Social Entrepreneurship Midterm
Cognitive Mechanisms: Moral Justification
Perpetrator reconstruct the motive of the inhumane action.
Design Elements
- Content (What should be performed) - Structure (How should they be linked and sequenced?) - Governance (Who should perform them and where?)
The 4 C's of an Opportunity (Gartner & Bellamy, 2010)
- Customer - Consideration - Connection - Commitment
Important of the Feasibility Analysis
- Determine whether to pursue - Refine the idea to improve its potential for success. - Abandon the idea - Search for new ideas
Design Themes
- Novelty (Adopt innovative content, structure and governance) - Lock-in (building in elements to retain business model stakeholders.) - Complementarities (Bundle activities to generate more value) - Efficiency (Reorganize activities to reduce transaction costs)
Quick Screen Model
1) Market and Margin Issues 2) Competitive Advantage 3) Value creation and realization issues
Nature of Social Entrepreneurship Opportunities
1) Prevalence 2) Relevance 3) Urgency 4) Accessibility 5) Radicalness
Components of a Business Model
1) Revenue Sources 2) Cost structure drivers 3) Investment size 4) Critical success factors
Kitzi's Model of Evaluating Social Opportunities
1) Social Value Potential 2) Market Potential 3) Sustainability Potential
From a Business Opportunity to a Business Concept
A business concept refers to a set of favorable events involving customers, consideration, connection, and commitment that have the potential to become a successful business.
Business Model
A firm's plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value sustain itself on the basis of the profits it earns. Rationale of how a firm will create, deliver and capture value.
Alertness
Ability to overlook opportunities overlooked by others. 1) scanning and searching for new information 2) connecting previously disparate information 3) evaluating whether the new information represents an opportunity.
Outside-In/Inside-out Analysis Model
Considers both inside and outside factors OUtside factors: Economic, political, legal, social, global, technological, and the competition. Inside: internal resources, expertise and skills of managers and employees.
Design Thinking
Consists of using ethnographic methods, such as observation to come up with new ways of solving problems. -Define -Research -Ideate -prototype -choose -Implement -Learn
Product/Service Feasibility
Desirability and demand
Building social venture Sustainability Models
Developing a business model consists of creating the content, structure and governance of transactions designed to create value through the exploitation of business opportunities. 1) Design Elements 2) Design themes
Systematic Search
Entrepreneurs actively search for opportunities. They do so by relying on their competencies, personal and professional experiences. Systematic search is a narrow process that is limited to the entrepreneur's experience. Subject to the corridor principle. According to the corridor principle, once an entrepreneur starts a firm, he or she begins a journey down a path where corridors leading to new venture opportunities become apparent (Barringer & Ireland, 2012).
Industry/Target Market Feasibility
Industry attractiveness Target market attractiveness
Type B Ideas
Involved identifying entirely new products/services.
Organizational feasibility
New venture team effectiveness Sufficiency of non-financial organizational resources
Creation Theory
Opportunities do not exist independent of entrepreneurs. Applies an evolutionary realist theory.
Discovery Theory
Opportunities exist, independent of the creator. Applies a realist philosophy.
Cognitive Mechanisms: Euphemistic labeling
Perpetrator uses language that reduced the inhumane aspect of the behavior.
Feasibility Analysis
Process of collecting and analyzing data prior to business start-up, and then using knowledge thus gained to formulate the business plan itself. It intends to test whether the business concept is worth pursuing and under which conditions. The focus of is on the idea and whether it is worth pursuing.
Social Venture Sustainability Models
Process of creating, delivering and capturing value for all stakeholders involved in the social venture.
Financial Feasibility
Total start-up cash needed Financial performance of similar firms Overall financial attractiveness of the new venture
Social Justice and Social Entrepreneurship
Unmet social needs could be perceived as a social injustice. Perceptions of social injustices lead to social entrepreneurship. Perceptions of social injustice could trigger a moral response. Perceptions of social injustice trigger a deontic response, a moral obligation to act.
Idea Generation
includes an active and passive phase. Draws from the effectuation theory and creation theory Uses tools such as: -Brainstorming -Focus group
Entrepreneurial Actions
Act on opportunities, entrepreneurship is about execution.
Explain the four components of a business model
Revenue Sources: All revenue streams a particular business model will product, and the source, size, significance, and growth potential of each. Cost Structure Drivers: The cost structure of a business model (fixed, variable, recurring, etc.) relative important, and how it may change over time. Investment Size: Amount and timing of investment to product positive cash flow, including cash required for startup and working capital. Critical Success Factors: Elements that have the greatest impact on the firm becoming profitable.
