ENTREPRENEURSHIP AND

ENTERPRIZE DEVELOPMENT

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Entrepreneurship in the Twenty-first
Century

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Entrepreneur
Is it all a Myth

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 Etrepreneurship in the Past
• “ If you are a small businessman, you may be
as extinct as the village blacksmith”
• “Small business is as dead as the dodo”

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 Entrepreneurship Today
• 70% of economic activity
• Between 60% and 80% of new jobs
• Driven by passion and purpose
• U.S. standard of living (4 times better than
former USSR) ascribed to entrepreneurship

• How about the change in living

standards in Ethiopia? 6
 The Evolution of Entrepreneurship

• Entrepreneur is derived from the French

entreprendre, meaning “to undertake”.

• No single definition of entrepreneur :

1. Small Business
2. Leadership Style

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 Who Are Entrepreneurs?
Entrepreneurs, driven by an intense
commitment and determined perseverance,
work very hard.

They are optimists who see the cup as half full

rather than half empty. They strive for
integrity. They burn with the competitive
desire to excel. 8
 Common Characteristics Associated with
Entrepreneurs
• Commitment,
Determination, and
Perseverance
• Drive to Achieve
• Opportunity Orientation
• Initiative and
Responsibility
• Persistent Problem Solving
• Seeking Feedback
• Internal Locus of Control
• Tolerance for Ambiguity
• Calculated Risk Taking
• Integrity and Reliability
• Tolerance for Failure
• High Energy Level
• Creativity and
Innovativeness
• Self-confidence and
Optimism
• Independence
• Team Building
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 Defining The Concept
Recent research has defined corporate
entrepreneurship as a process whereby
an individual or a group of individuals,
in association with an existing
organization, creates a new organization
or instigates renewal or innovation
within the organization.

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Entrepreneurs and Owner-
managers
…additional differences between Managers
and entrepreneurs
 Entrepreneurs differ from professional
managers in that they undertake a venture for
their personal gratification.
As such they don‟t love working within the
framework of occupational behavior set by
others.
They may engage themselves as professional
manager to perform some of the functions such as
setting objectives, policies, procedures, rules,
strategies and formal communication network.
Entrepreneurial Orientation

Autonomy

Innovativeness

Proactiveness

Competitive aggressiveness

Risk-Taking
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Entrepreneurial Orientation

Dimension Definition
Autonomy Independent action by an individual or team aimed
at bringing forth a business concept or vision and
carrying it through to completion.
Innovativeness A willingness to introduce novelty through
experimentation and creative processes aimed at
developing new products and services as well as
new processes.
Proactiveness A forward-looking perspective characteristic of a
marketplace leader that has the foresight to seize
opportunities in anticipation of future demand.
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice,
Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,”
Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,”
Management Science 29 (1983), pp. 770-91.

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Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation
Entrepreneurial Orientation

Dimension Definition
Competitive An intense effort to outperform industry rivals. It is
aggressiveness characterized by a combative posture or an
aggressive response aimed at improving position or
overcoming a threat in a competitive marketplace.
Risk taking Making decisions and taking action without certain
knowledge of probable outcomes; some
undertakings may also involve making substantial
resource commitments in the process of venturing
forward.
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice,
Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,”
Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,”
Management Science 29 (1983), pp. 770-91.

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Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation
Entrepreneurial Orientation

Risk
Taking

Innovation

Pro-
activeness
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 “Corporate Entrepreneurship
Assessment Instrument
(measured key entrepreneurial climate factors)

• Management Support
• Autonomy/Work Discretion
• Rewards/Reinforcement
• Time Availability
• Organizational Boundary

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Social Entrepreneurship (SE)

Theory and Practice

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 Introduction

Increasing interest in finding social solutions to socio-

economic problems such as social exclusion and market
failure has stimulated numerous projects and initiatives
that combine economic, social and ecological goals into
a „triple bottom line‟.i.e, people, planet and profit

