahra and Dess, 2001).
Therefore, we believe that the development of the concept of entrepreneurship
should be looked at from the classical viewpoint. For example, pioneers such as
Richard Cantillon, Adam Smith, Jean Baptiste Say, John Stuart Mill, Carl Menger
and Joseph Schumpeter all have made substantial contributions towards both the
initial development and the latter contemporary developments of the concept of
entrepreneurship.










4 J.O. Okpara and D. Halkias












Richard Cantillon, for instance, was a French economist who has been credited with
giving the concept of entrepreneurship a central role in business management and
economics (Okpara and Ohn, 2008). In his Essaisur la nature du commerce en gnral,
Cantillon described an entrepreneur as a
person who pays a certain price for a product to resell it at an uncertain
price, thereby making decisions about obtaining and using resources while
consequently assuming the risk of enterprise.
A significant point in Cantillons definition was that entrepreneurs consciously make
decisions about resources allocations. Cantillon suggested that the entrepreneur shifts
economic resources out of an area of lower and into an area of higher productivity
and greater yield (Sullivan Mort et al., 2003). Cantillon also argued that entrepreneurs
were directly involved in the equilibrium condition of supply and demand functions
(Jennings, 1994).
Adam Smith, a brilliant British economist, also defined the enterpriser in his 1776
Wealth of Nations as an individual who undertook the formation of an organisation for
commercial purposes. In Smiths view, entrepreneurs reacted to economic change,
thereby becoming the economic agents who transformed demand into supply. Another
French economist, Jean Baptiste Say, in his 1803 Trait d economie politique,
described an entrepreneur as one who possessed certain arts and skills of creating new
economic enterprises, yet a person who had exceptional insight into societys needs and
was able to fulfill them. Another British economist John Stuart Mill (1848) elaborated
on the necessity of entrepreneurship in private enterprise.
The term entrepreneur subsequently became common as a description of business
founders, and the fourth factor of endeavour was entrenched in economic literature
as encompassing the ultimate ownership of a commercial enterprise. Carl Menger
(18401921) established the subjectivist perspective of economics in his 1871
Principles of Economics. The entrepreneur becomes, therefore, the change agent who
transforms resources into useful goods and services, often creating the circumstances that
lead to industrial growth. However, Menger saw the entrepreneur as an astute individual
who could envision this transformation and create the means to implement it (Okpara and
Ohn, 2008). Menger assigned priority numbers to different events in this chain so that a
high-priority event would have a low number and would be an ultimate end use to
satisfy a human need. At the other extreme, Menger assigned a low-priority event with a
high number and this might represent raw material needed to create the number one
event; fields of unharvested wheat would have a low priority (Okpara and Ohn, 2008).
Schumpeter (1934), an Austrian economist, revived the concept of entrepreneurship
when he joined Harvard University Faculty in Cambridge, Massachusetts. His research
on entrepreneurship was published in the USA in 1934. Schumpeter described
entrepreneurship as a force of creative destruction whereby established ways of doing
things are destroyed by the creation of new and better ways to get things done. He argues
that enhancement of profits are made possible by innovation, which, in turn, stimulates
imitation, which finally brings the flow of the innovators profits to an end.
In support of the classical perspectives on entrepreneurship, Sullivan Mort et al.
(2003) stated that entrepreneurs play a significant role in an economy because of
innovators who drive the creative-destructive process of capitalism. In general,
early literature suggests that the primary function of an entrepreneur is to start new
profit-seeking business ventures. Subsequent literature, however, reflects that this









