Mission, Finance, and Innovation: The Similarities and Differences Between Social Entrepreneurship and Social Business

  • Markus BeckmannEmail author
  • Anica Zeyen
  • Anna Krzeminska


Social business and social entrepreneurship offer an exciting field for empirical and conceptual management research. Yet, while there are many attempts to define either social entrepreneurship or social business, the boundaries and overlaps of both phenomena often remain vague or contested – thus rendering empirical or conceptual learning more difficult. We propose a three-dimensional definitional framework to define social business and social entrepreneurship, distinguish them, and relate them to each other. Our framework interprets the pure forms of both social business and social entrepreneurship as the two-dimensional combination of a pure social mission with either pure financial self-sustainability (social business) or a pure innovation focus (social entrepreneurship). Since the finance and innovation perspective are distinct yet independent dimensions, we derive and illustrate four cases of how social business and social entrepreneurship may but need not overlap. Challenging the assumption that each dimension is confined to two dichotomous values, we then interpret each dimension as a full spectrum and introduce the idea of mission, finance, and innovation hybridity. Our discussion suggests that multidimensional hybridity is the empirical rule rather than the exception. It is for this reason that the study of the pure forms of social business and social entrepreneurship promises particularly fruitful insights for management research. We conclude with implications for future management research.


Ethical Theory Ideal Type Social Entrepreneurship Capability Approach Social Entrepreneur 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Alsop, R. (2007, January 31). How boss’s deeds buff a firm’s reputation. Wall Street Journal. pp. B1.Google Scholar
  2. Alvord, S. H., Brown, L. D., & Lerts, C. W. (2003). Social entrepreneurship and social transformation: An exploratory study. The Journal of Applied Behavioural Studies, 40(3), 260–282.CrossRefGoogle Scholar
  3. Austin, J., Stevenson, H., & Wei-skillern, J. (2006). Social and commercial entrepreneurship: Same, different, or both? Entrepreneurship: Theory and Practice, 30(1), 1.22.CrossRefGoogle Scholar
  4. Battilana, J., & Dorado, S. (2010). Building sustainable hybrid organizations: The case of commercial microfinance organizations. Academy of Management Journal, 53(6), 1419–1440.CrossRefGoogle Scholar
  5. Battilana, B. J., Lee, M., Walker, J., & Dorsey, C. (2012). In search of the hybrid ideal. Stanford Social Innovation Review, Stanford (summer), 49–55.Google Scholar
  6. Baumol, W. J. (1990). Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98(5), 893–921.CrossRefGoogle Scholar
  7. Baumol, W. J. (2010). The microtheory of innovative entrepreneurship. Princeton: Princeton University Press.Google Scholar
  8. Bentham, J. (2009). An introduction to the principles of morals and legislation (Dover Philosophical Classics). Mineola: Dover Publications.Google Scholar
  9. Casson, M. (1982). The entrepreneur: An economic theory (pp. 1–418). Oxford: Robertson.Google Scholar
  10. Christensen, C. M. (1997). The innovator’s dilemma: When new technologies cause great firms to fail. Cambridge, MA: Harvard Business Review Press.Google Scholar
  11. Dacin, T. A., Dacin, P., & Matear, M. (2010). Social entrepreneurship: Why we don’t need a new theory and how we move forward from here. Academy of Management Perspectives, 24(3), 36–56.CrossRefGoogle Scholar
  12. Dees, J. G. (2001). Enterprising nonprofits. Harvard Business Review, 76, 55–67. Wiley.Google Scholar
  13. Dees, J. G., & Anderson, B. B. (2006). Framing a theory of social entrepreneurship: Building on two schools of practice and thought. In D. Williamson (Ed.), Research on social entrepreneurship: Understanding (vol. 3, pp. 39–66). Indianapolis: ARNOVA. Retrieved from