Normative
Social norms, values and beliefs influence the relative social desiribility of entrepreneurial an occupational choice.
Explain the Different types of social ventures
*Purely philanthropic social ventures* Asks for gifts and grants from donors and provides free services and goods to beneficiaries, must rely on external sources to continue funding their adventures. *Hybrid social ventures* Both social value and economic value creation are core organizational activities. They straddle the boundary between a for-profit business and a socially driven business. *For-profit social ventures* These are market driven and provide economic value, however they serve a social purpose while making a profit.
Assumptions of Moral engagement
-Existence of unmet social needs trigger feelings of the violation of personal moral standards. -Feelings of the violation of moral standards create the motivation to engage in social entrepreneurship activities. -Conveys the intention that addressing a particular social problem is 'the right thing' to do. -Emphasizes the sense of duty.
Moral Disengagement centers on the following aspects:
1) The reconstrual of the conduct itself so that it is not viewed as immoral. 2) The operation of the agency of action so that perpetrators can minimize their in causing harm. 3) the consequences that flow from actions. 4) how the victims of maltreatment are regarded by devaluing them as human beings and blaming them for what is being done to them.
Similarities between commercial entrepreneurship and social entrepreneurship
Both offer opportunities to improve systems, create solutions, and invent new approaches. Both dynamic processes.
Social Factors
Culture traditions religion/tolerance Lifestyle Value system Norms Population demographics
What is the difference between an idea and an opportunity?
Ideas are simply the seeds of the entrepreneurial process and they must be acted upon to become useful. They have no real value in and of themselves. Opportunities are situations in which new goods, services, raw materials and organizing methods can be introduced and sold at greater than the cost of their production. The opportunity is the beginning point to which value is created.
Type A Ideas
Involves identifying a new market for an existing product/service.
Entrepreneurial outcomes
New venture should create social or economic value. Social venture should have impact. Contribute to economic growth.
Explain the role of passion in launching and managing a social venture.
Passion allows the entrepreneur to relentlessly pursue the social opportunity.
Types of Social Ventures
Purely Philanthropic Social Ventures Purely Commercial Social Ventures Hybrid Social Ventures Corporate Social Ventures
Growth Mindset
Refers to the view that one's talents and abilities can be developed through effort. Dedication and hard work.
Social Engineers
Schumpeter Creation of newer, more effective social systems designed to replace existing ones when they are ill-suited to address significant social needs.
Entrepreneurial Opportunity
Situations in which new goods, services, raw materials and organizing methods can be introduced and sold at greater than the cost of their production.
Entrepreneurial Mindset
Specific state of mind that orients a person toward the discovery and exploitation of opportunities that lead to the creation of new ventures or new way of doing things. Drawn to opportunities, innovation and new value creation.
Environmental Scanning
Strategic tool used to analyze a firm's external environment: (1) identifying the environmental scanning needs of the firm. (2) gathering the information needed by the focal firm. (3) analyzing the information. (4) communicating the results to concerned parties. (5) making informed decisions.
One of the limitations of a buyer intentions survey is that buyer intentions do not always translate into actual buying behavior. How would you overcome this limitation in a proof-of-concept study?
This limitation can be overcome in the proof-of-concept study because feedback from individuals who are familiar with the industry will be able to give constructive criticism that will allow the product/service to be perfected, the maximize buying potential.
Entrepreneurial Mindset includes
Thoughts Choices Actions Outcomes
Outer-directed moral engagement
refers to the extent to which the person feels obligated to live up to other's expectations.
Porter's Fives Forces Model
1) Intensity of rivalry among existing firms 2) threats of new entrants 3) threat of substitutes 4) Bargaining power of buyers 5) Bargaining power of suppliers
Identify potential differences between a business model and a social venture sustainability model as defined in the chapter.
A social venture sustainability model focuses on how a social venture will create social value while remaining viable over time. A business model includes three components: economic, operational, and strategic and is how the company will make money and compete in an industry.
External Environment of Entrepreneurship
A socially embedded activity PEST
What is competitive intelligence?
A strategic management tool that is used to garner useful information about the competition, the market, and the technology that can be utilized by managers to make strategic decisions. In the social realm, it is used to collect information about social needs to address and the potential competitive landscape of social ventures that address similar needs.
The Role of a Social Entrepreneur
Adopting a mission to create and sustain social value. Recognizing and relentlessly pursuing new opportunities to serve that mission Engaging in a process of continuous innovation, adaptation and learning. Acting boldly without being limited by resources currently in hand. Exhibiting heightened accountability to constituencies served and the outcomes created.