Social entrepreneurship: an overview of its theoretical evolution 5












function is not considered a sufficient condition for entrepreneurship. In an extensive
review, Cunningham and Lischeron (1991) observe the existence of six schools of
thought about entrepreneurship in the literature. First, the great person school of thought
suggests the entrepreneur has an intuitive ability a sixth sense and the traits and
instincts he or she is born with. Second, the psychological characteristics school
suggests that entrepreneurs have unique values, attitudes and needs, which drive them.
Third, the classical school of entrepreneurship reflects the early approaches to
entrepreneurship and suggests that the central characteristic of entrepreneurial behaviour
is innovation. Fourth, the management school suggests that entrepreneurs are organisers
of an economic venture; they are people who organise, own, manage and assume the risk.
Fifth, the leadership school argues that entrepreneurs are leaders of people. They have the
ability to adapt their style to the needs of people. Sixth, the intrapreneurship school
suggests that entrepreneurial skills can be useful in complex organisations. Cunningham
and Lischeron (1991) observe that a judgement concerning each models appropriateness
depends on the researchers assessment of its capacity for explaining and improving
certain aspects of the entrepreneurial process.
In a major departure from the classical perspectives, a number of researchers
have suggested that entrepreneurship can be viewed as a behavioural characteristic
of the organisation. This school of thought argues that entrepreneurs display three
characteristics in their decision making within organisations: tolerance for risk,
proactiveness and innovativeness. These characteristics form the basis of the behavioural
entrepreneurship scale developed by Covin and Slevin (1986). Furthermore, the
proponents of this school of thought argue that adoption of a firm-behaviour model of
entrepreneurship has a number of advantages over more traditional entrepreneurship
models and theories that focus on traits of the individual entrepreneur, primarily because
the level of analysis at firm level is more appropriate to understand effectiveness and the
types of firm-level behaviours that result in performance (Okpara and Ohn, 2008).
Recently, some researchers have produced a compelling argument that entrepreneurial
opportunity recognition and exploitation are constructs that fall squarely within the
unique domain of entrepreneurship and should be the focus of research in the field
(Shane and Venkataraman, 2000). Casson (1982) defines entrepreneurial opportunities as
those situations in which new goods, services, raw materials, and organising methods
can be introduced and sold at greater than their cost of production. This definition
requires profit generation as a precondition for an entrepreneurial opportunity, which can
be applied post hoc only, after profits have been achieved. With a view to reconciling
this debate, Singh (2001) suggests that the potential to generate profits would be an
appropriate indicator of an entrepreneurial opportunity. Against this background, it is
appropriate to examine the concept of social entrepreneurship.
3 Social entrepreneurship
Martin and Osberg (2007) have argued that any definition of the social entrepreneurship
must start with the word entrepreneurship. They contend that the word social simply
modifies entrepreneurship. Thus, we will begin our analysis with the definition of
entrepreneurship and then switch to social entrepreneurship. The definition of
entrepreneurship has been debated among scholars, educators, researchers and
policy-makers since the concept was first established in the early 1700s. What exactly is









6 J.O. Okpara and D. Halkias












an entrepreneur? More importantly, what is entrepreneurship? According to Kautz
(1999), the definition of entrepreneurship is still evolving as the field itself comes into the
mainstream business. Despite the complex and dynamic nature of entrepreneurship,
an operational definition can be identified to help explain the characteristics
of entrepreneurial activity and its positive effects on the economy. The term
entrepreneurship comes from the French verb entreprendre and the German word
unternehmen, both of which mean to undertake (Okpara and Ohn, 2008).
Entrepreneurial process is still involving, including all the functions, activities and
actions connected with the opportunities and the creation of organisations to pursue
them (Carton et al., 1998). The modern definition of entrepreneurship was introduced
by Schumpeter (1934). Schumpeter stated that the carrying out of new combinations
of business is called enterprise and the individuals whose function is to carry them
out are called entrepreneurs. Carton et al. (1998) provided an operational definition
of entrepreneurship that attempts to encompass definitions from scholars like Schumpeter
into a comprehensive and adequate concept: He defined entrepreneurship as the
pursuit of a discontinuous opportunity involving the creation of an organisation
(or sub-organisation) with the expectation of value creation to the participants. According
to Carton et al. (1998), an entrepreneur is the individual (or team) that identifies the
opportunity, gathers the necessary resources, creates and is ultimately responsible for the
performance of the organisation. Therefore, entrepreneurship is the means by which new
organisations are formed with their resultant job and wealth creation. An important
criterion of the Carton, Hofer and Meekss definition is that the organisations must
provide goods or services to society. Though this definition will not satisfy everyone,
it does capture the important aspects of entrepreneurship.
Scholars such as Shane and Venkataraman (2000) and Singh (2001) define an
entrepreneurial opportunity as
a practicable, profit seeking, potential venture that provides an innovative new
product or service to the market, improves on an existing product/service, or
imitates a profitable product/service in a less-than-saturated market.
Singh (2000) argues that this definition is purposely broad and can be applied to
entrepreneurial opportunities based on incremental market improvements, those that are
highly innovative and create new markets, and everything in between. Drucker (1995)
defines entrepreneurship as a systematic, professional discipline. This definition brought
a new level of understanding to the concept (Maurer et al., 1995). Sharma and Chrisman
(1999) identified two schools of thought on the meaning of entrepreneurship. One group
focused on the characteristics of entrepreneurship (innovation, growth and uniqueness)
whereas a second group focused on the outcomes of entrepreneurship (for example, the
creation of value). On the basis of the different definitions of entrepreneurship, the
concept appears to be confusing. Filion (1997) argued that the confusion surrounding the
definition of the concept of entrepreneurship was not as serious as was previously
believed because similarities in the perception of the entrepreneur emerge within each
discipline, for example, social science scholars, such as economists, associate the term
entrepreneur with innovation, whereas the behavioural scholars focus on the creative and
intuitive characteristics of entrepreneurs. In sum, Outcalt (2000) concluded that three
traits are associated and included in the definition of entrepreneurship. These are:











