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Motivational Model of Social Entrepreneurship: Exploring the Shaping of Engagement of Social Entrepreneur

  • Balram BhushanEmail author
Conference paper
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Part of the Springer Proceedings in Business and Economics book series (SPBE)

Abstract

Value creation and capture connect the economy and society. Examining the relationship between them, this paper identified three types of social entrepreneurs. Further, I identified exemplar belonging to each type and analysed their motivational aspects. Here, Stimulus → Organism → Response (SOR) framework was used to develop a motivational model of social entrepreneurship. The findings elaborated that family and society are the two main sources of motivation. Both of them contribute differently and synergistically and facilitate the integration of ‘social’ and ‘entrepreneurial’ part of social entrepreneurship at the level of the organism and hence challenging the much-discussed integration of these two at the outcome level. Initially, negative emotion brought them in the process, but positive emotions kept them engaged. This transition of negative emotion to positive emotion created a self-perpetuating cycle of action–emotion sequence. Continued stimuli from society and family strengthen the process which resulted in expansion of ways of value creation.

Keywords

Social entrepreneurship Engagement Value creation Emotion Society 

7.1 Introduction

Social entrepreneurship is a unique opportunity to serve social needs by following entrepreneurial mechanism (Peredo and McLean 2006). The field is in the pre-paradigmatic stage and lacking dominant theory (Nicholls 2010). Yet, theory development is a debatable topic here, for example, Chell (2007) supports the need for theory development but Dacin et al. (2010) do not see any such need. Looking at the tautological nature of construct as a major challenge for theory building, Santos (2012) proposed ‘positive theory of social entrepreneurship’ by considering trade-off nature of ‘value creation’ and ‘value capture’. But, between this trade-off does not capture all possibilities (Austin et al. 2006; Marshall 2011). It means this positive theory has narrower applicability (Agafonow 2014). In this line, no attempt is made to explore the mechanism through which different relationships between value creation and value capture serve social entrepreneurship.

Second challenging question is what motivates people to participate in the process of social entrepreneurship (Austin et al. 2006; Zahra et al. 2009). Integration of social work and psychology can help to understand the motivation of social entrepreneur (Mair and Martı´ 2006). For example, Miller et al. (2012) identified compassion as a prosocial motivation for social entrepreneurs. Critiquing their work, Arend (2013) asked future researchers to focus on affective exploratory variables and factors driving those emotions. Furthermore, Guclu, Dees, and Anderson (2002) emphasized on the interaction between person and society. But, there is no study which explains what happens within the person (at affective and cognitive level) due to this interaction of person and the outside world and how they respond to those changes and keep themselves engaged in the process of social entrepreneurship. Accordingly, I pose three research questions: what are the different possible relationship between value creation and value capture in the context of social entrepreneurship, what are the motivating factors for participating in social entrepreneurship process and finally, what keeps people engaged in the process of social entrepreneurship?

To answer the first research question, I examined the literature and identified three types of social entrepreneurship process based on different relationship between value capture and value creation. Further, it identified exemplars of each category and through empirical evidences developed a motivational model of social entrepreneurship on the basis of Stimulus → Organization → Response model to answer second and third research questions.

7.2 Value Creation Versus Value Capture and Social Action

Santos (2012) attempted to remove the ‘social’ adjective and concluded that social entrepreneurship is a process of maximizing value creation and satisfying value capture. But, this dichotomous differentiation is applicable to ‘social enterprise’ only (Agafonow 2014). As social entrepreneurship occurs across the for-profit, not-for-profit and hybrid organizations (Dees and Anderson 2003; Weerawardena and Mort 2006); hence, value creation and value capture may have complex associations. Apart from that, commercial entrepreneurship also creates value (Mizik and Jacobson 2003). But, the difference lies at the level of prioritising one over the other. In case of social entrepreneurship, value creation is ultimate objective and hence gets priority over value capture, but in case of commercial entrepreneurship, value is created for the purpose of value capture (Seelos and Mair 2005).

