Social Entrepreneurship Flashcards
What is an entreprenuer and what are the three classes?
Def; A person who takes non-isunrable risk
THREE classes:
1) German; Schumpeter –> innovation
2) Chicago; Uncertainty
3) Austrian; Opportunities
What FOUR competences does an entrepreneur need?
1) Innovation
2) Brokering (create access to info and relation)
3) Championing (mobilize enthusiasm)
4) Sposoring (mobilize financial resources for support)
What are the drivers of SE?
- Crisis of the traditional welfare state
- Raising competitive pressure on non-profit
- Raising competitive pressure on profit sector, to find new sources of competitiveness
What is the difference between the narrow and the extended view on SE?
Narrow:
- SE concept as the most recent innovation in the nonprofit sector
- A way to improve nonprofits’ operational efficiency
Extended:
- SE as a NEW, INDEPENDENT and cross-boundary field of inquiry
- The ability to actively contribute to social change with creativeness, innovation and economic sustainability
Definition of SE
Social Entrepreneurship is an innovation process targeting social disequilibria through balancing conventional business logics with an attitude to serve community as typically happens in the nonprofit sector
List the 5 key featurs of SE
1) Value-driven and human-centered
2) Professionalism
3) Innovative
4) Sustainability
5) Scalability
What similarities and dissimilarities exist between SE and traditional entrepreneurship?
Similarities:
- Tension towards innovation
- Change-friendly mindset
- Problem-solving orientation
Differences of the SE
- Diverging long-run objectives
- Priority on social value creation
- Openness to third-part scalability
What similarities and dissimilarities exist between SE and NON-profits?
Similarities:
- Community stewardship
- Participatory decision making models
- Stakeholder engagement
Differences of the SE
- Priority on PLANNING
- Focus on being efficient
- Balance between economic success and social aims
What has prevented the development of a common school of though on entrepreneurship?
- Overemphasis on who entrepreneurs ARE rather than on what they DO
Describe the 5 steps in the entrepreneurial process:
1) Identification
2) Evaluation
3) Formalization
4) Exploitation
5) Scaling-up –> then back to 1)
In the context of the entrepreneurial process, describe the identification phase
- Identify an unfilled social problem and match it with a SOLUTION, which is an initiative breaking up pre-existing plans
In the context of the entrepreneurial process, describe the evaluation phase
Two areas to evaluate if the idea identified is good:
1) Social value potential based on; Prevalence, relevance, radicalness, urgency and alternatives
2) Economic viability
In the context of the entrepreneurial process, describe the formalization phase
Translation of the idea into a unique value proposition
1) Develop a mission statement to enhance legitimacy and attractiveness
2) Make commitments
In the context of the entrepreneurial process, describe the exploitation phase
This is the execution of the opportunity.
Done by:
- Acquiring and organizing resources and competences
- Setting up an operating model
- Setting up an organizational model that fit legal arrangements
In the context of the entrepreneurial process, describe the scaling-up phase
- Scaling to maximize social value
Three levels of scaling:
1) Programs (package of procedures and routines)
2) Organizations (autonomous legal entities)
3) Principles (Guidelines and value systems)
How can we define a social innovation?
Innovation –> effective execution and diffusion of an idea
Innovation has to hold:
1) Novelty (not original)
2) Improvement (radical versus incremental)
3) Sustainability (triple bottom line)
How does Phills et al. (2008) define a social innovation?
A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals
What are the FOUR types of social innovation?
1) New products or services
2) New process for production or delivery of existing good
3) Delivery of existing goods to underserved markets
4) New organizational or industrial structure
Where does social entrepreneurship come from/what prompts are needed?
It comes from COMPASSION, which is made up of:
1) Traits (vision, creativity)
2) Background (grow up where?)
3) Behavior (Courage to criticism, failure approach)
What are the 7 traits and skills an entrepreneur needs?
#1 Multiple stakeholder management #2 Attitude to educate #3 Social impact quantification #4 Co-creation of products and services #5 Social problem-solving #6 Search for sustainability #7 Social value over financial results
What role does networks play in the context of innovation?
Brokers of networks often obtain information before everyone else, thus if you can situate yourself between two networks, you are in a highly innovation-prone position
What are the 6 factors that foster entrepreneurial creativity?
- Associate ideas (connect information)
- Networks
- Have a “watchful” eye
- Challenge the “status quo”
- Experiment and test (failure is not dangerous)
- Learn from failures
Two types of innovation from within?
1) innovation from the lab
2) grass-root innovation (bottom up)
Four types of innovation from outside?