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 Three Concepts

PRIVATE PUBLIC THIRD

SECTOR SECTOR SECTOR

HOUSEHOLD INFORMAL
SOCIAL
ECONOMY

SOCIAL
VOLUNTARY
ENTERPRISE

SOCIAL
ENTREPRENEURSHIP

•Deakins and
Friel, 2012 20
 Defining Social Entrepreneurship
Definitions of Entrepreneurship and Social Entrepreneurship
Definition of Definition of Social Entrepreneurship (Dees, 2001:4)
Entrepreneurship (Timmons,
1994:6)
“creating and seizing an “Social entrepreneurs play the role of change agents in the
opportunity and pursuing it social sector, by:
regardless of the resources - Adopting a mission to create and sustain social value
currently controlled…it is a - Recognizing and relentlessly pursuing new opportunities
human creative act…it usually to serve that mission;
requires a vision…it involves - Engaging in a process of continuous innovation,
building a team…of sensing adaptation, and learning;
opportunities and finding and - Acting boldly without being limited by resources currently
marshalling resources and in hand; and
ensuring the venture does not -Exhibiting a heightened sense of accountability to the
run out of money. constituencies served and for the outcomes 21
created.”
The Difference Between Social Entrepreneur &
Social Entrepreneurship, while we are on the subject of definitions…

•
• Source: L. McGilvray (2015)

Social Entrepreneurship is the term used to describe the

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pursuit of an opportunity to deliver social value.
Where Does the Social Entrepreneurial
Model Sit Within the Economy?

Third Sector
Not-for-personal
profit
First Sector Non-governmental
organisations
For-personal (NGOs)
profit Charities
Paid by sales,
donations, grants

Second Sector
Public Sector
Goverment organised
Paid for by Taxes

•Pearce, 2007
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 The Third Sector

•L. McGilvray, 2015 24

 Social Economy

The social economy: represents the organisations that

pursue social goals not undertaken by either government
or commercial businesses

Social economy businesses generate income and

employment, both paid and voluntary, and aim to
address social problems and meet community needs
rather than operate for pure profit.
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What is Social Enterprise?

Combining income generating

activity with a social goal

Creating social change at a

community level

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 Classifying a Social Enterprise
Six defining characteristics and values of social enterprise
(Pearce, 2007)
1. Having a social purpose
2. Engaging in trading activities to achieve social purpose (at
least in part)
3. Not distributing profits to individuals
4. Holding assets and wealth in trust for community benefit
5. Democratically involving members of its constituency in
governance of organisation
6. Independent organisation with accountability to defined
constituency & wider community

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 Social Value and the Impact of
Social Entrepreneurship
• What is social value and how can it be measured?
• Value defined generally:
• Grönroos (2011: 242) posits two views of value,
• Cost benefit analysis on the part of the buyer, and also his
own definition that “value for customers means that they,
after having been assisted by the provision of resources or
interactive processes, are or feel better off than before.”
• He asserts that success in terms of delivering value can be
measured in monetary terms.

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 Social Value Creation
• Social value can be considered the combination of impacts in
three key areas, commonly referred to as the triple bottom
line: people, planet and profit
• In social entrepreneurship social value is an end in itself
(Agafonou, 2014; Santos, 2012) rather than merely a means
of improving commercial performance.
• Value considered in three ways
– Social
– Economic
– Enviromental

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 Social Value and the Impact of Social
Entrepreneurship
• Social value or social impact can be determined according to
two broad approaches
• One mainly quantitative, called Social Return on Investment
(SROI)
• The other mainly qualitative, called the social audit.

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 Measuring Social Value
• Big Issue Value Creation
• Economic Value
– It creates employment for a potentially broad range of
constituencies
– Provides a source of income for homeless people and core
staff alike
– It reduces governmental intervention through decreased
reliance on the public sector in areas such as health benefits
and social care
– Through greater economic agency, choice becomes more
relevant and this encourages and supports healthy
markets and economic prosperity more generally.
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 Measuring Social Value
• Social value creation, on the other hand, is more challenging to
measure
• Social Value and the Big Issue
– Combats social exclusion and provides opportunities for
homeless people to engage with the world of commerce
– Creates an environment for mutual self-self help, friendship
and development of formal and informal support networks
– Homeless people have an opportunity to meet people from a
range of socio-economic backgrounds
– It improves the confidence of homeless people
– It reminds society that homelessness is a real issue that can
have dire consequences for those affected. 32
 Activity:

How changes to the lives of homeless people

could be measured?

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Social Value in Communities: Social
Capital (SC)
It is defined in various ways by scholars and can be split into
three types, each with its own theoretical underpinning
1. Bonding SC - The bonds that exist between families and
communities in terms of shared values and norms; this is called
bonding social capital
2. Linking SC -Relationships between people from markedly
different power or economic structures are referred to as linking
social capital
3. Bridging SC- The linkages between different communities,
between unemployed and employed people, for example; this is
called bridging social capital.

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 Measuring Social Capital
We use proxy measures such as
• Trust
• Municipality
• Reciprocity
• Civil spirit
• Community cohesion
• Shared values

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Thank you!

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