The One and the Many Sides of Social Business: A Critical Reflection

Abstract

The concept of social business has inspired many people world-wide. However, also critical voices have been raised pointing to potential shortcomings of social business models. Especially because the model addresses issues highly relevant to society, it is inevitable to scrutinize its positive effects, but also the challenges involved. In this chapter, we present the four main strengths of social business in fostering positive social change, empowering marginalized groups, producing effective solutions, and defining a new role for business. We then point to four limitations and critically discuss them. Thereby, we elaborate on a set of questions regarding the reach, effects, and sustainability of social business models as well as the degree of participation they achieve. Lastly, we provide an overview of critical management challenges social businesses are facing. We conclude that if social business policies and founders take account of and engage with these challenges, the concept bears considerable potential.

References

  1. Achleitner, A.-K., Spiess-Knafl, W., & Volk, S. (2011). Finanzierung von Social Enterprises – Neue Herausforderungen für die Finanzmärkte. In H. Hackenberg & S. Empter (Eds.), Social Entrepreneurship – Social Business: Für die Gesellschaftunternehmen (pp. 269–286). Wiesbaden: VS Verlag für Sozialwissenschaften.CrossRefGoogle Scholar
  2. Albert, S., & Whetten, D. A. (1985). Organizational identity (Vol. 7). Greenwich: JAI Press.Google Scholar
  3. Alexander, J. A., & Weiner, B. J. (1998). The adoption of the corporate governance model by nonprofit organizations. Nonprofit Management and Leadership, 8(3), 223–242.CrossRefGoogle Scholar
  4. Alvord, S. H., Brown, L. D., & Letts, C. W. (2004). Social entrepreneurship and societal transformation – An explanatory study. The Journal of Applied Behavioral Science, 40(3), 260–282.CrossRefGoogle Scholar
  5. Anheier, H. K. (2005). Nonprofit organizations: Theory, management, policy. New York: Routledge.Google Scholar
  6. 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
  7. Austin, R., Wareham, J., & Busquest, J. (2008). Specialisterne: Sense and details. Harvard Business School Paper: 9-608–109.Google Scholar
  8. Bahree, M. (2010, September 9). Microfinance or loan sharks? Grameen Bank and SKS fight it out. Forbes. Retrieved from http://www.forbes.com/sites/meghabahree/2010/09/21/microfinance-or-loan-sharks-grameen-bank-and-sks-fight-it-out/
  9. 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
  10. Beckmann, M., & Zeyen, A. (2013). Franchising as a strategy for combining small and large group advantages (Logics) in social entrepreneurship: A Hayekian perspective. Nonprofit and Voluntary Sector Quarterly. doi:10.1177/0899764012470758
  11. Berglund, K., & Schwartz, B. (2013). Holding on to the anomaly of social entrepreneurship: Dilemmas in starting up and running a fair-trade enterprise. Journal of Social Entrepreneurship, 4(2), 237–255.CrossRefGoogle Scholar
  12. Beyes, T., & Jäger, U. (2005). Erforschung multidiskursiver Organisationen. NPO-Management aus systemtheoretischer Sicht. Die Betriebswirtschaft, 65(6), 627–645.Google Scholar
  13. Block, S. R., & Rosenberg, S. (2002). Toward an understanding of founder’s syndrome: An assessment of power and privilege among founders of nonprofit organizations. Nonprofit Management and Leadership, 12(4), 353–368.CrossRefGoogle Scholar
  14. Dees, J. G. (1998). The meaning of ‘social entrepreneurship’ Kauffman Center for Entrepreneurial Leadership (pp. 1–6). Palo Alto: Ewing Marion Kauffman Foundation and Miriam and Peter Haas Centennial Professor in Public Service Graduate School of Business, Stanford University.Google Scholar
  15. Defourny, J., & Nyssens, M. (2008). Social enterprise in Europe: Recent trends and developments. Social Enterprise Journal, 4(3), 202–228.CrossRefGoogle Scholar