As social action of social entrepreneurs connecting value creation (measured at societal level) and value capture (measured at organizational level), hence it cannot be explained by separating economy and society. Based on Weber’s (1978) work on ‘Economy and Society’, Kalberg (1980) discussed four types of rationality (practical rationality, theoretical rationality, substantive rationality and formal rationality) of such actions. Out of these, organizational theorists are familiar with formal rationality which is related to ‘instrumentally rational’ social action and substantive rationality which is related to ‘value rational’ social action as conceptualized by Weber (Townley 2002). Formal rationality is based on calculations on how to achieve particular ends, whereas substantive rationality helps in selectively picking worth pursuing ends (Parkan 2008). In other words, formal rationality is related to quality and criteria of decision-making to achieve a particular end and substantive rationality is related to selecting those ends. It means efficiency is related to the formal rationality, but emotionality is related to substantive rationality (Barbalet 2009). Substantive rationality helps economic actors to overcome the insufficiency and problematic aspects of decision-making (Berger 2008). Thus in views of Weber, substantive rationality is an analytical tool conveying that economic activities are meant to achieve ultimate ends with social intent. Weber also realized inherently complex relationship between formal and substantive rationality and concluded that these are inseparable (Glynn and Lounsbury 2005). Yet, these are capturing two different dimensions of social action. Often, they are antagonistic to each other, but finding synergy is not quite rare. When they are antagonising each other, then it is the social actor who takes a final disposition either in favour of calculability or in favour of values (Stinchcombe 1986). But, in case of synergy this calculability facilitates the actor towards the meaningful end (Eisen 1978).

In an organization, formal rationality is reflected through its mechanisms ensuring revenue from the organizational activity. This is what this paper conceptualizes as value capture activity. Similarly, organization-associated values in terms of their contribution to the advancement of society and the same are called here value creation. This value creation activity is related to substantive rationality.

Clearly, value creation by social entrepreneur needs explanation based on substantive rationality, and value capture can be explained by formal rationality. Based on the above discussions, there are three possible relationships between value creation and value capture if we examine them through the lens of formal and substantive rationality. Accordingly, this paper identifies three types of social entrepreneurs as per three relations between value capture and value creation.

Calculativist: these people display a high level of value capture and optimize at the value creation front. Although their primary objective is value creation, their calculated approaches ensure self-sufficiency. They maintain a synergistic relationship between value capture and value creation and never take a path where there is a possibility of trade-off between them. They articulate value-laden financial calculations to defend their social entrepreneurial action. Here, the relationship between value capture and value creation is synergistic. Founders of earned income-based social entrepreneurship organization are a typical representative of this category.

Consciousnist: these people display a strong connection and concern for the target population. Their purpose is not to achieve success and particularly not in terms of financial gains at all but to serve and empower the targeted population. Hence, they select an antagonistic relationship between value creation and value capture in favour of value creation to benefit society. Here, there is a trade-off between value capture and value creation. The preference over one or the other is dependent on the value judgement of the actor. If a social entrepreneur is practising interventions based on voluntary contribution, then he belongs to this category.

Optimist: they are able to make their value-driven work visible to the upper and middle class in such a way that they also provide voluntary support to them. At the same time, they also enable the target population to contribute to the process of value creation. They are an optimist because they design their value capture and value creation activity in a sequential manner with the ultimate goal of value creation and value capturing ensures their financial stability. In other words, value capture acts as a means of value creation. Here, value creation and value capture are separate (temporally or spatially) and sequentially related activities. In case of temporal separation, the organization first captures the substantial value and then uses it for the purpose of value creation. In case of spatial separation, the organization operates at two geographically distinct places and captured value at one place (or time) is used to create value at other. Founders of hybrid social entrepreneurship organization fall under this category.

Explanation of action of social entrepreneur-based value creation and value capture connects an individual’s action with its own environment. Motivated by the work of Lockett et al. (2014), Stimulus → Organism → Response model is introduced next to elaborate upon this connection and also to answer the remaining two research questions.

7.3 Stimulus → Organism → Response Model

Stimulus → Organism → Response attributes environment as a source of stimulus which triggers cognitive processes in the individual (Shaver and Scott 1991). Under the influence of the stimulus, the social entrepreneur takes action (Scaturo 2001) to serve the needs of the targeted population. The perspective of SOR provides an opportunity for theoretical development by linking cause and effect relationship. The same can also be achieved through qualitative methods while ensuring theoretical saturation (Partington 2000).

7.3.1 Stimulus

Social entrepreneurship is regarded as an entity belonging to the third sector (Perrini and Vurro 2006) and emerged due to distrust in NGOs, the apathy of business world and impotence of government which are supposed to serve the needs of people (Robinson 2006). Meeting basic needs is largely the responsibility of welfare state, but such systems are either unable or not willing to serve these needs of the people (Thompson et al. 2000). The condition of the targeted population, its cause, the role of government and others are not under the control of social entrepreneur and are a strong source of the stimulus (Austin et al. 2006).