Social entrepreneurship: an overview of its theoretical evolution 7












uncertainty and risk
complementary management competence
creative opportunism.
Outcalt (2000) warned that to ignore any of these areas is to risk repeating, rather than
learning from the history of the concept of entrepreneurship. With this in mind, we are
ready to explore the concept of social entrepreneurship.
3.1 Different definitions of social entrepreneurship
The concept of social entrepreneurship means different things to different people
including researchers (Dees, 1998). Specifically, some in the literature see a social
enterprise as a more efficient outgrowth of not-for-profit institutions, while others see the
concept as a for-profit business attempting to address social needs in the marketplace
(Harding, 2004; Massetti, 2008). For example, the UKs Global Entrepreneurship
Monitor has divided social enterprises into three categories, depending on the form of
funding stream used by each.
Dees (1998) stated that any definition of social entrepreneurship should include an
emphasis on discipline and accountability with the philosophy of value creation,
innovation, change agents, pursuit of opportunity and resourcefulness. According to Dees
(1998) articulation, to qualify as a social entrepreneurship, entrepreneurs must be change
agent by adopting a mission to create and sustain social value, engaging in a process of
continuous innovation, adaptation, and learning, acting boldly without being limited by
resources currently in hand, and exhibiting heightened accountability to the
constituencies served. Dees (1998) noted that social entrepreneurs will exemplify these
characteristics in different ways and to different degrees. The closer a person gets to
satisfying all these conditions, the more that person fits the model of a social
entrepreneur. Definitions of entrepreneurial phenomena are hardly able to capture the
whole picture. The definition offered in this paper aims to reflect some of our basic
assumptions.
First, we view social entrepreneurship as a process of creating value by combining
resources in new ways. Second, these resource combinations are intended primarily
to explore and exploit opportunities to create social value by stimulating social change
or meeting social needs. And third, when viewed as a process, social entrepreneurship
involves the offering of services and products but can also refer to the creation of new
organisations. Importantly, social entrepreneurship, as viewed in this paper, can occur
equally well in a new organisation or in an established organisation, where it may be
labelled social intrapreneurship. Like intrapreneurship in the business sector, social
intrapreneurship can refer to either new venture creation or entrepreneurial process
innovation. The organisational context in which social entrepreneurship occurs,
i.e., newly created or established organisations, sets it apart from other more loosely
structured initiatives aimed at social change, such as activist movements (Mair and
Mart, 2005).
Martin and Osberg (2007) define social entrepreneurship as having the following
three components:











8 J.O. Okpara and D. Halkias












identification of a stable but inherently unjust equilibrium that causes the exclusion,
marginalisation, or suffering of a segment of society that lacks the financial means
or political clout to achieve any transformative advantage on its own
identification of an opportunity in this unjust equilibrium, developing a social value
proposition, and bringing to bear inspiration, creativity, direct action, courage
and fortitude, thereby challenging the stable states hegemony
forging of a new, stable equilibrium that releases trapped potential or alleviates the
suffering of the targeted group, and through imitation and the creation of a stable
ecosystem around the new equilibrium, ensuring a better future for the targeted
group and even society at large.
Ashoka Foundation (2007) defines social entrepreneurs as individuals with innovative
solutions to societys most pressing social problems. They are ambitious and persistent
in tackling major social issues and offering new ideas for wide-scale change. Rather than
leaving societal needs to the government or business sectors, social entrepreneurs find
what is not working and solve the problem by changing the system, spreading the
solution and persuading entire societies to take new leaps. Social entrepreneurs often
seem to be possessed by their ideas, committing their lives to changing the direction
of their field. Ashoka further describes the characteristics of a social entrepreneur.
They stated that each social entrepreneur should present ideas that are user-friendly,
understandable, ethical, and engage widespread support to maximise the number of local
people who will stand up, seize their idea and implement it. This means that every
leading social entrepreneur is a mass recruiter of local change-makers a role model
proving that citizens who channel their passion into action can do almost anything. Just
as entrepreneurs change the face of business, social entrepreneurs act as change agents
for society, seizing opportunities others miss and improving systems, inventing new
approaches, and creating solutions to change society for the better. While a business
entrepreneur might create entirely new industries, a social entrepreneur comes up with
new solutions to social problems and then implements them on a large scale (Ashoka
Foundation, 2007).
Schwab Foundation defines a social entrepreneur as someone who innovates
by finding a new product, a new service, or a new approach to perform actions that are
socially responsible (www.schwabfound.org/definition.htm). The Institute for Social
Entrepreneurship defines social entrepreneurship as the simultaneous pursuit of
financial and social returns on investment which is the ultimate benchmark for a social
enterprise or a social sector business. They refer to this as a double bottom line
(www.socialent.org/beta/definitions.htm).
Morfopoulos et al. (2006) argue that a social entrepreneurship venture should fulfil
the following conditions to be successful:
1 Realism: Does the business venture present an opportunity that is feasible
to accomplish its goals while at the same time making a positive outcome
on the society?
2 Affordability: Is the product/service affordable to produce/provide? Is it priced
in accordance with the market and the consumers ability to pay for it?











Social entrepreneurship: an overview of its theoretical evolution 9












3 Profitability: Will this product/service provide the entrepreneur with a vehicle
to make profits?
4 Societal impact: Will this venture have a positive societal outcome for the
community (on local, regional, international levels)?
Boschee and McClurg (2003) define a social entrepreneur as any person, in any sector,
who uses earned income to pursue a social objective. Boschee and McClurg (2003)
who argued that unless a non-profit organisation is generating earned revenue from its
activities, it is not acting in an entrepreneurial manner and that an earned income
will enable a social entrepreneur to become sustainable or self-sufficient.
This definition is somehow related to Morfopoulos et al. profit component definition
of social entrepreneurship.
The forgoing discussion clearly demonstrates a lack of agreement on the concept
of social entrepreneurship leading to the lack of a coherent, scholarly approach on how to
research the concept. On the basis of our review, we conclude that while there is a
substantial body of literature on social entrepreneurship emerging from a number of
domains, the literature is still fragmented, and to our knowledge, there are a few
conceptual frameworks to date that are available to aid the development of the construct.
We, therefore, argue that there is a need to develop a coherent conceptual framework
in the discipline of social entrepreneurship (see Table 1 and Figure 1).
Table 1 Selected social entrepreneurship definitions
Author (s) Definition of social entrepreneurship
Ashoka Foundation (2007) Defined in terms of using innovative solutions to solve
societys social problems
Boschee and McClurg (2003) Defined in terms of using earned income to solve societys
social problems
Dees (1998) Defined in terms of value creation, innovation,
and opportunity
Drayton (2002) Defined in terms of a change that will solve societys
social problems
Hartigan (2006) Defined in terms of social transformation
King and Roberts (1987) Defined in terms of innovation and leadership
Korosec and Berman (2006) Defined in terms of identifying and addressing important
social issues in the society
Morfopoulos et al. (2006) Defined in terms of doing something that is realistic,
affordable, profitable, and benefits society
Sullivan Mort et al. (2003) Defined in terms of creating better social values for society
Prabhu (1998) Defined in terms of a social change whose mission is to
develop people
Schwab Foundation for Social
Entrepreneurship (2007)
Defined in terms of innovation by finding a new product,
service, or approach to do things that are socially responsible
Thompson et al. (2001) Defined as a process of adding something new and different