In Europe, Social Entrepreneurship is defined as
All organizations in the third sector
Explain the difference between an opportunity and a business concept.
As opportunity is just a favorable situation, the actual business concept is a set of favorable events involving customers, considerations, connection and commitment that have potential to become a successful business. The difference is in the tangibility of resources.
Cognitive
Availability of expertise and knowledge, perceptions and shared mental models.
Discuss the role of autonomy and independence in social venture creation.
Being a social entrepreneur helps to manage one's own venture. It also helps become one's own boss.
Do you think that alertness plays a critical role in the discovery or creation of social entrepreneurial opportunities? Yes? No? Explain.
Being alert to social opportunities leads to social entrepreneurs to seek opportunities where others see intractable problems. Prior experience and knowledge can improve alertness, leading a social entrepreneur to spot opportunities in familiar terrains.
Entrepreneurial Thoughts
Cognitive processes leading to the discovery or creation of entrepren. opportunities. Focus on how entrepreneurs think. Focus on how entrepreneurs translate situations into viable opportunities.
Miller's Model of Compassion
Compassion acts as a prosocial motivator of cognitive and affective processes including: - integrative thinking - prosocial judgements regarding the costs and benefits of social entrepreneurship - commitment to alleviate others' suffering
Entrepreneurial Choices
Decide which opportunities to pursue or which ones to disregard. Ability to pursue the right opportunities is one of the main characteristics of effective entrepreneurs.
Explain how goals affect individuals' tendency to engage in social entrepreneurial activities.
Goal setting allows the social entrepreneur to focus on the direction sets for the social venture. Inner action leading a person to pursue a given course of action. It is important to start and sustain a social venture.
Social Bricoleurs
Hayek Perceive and act upon opportunities to address local social needs. They are motivated and have the expertise and resources to address social needs.
Do you agree with the assumption that social entrepreneurs have a strong sense of social justice? Yes? No? Explain.
I believe that social entrepreneurs do have a strong sense of social justice, being that their mission is usually to pursue a social issue that is otherwise not taken care of by government initiatives. Social justice is powerful motivator to those who are morally outraged by injustices and are sensitive to issues of equity. They pursue a venture in hopes of redressing perceived social injustices.
Type C Ideas
Involves creating new processes for producing or delivering existing products or services. Reengineering a company's processes to be more efficient and responsive to customers.
Social Constructionists
Kizner Build and operate alternative structures to provide goods/services addressing social needs that governments, agencies and businesses cannot
Regulatory
Laws, regulations, rules set by legal and formerly recognized institutions
Idea
Mere thoughts and the point of departure of the entrepreneurial process. Not opportunities themselves. The "grist of the mill" and commodities of the entrepreneurial process.
Discuss how the three components of the institutional environment could facilitate the emergence of social entrepreneurship in a given country.
Normative: This includes the social norms, values, and beliefs that influence the relative social desirability of entrepreneurship as an occupational choice. Therefore, the normative institutions reflect the degree to which a country's residents admire entrepreneurs and their activity. This environment encourages people to become entrepreneurs, but the other factors are important in the execution. Cognitive: This is the availability of expertise and knowledge and perceptions and shared mental models through which people share information. This reflects the knowledge and skilled possessed by people and the framework they use to categorize and evaluate the information. This is importance because the society needs a common frame of reference/interpretation of a situation and that idea is shared among the individuals. Regulatory: This refers to the laws, regulations and rules set by legal and formerly recognized institutions. This promotes certain behaviors and restricts others, influencing economic growth and basically setting "rules of the game." Creating supportive regulatory environments are important because studies have shown that areas that promote regulation foster the rate of general entrepreneurial growth activity more than any other factor.
Technological Factors
R&D activity Automation Rate of technological change Use of technology Types of technology
Discuss each of the phases of the life cycle of a business model
Specification: At the start of a venture, the entrepreneur may design and implement a specific business model. This may be unique and take into account the resources the new firm can control as well as the environment in which it operates. Refinement: The business model can be modified and refined as it is implemented. Adaptation: Some aspects of the business model may work perfectly, which other may need readjustment. Sometimes, the business model may need to adapt to some external factors or may need some major revisions. Revision: The entrepreneur may completely modify the business model to adapt to environment contingencies. In fact, business model change represents a search for new optimal design that repositions the firm in response to changing interdependencies caused by exogenous environmental changes. Reformulation: If the business model is obsolete and no longer viable, it may have to be abandoned and replaced with a new one.
Competitive Intelligence
Strategic tool used to garner information about the competition Involves: Collecting information, analyzing and interpreting information, distributing and storing information, responding to the information.