  16. Defourny, J., & Nyssens, M. (2010). Conceptions of social enterprise and social entrepreneurship in Europe and the United States: Convergences and divergences. Journal of Social Entrepreneurship, 1(1), 32–53.CrossRefGoogle Scholar
  17. Department of Economic and Social Affairs, U.N. (2009, September 15). Child adoption: Trends and policies. Retrieved from http://www.un.org/esa/population/publications/adoption2010/child_adoption.pdf
  18. Dey, P., & Steyaert, C. (2010). The politics of narrating social entrepreneurship. Journal of Enterprising Communities: People and Places in the Global Economy, 4(1), 85–108.Google Scholar
  19. Dey, P., & Steyaert, C. (2012). Social entrepreneurship: Critique and the radical enactment of the social. Social Enterprise Journal, 8(2), 90–107.CrossRefGoogle Scholar
  20. Di Domenico, M., Haugh, H., & Tracey, P. (2010). Social bricolage: Theorizing social value creation in social enterprises. Entrepreneurship: Theory and Practice, 34(4), 681–703.CrossRefGoogle Scholar
  21. Douglas, J. (1983). Why charity? The case for a third sector. London: Sage.Google Scholar
  22. Eikenberry, A. M., & Kluver, J. D. (2004). The marketization of the nonprofit sector: Civil society at risk? Public Administration Review, 64(2), 132–140.CrossRefGoogle Scholar
  23. Gammeltoft-Hansen, T. (2012, April 1). Can privatization kill? The New York Times Opinion pages. Retrieved from http://www.nytimes.com/2012/04/02/opinion/when-it-comes-to-immigration-privatization-can-kill.html
  24. Glynn, M. A. (2000). When cymbals become symbols: Conflict over organizational identity within a symphony orchestra. Organization Science, 11(3), 285–298.CrossRefGoogle Scholar
  25. Goerke, J. (2003). Taking the quantum leap: nonprofits are now in business. An Australian perspective. International Journal of Nonprofit and Voluntary Sector Marketing, 8(4), 317–327.CrossRefGoogle Scholar
  26. Haugh, H. (2007). Community‐led social venture creation. Entrepreneurship: Theory and Practice, 31(2), 161–182.CrossRefGoogle Scholar
  27. Hiltzik, M. (2009, December 10). Why privatizing the University of California won’t work. Los Angeles Times. Retrieved from http://articles.latimes.com/2009/dec/10/business/la-fi-hiltzik10-2009dec10
  28. Independent, T. (2009, May 31). Better, faster… and no office politics: the company with the autistic specialists. The Independent. Retrieved from http://www.independent.co.uk/life-style/health-and-families/features/better-faster-and-no-office-politics-the-company-with-the-autistic-specialists-1693057.html
  29. Kamat, S. (2004). The privatization of public interest: Theorizing NGO discourse in a neoliberal era. Review of International Political Economy, 11(1), 155–176.CrossRefGoogle Scholar
  30. Kerlin, J. A. (2006). Social enterprise in the United States and Europe: Understanding and learning from the differences. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 17(3), 246–262.CrossRefGoogle Scholar
  31. Kerlin, J. A. (2010). A comparative analysis of the global emergence of social enterprise. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 21(2), 162–179.CrossRefGoogle Scholar
  32. Kreutzer, K., & Jäger, U. (2011). Volunteering versus managerialism: Conflict over organizational identity in voluntary associations. Nonprofit and Voluntary Sector Quarterly, 40(4), 634–661.CrossRefGoogle Scholar
  33. Maier, F., & Meyer, M. (2011). Managerialism and beyond: Discourses of civil society organization and their governance implications. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 22(4), 731–756.CrossRefGoogle Scholar
  34. Mair, J., & Marti, I. (2006). Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1), 36–44.CrossRefGoogle Scholar
  35. Maitland, I. (1997). Virtuous markets: “The market as school of the virtues”. Business Ethics Quarterly, 7(1), 17–31.CrossRefGoogle Scholar