7.3.2 Organism

Dees (1998) called social entrepreneurs as ‘rare breed’ and this is consistent with the logic of the SOR model which explores why few people are affected by the stimulus but others are not. At the level of the individual, emotion (Miller et al. 2012), affects (Arend 2013) and cognitive lenses (Dacin et al. 2011) are important for theoretical development.

7.3.3 Response

The purpose of this paper is to investigate the motivation of social entrepreneurs to engage themselves in the process of social entrepreneurship. Hence, long-term engagement is the ultimate response of the social entrepreneurs for this research, and empirical investigation is conducted to explore the mechanism through which social entrepreneurs achieve this engagement.

7.4 Method and Empirical Setting

This paper attempts to answer ‘how’ questions, and hence, qualitative research design was selected. As questions are context-specific (process of social entrepreneurship), hence case-study approach was found suitable for this research. Furthermore, multiple case studies were conducted to ensure a robust foundation of theory building (Yin 2003). This also facilitated a higher level of accuracy and generalizable explanations than single-case study (Eisenhardt and Graebner 2007). Furthermore, the grounded theory method of coding was practised to analyse the data.

7.4.1 Identifying the Cases

As there is no well-developed theory which can help to identify social entrepreneurs, hence I have generated a list of social entrepreneurs recognized by five prominent institutions in the field. These organizations are Ashoka, Santa Clara University, Skoll Foundation, Schwab Foundation and Echoing Green. This list was subjected to the following criteria:
  1. a.

    For capturing multi-dimensionality of social entrepreneurship—the focal actor must be recognized by more than one organization.

     
  2. b.

    In order to avoid mission drift—the person must be the founder of the venture and continuing in the same for more than 15 years.

     
  3. c.

    The interventions practised by different persons of the sample must be significantly different.

     
  4. d.

    The list generated after following above three processes must include founders following earned income, hybrid model and voluntary contribution-based interventions and hence capturing calculatives, consciousnist and optimist, respectively.

     

This resulted in 19 social entrepreneurs recognized by more than one institution and are actively engaged in the process of social entrepreneurship for more than 15 years. Then, I categorized all them into calculatives, optimists and consciousnists based on the nature of their intervention (earned income, hybrid model and voluntary contribution based). I have not followed the legal classification of for-profit or non-profit as a social entrepreneur might be following earned income strategy (hence calculative) but registers its organization as non-profit (a consciousnist).

7.4.2 Data Collection

In order to minimize the influence of the researcher, the data was collected from secondary sources through Internet searches. These include website information, archival information, YouTube videos, interviews at independent fora and newspaper reports. Search word includes the name of the founders and name of the organizations. Further, in order to eliminate interpretation of any third party, only quoted information was taken from written documents. Statements were carefully selected to avoid misrepresentation due to contextual variation. In this direction, special care was taken to remove all these circumstances where leading questions were asked. Data collected through multiple sources was used for data triangulation.

7.5 Data Analysis and Findings

7.5.1 First-Order Within-Case Analysis

The data analysis has three steps. First and second steps were related to within-case analysis and third step was related to cross-case analysis. In the first step, I have identified relevant constructs related to stimulus, organism and response. During this, I classified entire data into stimulus, organism and response. Information related to those aspects which were not under control of the social entrepreneurs was classified as stimulus. Affective and cognitive processes of social entrepreneurs were categorized under organism and their actions were categorized under response. Following Strauss and Corbin (1990), every single piece of data was given minute attention. This helped me to develop a list of first-order codes (see Tables 7.1, 7.2 and 7.3) belonging to different aggregate theoretical categories (stimulus, organism and response).
Table 7.1

Anshu Gupta: (The consciousnist)

