Post on 09-Apr-2018
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Entrepreneurship: TheEntrepreneurship: TheBuilding BlocksBuilding Blocks
Michael MorrisMichael MorrisWitting Chair in EntrepreneurshipWitting Chair in Entrepreneurship
Dept. of EntrepreneurshipDept. of EntrepreneurshipWhitman School of ManagementWhitman School of Management
Syracuse UniversitySyracuse University
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Defining EntrepreneurshipDefining Entrepreneurship
Process of creating value by bringingProcess of creating value by bringingtogether a unique package of resources totogether a unique package of resources toexploit an opportunityexploit an opportunity
Pursuit of opportunity without regard toPursuit of opportunity without regard toresources currently controlledresources currently controlled
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Underlying DimensionsUnderlying Dimensions
EntrepreneurialOrientation (EO)
Innovativeness Risk-taking Proactiveness
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The Elements Required forThe Elements Required forEntrepreneurshipEntrepreneurship
The organizationalcontext
Theentrepreneur
The resourcesThe concept
The entrepreneurialprocess
The environment
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Entrepreneurship as a ProcessEntrepreneurship as a Process
Identifying an Opportunity
Develop the Concept
Determine the RequiredResources
Acquire the NecessaryResources
Implement and Manage
Harvest the Venture
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What Is SocialWhat Is SocialEntrepreneurship?Entrepreneurship?
Arthur C. BrooksArthur C. BrooksProfessor of Public AdministrationProfessor of Public Administration
Maxwell School of Citizenship and Public AffairsMaxwell School of Citizenship and Public Affairs
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Social Entrepreneurship:Social Entrepreneurship:Definition 1Definition 1
•• Profit-making ventures designedProfit-making ventures designedto provide revenues to nonprofitsto provide revenues to nonprofits
•• ExamplesExamples–– Affinity credit cardsAffinity credit cards–– Cause-related marketingCause-related marketing–– Use of nonprofit facilities forUse of nonprofit facilities for
commercial activitiescommercial activities
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Social Entrepreneurship:Social Entrepreneurship:Definition 2Definition 2
•• The process of pursuingThe process of pursuingopportunities in pursuit of highopportunities in pursuit of highsocialsocial returns returns
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Key Elements of SocialKey Elements of SocialEntrepreneurshipEntrepreneurship
•• Social entrepreneurshipSocial entrepreneurshipaddresses social problems oraddresses social problems orneeds that are unmet by privateneeds that are unmet by privatemarkets or governmentsmarkets or governments
•• Social entrepreneurship isSocial entrepreneurship ismotivated primarily by socialmotivated primarily by socialbenefitbenefit
•• Social entrepreneurship worksSocial entrepreneurship workswithwith——not againstnot against——market forcesmarket forces
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The Process of SocialThe Process of SocialEntrepreneurshipEntrepreneurship
Opportunity recognition・ Social problems・ Unmet needs
Concept development・ Identification of social
rewards・ New products or markets
Resource determination and acquisition・ Financial resources・ Human resources・ Human capital
Launch and venture growth・ Measurement of returns・ Expansion and change
Goal attainment・ Succeed in mission and shut down・ Succeed in mission and find new
opportunity・ Attain a stable service equilibrium・ Integrate into another venture
Opportunity recognition・ Social problems・ Unmet needs
Concept development・ Identification of social
rewards・ New products or markets
Resource determination and acquisition・ Financial resources・ Human resources・ Human capital
Launch and venture growth・ Measurement of returns・ Expansion and change
Goal attainment・ Succeed in mission and shut down・ Succeed in mission and find new
opportunity・ Attain a stable service equilibrium・ Integrate into another venture
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ItIt’’s not All About Start-Upss not All About Start-Ups
•• Social entrepreneurships typesSocial entrepreneurships types–– InnovationInnovation–– AdaptationAdaptation
•• Inside or outside establishedInside or outside establishedorganizationsorganizations–– EntrepreneurshipEntrepreneurship–– IntrapreneurshipIntrapreneurship
•• There are lots of ways to beThere are lots of ways to beentrepreneurialentrepreneurial
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Sources of Opportunity for SocialSources of Opportunity for SocialEntrepreneurshipEntrepreneurship
•• Demographic changesDemographic changes–– Neighborhoods in declineNeighborhoods in decline
•• Public policy shiftsPublic policy shifts–– Changes in public arts fundingChanges in public arts funding
•• Public opinionPublic opinion–– The Mozart EffectThe Mozart Effect
•• Changes in technologyChanges in technology–– MP3sMP3s
•• Changes in tasteChanges in taste–– Sudden interest in BachSudden interest in Bach
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Opportunities vs. ThreatsOpportunities vs. Threats
•• Social entrepreneurs are alwaysSocial entrepreneurs are alwaysscanning the horizon forscanning the horizon foropportunitiesopportunities
•• Opportunities for entrepreneursOpportunities for entrepreneurslook like threats and tragedies tolook like threats and tragedies toothersothers
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Many Good Ideas Are notMany Good Ideas Are notOpportunitiesOpportunities
physiological
safety and security
belongingess
self-esteem
cognitive
aesthetic
self-actualization
self-transcendence
Proper nutrition
School and neighborhood safety
Community programs
Empowermenteem
cognitive
aesthetic
self-actualization
self-transcendence
Proper nutrition
School and neighborhood safety
Community programs
Empowerment programs
Academic programs
The arts
College scholarships
Programs to create mentors
Maslow’s Hierarchy Example enterprises
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Who Are Social Entrepreneurs?Who Are Social Entrepreneurs?