10 J.O. Okpara and D. Halkias












Figure 1 Framework for studying social entrepreneurship

On the basis of the preceding review, the following definition of competency can be
developed.
Innovation + Leadership + Opportunity + Profitability
+ Value creation + Social benefits = Social entrepreneurship.
Our proposed model is that social entrepreneurship (SE) is a function of Innovation
+ Leadership + Opportunity + Profitability + Value creation + Social benefits = Social
entrepreneurship. Thus, SE = (I + L + O + P + VC + SB)
where
I: Innovation
L: Leadership
O: Opportunity
P: Profitability
VC: Value creation
SB: Social benefits.
Thus, the definition of social entrepreneurship should include: innovation, leadership,
opportunity, profitability, value creation and social benefits. A social entrepreneur is,
therefore, defined as one who uses his or her leadership and innovative capabilities to
find an opportunity to create a new product, a service, or a new approach to address the
most pressing social issue in the society. The issues include but not limited to Child
Labour, Disability, Education, Environment, Health, Homelessness, Poverty, Water
Purification and so forth. We will discuss our proposed model in the following section.
On the basis of the preceding model and definition, we therefore made several
propositions that need further investigation through detailed studies.









Social entrepreneurship: an overview of its theoretical evolution 11












P1: The greater the presence of leadership qualities in a social entrepreneur, the lower
will be the leadership competency deficit, resulting in a higher level of successful and
sustainable social entrepreneurship programme.
P2: The greater the presence of innovative traits in a social entrepreneur, the lower will
be the innovative competency deficit, resulting in a higher level of successful and
sustainable social entrepreneurship programme.
P3: The greater the presence of creativity in a social entrepreneur, the lower will be the
creativity competency deficit, resulting in a higher level of successful and sustainable
social entrepreneurship programme.
P4: The greater the presence of identifying opportunity in a social entrepreneur, the more
likely he or she will establish a social entrepreneurship programme, resulting in a
successful and sustainable social entrepreneurship programme.
P5: A social programme designed to address important social issues that benefit society
is more likely to be successful and sustainable.
P6: A social programme designed to address important social issues that benefit society
as well as to make profit for the entrepreneur is more likely to be successful and
sustainable than the one that is designed for non-profit making.
3.2 Innovation
Innovation is described as the lifeblood of any organisation. Innovation can apply
to many things. It is usually the term applied to a new product, but it can also be used
to describe new processes, methods or inventions (Reavis, 2010). Entrepreneurs
including social entrepreneurs are innovative, they break new ground, develop new
models and pioneer new approaches. However, as Schumpeter notes, innovation can take
many forms. It does not require inventing something wholly new; it can simply involve
applying an existing idea in a new way or to a new situation. Entrepreneurs need not be
inventors. They simply need to be creative in applying what others have invented.
Their innovations may appear in how they structure their core programmes or in how
they assemble the resources and fund their work.
Social entrepreneurs look for innovative ways to assure that their ventures will have
access to resources as long as they are creating social value. This willingness to innovate
is part of the modus operandi of entrepreneurs. It is not just a one-time burst of creativity.
It is a continuous process of exploring, learning and improving. Of course, with
innovation comes uncertainty and risk of failure. Entrepreneurs tend to have a high
tolerance for ambiguity and learn how to manage risks for themselves and others.
They treat failure of a project as a learning experience, not a personal tragedy.
In a study of innovation and innovative process by Cisco in 2005, the key findings
from this study are that innovation is one of the most important factors in business
success. Fifty-three percent of the respondent in the study cited innovation as having
the biggest impact on competitiveness, while increasing employee education and skill
levels was favoured by 26%. Reducing wages (14%) and cutting corporate taxes (7%)
were not seen as strong drivers of competitiveness (Cisco Innovation, 2005).