First-order codes

Reference

Theoretical categories

Aggregate theoretical dimension

I survived and someone else died (during winter) on the road, and it is a lack of clothing. It is highly preventable death

https://www.youtube.com/watch?v=J67Xxlo-TPk

Social justice violation

Stimulus

We have just ignored such disaster; the fire all across the country in the slums; the flood in eastern and north-eastern part of the country; which is literally become the ritual

https://www.youtube.com/watch?v=J67Xxlo-TPk

Non-responsiveness

Meenakshi my wife, a support I can’t explain and a friend Ajay, my parents too, who trusted me, made suggestions but never opposed … not a typical parental act

http://gunjanarora.blogspot.in/2006/11/initiative.html

Self-positioning

I to myself recognize biggest product of subsidy … Every single person who have even studied in a private school is the biggest product of subsidy of the country

https://www.youtube.com/embed/C05CX-Xsy_k?autoplay=1

Welfare state policy

Let me give you an example- A Dalit person somehow gets a chance to study and he becomes a scientist. He goes back to his village as a part of the national literacy mission

http://gunjanarora.blogspot.in/2006/11/initiative.html

Idealization

Once you see the impact of your work, you feel good; you enjoy

http://www.firstpost.com/india/as-you-pursue-your-goals-obstacles-become-irrelevant-magsaysay-awardee-anshu-gupta-on-running-goonj-2371100.html

Emotion

Organism

I am doing out of guilt (personal interaction)

My source of inspiration is my anger

https://www.youtube.com/watch?v=O0XdtA3HjMM

My professional journey began as a copywriter in an ad agency, followed by a stint in a public sector enterprise and finally, as a corporate communication manager. But in 1998, I left and formed Goonj—a voluntary organization, with a mission to address the most basic, but ignored need of clothing and the multifaceted role it plays in villages across India

http://www.firstpost.com/india/as-you-pursue-your-goals-obstacles-become-irrelevant-magsaysay-awardee-anshu-gupta-on-running-goonj-2371100.html

Risk-taking ability

You need a lot of determination and faith in yourself. I still have a long way to go but this early lesson has helped me make some crucial decisions

http://gunjanarora.blogspot.in/

Commitment

I guess one of the reasons we the rich, the middle class don’t fight all these things is because we have no moral right since we are the ones responsible for many of these evils

http://creative.sulekha.com/get-angry-stay-angry-but-for-heavens-sake-act_432015_blog

Ownership

Response

We (present system) do not take care of the local wisdom…I am learning every day from the lives of the villagers I meet when I travel…

http://www.brevis.co.in/anshu-gupta.html

Opportunity exploration

We have laid the pipelines in the county, where we develop the systems in urban India, in rural India and in the middle path

http://khemkafoundation.in/index.php?option=com_k2&view=item&id=242:creating-paradigms-where-trash-is-currency-anshu-gupta&Itemid=259

Opportunity restructure

Have we been able to bring out even ten people out of poverty; the answer is no. why? Because ecosystem does not support … It’s the ‘keeda’ (worm) inside me to do something different, to do something good and big for the society … the determination to reach that goal, which keeps me motivated. Once you see the impact of your work, you feel good; you enjoy … 17 years of operation and in 23 states

https://www.youtube.com/embed/C05CX-Xsy_k?autoplay=1

Engagement

Table 7.2

Vijay Mahajan (The calculatives)

First-order codes

Reference

Theoretical categories

Aggregate theoretical dimension

… We have this paradox in National statistics that in one hand unemployed … unemployment rate is as low as 8 to 9% … but our poverty ratio is around 25%. We have the phenomenon of working poor

https://www.youtube.com/watch?v=7Rcr0H3kx8Y

Social justice violation

Stimulus

Why doesn’t rest of world care about these issues. To me it is a kind of obvious … The problem that I have lived with all my life is that why efforts has been asymmetric

https://www.youtube.com/watch?v=EJ0vi2rhPDI

Non-responsiveness

And yeah, throughout our history, including today, she has always earned more than me. So that makes a difference

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Self-positioning

This scheme (Public Distribution System) is widely misused. Middlemen collect hundreds of ration cards in return for the promise of giving 15 kg out of 35 kgs rice for free, and a bottle of liquor costing Rs 50. Thus, the middleman spends Rs 80 per card. The balance of 20 kg rice is sold in the market for Rs 16, thus earning Rs 320

https://vijaymahajan.wordpress.com/2011/02/13/day-11-raipur-activists-and-ngos/

Welfare state policy

Once Gandhiji was convinced that there is truth in what the farmers are deprived of, he fought for the farmers and won this battle against injustice in just 6 months

https://vijaymahajan.wordpress.com/

Idealization

We would go out to work in rural areas now and then and that would give me great pleasure and a sense of satisfaction …