Political Factors
Tax policy Labor law environmental law trade restrictions Tariffs Democracy Political stability Political risk Rule of law
Describe and discuss the factors that make a given venture social.
The enterprise must be created to solve a social problem or address some kind of government or market failure while operating in a financially sound manner. Have "social" missions that focus on creating systematic and sustainable change while addressing the needs of others.
Describe the entrepreneurial mindset and explain how it might affect the likelihood of an individual to engage in social entrepreneurship
The entrepreneurial mindset encompasses a way of thinking about business and includes characteristics like passionate pursuit of opportunities, pursuit of opportunities with discipline, pursuit of only the best opportunities, a focus on adaptive execution and engagement with energies of everyone. Some of these qualities are in common with those characteristics of a social entrepreneur. Therefore, someone who has characteristics of passion, relentless in pursuit of their vision, a vision for change, and a willingness to not give up until they have spread their idea as far as they can. Both are innovative and possess high amounts of energy, tenacity and resilience.
How can environmental scanning help social entrepreneurs?
This is the strategic management tool that is used to analyze the external environment of a firm. Environmental scanning can help a firm identify the driving forces in the industry it operations. Because these driving forces are the major causes of the changing industry and competitive conditions, environmental scanning can help the firm in forecasting and adjusting operations to optimize performance.
What are type A, B, C Product or Service Ideas?
Type A ideas: Involves identifying a new market for an existing product or service. Type B Ideas: Involves identifying entirely new products or services. Type C Ideas: Involves creating new processes for producing or delivering existing products or services.
What is feasibility analysis? What is it designed to achieve and how is it different from a business plan?
A feasibility analysis is a pre-start strategic planning tool, conducted in the pre-business plan phase of the development of a new venture. It is designed to achieve an informed go/no-go decision on a proposed new venture before considerable time and resources have been invested. The intention is to test whether the business concept is worth pursuing and, if so, under which conditions. It is different than a business plan because it is done as a pre-start up tool, and the knowledge gained from collecting and analyzing this data is used to formulate the business plan.
Explain the role of compassion in social entrepreneurship. Do you think that social entrepreneurs are more compassionate than commercial ones? Explain.
Compassion is a key role in social entrepreneurship because it directs one's attention from self-concern to concern for others and their suffering. It also increases one's belief in the significance of others; suffering and one's understanding of the issues contributing to it. It encourages a concerted response for the benefits of others and it can make others' suffering personally relevant and generalize such concerns to others. Although I believe it is possible for commercial entrepreneurs to also foster these actions, I believe commercial entrepreneurs have more of a self-advancement focus and are often times more concerned with performance than on the lasting effect of the consumer or those effected by the business. I believe commercial entrepreneurs are more passionate about the gains than their mission.
Concept of corporate social entrepreneurship
Corporate social entrepreneurship is the process of extending the firm's domain of competence and corresponding opportunity set through innovative leveraging of resources, both within and outside its direct control, aimed at the simultaneous creation of economic and social value. It emerges from the conceptual frameworks of entrepreneurship, social entrepreneurship and corporate entrepreneurship.
Discuss the role of moral mandates in social venture creation.
Moral mandates are a selective self-expressive stand on a specific issue and not a generalized orientation toward the world. The strong attitudes that social entrepreneurs have rooted in a moral conviction can influence their reactions towards the world's unmet social needs and thus influence them to take action towards creating a social venture that can alleviate the need.
Identify the key competencies discussed in the text and explain how they could lead to the creation and effective management of a social venture. (Opportunity, Relationship, Conceptual, Organizing, Strategic, Commitment)
*Opportunity Competencies* measurements of the ability to recognize and utilize the development of market opportunities, and the willingness to execute the necessary processes. These are important to creating viable business opportunities that can generate value. *Relationship competencies* the ability an entrepreneur has to create connections and build social interactions and leverage them to raise resources needed. These are important skills for optimizing resource opportunities and creating the best possible scenario for management. *Conceptual competencies* the behaviors entrepreneurs exhibit that allow them to make calculated decisions, understand complex information. The ability to plan efficiently and effective can lead cutting out costly mistake and optimizing time money and resources. *Organizing competencies* the ability to strategize the available resources, whether they are internal or external, or physical, financial, and technological. This is an important skill because being able to utilize and identify the most effect method for operation is very beneficial. Strategic competencies are the setting, evaluating and implementing of strategies for a venture. Without a strategy, managers and employees will likely be unsure of goals and the direction of their efforts. *Commitment competencies* the entrepreneurs commitment and will to see operations and goals through to their end results. It is important that this commitment is present because when obstacles occur, the entrepreneur must have the capacity for passion to be resilient and push past difficulties to reach their goals.