  36. Mauksch, S. (2012). Beyond managerial rationality: Exploring social enterprise in Germany. Social Enterprise Journal, 8(2), 156–170.CrossRefGoogle Scholar
  37. Mead, L. M. (1997). The new paternalism: Supervisory approaches to poverty. Washington, DC: Brookings Institution Press.Google Scholar
  38. Milofsky, C. (1988). Community organizations: Studies in resource mobilization and exchange. Oxford: Oxford University Press.Google Scholar
  39. Mintzberg, H. (1996). Managing government, governing management. Harvard Business Review, 74, 75–85.Google Scholar
  40. Mort, G. S., Weerawardena, J., & Carnegie, K. (2003). Social entrepreneurship: Towards conceptualisation. International Journal of Nonprofit and Voluntary Sector Marketing, 8(1), 76–88.CrossRefGoogle Scholar
  41. Nickel, P. M., & Eikenberry, A. M. (2009). A critique of the discourse of marketized philanthropy. American Behavioral Scientist, 52(7), 974–989.CrossRefGoogle Scholar
  42. Paton, R. (2003). Managing and measuring social enterprises. London: Sage.Google Scholar
  43. Peredo, A. M., & McLean, M. (2006). Social entrepreneurship: A critical review of the concept. Journal of World Business, 41(1), 56–65.CrossRefGoogle Scholar
  44. Polgreen, L., & Bajaj, V. (2010, November 17). India microcredit faces collapse from defaults. The New York Times. Asia Pacific, Retrieved from http://www.nytimes.com/2010/11/18/world/asia/18micro.html?pagewanted=all&_r=0
  45. Rapoport, A. (2012, May 21). A plan to privatize a state’s entire male prison system. The American Prospect. Retrieved from http://prospect.org/article/plan-privatize-states-entire-male-prison-system
  46. Riben, M. (1988). Shedding light on… The dark side of adoption. Dayton: Advocate Publications.Google Scholar
  47. Riben, M. (2007). The stork market: America’s multi-billion dollar unregulated adoption industry. Dayton: Advocate Publications.Google Scholar
  48. Saerberg, S. (2007). The dining in the dark phenomenon. Disability Studies Quarterly, 27(3), 60–73.Google Scholar
  49. Schweitzer, L. (2011, July 13). For sale: U.S. infrastructure? Los Angeles Times. Retrieved from http://articles.latimes.com/2011/jul/13/opinion/la-oe-schweitzer-infrastructure-20110713
  50. Sen, A. K. (2009). The idea of justice. New York: Harvard University Press.Google Scholar
  51. Shaw, E., & Carter, S. (2007). Social entrepreneurship: Theoretical antecedents and empirical analysis of entrepreneurial processes and outcomes. Journal of Small Business and Enterprise Development, 14(3), 418–434.CrossRefGoogle Scholar
  52. Thirani, N. (2012, February 27). ‘Yunus was right’, SKS microfinance founder says. The New York Times. Retrieved from http://india.blogs.nytimes.com/2012/02/27/yunus-was-right-sks-microfinance-founder-says/
  53. Thompson, J., Alvy, G., & Lees, A. (2000). Social entrepreneurship – A new look at the people and the potential. Management Decision, 38(5), 328–338.CrossRefGoogle Scholar
  54. Tracey, P., & Jarvis, O. (2006). An enterprising failure – Why a promising social franchise collapsed. Stanford Social Innovation Review, 5, 66–70.Google Scholar
  55. Wood, M. M. (1992). Is governing board behavior cyclical? Nonprofit Management and Leadership, 3(2), 139–163.CrossRefGoogle Scholar
  56. Yunus, M. (2009). Creating a world without poverty: Social business and the future of capitalism. New York: PublicAffairs.Google Scholar
  57. Yunus, M. (2011a, January 14). Sacrificing microcredits for megaprofits. The New York Times. Retrieved from http://www.nytimes.com/2011/01/15/opinion/15yunus.html
  58. Yunus, M. (2011b). Building social business: The new kind of capitalism that serves humanities most pressing needs. New York: PublicAffairs.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.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Department of Strategy, Organization & LeadershipEBS Business SchoolWiesbadenGermany
  2. 2.Institute of AnthropologyLeipzig UniversityLeipzigGermany

Personalised recommendations