Social entrepreneurship and value creation: Marketing perspective. Case study in European context.

UNIVERSITY​​OF​​VAASA FACULTY​​OF​​BUSINESS​​STUDIES

DEPARTMENT​​OF​​MARKETING

Laura​​Lipponen

SOCIAL​​ENTREPRENEURSHIP​​AND​​VALUE​​CREATION:​​MARKETING PERSPECTIVE

Case​​study​​in​​European​​context

Master’s​​Thesis in​​Marketing Management

VAASA​​2017

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TABLE​​OF​​CONTENTS

LIST​​OF​​FIGURES​​AND​​TABLES ABSTRACT

ACKNOWLEDGEMENTS

1.​​INTRODUCTION 13

1.1.​​Introduction​​to​​the​​research​​topic 16 1.2.​​Research​​problem​​and​​objectives​​of​​the​​study 17 1.3.​​Research​​approach​​and​​research​​methods 20

1.4.​​Definition​​of​​key​​concepts 21

1.5.​​Structure​​of​​the​​study 23

2.​​SOCIAL​​ENTREPRENEURSHIP​​AS​​A​​PHENOMENON 25 2.1.​​Social​​entrepreneurship​​as​​a​​field​​of​​research 25 2.2.​​Central​​concepts​​within​​the​​phenomenon 28 2.3.​​Characteristics​​of​​social​​entrepreneurship​​and​​social​​enterprises 32 2.4.​​From​​for-profit​​to​​non-profit​​business​​models 37

2.5.​​The​​entrepreneurial​​ecosystem 39

2.6.​​Support​​from​​the​​government​​and​​other​​actors 43 3.​​SOCIAL​​ENTREPRENEURSHIP​​IN​​THE​​EUROPEAN​​CONTEXT 45

3.1.​​The​​European​​environment 45

3.2.​​The​​state​​of​​social​​entrepreneurship​​in​​Europe 49 3.3.​​Support​​from​​the​​European​​Union​​and​​other​​actors 52 4.​​VALUE​​CREATION​​AND​​MARKETING​​IN​​SOCIAL​​ENTERPRISES 56 4.1.​​Social​​entrepreneurship​​and​​value​​creation 56

4.1.1.​​Social​​value​​creation 58

4.1.2.​​From​​value​​capture​​to​​value​​creation 60 4.1.3.​​Value​​created​​by​​social​​entrepreneurship 62 4.2.​​Theoretical​​considerations​​of​​marketing​​in​​social​​entrepreneurship 65

4.2.1.​​Entrepreneurial​​marketing 68

4.2.2.​​Non-profit​​marketing 70

4.2.3.​​Social​​and​​societal​​marketing 72

4.3.​​Marketing​​in​​social​​enterprises 75

4.4.​​Marketing​​communications 80

4.5.​​Theoretical​​framework 82

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5.​​METHODOLOGY 85

5.1.​​Research​​approach​​and​​philosophy 85

5.2.​​Case​​study​​research 86

5.3.​​Methods​​of​​data​​collection 87

5.3.1.​​MARCIEE​​program 88

5.3.2.​​Theme​​in-depth​​interviews 89

5.3.3.​​Case​​criteria 90

5.4.​​Data​​analysis 92

5.5.​​Reliability,​​validity​​and​​coverage 93

6.​​EMPIRICAL​​FINDINGS 95

6.1.​​Overview​​of​​the​​case​​companies 95 6.2.​​Country-specific​​characteristics​​and​​introduction​​of​​the​​case​​companies 101 6.3.​​Marketing​​and​​networks​​as​​success​​factors 110 6.3.1.​​The​​importance​​of​​networks​​and​​stakeholders 111 6.3.2.​​Marketing​​practices​​and​​strategies 113 6.3.3.​​Marketing​​communications​​supporting​​the​​success 114 6.4.​​Industrial​​dynamics​​supporting​​social​​entrepreneurship 119 6.5.​​The​​importance​​of​​governmental​​support 123

6.5.1.​​Forms​​of​​support 125

6.5.2.​​Critique​​expressed​​towards​​support 131 6.5.3.​​The​​governmental​​perspective​​to​​the​​perceived​​support 134 6.6.​​Value​​creation​​through​​marketing​​in​​the​​social​​entrepreneurial​​context 138