Economic Factors
Economic growth interest rates Exchange rates Inflation rates State of economy Standard of living Economic risk Structure of industry Market size Availability of investment capital
Inner-Directed Moral Engagement
Refers to the extent to which the person is morally obligated to fulfill his/her own goals and objectives.
Social Entrepreneurship
Refers to the process of exploiting entrepreneurial opportunities that add social value. Is social value creating activity. Addresses social issues.
Explain the role of self-efficacy in creating and running a social venture
Self-efficacy is the belief is one's own ability to gather and implement the necessary personal resources and competencies to attain a certain level of achievement on a given task, and for entrepreneurs, this is their personal confidence in their capability to start, grow and operate their own ventures. People with greater entrepreneurial self-efficacy are those who are more driven to execute higher will and drive to put in effort, persist, and strategize for a greater period of time.
Explain the key assumptions of the creation theory of entrepreneurial opportunity.
The opportunity creation theory asserts that opportunities do not exist independently of the entrepreneur but are created by the actions, reactions, and behaviors of entrepreneurs as they explore new ways to create new products or services. Entrepreneurs do not search for opportunities, but they create them.
Characteristics of an Opportunity (Timmons & Spinelli 2007)
1) Ability to add value to the customer 2) Adding value by solving a customer's problem or fulfilling a customer need. 3) Ability to capture a market and generate profits 4) Compatibility with the skill set of the entrepreneur who pursues them.
Benchmarking
1) Identify problem areas 2) Identify industries that have similar processes 3) Identify organizations that are leaders in those areas 4) Survey leading organizations for measures and practices 5) Visit the leading organizations to identify the best practices 6) Implement best practices 7) Evaluate and make adjustments when necessary.
Explain the key components of a business model.
A business model entails designing the rationale of how the new firm will create, deliver and capture value Key components of a business model includes economic, operational, and strategic categories. The economic component of a business models concerns with the revenue model, which is how the firm will generate revenue and make profits by exploiting the business opportunity. This includes revenue sources, pricing methodologies, cost structures, potential margins and expected volumes. Here, the revenue is used as a metric to gauge the effectiveness of the business model. The operational component focuses on the internal processes and design of infrastructure that enable to firm to create value. The strategic component emphasizes the overall direction of the firm, like the marketing positioning, interactions across organizational boundaries, and growth opportunities. This is where the company selects its customers, defines and differentiates its offerings, identifies the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profit.
How can social entrepreneurs effectively use benchmarking to learn from the best in their respective industries?
Benchmarking is the process is comparing one's own business processes and performance metrics with the industry's best or with the best practices from other industries. This is an effective process that allows entrepreneurs to learn from the best practices. This can help social entrepreneurs because they can learn from other high-quality social ventures or even high-performing commercial businesses and implement similar strategies.
Discuss the application of Porter's Five Forces model to social entrepreneurship. How could their understanding help social entrepreneurs to understand their competitive environment?
By applying Porter's Five Forces Model, the analysis will help social entrepreneurs determine the intensity of the competition in a given industry. In social entrepreneurship, it is believed the higher the strength of the forces, the lower the expected sustainability of the venture operating in that sector. If the firm is well prepared enough and is knows the effect of each competitive force, it can take action to address it. Because it is possible that a social venture may compete with other social ventures or even commercial, it is important to apply this model. Rivalry among existing competitors: Includes any social venture that provides similar services. They compete to acquire much-needed financial resources from benefactors, grants, government contracts, corporate and foundation sponsorships and for volunteers. Bargaining Power of Buyers: In social ventures, buyers equates to beneficiaries because "buyers" are unable to purchase specific products and services themselves. They often do not have strong bargaining power over the focal social venture. Bargaining Power of Suppliers: Social ventures that make products interact with the suppliers of raw materials. Such suppliers could have strong bargaining power when they are few number and have a vested interest in the social needs addressed by the social venture. Threat of Substitute Products or Services: Substitute products may not operate in quite the same manner as in the traditional model. Here, the beneficiaries may not have the choice to choose alternatives services because they are often needy. Threat of New Entrants: This refers to the possibility that new social ventures may enter the "social market" to provide similar products or services. Such entry may erode the competitive advantage of existing social ventures.
Discuss the relationship between the design elements and the design themes in using an activity system design framework for designing a business model.
Design elements ask questions about content, structure, and governance. What activities should be performed? Who should perform them? How should they be linked and sequenced? Design themes ask about novelty, lock-in, complementarities, and efficiency. It is important to understand how to adopt innovative content and activities to generate more value, recognize activities to reduce transaction costs, and try to retain business model stakeholders.