 

Emotion

Organism

The problem was, Indian banks were still not willing to lend to us. We got very Frustrated

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Yes, I made a mistake now let’s find out how to fix it! … We went through very major turmoil, debate, demotivation. I came close to thinking that yeh sab bekaar hai. My life was wasted doing all this. Eventually we gathered our wits and crafted a new operating strategy

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Risk-taking ability

Giving up my corporate, high-profile job was the inevitable that had to happen; not that it was hailed by one and all, but then my mind was made up …

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Commitment

I wanted to prove to myself and others that lending to the poor can be investment-worthy

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Ownership

Response

When I took over the Bihar projects, all the money had already been spent … But there were no benefits because of poor planning and implementation … I managed to turn around one village first. Once that happened, the word spread and I became more welcome in other villages

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Opportunity exploration

The kind of things that one does in an organization every five years, we were doing every six months. We thought that it has been done. We have gone from a concept note to a local area bank in two years flat

https://archive.org/stream/StayHungryStayFoolish/STAY_HUNGRY_STAY_FOOLISH_djvu.txt

Opportunity reconstruction

I will continue to search for deeper solution and not been satisfied till I can look at inner contradiction of these … To call it impact investing is still I think Newtonian …

https://www.youtube.com/watch?v=b1ui47Sej10

Engagement

Table 7.3

Harish Hande (The optimists)

First-order codes

References

Theoretical categories

Aggregate theoretical dimension

How do I tell kids that we are all part of the same society? That they need to learn from each other to create some sort of social equity?

http://www.livemint.com/Leisure/dLJtbPdbJeHgXmC6Qo2gWN/Harish-Hande–Here-comes-the-sun.html

Social injustice

Stimulus

The pani puri vendor has a thela (stall) which she struggles to protect while trying to prevent her stove from falling. We have sent men to the moon, we have satellites, we have created iPads but we have not created a good thela …

http://www.scholarsavenue.org/uncategorized/interview-with-dr-harish-hande/

Non-responsiveness

She (wife) … Born and brought up in the US, and works as a software engineer there … She knew my life was in rural India. It’s the shared belief in what each of us is doing that has helped us in sustaining our relationship for 20 years

http://electronicsb2b.efytimes.com/i-want-to-inspire-the-youth-to-change-the-face-of-rural-india-2/

Self-positioning

I graduated from Indian Institute of Technology where I had subsidized education and subsidies are basically paid by the poor people …

https://www.youtube.com/watch?v=x69sA7EgSHE

Welfare state policy

So, he is 91. He is the only guy I know who was with Mahatma Gandhi and there is another guy I know now, who used to be driver of Martin Luther King. So, these are the guys who are actually talking about sustainability

https://www.youtube.com/watch?v=PTOHcNexRKI

Idealization

Frankly speaking, enjoyed in 20 years, it is the same fun that I had in 20 years, that I had in 4 years of hostel life …

https://www.youtube.com/watch?v=x69sA7EgSHE

Emotion

Organism

Frustration is the best part of motivation. If you are not frustrated you can’t be motivated …

https://www.youtube.com/watch?v=HQOk0PlXnbI

IITKGP really changed me completely not what I did in classes which I hardly did anything … It is 2 h … and 45 min of absolutely pure drill … after that 2 h and 45 min of that life, nothing can deter me

https://www.youtube.com/watch?v=PTOHcNexRKI

Risk-taking ability

Quitting has never occurred to me. There have been frustrations and plenty of them, but they were not from a personal point of view. I always ask, do we have the time and do we have the solution?

http://www.telegraphindia.com/1110911/jsp/7days/story_14492286.jsp

Commitment

I would want to remove the boundaries that we have created in the world. I believe we are all the same, irrespective of the country we live in and the ‘class’ we belong to

http://electronicsb2b.efytimes.com/i-want-to-inspire-the-youth-to-change-the-face-of-rural-india-2/

Ownership

Response

On my field visit to Dominican Republic, I saw a lot of poverty and darkness and the two began to look like same thing to me … I decided to explore the potential technology had to improve lives, without urban frills

http://electronicsb2b.efytimes.com/i-want-to-inspire-the-youth-to-change-the-face-of-rural-india-2/

Opportunity exploration

The credit of idea (Chitradurga Bus Project) actually came from the father of Don Bosco in the Chitradurga town … basically we sat with him … redesign the configuration of type of laptop, type of solar charging and it is done in way, now serves dual purpose

https://www.youtube.com/watch?v=x69sA7EgSHE

Opportunity reconstruction

Once you get into this field, it is very addictive

(https://www.youtube.com/watch?v=HQOk0PlXnbI)

Engagement

In the second step of data analysis, axial coding is done so as to develop second-order concepts and to get more abstract dimension which is existing across the cases (Corley and Gioia 2004). Here, I mixed deductive reasoning with inductive processes of data analysis at the first stage so as to maintain consistency with stimulus–organism–response model and generate theoretical categories covering first-order codes.