12 J.O. Okpara and D. Halkias












3.3 Leadership
According to the US Small Business Administration (2007), good leaders must be able
to tolerate frustration and stress. Overall, they must be well adjusted and have the
psychological maturity to deal with anything they are required to face (Okpara and Ohn,
2008). They are often competitive, decisive, and usually enjoy overcoming obstacles.
Overall, they are assertive in their thinking style as well as their attitude in dealing
with others. They are usually seen as active, expressive, energetic, optimistic and open
to change. Overall, they are generally quick and alert and tend to be uninhibited.
In addition to these basic traits, entrepreneurs including social entrepreneurship leaders
must also have traits, which will help them motivate others and lead them in new
directions (Okpara and Ohn, 2008).
Visionary leaders reminiscent of social entrepreneurs must be able to envision the
future and convince others that their vision is worth following. To do this, they must be
comfortable with criticism, self-assuredness, resiliency, they must be able to work long
hours, remaining alert and staying focused, and empathy being able to put yourself
in the other persons shoes is a key trait of leaders today. In sum, a social entrepreneur
must also be a good leader and excellent leadership traits play a major role in determining
who will and who will not be comfortable leading others, which will, in turn, determine
the success and longevity of a social entrepreneurial programme.
3.4 Opportunity
According to Shane (2003), entrepreneurial opportunity is defined as a situation in which
an entrepreneur can create a new means-ends framework for recombining resources that
will yield a profit. There are two types of entrepreneurial opportunities identified:
Kirznerian and Schumpeterian. Kirznerian opportunities are based on differential access
to the existing information (Kirzner, 1997) while Schumpeterian are created when
changes in technology, political forces, regulation, macro-economic factors and social
trends provide new information that enable entrepreneurs to recombine resources into
more valuable forms (Schumpeter, 1934).
Entrepreneurs discover opportunities because they have better access to information
about opportunities and because they are better at recognising opportunities than others
given the same information (Shane, 2003). In his examination of entrepreneurship
and organisational change in human services, Young (1985) found that entrepreneurial
opportunities were often discovered as part of solving important problems that
reflected trends and long-term developments in the social, economic and technological
environment.
3.5 Entrepreneurial profit
According to Shoemaker (2009), making a profit should be a secondary concern for
social entrepreneurs; however, if social entrepreneurs want to be successful, they cannot
shy away from the idea of profit. They must learn to embrace profit and appreciate it for
what it is, a means to an end (Shoemaker, 2009). Social enterprises, like any other
company, need a money base from which they can operate, particularly when times get
tough. When you are in start-up mode, it is easy to think that profitability is a hurdle you
only have to overcome once. In fact, it is unwise to think that, once established, any flow









Social entrepreneurship: an overview of its theoretical evolution 13












of profit will be constant. Recessions, competition, strategic mistakes, failure to innovate
and so forth can all create periods of un-profitability for an organisation. When these
periods hit, you will need cash reserves from past profits to draw on to ensure survival
(Okpara and Ohn, 2008).
3.6 Value creation
Adopting a mission to create and sustain social value is the foundation of what
distinguishes social entrepreneurs from business entrepreneurs even from socially
responsible businesses. For a social entrepreneur, the social mission is fundamental.
This is a mission of social improvement that cannot be reduced to creating private
benefits (financial returns or consumption benefits) for individuals. Making a profit,
creating wealth, or serving the desires of customers may be part of the model,
but these are means to a social end, not the end in itself. Neither the profit nor the
customer satisfaction is the gauge of value creation; social impact is the gauge. Social
entrepreneurs look for a long-term social return on investment. Social entrepreneurs want
more than a quick hit; they want to create lasting improvements. They think about
sustaining the impact.
3.7 Social benefits
Social enterprises need to generate revenue for sustainability but they also have equally
important social or environmental aims. The requirement to manage this triple bottom
line (financial, social and environmental aims) can result in unique challenges for a
social enterprise business. However, the ability to bring about positive change to people
and communities can be enormously rewarding. A wider benefit of running a social
enterprise can be in the employment of local people. People who have traditionally found
it hard to enter the labour market can find social enterprises the ideal environment for
developing their potential, whether as an employee or heading up an operation.
The types of people who can benefit from running or working in social enterprises
include: the long-term unemployed, people with learning disabilities, disabled people,
people with mental health issues, minority ethnic groups, women, young people.
Social enterprises still need to be competitive in any environment in which they
operate. Attracting customers is vital to success and this could be achieved by a social
enterprise being able to offer high-quality services or products in an innovative way.
For instance, customers may be more willing to buy your products or services than a
competitors because they feel they are contributing to the welfare of others in their local
community.
3.8 Challenges for conducting social entrepreneurship research
Many of the issues we have brought up in this paper are typical of any emerging field
of research: the need to draw boundaries so as to delimit scope and clarify whether it
really is an independent field of research, and the need to identify the different levels
of analysis, disciplines and literatures. However, there are several issues to be considered
to advance our understanding of social entrepreneurship. One of the issues
is whether social entrepreneurship is an independent field of research. Many studies on
social entrepreneurship have adopted concepts and terminology used in the established