7.​​CONCLUSIONS 151

7.1.​​Discussion​​and​​conclusions 151

7.2.​​Managerial​​implications​​and​​limitations 161

8.​​REFERENCES 166

9.​​APPENDICES 173

Appendix​​1.​​​Questions​​for​​the​​social​​entrepreneurs ​​​​​​​​​​​​​​​​​​173 Appendix​​2.​​​Questions​​for​​the​​political​​decision​​makers ​​​​​​​​​​​​​​​​​​174 Appendix​​3.​​​MARCIEE​​flyer​​Trento​​2017 ​​​​​​​​​​​​​​​​​​175

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LIST​​OF​​FIGURES​​AND​ ​TABLES

Figure​​1.​​​Entrepreneurial​​ecosystem​​framework 41 Figure​​2​.​​Entrepreneurial​​Ecosystem​​Measurement​​Indices 42 Figure​​3.​​​The​​marketing​​concept 68 Figure​​4.​​​Societal​​marketing​​concept 73 Figure​​5.​​​Bricolage​​in​​entrepreneurial​​marketing 77 Figure​​6.​​​Theoretical​​framework 82 Figure​​7.​​​The​​scope​​of​​operations​​in​​the​​case​​companies 99 Figure​​8.​​​Attitudes​​towards​​support​​in​​the​​countries 125 Figure​​9.​​​Value​​creation​​in​​social​​entrepreneurship 139 Figure​​10.​​​Case​​companies​​in​​the​​landscape​​of​​social​​entrepreneurship 143 Table​​1.​​​The​​social​​enterprise​​spectrum 38 Table​​2.​​​Ranking​​of​​the​​selected​​EU​​countries​​according​​to​​HDI,​​EPI​​and​​SSI 47 Table​​3.​​​Dimensions​​of​​value​​creation 61 Table​​4.​​​Social​​marketing​​solution​​to​​social​​problems 74 Table​​5.​​​Interpreted​​business​​models​​of​​the​​case​​companies 96 Table​​6.​​​Overview​​of​​the​​case​​companies​​and​​the​​social​​objectives 98 Table​​7.​​​The​​complete​​list​​of​​case​​companies​​in​​the​​study 141

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UNIVERSITY​​OF​​VAASA Faculty​​of​​Business​​Studies

Author: Laura​​Lipponen

Topic​​of​​the​​Thesis: Social​​entrepreneurship​​and​​value​​creation:​​Marketing perspective.​​​​Case​​study​​in​​European​​context.

Name​​of​​the​​Supervisor: Arto​​Rajala

Degree: Master​​of​​Science​​in​​Economics​​and​​Business Administration

Department: Department​​of​​Marketing

Line: Marketing​​Management

Year​​of​​Entering​​the​​University: 2008

Year​​of​​Completing​​the​​Thesis: 2017 Pages:176

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ABSTRACT

The objective of the thesis was to examine how the means of marketing can support value creation in and contribute to reaching the social objectives in the context of European social entrepreneurship. The phenomenon, recognised to contribute to the objectives of sustainable development and supported by the European Union, has gained more awareness recently with the field growing in Europe. Yet the value that the innovative social ventures produce has largely remained uncharted, partly because of the issues in measuring non-monetary value. The field of marketing in the context has not been the focus of previous research, evoking interest towards the topic especially owing to the field’s ability to solve social issues by satisfying unmet needs. The research gaps discovered in the field might be a consequence of the pre-paradigmatic stage characterising​​the​​field​​and​​hindering​​the​​development​​of​​theory.

The theoretical part focused on describing characteristics of social entrepreneurship, the phenomenon in the European context and the relevant theories related to value creation, social value creation and marketing in social entrepreneurship. As the social ventures consist of various business models and earning logics with different emphasis on the creation of financial and social value, theories regarding both non-profit marketing and entrepreneurial marketing were discussed. The empirical part was created based on theme in-depth interviews conducted with 31 social entrepreneurs and 10 political decision makers from eight European countries, and the data was analysed​​using​​the​​approach​​of​​qualitative​​content​​analysis.

Based on the findings, marketing in social entrepreneurship can be described by the concept of bricolage with combining resources at hand with flexible and sometimes unplanned processes. In addition, the competitive means of marketing were interpreted to have a value adding qualities into the social venture.​The​hypothesis of the means of marketing being able to enhance the success of the social objectives was as well confirmed in the light of the findings, with marketing having a central​​role​​in​​both​​co-creating​​and​​communicating​​value​​to​​the​​stakeholders​​of​​the​​social​​venture.

