Toward a Normative Theory of Social Entrepreneurship

Abstract

Social entrepreneurship (SE) has rapidly emerged as a growing phenomenon of interest among researchers and practitioners to solve complex societal issues . Yet despite a rapidly expanding body of research, SE remains under-theorized and highly contested with poorly defined constructs and weak conceptual boundaries. This lack of strong theoretical development within SE may be leading researchers into a competency trap by over-utilizing theories from multiple phenomena (Shepherd, 2015). As such, I propose a normative theory of SE to explain both “why” and “how” SE differs from commercial entrepreneurship (CE) in terms of competing exchange systems and the value creation process from a system level of analysis. Although value creation is commonly conceptualized at the societal level (Santos, 2012), I define and illustrate the interactive relationship between the enterprise as a producer of value creation and the community and retail markets as value consumers. I also examine the enterprise’s integrative application of community enablement activities as a value-supportive mechanism for addressing the institutional voids that perpetuate unmet social needs. I further propose a theoretical model and research propositions to test the empirical differences between CE and SE and their corresponding modes of organizing—i.e., traditional for-profits, corporate social responsibility, integrated hybrids, and differentiated hybrids.