What are the two parameters of a business model design? Discuss their key elements. Two sets of parameters that business model designers must consider are design elements and design themes. Explain them.
Developing a business model consists of creating the content, structure and governance of transactions designed to create value through exploitation of business opportunities. Design elements: Refers to the conceptualization and configuration of the business model. Includes content, which is what activities should be performed. Structure, how they should be linked and sequenced and governance, who should perform them and where. Design themes: Novelty, adopting new activities or new ways of linking the activities or new ways of governing the activities. Lock-in, the power of the business model to keep third-parties attracted as business model participants, derived from the design element. Complementarities, which occur whenever bundling activities within a system provides more value than running activities separately. Efficiency, refers to how firms use their activity system design in order to achieve greater efficiency through reduction of transaction costs.
Bandura's Theory of Moral Disengagement
Explains why people engage in cruel and inhumane actions. *Inhibitive* Manifested in both the power to refrain from behaving inhumanely *Proactive* Manifested in the proactive form is expressed in the power to behave humanely.
Do you think that 'entrepreneurship by necessity' could apply to the creation of social ventures? Yes? No? Explain.
Many people find that the negative influences in their life are the biggest motivators to change their current state. Although positive influences are attractive to work towards, the desire to get out of one's current state because it is no longer suitable for them is a much biggest motivator. Therefore, those who pursue their venture because of push factors, also known as "entrepreneurship by necessity", which is the motivator for those who are dissatisfied with their current work, need a more flexible schedule, want to create a better income or are having a hard time finding employment that fits their lifestyle or finding employment in general.
How do you think moral engagement explains the motivation to become a social entrepreneur.
Moral engagement refers to the extent to which social entrepreneurs are deeply committed to their ideals and feel morally obligated to pursue them. For social entrepreneurs, this explains their motivations to become so because it conveys the intention to addressing a particular social problem because it is "the right thing to do" and are more motivated to help others fulfill their selfish interests.
Identify some of the reasons why it is important for social entrepreneurs to develop sustainability models for their social ventures.
New social venture sustainability models are needed because social ventures operate in environments where infrastructure, governance, politics, and technology represent, in themselves, problems to overcome in the first place. Purely philanthropic social ventures (nonprofits) relying on donations and grants would have sustainability models different from hybrid forms of social ventures (which also generate sales and profits along with fulfilling their mission).
Discuss how the three components of the institutional environment could impede the emergence of social entrepreneurship in a given country.
Normative: In places where the social norms and values towards entrepreneurs themselves is negative, this will inhibit entrepreneurial activity. In cultures where high risk propensity is the deemed negatively, appreciation of entrepreneurship is lower. Cognitive: If the entrepreneurial venture is not familiar to the knowledge and perceptions of the institutional environment, this could greatly hinder the start-up or growth of the venture,. Regulatory: The laws and regulations put in place legally can be restrictive to the actions of those trying to start-up a new venture. The "rules of the game" could be prohibitive to growth, and could possibly indefinitely limit the capabilities of a new venture to expand.
Pull Theory
People are attracted into entrepreneurial activities because they seek independence, self-fulfillment, wealth and other desirable outcomes.
Push Theory (By Necessity)
People are pushed into entrepreneurship by negative external forces (ex: job dissatisfaction, difficulty find employment, insufficient salary or inflexible work schedule)
Cognitive Mechanisms: Advantageous Comparison
Perpetrator compares the inhumane acts to others to legitimize them. Such comparison leads to come some type of exoneration.
Cognitive Mechanisms: Displacement of responsibility
Perpetrator obscures or minimizes his/her role in the harm caused. Ex: When the actions are committed in a group or when the perp receives orders from authorities or when the harmful conducts are collective ones.
Sources of Ideas
Personal experiences Hobbies Accidental Discovery Systematic Search Awareness created by media
Discuss the PEST (Political, Economic, Social, Technological) model and its influence on understanding social venture environments.