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KEYWORDS:​​​Social​​entrepreneurship,​​social​​innovation,​​value​​creation,​​entrepreneurial marketing,​​non-profit​​marketing,​​societal​​marketing

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ACKNOWLEDGEMENTS

To​​my​​late​​grandfather,​​my​​father​​and​​my​​stepfather,​​all​​of​​whom​​have​​endlessly​​inspired​​me​​with their​​achievements​​in​​the​​field​​of​​entrepreneurship,​​leading​​me​​to​​choose​​this​​direction​​of​​interest into​​my​​studies​​and​​the​​entrepreneurial​​spirit​​into​​my​​life​​in​​general.​​You​​have​​taught​​me​​that​​the most​​valuable​​resources​​are​​the​​ones​​already​​within​​you,​​as​​well​​as​​the​​importance​​of​​being​​humble,

no​​matter​​what​​the​​circumstances.

First​​and​​foremost,​​I​​want​​to​​express​​my​​gratitude​​to​​my​​supervisor​​Arto​​Rajala​​for introducing​​me​​to​​the​​interesting​​research​​topic​​and​​arranging​​the​​data​​to​​be​​used​​in​​my thesis.​​Your​​valuable​​insights​​and​​guidance​​have​​been​​crucial​​for​​the​​research,​​not​​to mention​​your​​support​​and​​encouragement​​in​​my​​times​​of​​desperation​​when​​the​​goal​​has seemed​​to​​be​​beyond​​the​​horizon.

I​​am​​grateful​​to​​have​​been​​able​​to​​participate​​in​​the​​MARCIEE​​project​​in​​2015​​funded​​by the​​Erasmus+​​program,​​and​​also​​for​​the​​exciting​​opportunity​​to​​utilise​​the​​data​​gathered within​​the​​project.​​In​​addition​​to​​the​​knowledge​​gained​​from​​participating​​in​​the

international​​project,​​I​​have​​also​​been​​fortunate​​enough​​to​​make​​new​​friends​​along​​the​​way not​​the​​mention​​the​​experience​​regarding​​teamwork​​in​​cross-country​​teams.

I​​would​​also​​like​​to​​thank​​my​​family​​and​​friends​​for​​the​​endless​​support​​I​​have​​been receiving​​during​​this​​at​​times​​challenging​​process​​with​​times​​of​​doubt.​​Thank​​you​​for making​​me​​laugh.​​Nevertheless,​​even​​with​​the​​occasional​​struggling,​​the​​process​​of​​making this​​thesis​​has​​been​​surprisingly​​rewarding,​​and​​despite​​the​​endless​​hours​​spent​​with​​graphs and​​piles​​of​​previous​​research​​it​​was​​all​​worth​​it​​in​​the​​end.

I​​am​​also​​grateful​​for​​the​​University​​of​​Vaasa​​for​​all​​these​​years,​​everyone​​who​​has​​helped me​​during​​my​​studies,​​and​​also​​for​​Päivi​​Borisov,​​thank​​you​​for​​being​​the​​co-evaluator​​in this​​thesis.​​Thank​​you​​everyone​​for​​your​​support,​​without​​you​​all​​any​​of​​this​​would​​not have​​been​​possible.

“This​​report,​​by​​its​​very​​length,​​defends​​itself​​against​​the​​risk​​of​​being​​read.”

Winston​​Churchill

Helsinki,​​4​^th​​​December​​2017 Laura​​Johanna​​Lipponen

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1.​ ​INTRODUCTION

The​​purpose​​of​​this​​study​​is​​to​​examine​​the​​phenomenon​​of​​social​​entrepreneurship​​from the​​perspective​​of​​marketing.​​It​​is​​perceived​​that​​the​​means​​of​​marketing​​can​​be​​able​​to contribute​​to​​the​​societal​​challenges​​that​​social​​entrepreneurship​​is​​answering​​to​​by​​creating value​​in​​the​​process​​and​​enhancing​​the​​success​​of​​the​​social​​venture.​​The​​input​​that

marketing​​can​​add​​into​​the​​equation​​can​​be​​seen​​to​​support​​reaching​​the​​objectives​​of​​the social​​ventures,​​and​​marketing​​can​​also​​be​​seen​​to​​have​​a​​central​​role​​in​​value​​creation, especially​​customer​​value​​creation​​since​​it​​is​​one​​of​​the​​interfaces​​between​​the​​customers and​​the​​company.​​Thus,​​it​​is​​interesting​​to​​have​​a​​glimpse​​of​​how​​marketing​​is​​perceived​​in the​​social​​ventures​​in​​practice,​​and​​what​​kind​​of​​conclusion​​can​​be​​made​​from​​this​​in​​regard to​​the​​value​​creation​​by​​marketing​​and​​marketing​​as​​the​​means​​of​​intermediating​​the​​value for​​the​​stakeholders.

