Social and Commercial Entrepreneurship: Same, Different, or Both?

Posted: 9 Nov 2009

See all articles by James Austin

James Austin

affiliation not provided to SSRN

Jane Wei-Skillern

Stanford Graduate School of Business

Howard Stevenson

affiliation not provided to SSRN

Date Written: 2006

Abstract

This study undertakes an analytical comparisonbetween social and commercial entrepreneurship using a model from commercialentrepreneurship. It is an exploratory analysis of the extent that elementsapplicable to commercial entrepreneurship are transferable to socialentrepreneurship. Conversely, it explores the ways insights from social entrepreneurship canilluminate an understanding of commercial entrepreneurship. Socialentrepreneurship can be defined broadly or narrowly, but the authors define itas an innovative, social-value creating activity that can occur within oracross the nonprofit, business, or government sectors. The comparative analysis is guided by four theoretical propositions focusingon four variables: (1) market failure, (2) mission, (3) human and financeresource mobilization, and (4) performance measurement. These will createdifferences between social and commercial entrepreneurs. A commercial entrepreneurship model is proposed in order to approach thesocial entrepreneurship process more systematically and effectively. This modelstresses the dynamic fit among the people, the context, the deal, and theopportunity. For each element, the similarities and differences between socialand commercial entrepreneurship are examined. The analysis draws out lessonsuseful for both social and commercial entrepreneurs. Finally, a revised social entrepreneurship model is proposed. At the centeris a Venn diagram in which the intersection of opportunity, capital, and peopleis a core social value proposition. Surrounding the Venn diagram are the tax,regulatory, sociocultural, macroeconomy, political, and demographics forces. Todeliver the social value proposition effectively, all components must achieve astate of alignment. (TNM)

Keywords: Resource acquisition, Not-for-profit organizations, Performance evaluation, Human capital, Entrepreneurial environment, Cultural values, Social entrepreneurship, Value maximization, Philanthropy

Suggested Citation

Austin, James and Wei-Skillern, Jane and Stevenson, Howard, Social and Commercial Entrepreneurship: Same, Different, or Both? (2006). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1501555

James Austin

affiliation not provided to SSRN

Jane Wei-Skillern

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Howard Stevenson

affiliation not provided to SSRN

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