Political: Factors include tax policy, labor law, environmental law, trade restrictions, tariffs, democracy, political stability, political risk and rule of law. Governments can generally influence the propensity of entrepreneurship and innovation. As governments begin to understand their role in wealth creation and economic prosperity, they are learning to become more supportive, where it can foster the emergence of entrepreneurial and innovative ecology. Economic: Factors including economic growth, interest rates, exchange rates, inflation rates, state of economy, standard of living, economic risk, structure of industry, market size and availability of investment capital. The attractiveness of social entrepreneurship in a country frequently exists as a result of information about existing material and human resources. Economic stability, capital availability and reduced personal income taxes are all positively related to new venture creation. Social: Factors that include the culture, traditions, religions, religious tolerance, lifestyle, value system, norms, and population demographics. These factors are important because norms and values influence the relative desirability of entrepreneurship as an occupational choice. Individualistic societies emphasize personal freedom, which encourages individuals to think and act creatively to discover for themselves what works or does not work, whereas collectivistic societies tend to impede communication upwards through social hierarchy, overcentralize authority, rely on rules and procedures, and resist the radical social changes that often accompany innovation. Technological: These include factors like Research & Development activity, automation, rate of technological change, use of technology and the types of technology. Information technology facilitates increased awareness of the existence of social problems not only locally but in other parts of the world. Technology can also facilitate the creation of social ventures because social entrepreneurs can easily use the internet to advertise their social ventures. Technology also facilitates partnerships among social entrepreneurs located worldwide.
Discuss the importance of using primary data in feasibility analysis.
Primary data is important in a feasibility analysis because this is first hand data that the entrepreneur can collect and analyze. This is usually collected through a buying-intentions survey to determine whether a customer would wish to buy a particular product or use a particular service, should it become available. This way, the entrepreneur can directly infer from the consumers about their buying behavior as opposed to analyzing predictions and trying to make forecasts.
Identify and describe the four components of a feasibility analysis.
Product/Service Feasibility Product/service desirability, or product/service demand, often assess by entrepreneurs by completing a proof-of-concept test. This involves a preliminary description of a product or service idea, where they write a concept statement, a detailed description of the product or service, its principle features and its function. Any feedback will help the entrepreneur to refine the product/service or to better position in the market. Industry/target market feasibility The assessment of whether the industry looking to compete in is attractive. The analysis will reveal whether it is growing or shrinking, emerging and young or old and mature, and whether it has low or high operating margins. After the industry attractiveness is assessed, they must analyze the attractiveness of the target market. When it is sufficiently large at present and has the potential to expand over time, it is more attractive, allowing scalability of the venture in the future. Organizational Feasibility This is the extent to which the new firm has the necessary human capital to exploit the opportunity successfully. There should be enough new employees to start up operations and they should be skilled and dedicated. In addition to the new team, the key employees, and the protection of intellectual property, this additionally includes partnerships, government support, and key equipment that will be needed. Financial Feasibility The focus is on determining whether the venture has or will acquire the financial resources needed to start its operations, which includes total startup cash needed, financial performance of similar firms, overall financial attractiveness of the new venture. What may help this processes is benchmarking existing firms to assess their financial performance.
Intensity of moral engagement
Refers to the strength of an individuals moral commitment and determination to act.
Fixed Mindset
Refers to the view that one's talents and abilities are a set of traits.
Scott's Institutional profile of a country
Regulatory, Normative, Cognitive
Explain the role that risk propensity could play in social entrepreneurship.
Risk propensity is the natural inclination or tendency to take risks. It is noted that entrepreneurs has a high risk propensity, which is necessary as undertaking a entrepreneurial venture is a high risk operation and the person must be able to deal with uncertainty. In terms of social ventures, risk propensity can positively influence the creation of social ventures because they run the risk of their income, reputation, and psychological well-being as they start their social venture.
Discuss the importance of using secondary data in feasibility analysis.
Secondary data is important in this analysis because library, internet research and existing database resources can provide about the viability of business ideas without doing much field investigation. Here, a social entrepreneur can assess whether the social opportunity has social value potential, and this information garnered from these sources can help determine whether the opportunity has the potential to make a difference in people's lives.
Identify at least three elements that could be included in the normative component of the institutional environment. Explain how they could affect social venture creation.
Social Norms: This is the accepted behavior than an individual is expected to conform to in a particular group, community or culture. If a venture tries to venture outside of that expected behavior it has the potential to 1) not be accepted well from the target market causing the creation of the venture to stunted 2) created a trend among the target market that is outside of their normal behavior. Values: In an institutional environment, these are individuals principles or standards of behavior or one's judgement of what is important in life. If the mission of a new venture coincides with the values of a particular culture, this could benefit the company because supporters will promote the brand with acquaintances would share common values. Adversely, if the mission of a venture is contrary to the values of a person, it could lead to bad endorsement and the spread of negative publicity. Beliefs: Beliefs are assumptions and convictions that individuals hold to be true. If the beliefs exemplified by a new venture align with its target market, it will have the same effect as above with the values, and the consumers will identify well with the mission. If the convictions of the mission are contrary to the consumers belief, they will lose support those within that normative framework.