Entrepreneurship​​in​​general​​can​​be​​defined​​as​​profit​​seeking​​ambition​​which​​has​​the​​ability to​​enrich​​the​​overall​​economy​​and​​society​​when​​successful​​(Isenberg​​2011),​​and​​it​​is​​an important​​driver​​for​​economic​​prosperity​​and​​social​​well​​being​​because​​of​​its​​ability​​to create​​economic​​competitiveness​​(Vogel​​2013).​​While​​capitalism​​is​​thriving​​in​​the​​modern world,​​some​​entrepreneurs​​have​​begun​​to​​think​​outside​​the​​box​​and​​personal​​interests, establishing​​their​​businesses​​with​​other​​than​​monetary​​motives​​by​​operating​​as​​social entrepreneurs.​​These​​social​​ventures​​with​​social​​and​​environmental​​objectives​​are

challenging​​the​​status​​quo​​and​​the​​conventional​​thinking​​about​​what​​is​​possible​​(Seelos​​&

Mair​​2015),​​going​​beyond​​traditional​​entrepreneurship​​with​​the​​emphasis​​on​​the​​social​​well being​​with​​a​​more​​long​​term​​scope​​(Satar​​&​​John​​2016).​​The​​new​​innovative​​business​​are creating​​new​​markets​​with​​business​​models​​that​​can​​significantly​​extend​​the​​reach​​of​​the products​​and​​services​​into​​places​​where​​they​​would​​normally​​not​​be​​afforded​​(Elkington​​&

Hartigan​​2008:​​19).​​It​​also​​enables​​the​​civil​​society​​and​​private​​organisations​​to​​directly influence​​the​​problems​​in​​the​​community​​without​​middlemen​​and​​without​​relying​​on​​the

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public​​funds​​for​​the​​continuance​​of​​the​​business​​(Borgaza​​&​​Defourny​​2001),​​as​​the enterprises​​are​​perceived​​as​​a​​rational​​and​​functional​​solution​​to​​the​​public​​sector​​funding and​​resource​​constraints​​(Dart​​2004b).

Because​​of​​the​​global​​changes​​in​​consumptions​​habits,​​the​​shorter​​product​​life​​cycles​​and the​​emphasis​​on​​financial​​returns,​​the​​environment​​has​​been​​neglected.​​The​​future​​of civilisation​​as​​we​​know​​it​​may​​depend​​at​​least​​to​​some​​extent​​on​​the​​spread​​of entrepreneurship​​(Isenberg​​2011),​​highlighting​​even​​more​​the​​importance​​of​​social

innovations​​and​​entrepreneurship​​as​​a​​new​​preferred​​way​​of​​making​​the​​difference​​as​​social entrepreneurship​​has​​been​​recognised​​to​​contribute​​directly​​to​​the​​internationally​​recognised goals​​of​​sustainable​​development​​(Seelos​​&​​Mair​​2015).​​Social​​entrepreneurship​​and​​the social​​innovations​​attached​​have​​also​​become​​increasingly​​important​​as​​new​​social​​needs are​​emerging​​(OECD​​2010:​​31),​​and​​in​​general​​the​​social​​dimension​​is​​viewed​​to​​deserve​​a greater​​attention​​because​​of​​these​​growing​​social​​demands​​(BEPA​​2011).​​This​​importance is​​seen​​also​​in​​the​​rapid​​rise​​of​​social​​entrepreneurs​​(Mitchell,​​Madill​​&​​Chreim​​2015)​​and the​​growth​​of​​the​​phenomenon​​itself​​(Mallin​​&​​Finkle​​2007).​​In​​Europe,​​technological advances,​​globalisation​​and​​the​​ageing​​populations​​are​​changing​​societies​​at​​a​​rapid​​pace (BEPA​​2011).​​Especially​​new​​communication​​technologies​​have​​increased​​the​​access​​to information,​​increasing​​the​​European​​consumers’​​awareness​​about​​social​​issues​​(European Commission​​2013b).​​As​​social​​entrepreneurship​​was​​recognised​​as​​an​​important​​form​​of business​​supporting​​the​​societal​​development,​​the​​European​​Commission​​launched​​in​​2011 the​​Social​​Business​​Initiative,​​aimed​​at​​support​​and​​development​​of​​the​​field​​(European Commission​​2011,​​2017b),​​illustrating​​the​​emphasis​​that​​has​​been​​placed​​on​​developing​​the field.

