Social change models based on altruism have proven inadequate to fully address the complete range of basic but unmet societal needs. In recent times, organizations have begun experimenting with profit-generating business models to produce sustained social change; such “hybrid” organizations possess a double bottom line, the goals of generating social and economic value. These organizations range from those which focus largely on economic value creation to others which focus primarily on social value creation; somewhere in the middle there is a more balanced blend of the two. A unique aspect of double-bottom-line organizations (also called social ventures) has to do with their ambidextrous orientation: the imperatives of both social change and marketplace competition are operative.
The canvas for social venture research is broad and, for the most part, wide open: little is known through empirical research as to how social ventures come into being and succeed at meeting not only startup challenges but also those resulting from the organization’s dual goals. In addition, research is needed to clarify if and how startup social ventures differ from conventional nonprofit and business venture startups. With significant differences in the motivation to create social and business value in order to yield empirically validated results, this research is restricted to just a subset of social ventures, those which are entrepreneurial. This choice is driven by the fact that even in an economic downturn entrepreneurship has the potential to address intractable social issues.
A mixed-method research design is built around three interrelated studies which collectively tell us (1) “the What?” (the actions of social entrepreneurs), (2) “the How?” (approaches employed), and, finally, (3) the impact of both the actions and approaches on nascent stage performance, i.e. perceived social and economic value created. The first study, which focuses on 23 startup social ventures, is qualitative and informed primarily by startup behaviors, nonprofit and entrepreneurial strategy literatures and organizational ecology studies, among others. The emergent findings from this study identify three developmental stages, those of a) social-business concept development, b) product / service innovation and c) operating the social-business, as well as stage-specific actions and entrepreneurial approaches employed across all stages.
Two conceptual models of entrepreneurial actions (the What) and approaches (the How) are designed to predict nascent social venture performance. The models are sequentially designed wherein results of the first model influence the second conceptualization and are tested through Studies Two and Three. The model in Study Two is based on emergent findings from the qualitative research. Data from a survey of 196 social entrepreneurs confirmed that entrepreneurial proactivity results in superior perceived performance; however, the effects of experimentation and alertness-to-environment were puzzling. Results from Studies One and Two drove an alternate conceptualization explored in Study Three wherein (a) design theory-driven coding of qualitative data from 23 startup social ventures led to the conceptual model and (b) the survey-based data from 196 social entrepreneurs were used to test the conceptual model. The analysis strongly supported the design-theory based model, suggesting that the three entrepreneurial approaches of experimentation, making connections, and problem-solving are, indeed, central to successfully designing social venture products and processes. In addition, the number of activities engaged in from a stage-specific list determines nascent stage performance.
Taken together, the three studies serve to triangulate around the notion that successful ventures are designed by (a) focusing on stage-specific products and processes during development, then (b) continually shaping venture products / processes via behaviors which generate feedback and new knowledge, as well as continuously evaluating development so as to minimize potential losses. This dissertation contributes to an empirically-based understanding of the process of social entrepreneurship, providing tentative constructs to measure entrepreneurial actions, approaches and perceived venture performance.
The dissertation provides practical guidance to social entrepreneurs and investors, policy makers, and educators. Its findings indicate that, subsequent to their decision to engage in social change ventures, founders must personally engage in its creation. Founders can balance the tension between achieving social and economic outcomes by designing venture artifacts specific to the development at a particular stage. Designing involves -- engaging constituencies to facilitate diverse views, openness to feedback (even to the extent of embracing radically different solutions than those previously envisioned), reframing the problem to overcome constraints, storytelling and persuasion to invite support, and making creative connections. Regional and national support structures must be instituted to guide the unique requirements of social ventures. This includes guidance on staged development, design approach, and expansion of networks for social and economic outcomes. Finally, educators may complement current business planning approaches to create real-world or simulated settings for students to practice design skills necessary for social innovation and new venture creation.