14 J.O. Okpara and D. Halkias












entrepreneurship literature. Does this imply that social entrepreneurship is a sub-category
of entrepreneurship, in which the social context provides a new and unusual setting in
which to study and test entrepreneurial phenomena? Some researchers have argued that
social entrepreneurship differs from other forms of entrepreneurship in that it gives
higher priority to social value creation by catalysing social change and catering to social
need than to value capture (Mair and Mart, 2005). According to Mair and Mart (2005),
social entrepreneurship deserves considerable attention as a field of research because it
has enormous potential to inform and enhance the field of entrepreneurship. They also
argued that it provides an excellent opportunity to challenge and rethink central concepts
and assumptions of social entrepreneurship.
Measuring social performance and impact is one of the greatest challenges for
practitioners and researchers in social entrepreneurship (Mair and Mart, 2005). The real
problem may not be the measurement per se, but how the measures may be used to
quantify the performance and impact of social entrepreneurship (Mair and Mart, 2005).
According to Mair and Marti (2005), many researchers consider it very difficult,
if not impossible, to quantify socio-economic, environmental and social benefit/effects
of social entrepreneurship programmes. As Emerson pointed out, cited in Mair and Mart,
(2005), for many of those actively involved in the social sector, it has been taken as a
virtual given that most elements of social value stand beyond measurement and
quantification. Yet, it is necessary to make major efforts in this direction and to develop
useful and meaningful measures that capture the impact of social entrepreneurship
and reflect the objectives pursued. Clearly, more research and managerial practice
is needed to establish social impact as an essential dimension of performance
measurement.
4 Conclusion
The increase and resulting recognition of social enterprises is a wide process that cuts
across various countries. Despite its significant development, a social enterprise
definition shared by the researchers committed to study this phenomenon does not yet
exist. Nonetheless, this lack of general understanding should not be regarded as a
constraint preventing its further development. What appears clearly is that the upsurge
of social enterprises influences the theoretical framework of enterprise. The general
conception of enterprises as businesses promoting the exclusive interests of their owners
is questioned by the emergence of enterprises supplying general-interest services and
goods in which profit maximisation is no longer an essential condition.
We consider social entrepreneurship to be a particularly exciting and fruitful research
topic and it is our hope that this paper will bring us a step closer towards legitimising
and inspiring social entrepreneurship as a means to create social and economic value and
as a field of research. The working definition articulated in this paper and the proposed
model of social entrepreneurship put forward are intended to facilitate a more detailed
examination of the main components of the concept. We suggested that further empirical
and conceptual work is needed to establish a comprehensive picture of social
entrepreneurship. It is our hope that our examination of the concepts of social
entrepreneurship helps to clarify the distinctive value each approach brings to society and
ultimately leads to better understanding and more informed decision making among those
committed to encouraging and advancing positive social change. It is also our hope that









Social entrepreneurship: an overview of its theoretical evolution 15












the conceptual framework and model of social entrepreneurship we have developed
would help researchers in the field to begin to conduct empirical research on this
important subject.
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