7.5.2 Second-Order Themes—Cross-Case Analysis

In the final and third step of data analysis, I have adopted inductive as well as deductive approaches. Here, I took the help of extant literature of social entrepreneurship and existing theories to connect the theoretical categories. Finally, a comparative analysis which is the outcome of a second-order case analysis is presented in Table 7.4.
Table 7.4

Cross-case comparison

Aggregate theoretical dimension

Theoretical category

Anshu Gupta

Vijay Mahajan

Harish Hande

Stimulus

Social injustice

In relation to self and highly personalized

In relation to nation and least personalized

In relation to society/class but relatively less personalized

Non-responsiveness

For range of issues and highly individualized

For issues related to government policies and highly institutionalized

For range of issues and individualized with class concerns

Self-positioning

Shifting of family responsibility more to wife and in later phase wife also got completely involvement. Support of friends in the process

Role of wife is more supportive and indirect. Integration of professional and personal life

Role of wife is more supportive and indirect. Support is much more professional with strong personal ties

Welfare state policy

Recognize himself as one of the beneficiary of welfare state policy

Recognizes the inefficiency of welfare state policy

Recognize himself as one of the beneficiary of welfare state policy

Idealization

Idealization based on the evident work done by role model and connecting them with related others

Idealization based on the evident work done by role model

Idealization as per the personal exposure and experience with the role model

Organism

Emotion

Anger, guilt

Frustration, ‘not in peace’

Frustration, guilt, disappointment

Feeling good, faith, satisfaction

Satisfaction, pleasure

Joy, love

Risk-taking ability

High level of risk by killing alternatives

Relatively lower level of risk with rationalized planning

High level of risk-taking by being ready for even worst situation

Commitment

Gradual shaping of commitment ‘with determination and faith’

Rationalized commitment so as to remain in the sector

Strong commitment with the decisive stand that ‘quitting is not an option’

Response

Ownership

Class-level ownership of the cause with specific focus on middle class

Individualized level ownership to ‘prove myself’

Cass level ownership of the cause with specific focus on elite class

Opportunity exploration

Travelling and spending time with target group to explore local wisdom

Association with pre-existing system to learn from them and work to improve their efficiency

Travelling and listening target group to understand their problem so as to identify the opportunity

Opportunity reconstruction

Diversification in wide range of activities based on the local needs

Diversification in related services keeping main focus primary

Integration of range of services from diverse range of players to make system efficient at every level

Engagement

Ready with a package of changing life of people and call it ‘trash-based economy’

Integrating service to take care of life from birth to death

Long-term goal of knowing ‘rural India’ without making any change in current approach

7.6 Contributions and Implications

With the objective to understand how others (members of society) facilitate engagement of entrepreneurs in the process of social entrepreneurship, I started exploring different relationships between value capture and value creation. By taking inferences from Santos (2012), I have also identified three types of social entrepreneurs based on the relationship between value capture and value creation. As integration of entrepreneurial aspect, i.e. risk-taking (Sarasvathy 2001) and social aspect (Bergami and Bagozzi 2000) happens at the level of the individual, I have examined the life of one exemplar of all three types and explained the mechanism of their engagement. Now, I will discuss the findings in the context of extant literature to develop testable hypotheses.

7.6.1 Family, Individual and Action

Family plays an important role in the start-up’s decision. It also helps in resource mobilization. Family can be a source of trigger that stimulates the entrepreneurial process. In case of the dual-income family, people will be more risk takers and hence take greater initiative in the direction of new venture creation (Aldrich and Cliff 2003). A decision to become the entrepreneur affects family relation and also influenced by the financial obligation of the person. Such a decision may jeopardize the standard of living (Brockhaus 1980). So, people whose family income falls in the range of average or above average are more likely to explore independent opportunities and become self-employed. Addition to that, males from better-off families are more inclined towards looking for independent opportunities (Hundley 2006).