Reasons why social entrepreneurship is becoming a global phenomenon (community similarities and technology)
Social entrepreneurship around the world is influenced by a lot of factors, including colonial history, cultural and social values, ethnic identity, religious beliefs and government support. The current trend for these ventures is hybridization to assist the social missions. Meaning organizations accept grants and donations, however they incorporate earned-income activities because they allow they to improve governance over more professional management tactics, greater financial rigor, improved accounting practices and greater transparency and accountability. One common concept across the board is that organizations will address the social missions that are prevalent in a particular country or community.
What is the difference between a business opportunity and a social venture opportunity?
The business opportunity follows the four C's of the commercial enterprise, which is customer, consideration, connection and commitment. However, when it is a social venture, these four C's may have a slightly different meaning. To begin, the person to derive value from the process is the customer, although they may not pay for it. The consideration means that the product or service should make a difference in the lives of the customers. The connection is the extent to which the social entrepreneur will deliver the product or service to the beneficiaries, as opposed to the commercial definition of connecting with the customer for purpose of just the distribution channel.
Explain the difference between a buyer intentions survey and a (product/service) concept statement.
The concept statement is written up while the product/service is still just an idea, and it is used to help the entrepreneur refine the idea and make it more attractive for when it hits the market. The buyer intentions survey provides an indication of whether there is a demand for the product/service, and this will show what the demand is for the product, to determine if potential consumers would be interesting in buying the product/service, should it become available.
Discuss some of the techniques of idea generation, such as brainstorming and focus groups, and apply them to social venture opportunities.
The creation process for idea generation includes an active and passive phase, in which the active phase includes would-be entrepreneurs actively taking steps to generate business ideas. Brainstorming is a method used by gathering a group of people in room to generate ideas about a specific topic, in an informal or formal matter. Brainstorming ideas generally do not allow criticism to facilitate the generation of novel ideas. In entrepreneurship, it may be a group of potential entrepreneurs or a team of entrepreneurs sitting down to generate ideas about possible business opportunities. A focus group is typically made up of 5 to 10 people who are familiar with a specific topic. In entrepreneurship, this can be used as a follow up to brainstorming and used to refine the business idea and answer specific questions pertaining to the opportunity. Other techniques include library/internet research or customer advisory board meetings.
The Model of Moral Engagement
The extent to which social entrepreneurs are deeply committed to their ideals and feel morally obligated to pursue them. Conveys the intention that addressing a particular social problem is the 'right thing' to do.
Explain the key assumptions of the discovery theory of entrepreneurial opportunity.
The opportunity discovery theory contends that opportunities exist in the external environment and so can be discovered by clever entrepreneurs. This theory views entrepreneurs as different from non-entrepreneurs as entrepreneurs are able to identify opportunities where others are not.
Explain how pull (positive influences) and push (negative influences) approaches contribute to social entrepreneurial motivations.
The positive and negative influences in an entrepreneur's life have a large role in the motivation to execute their business ventures. Things such as dissatisfaction with their jobs or inflexible work schedule pushed them to pursue an alternate endeavor. However, the pull is just the opposite, where positive outcomes such as self-fulfillment, wealth and independence attract these entrepreneurs to pursue new ventures.
Does a social entrepreneur need a feasibility analysis to determine whether to go ahead with his/her social venture idea? Yes? No? Explain.
The social entrepreneur does need to complete a feasibility analysis to determine whether to go ahead with their venture, because it will help them save time and resources. A feasibility analysis has an internal audience and helps the entrepreneur focus on the opportunity and the potential to realize. It can help them decide whether to pursue the idea, refine the current idea to improve its potential for success, abandon the current idea, or search for a more suitable idea.
Describe the elements that would make a social venture opportunity attractive.
There are multiple factors that can make a social venture opportunity attractive. In terms of social value potential, a business that directly addresses an identified social need, has a direct alignment with its mission, can fulfil identifies social need in a measurable way, has an effectiveness-to-cost ratio and has a positive perception and will be endorsed by the community, it is a strong opportunity. The venture will have strong market potential if the target beneficiary both needs and wants the service or product, the timing is good, the market is large, it is an open market with little to no competition, and the interest from investors had evidence of philanthropic, government or private sector financial interest. The venture will have a strong competitive advantage potential if the barriers to entry are high and there are many, if there are many potential partnerships and alliances, there is substantial control over cost, if there is a highly compelling mission and widespread sympathy and the management team has a strong, complete skill set. Lastly, the sustainability potential is strong if there is sufficient physical resources to start and maintain the venture, sufficiently skilled entrepreneurs, staff and board, and there is high potential for charging user fees and/or selling goods/services.
