Social entrepreneurship with an insider perspective: Issue experience, inclusive organizing, wellbeing, and performance in social enterprises

• In Event: Social entrepreneurship

Abstract

Social issues are the raison d’etre for social enterprises but they rarely receive research attention (Mair & Rathert, 2020). In parallel, the understanding of the micro-foundations of social venturing tends to focus on prosocial motivations such as traits and values, but not personal experiences (Stephan & Drencheva, 2017; Vedula et al., 2022). We seek to advance the micro-foundations of social venturing by asking: what is the role of social entrepreneurs’ personal experience with a social issue?

Leveraging construal level theory (Trope & Liberman, 2010), we investigate how social entrepreneurs' personal experiences with the social issues they work on (e.g., being affected by discrimination themselves in a venture working on discrimination), impacts their well-being, enterprise performance, and adoption of inclusive organizing practices. Such personal experiences can shape individuals' perceptions, either as psychologically close and detailed or psychologically distant and abstract (Drencheva et al., 2021; Trope & Liberman, 2010).

Our study hypothesizes that social entrepreneurs' proximity to social issues positively relates to eudaimonic and hedonic well-being (Vandor and Meyer, 2021). We also propose that these experiences drive higher organizational performance, including serving more beneficiaries and fostering innovation. Additionally, we suggest that such experiences prompt social entrepreneurs to adopt inclusive organizational practices (Sabharwal et al., 2014; Shore et al., 2018) and practices of open strategy (Mair et al., 2020), and that these serve as mediation pathways for effects of issue proximity on wellbeing and performance.

Finally, democratic institutions have recently been highlighted as an overlooked enabler of entrepreneurial activity (Audretsch & Moog, 2022; Mickiewicz et al., 2021). Against this backdrop we hypothesize that the adoption of inclusive practices depends on the political context, with exposure to democratic institutions likely encouraging social entrepreneurs to adopt such practices.

We test our hypotheses in a survey in the Impact Hub, a global network of impact-entrepreneurial communities. Our sample includes 254 social entrepreneurs from 36 countries. Findings indicate that social entrepreneurs with issue experience indeed report higher eudaimonic well-being, serve more beneficiaries, and are more likely to adopt inclusive practices. We also find that the adoption of inclusive practices is more prevalent in democratic contexts, and indirectly contributes to higher innovativeness. However, we do not find support for the impact of issue experience on hedonic well-being.

In conclusion, our study highlights the significance of personal experience in social entrepreneurship. Even though many of these personal experiences are subjectively negative, our findings suggest that the issue proximity enabled by these experiences can contribute to higher individual wellbeing in entrepreneurship, higher organizational performance and more inclusive organizations. Our work contributes to the understanding of the role of personal adversity as a driving force for entrepreneurship (e.g., Williams & Shepherd, 2016; Yu et al., 2022) and emphasizes the importance of inclusive organizing practices in fostering meaningful social change within enterprises.

References

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Authors

• Peter Vandor, Social Entrepreneurship Center WU Vienna

• Ute Stephan, King's College London