Now, I will go back to data and examine the family of these three focal actors and actions of their family. All these three focal actors married to a highly competent lady. Vijay Mahajan’s wife was her classmate in IIMA. Harish Hande met her wife in the USA while pursuing his studies where she was also enrolled and Anshu Gupta also married to one of his classmates. All these three ladies were earning when these focal actors took the decision of founding the organization. All of them have very less number of dependent members in the family (two daughters of Harish Hande and they live in the USA with their mother and one daughter of Anshu Gupta). Apart from that, they also get support from their friends, for example, Goonj was founded with the help of few friends of Anshu Gupta. Vijay Mahajan also took the help of few of the friends during the initial days of BASIX. In case of Anshu Gupta, the first 67 cloths with which he started his work came from his family only.

Hence, I conclude here my first hypothesis as:
  • Hypothesis 1. Self-positioning of the social entrepreneur increases the risk-taking ability of the individual, and hence, such individual takes ownership of the act of value creation.

Although the extant literature discussed the role of self-positioning with respect to family and friends but limited its implication to risk-taking and resource mobilization. The hypothesis above extends present conceptualization and connects risk-taking ability to the ownership of the act of value creation which is consistent with Stimulus → Organism → Response sequence.

7.6.2 Society, Individual and Action

In this section, I am considering, social injustice, idealization, welfare state policy and non-responsiveness as representative of society, emotion and commitment represent organism and activities related to opportunity represent action.

Awareness of the suffering of others sensitizes justice-related cues and hence stimulates cognitive processes. Also, social injustice fuels negative emotions like anger, guilt, shame, etc., and under the influence of such emotion, people take action to eliminate such injustice (Lerner 2003). Apart from that, non-responsiveness of abled actors fuels emotions which facilitate corrective action (Kuhn 1998). Similarly, the presence of role model also promotes emotions in such a way that the person gets determined for the goal (Rafaeli and Sutton 1987). Finally, the last construct in this category is ‘state policy’. After independence, India became a democratic country with a welfare state vision. Constitution of India aims to ensure social justice. So, the role to address various imbalances is taken by the government through various policies (Sarker 1994). In India, subsidy is one such welfare state policy.

Looking at the data, Anshu Gupta talks about a range of issues related to social injustice, welfare state policies and non-responsiveness of the common citizen and his most of the talk includes one or other emotional variables strengthening his commitment. Similarly, Harish Hande also talks about these issues but with relatively lesser intensity. The same is true for Vijay Mahajan also. Furthermore, Harish Hande’s approach is to become like the needy person to understand the real issue while Anshu Gupta uses democratic discussion with the community to understand their need. Vijay Mahajan looks at the traditional serving which is not served to the target group. So, I conclude my second hypothesis as:
  • Hypothesis 2: Society stimulates emotions in the individual which gets translated into a commitment for designing the ways to create value by dealing with opportunities.

Here, I captured the holistic nature of society as a source of stimulus. Theoretical development examined each of the components (state policy, idealization, social injustice and non-responsiveness) in isolation. But, these do not work in isolation. For example, state policies set accountability, and idealization gives a lens to evaluate the level of social (in) justice in the action of an accountable actor. If the evaluator believes that appropriate measures are already in place, then such people will not get engaged in addressing social injustice otherwise he/she will.

7.6.3 Linking Actions of Social Entrepreneurs

Effectuation logic explains the process of opportunity creation (Bhowmick 2011). It suggests that the opportunities are not out there, but the actor contribution in the creation of socially relevant opportunities based on resources at hand (Corner and Ho 2010). But this is not a standalone process, and it requires multiple iterations based on emerging resources at hand (Bhushan 2018). VanSandt et al. (2009) presented a sequence of events relating effectuation logic and socially entrepreneurial opportunity. It starts with effectual logic then goes identifying opportunity, followed by adding strategic partner, then to expanding stakeholder base and finally to impact. In a similar way, this paper proposes a model where the action starts with determining the pattern of ownership of the action followed by aspects of opportunity and then to engagement. As there is dealing with the opportunities through opportunity exploration and opportunity restricting (both together called here opportunity creation) is a continuous ongoing process, hence the resultant engagement is well sustained. Such engagement triggers positive emotions which further strengthen the interplay between opportunity exploration and opportunity restructuring. Here, aspects of opportunity include both opportunity exploration and opportunity restructuring. I see opportunity exploration similar to identifying opportunity and adding resources around it to realize the opportunity as opportunity restructuring.
  • Hypothesis 3: The process of social entrepreneurship action starts with ownership which determines the interplay between opportunity exploration and opportunity restructuring leading to engagement.