  14. Defourney, J., & Nyssens, M. (2010). Conceptions of social enterprise and social entrepreneurship in Europe and the United States: Convergence and divergence. Journal of Social Entrepreneurship, 1(1), 32–53.CrossRefGoogle Scholar
  15. Drucker, P. F. (2006). Innovation and entrepreneurship. Practice and principles. New York: Harper Business.Google Scholar
  16. Eckhardt, J. T., & Shane, S. A. (2003). Opportunities and entrepreneurship. Journal of Management, 29(3), 333–349. doi: 10.1177/014920630302900304.CrossRefGoogle Scholar
  17. Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business (p. 417). Chichester: Capstone.Google Scholar
  18. Freeman, E. (1984). Stakeholder management. A strategic approach. Marshfield: Pitman Publishing.Google Scholar
  19. GEM. (2011). Global entrepreneurship monitor report. Retrieved from
  20. Henderson, R. M., & Clark, K. B. (1990). Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35(1), 9–30.CrossRefGoogle Scholar
  21. Hockerts, K. (2006). CafeDirect: Fair trade as social entrepreneurship. In F. Perrini (Ed.), What awaits social entrepreneurial ventures? (pp. 192–209). Cheltenham: Edward Elgar.Google Scholar
  22. Hoffman, A. J., Badiane, K. K., & Haigh, N. (2012). Hybrid organizations as agents of positive social change: Bridging the for-profit & non-profit divide. In K. Golden-Biddle & J. Dutton (Eds.), Exploring positive social change and organizations: Building and theoretical and research foundation (pp. 131–153). New York: Routledge/Taylor and Francis Group.Google Scholar
  23. Kreutzer, K., & Jager, U. (2011). Volunteering versus managerialism: Conflict over organizational identity in voluntary associations. Nonprofit and Voluntary Sector Quarterly, 40(4), 634–661. doi: 10.1177/0899764010369386.CrossRefGoogle Scholar
  24. Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135–172.Google Scholar
  25. Mackey, J. (2006). Winning the battle for freedom and prosperity. Liberty, 20(6), 1–13.Google Scholar
  26. Mair, J. (2006). Introduction to Part II: Exploring the intentions and opportunities behind social entrepreneurship. In J. Mair, J. Robinson, & K. Hockerts (Eds.), Social entrepreneurship (pp. 89–95). New York: Palgrave Macmillan.CrossRefGoogle Scholar
  27. Mair, J., & Martí, I. (2006). Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41, 36–44.CrossRefGoogle Scholar
  28. Martin, B. R. L., & Osberg, S. (2007). Social entrepreneurship: The case for definition. Stanford Social Innovation Review, Spring, 29–39.Google Scholar
  29. Mill, J. S. (1998). In R. Crisp (Ed.), Utilitarianism. Oxford: Oxford University Press.Google Scholar
  30. Millar, R. (2012). Social enterprise in health organisation and management: Hybridity or homogeneity? Journal of Health Organization and Management, 26(2), 143–148. doi: 10.1108/14777261211230817.Google Scholar
  31. Mintrom, M. (2000). Policy entrepreneurs and school choice. Washington, DC: Georgetown University Press.Google Scholar
  32. Moss, T. W., Short, J. C., Payne, G. T., & Lumpkin, G. T. (2010). Dual identities in social ventures: An exploratory study. Entrepreneurship: Theory and Practice, 35(4), 805–930.CrossRefGoogle Scholar
  33. Murphy, P. J., & Coombes, S. M. (2008). A model of social entrepreneurial discovery. Journal of Business Ethics, 87(3), 325–336. doi: 10.1007/s10551-008-9921-y.CrossRefGoogle Scholar
  34. Pache, A.-C., & Santos, F. (2010). Inside the hybrid organization: An organizational level view of responses to conflicting institutional demands. Fontainebleau: INSEAD.Google Scholar
  35. Popper, K. (1944). The poverty of historicism, I. Economica, 11(42), 86–103.CrossRefGoogle Scholar
  36. Porter, M. E., & Kramer, M. (2011, January–February). Creating shared value. Harvard Business Review. pp. 62–77.Google Scholar
  37. Rangan, V. K., & Thulasiraj, R. D. (2007). Making sight affordable (Innovations case narrative: The Aravind Eye Care System). Innovations: Technology, Governance, Globalization, 2(4), 35–49. doi: 10.1162/itgg.2007.2.4.35.CrossRefGoogle Scholar
