Compare and contrast social entrepreneurship and business entrepreneurship

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Entrepreneurship 207

Compare and contrast social entrepreneurship and business entrepreneurship

According to Gibb (1996) the term entrepreneurship is often equated with new venture creation, and small business management and the concepts of owner-manager and self-employment. This definition is widely accepted, however many researchers such as Kirby (2003) and Carland et al (1984) have identified vital points which contest the definition such as that not all owner-managers can be defined as entrepreneurs and that not all small businesses are entrepreneurial.

Social entrepreneurship is not a new term even though the entire concept of it was established relatively recently; the individuals and groups that have been addressing social issues have been doing so for many centuries. According to David Bornstein (2004) "Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they're serving." As stated in Bornstein’s book “How to Change the World: Social Entrepreneurs and the Power of New Ideas” social entrepreneurs have been around for hundreds of years in historical figures such as Florence Nightingale and Mahatma Gandhi, however it is only recently that these figures have developed a more entrepreneurial edge to their line of work. Generally social entrepreneurs are identified through non-profit organisations and are associated with a ‘hero’ concept. The ‘hero’ concept which has been identified by researchers such as Leadbitter (1997) and Drayton (2002) mainly established social entrepreneurs as heroes due to their biographical accounts. In the example of Mahatma Gandhi who used his peaceful civil disobedience as a way to gain civil rights, he is know considered as a true hero to many Indians and all over the world because of his peaceful ways, however such work still occurs today, an example of this would be by Aung San Suu Kyi. She is currently under long-term house arrest in the city of Yangon. She received the Nobel Peace Prize in 1991 for her non-violent efforts to bring down the oppressive military regime that rules over the Southeast Asian country. Aung San Suu Kyi’s work is similar to that of Gandhi yet she is rarely referred to as a ‘hero’ and many people across the world are not even aware of her efforts.

Catford (1998) identified a strong commitment to social justice as being a defining characteristic of a social entrepreneur. The characteristics of a social entrprepreneur are very similar to those of a business entrepreneur, for example the creativity and innovation in their ideas is a fundamental part of any success of an entrepreneur along with hard work and dedication. These characteristics only partially help to define a social entrepreneur as it seems evident that this form of entrepreneurship is more based on grouped social movement i.e. one social entrepreneur persuading others who have similar social ethics in order to address social issues in a entrepreneurial or business like manner.

A business entrepreneur is very much the opposite of a social entrepreneur in many ways as they are predominantly aiming to make substantial profit and personal gain. When discussing social entrepreneurs before it seemed clear that many social entrepreneurs are established due to a specific situation where they are able to thrive, the opposite seems to occur with business entrepreneurs. Business entrepreneurs are seen as exceptional individuals who can attribute their success if any to their personal abilities and personal characteristics as opposed to finding themselves in a favourable situation, this is widely known as the ‘fundamental attribution error’, which states that are entrepreneurs are alike however they are different from other people. Many psychologists have aimed their research at discovering certain personality traits which would allow a person to be a successful business entrepreneur; at this point in time they are very much unable to offer such an answer, however I do not believe psychologists will ever be able to identify single aspects of a person’s personality which would make them have certain skills as this debate will continue to reign as the nature versus nurture debate. A business entrepreneur will create their company for some of the same reasons as a social entrepreneur, for example, to make extra income or to support their families.  Any entrepreneur creating and starting a business needs to find the initial start-up costs and finances for day-to-day running of the business which means they will need to make enough money to cover these costs before they can then progress and use the money in order to complete their personal and company goals. The differences between a social entrepreneur and a business entrepreneur then begin to show after these costs have been covered. This is highlighted in a quote from

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Dr Yunus who founded Grameen Bank, which helps the people of rural Bangladesh to lift themselves out of poverty, Dr Yunus said, "Grameen's central focus is to help poor borrowers move out of poverty, not making money. Making profit is always recognised as a necessary condition of success to show that we are covering costs. Volume of profit is not important in Grameen in a money-making sense, but important as an indicator of efficiency."

The way in which social entrepreneurs are funded is identified as social enterprise which Alter (2002) defined as “a generic term for a non-profit ...

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