- Deconstruction –> copy
- Outsourced innovation
- Open innovation
- Design thinking
What defines design thinking as an innovation type?
HUMAN CENTERED –> based on observations of users and how they experience the solution
Definition: Design thinking is a human-centered approach to innovation that draws from the designers’ toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success
What are the five processes in design thinking?
Circular:
1) Define (challenge and goal definition)
2) Gain empathy (observe customers)
- tools: direct observ., personas, scenarios
3) Ideate (quantity > quality)
- diverge and then converge –> be crazy
4) Prototype (get visuable and tangible)
5) Test (observe client reactions)
–> back to 1)
Why is planning important in SE?
- Growing complexity and dynanism of current competitive dynamics
- Resource scarcity and uncertainty prevails
- Planning is critical to systematically formalize the entrepreneurial idea
- Identify sources and resources while recognizing and anticipating organizational challenges
Is planning enough? and what are the main reasons why?
NO! not enough, planning fails because of lack of:
- Lack of planning skills
- Financial market (liability of small- and newness)
- Cultural capital (info. assym. and cultural distance)
- Market (cycle, lack of awareness)
- Symbolic capital (legitimacy, reputation)
- Institutional context (regulation)
- Entrepreneurial team (conflicts, heroes syndrom)
What can be used as a useful tool for a pre-feasibility asessment?
Theory of Change (ToC)
What is ToC and what are its components?
ToC = a business plan in a nutshell:
First, One sharp sentence describing how change will happen in a given context
Second, FOUR components:
- Problem/challenge
- Solution
- Approach/activities
- Impact
AND ASSUMPTIONS
What is the important outcome of the pre-feasibility assessment, which could be ToC?
Situating an entry;
- Replication of existing model
- First-mover
- Public sector as main client
- Social franchising
- Buying an existing business
- Transforming (existing initiative into SEV)
What is an important extension of the feasibility assessment (a tool), that helps firms formalize their plan?
The Social Business Model Canvas,
Remember that in SE we have stakeholder value > shareholder value
Helps you understand:
- Value proposition
- Value creation and delivery (key activities and resources)
- Value capture (cost and revenue)
- Value network (customers, suppliers)
How do we define a traditional business model versus and social business model?
Traditional: articulates how a startup (or company) will turn resources and capabilities into economic value
Social: adopts an organizational-level and system-level
perspective, builds on the triple-bottom line approach to define purpose and measure performance, while includes a wider range of stakeholders
What are the 9 components of the Social Business Model Canvas?
1) Customer segments
2) Value proposition
3) Customer relationships
4) Distribution channels
5) Revenue streams
6) Key activities
7) Key resources
8) Partners
9) Cost structure
What is important to consider in the SBM regarding customer segments?
- Beneficiaries not necessary = customers
- Different groups of beneficiaries (organizations, people, institutions)
- Social needs are latent and complex, beneficiaries rarely know they need it
- Willingness to pay may not exist
What is important to consider in the SBM regarding value proposition?
it is a Bundle of products and services (and related benefits) that create value for a specific customer segment
In relation to the SBM, what different types of customer relationships exist?
Relationships differ between various customer segments!
- Personal assistance
- Dedicated personal assistance
- Self-service
- Automated services
- Communities
- Co-creation
What is important to consider in the SBM regarding revenues?
- Economic viability: price > cost
- Volume: set price to maximize social benefit
- Competition: Define pricing on what competitors are doing
In the SBM, what is meant by social value?
Social value creation refers to the ability of an institution, organization or individual to produce a tangible, durable change as a result of a certain action in a given field of intervention
What is important to consider in the SBM regarding resources?
What resources are the most important to the organization:
- Structural capital
- Intellectual capital
- Human capital
- Financial capital
- Symbolic capital
What is important to consider in the SBM regarding partners?
- Legitimacy versus liability of strangers
- Search for complementary assets to be exploited through partnerships
- Search for coherent partners (missions, managerial styles, workforce composition, target market, offering, culture, timing and evaluation styles)
- Cross sector boundaries!
What is important to consider in the SBM regarding costs?
- Fixed versus variable structure
- potential negative externalities; unintended consequences for the beneficiaries
What are the lessons learned from building the Grameen business model, which has been formalized into a social business model?
Three are similar to those of conventional business model innovation
- Challenging conventional thinking
- Finding complementary partners
- Undertaking continuous experimentation
Two are specific to social business models:
- Recruiting/favoring social-profit-oriented shareholders
- Specifying social profit objectives clearly and early
(6. Remember to involve key stakeholders along the process of defining the business model)