  38. Rawls, J. (1993). Political liberalism. New York: Columbia University Press.Google Scholar
  39. Salam, A. (2005). Unification of fundamental forces. Cambridge: Cambridge University Press.Google Scholar
  40. Sattar, Z. (2012). Social business: Capitalism with a human face. Social Business, 2(1), 39–47.CrossRefGoogle Scholar
  41. Schumpeter, J. (1911). Theorie der wirtschaftlichen Entwicklung. Berlin: Duncker und Humblot.Google Scholar
  42. Schumpeter, J. (1934). The theory of economic development. Cambridge, MA: Harvard University Press.Google Scholar
  43. Schumpeter, J. (1942). Capitalism, socialism, democracy. New York/London: Harper Business.Google Scholar
  44. Sen, A. (1999). Development as freedom. Oxford: Oxford University Press.Google Scholar
  45. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226.Google Scholar
  46. Smith, W. K., Besharow, M. I., Wessels, A. K., & Chertok, M. (2012). Paradoxical leadership model for social entrepreneurs: Challenges, leadership skills, and pedagogical tools for managing social and commercial demands. Academy of Management Learning and Education, 11(3), 463–478.CrossRefGoogle Scholar
  47. Stehr, N., Henning, C., & Weiler, B. (2006). The moralization of the markets. New Brunswick: Transaction Publishers.Google Scholar
  48. Suchmann, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Journal, 20, 571–610.Google Scholar
  49. Tan, W.-L., Williams, J., & Tan, T.-M. (2005). Defining the “social” in “social entrepreneurship”. Altruism and Entrepreneurship, 1, 353–365.Google Scholar
  50. Thornton, P., & Ocasio, W. (2008). Institutional logic. In R. Greenwood, C. Olivier, K. Sahlin, & R. Suddaby (Eds.), The Sage handbook of organizational institutionalism (pp. 99–129). London: Sage.CrossRefGoogle Scholar
  51. Volery, T., & Hackl, V. (2010). The promise of social franchising as a model to achieve social goals. In A. Fayolle & H. Matlay (Eds.), Handbook of research on social entrepreneurship (pp. 155–179). Cheltenham: Edward Elgar.Google Scholar
  52. Weerawardena, A. J., & Mort, G. S. (2006). Investigating social entrepreneurship: A multidimensional model. Journal of World Business, 41, 21–35.CrossRefGoogle Scholar
  53. Weisbrod, B. (1977). Toward a theory of the voluntary non-profit sector in a three-sector economy. In B. Weisbrod (Ed.), The voluntary nonprofit sector (pp. 51–76). Lexington: DC Heath.Google Scholar
  54. Wilson, F., & Post, J. E. (2011). Business models for people, planet (& profits): Exploring the phenomena of social business, a market-based approach to social value creation. Small Business Economics. doi: 10.1007/s11187-011-9401-0.Google Scholar
  55. Yujuico, E. (2008). Connecting the dots in social entrepreneurship through the capabilities approach. Socio-Economic Review, 6(3), 493–513. doi: 10.1093/ser/mwn003.CrossRefGoogle Scholar
  56. Yunus, M. (2003). Banker to the poor: Micro-lending and the battle against world poverty. New York: Public Affairs.Google Scholar
  57. Yunus, M. (2007). Creating a world without poverty. How social business can transform our lives: Social business and the future of capitalism. New York: Public Affairs.Google Scholar
  58. Yunus, M., & Weber, K. (2010). Building social business. The new kind of capitalism that serves humanity’s most pressing needs. New York: Public Affairs.Google Scholar
  59. Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. (2009). A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of Business Venturing, 24(5), 519–532. doi: 10.1016/j.jbusvent.2008.04.007.CrossRefGoogle Scholar
  60. Ziegler, R. (2010). Innovations in doing and being: Capability innovations at the intersection of Schumpeterian political economy and human development. Journal of Social Entrepreneurship, 1(2), 255–272.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.University of Erlangen-Nuremberg, School of Business and EconomicsNurembergGermany
  2. 2.UQ Business SchoolThe University of QueenslandBrisbaneAustralia

Personalised recommendations