Adding dynamics to the opportunity creation based on resources at hand, I add to the effectuation logic by adding motive of the entrepreneur to the process of effectuation. In fact, the social entrepreneur does not start applying effectuation logic based on any resources at hand, and he selects the appropriate combination of value-driven resources at hand to create the opportunity. The interplay between opportunity exploration and opportunity restructuring reflects the integration of motive and the process.

7.6.4 Moderating Role of Society

Government can play a supportive, neutral or destructive role in the process of entrepreneurship. The role played by the government comes through policies which regulate the institutional environment under which entrepreneurs look for the opportunity (Minniti 2008). For example, government policy in India reduced the number of sectors in the public sector from 17 to 8 during reforms in 1991. Government policies also contributed to the success of software entrepreneurs (Majumdar 2007). Alternatively, extensive bureaucratic control by the government may lead to problems in doing business (Majumdar 2004). Depending on the context of their studies the authors looked at enabling, constraining and neutral role of government in the process of social entrepreneurship. Three cases of this paper indicate the same. For example, a regulation passed by the Andhra Pradesh government limited the opportunity of Vijay Mahajan; involvement of government’s financial institution helped Harish Hande to design a customized package to the target population and neutral approach of the government towards issues related to clothing opened the door of ‘alternate economy’ built by Anshu Gupta. So, I conclude this in the following hypothesis.
  • Hypothesis 4: Government policies moderate the relationship between ownership and ways to create value in the process of social entrepreneurship. This moderation may be positive or negative dependent on enabling or restricting policies of the government.

Another construct related to society is ‘social injustice’ which strengthen the relationship between ways of value creation and engagement. For example, Anshu Gupta looks at a broader range of social inequality and he practices a range of activities while using cloths as currency in the direction of changing the ecosystem. Harish Hande looks for social injustice in the context of ‘need’ and ‘wants’, and he designs the services to increase ‘expendable income’ of the target population and hence talks about changing the life of people. Vijay Mahajan looks at social injustice in relation to livelihood so designs financial packages to take care of ‘birth to death’. So, I conclude this in hypothesis 5.
  • Hypothesis 5: Social injustice moderates the relationship between ways of creating value and engagement in the process of social entrepreneurship.

But the process does not stop here. Continuous engagement of these actors triggers positive emotions. For example, in case of Anshu Gupta, it is a sense of doing ‘good’, in case of Harish Hande it is enjoyment and in case of Vijay Mahajan it is ‘satisfaction’. I further argue that these positive emotions enhance the commitment of the actor so as to establish the virtuousness of the process of social entrepreneurship. This leads to our final hypothesis as:
  • Hypothesis 6: Engagement in the process of social entrepreneurship fuels positive emotions which add to the commitment and hence completes the self-perpetuating cycle of social entrepreneurship.

A summary of all this discussion is concluded in Fig. 7.1.
Fig. 7.1

Motivational model of social entrepreneurship

7.7 Limitations and Future Direction of Research

Although the criteria of case selection and selection of focal actors are stringent, the data is gathered through secondary sources. So, there is a need to verify the finding from the focal actors. Furthermore, there is a need to explore those cases where secondary data is not much available to draw any comprehensive conclusion. For addressing these two issues, further research is needed with primary data sources.

Secondly, in the process of social entrepreneurship apart from founders other members across the hierarchy are also engaged in the process of social entrepreneurship. The mechanism of their engagement may be different from that of the founders. As there is no secondary information available and social entrepreneurship looked at this issue, so participant observation and interview of these members of the organization will be helpful in addressing this concern. Third limitation is generalizability of the finding. Looking closely at this work, the purpose is not to test the theory but to develop a theory, and hence, generalization is not the intended purpose of this work. At this stage, I urge the research community to test the hypotheses developed in this paper so as to understand the applicability of the theory presented here.

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Copyright information

© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  1. 1.Xavier School of Rural ManagementXavier University, BhubaneswarPuriIndia

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