•• Nonprofit executivesNonprofit executives•• High-initiative staff memberHigh-initiative staff member•• Major volunteer or donorMajor volunteer or donor•• Active trusteeActive trustee•• Government officialGovernment official
Ref. Frumkin ch 5 2002
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Characteristics that Predict anCharacteristics that Predict anEntrepreneurial OrientationEntrepreneurial Orientation
Innovativeness
Education and experience
Achievement orientation
Independence
Sense of control over destiny
Low risk aversion
Tolerance for ambiguity
Entrepreneurialorientation
Community awarenessAnd social concern
Socially -entrepreneurialorientation
Innate characteristics
Innovativeness
Education and experience
Achievement orientation
Independence
Sense of control over destiny
Low risk aversion
Tolerance for ambiguity
Entrepreneurialorientation
Community awarenessAnd social concern
Socially -entrepreneurialorientation
Innate characteristics
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Risk Is RealRisk Is Real
Ref. Cordes et al
51%49%
38%36%
29% 28% 27%
0%
10%
20%
30%
40%
50%
60%
Environmental
Religion
Arts and culture
Education
Hum
an services
International
Health
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Threats to SocialThreats to SocialEntrepreneurshipEntrepreneurship
•• Institutional adversity to riskInstitutional adversity to risk•• Institutional intolerance toInstitutional intolerance to
innovationinnovation•• Bad ideas (or at least, ideas thatBad ideas (or at least, ideas that
are before their time)are before their time)
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Measuring ReturnsMeasuring Returns
OUTCOMESOUTCOMES
INPUTSINPUTS
ACTIVITIESACTIVITIESACTIVITIES
OUTPUTSOUTPUTS
IMPACTS
Social value
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Can We Measure SocialCan We Measure SocialReturns in DollarsReturns in Dollars
Enterprise valueFinancial return on investment
Social purpose valueCosts and savings from serving social mission
Blended valueEconomic + socioeconomic value of enterprise
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Case 1: Housing OpportunitiesCase 1: Housing OpportunitiesMade Equal (H.O.M.E.)Made Equal (H.O.M.E.)
•• ServicesServices–– Core services in housing disputes and fairCore services in housing disputes and fair
housing advocacy in Virginiahousing advocacy in Virginia–– Special projects and lawsuitsSpecial projects and lawsuits
•• Opportunity: Educate people on fairOpportunity: Educate people on fairhousing before-the-fact, instead ofhousing before-the-fact, instead offixing situations after-the-factfixing situations after-the-fact
•• Enterprise: Start fair housing trainingEnterprise: Start fair housing trainingInstituteInstitute
•• Returns: More housing for theReturns: More housing for thedisadvantaged, fewer complaintsdisadvantaged, fewer complaints
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Case 2: Boaz & RuthCase 2: Boaz & Ruth
•• ServicesServices–– Revitalizing a blighted neighborhood inRevitalizing a blighted neighborhood in
Richmond, VARichmond, VA–– Skills training for residentsSkills training for residents
•• Opportunity: Underutilized physicalOpportunity: Underutilized physicaland human capitaland human capital
•• Enterprise: Turn a local fire stationEnterprise: Turn a local fire stationinto retail space and traininginto retail space and trainingrestaurantrestaurant
•• Returns: Entrepreneurial skills forReturns: Entrepreneurial skills forresidentsresidents
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The Underlying ChallengesThe Underlying Challenges
Michael MorrisMichael MorrisWitting Chair in EntrepreneurshipWitting Chair in Entrepreneurship
Dept. of EntrepreneurshipDept. of EntrepreneurshipWhitman School of ManagementWhitman School of Management
Syracuse UniversitySyracuse University
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The Logic of E in For-profitsThe Logic of E in For-profits
EntrepreneurshipEntrepreneurship↓↓
New Products/Services/ProcessesNew Products/Services/Processes↓↓
Better Served CustomersBetter Served Customers↓↓
Competitive AdvantageCompetitive Advantage↓↓
ProfitProfit↓↓
Returns to StockholdersReturns to Stockholders↓↓
Career Advancement for InnovatorsCareer Advancement for Innovators
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Complicated Logic of Complicated Logic of NPOsNPOs
Entrepreneurship↓↓
New Process, Services, Products↓↓
Multiple Stakeholders With Conflicting Demands, Some ofWhich May be Served by these Innovations, Others Not
↓↓Alienated Stakeholders Could Withhold Resources
↓↓Enhanced Achievement of Social Mission
↓↓No More Resources Or Financial Returns Necessarily Result
From The Entrepreneurial Behavior
Also: If the innovation fails, resources could be deflectedfrom the core social mission
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Related ChallengesRelated Challenges
• Innovation can compromise basic mission & values, while• Diffusing scarce resources and distracting principals from
the core mission• Managers many have less business-specific skills• Boards play major role• Stakeholder alienation/Change can require consensus• Donors want contributions directed to traditional programs• Demands for transparency/Sanctions for rule-breaking• Stakeholders not diversified– less amenable to risk• Nondistribution constraints/Private inurement doctrine• Conceptualizing innovation• Performance metrics are difficult to quantify• Linkages/implications between innovation and
performance unclear• Risk/failure implications unclear• Sector diversity
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An Open ConversationAn Open Conversation
What are the implications of socialWhat are the implications of socialentrepreneurship for teaching,entrepreneurship for teaching,
research and service at Iowa State?research and service at Iowa State?