As​​social​​entrepreneurs​​are​​not​​primarily​​driven​​by​​financial​​motives​​(European

Commission​​2013a),​​they​​are​​using​​profits​​as​​a​​means​​to​​reaching​​the​​social​​goals​​instead (MARCIEE​​ISP.​​2017b;​​Satar​​&​​John​​2016),​​thus​​creating​​value​​to​​the​​society​​in​​one​​way

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or​​another​​with​​their​​motives.​​As​​social​​entrepreneurship​​consist​​of​​various​​business

models​​and​​differ​​in​​their​​goals,​​they​​can​​be​​seen​​to​​create​​value​​in​​many​​different​​levels​​in addition​​to​​the​​society​​as​​a​​whole.​​Social​​entrepreneurship​​has​​a​​tremendous​​role​​in​​the upliftment​​of​​the​​disadvantaged,​​the​​sustainable​​growth​​and​​therefore​​the​​development​​of the​​planet​​(Prabhu​​1999),​​and​​it​​is​​clear​​that​​the​​created​​value​​goes​​beyond​​the​​financial aspect.​​These​​other​​types​​of​​added​​value​​are​​perhaps​​not​​recognised​​or​​appreciated,​​and traditionally​​in​​evaluating​​entrepreneurial​​processes​​only​​the​​economic​​value​​has​​been counted​​for​​leaving​​much​​of​​the​​social​​value​​as​​well​​as​​other​​dimensions​​of​​value underestimated​​(Chell​​2007).​​These​​underestimated​​areas​​of​​value​​make​​the​​subject​​of value​​creation​​in​​social​​entrepreneurship​​more​​intriguing,​​with​​an​​added​​perspective​​of​​how the​​means​​of​​marketing​​can​​support​​the​​value​​creation​​and​​the​​social​​cause​​on​​venture itself.

In​​addition,​​it​​can​​be​​perceived​​that​​value​​creation​​connects​​to​​competition​​by​​creating customer​​value​​that​​is​​utilised​​as​​competitive​​advantage.​​According​​to​​the​​spirit​​of​​social entrepreneurship,​​value​​capture​​is​​merely​​a​​means​​in​​reaching​​the​​ultimate​​objective​​of value​​creation.​​In​​other​​words,​​a​​venture​​has​​to​​be​​able​​to​​sustain​​itself​​into​​a​​certain​​extent, but​​with​​additional​​profits​​reinvested​​in​​order​​to​​maximise​​the​​social​​impact.​​An

optimisation​​has​​to​​be​​made​​with​​the​​financial​​and​​social​​objectives,​​taking​​also​​into account​​the​​planetary​​restrictions​​and​​the​​goals​​of​​sustainable​​development.​​Some​​of​​the social​​ventures​​can​​be​​roughly​​categorised​​based​​on​​their​​primary​​objectives​​being​​related to​​environmental​​preservation​​and​​sustainable​​development,​​while​​some​​have​​work

integration​​of​​disabled​​and​​disadvantaged​​people​​as​​the​​primary​​purpose​​of​​existence,​​or​​the objective​​of​​introducing​​social​​solutions​​for​​instance​​for​​bringing​​services​​available​​for​​a larger​​part​​of​​the​​society.​​In​​addition​​to​​these​​main​​categories,​​the​​field​​includes​​as​​well examples​​of​​more​​general​​social​​objectives​​such​​as​​raising​​awareness​​for​​certain​​causes.

These​​wide​​variations​​within​​the​​field​​highlight​​the​​challenges​​for​​theory​​building​​and

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being​​able​​to​​produce​​theories​​with​​wide​​generalisability​​that​​could​​be​​applied​​into​​the fragmented​​field.

1.1.​​Introduction​​to​​the​​research​​topic

In​​the​​society​​today​​other​​forms​​of​​values​​and​​benefits​​besides​​financial​​value​​and​​growth are​​gaining​​importance​​partly​​because​​of​​changed​​and​​fragmented​​consumer​​needs​​and​​the changing​​perceptions​​towards​​endless​​consumption​​in​​general.​​This​​changes,​​together​​with the​​entrepreneurs​​with​​social​​entrepreneurial​​initiatives,​​have​​activated​​development​​also​​in Europe,​​while​​the​​developmental​​stage​​can​​also​​be​​interpreted​​to​​mirror​​the​​development​​of the​​values​​in​​the​​society.​​In​​general,​​in​​the​​context​​of​​the​​social​​entrepreneurship,​​the financial​​value​​is​​perceived​​the​​means​​instead​​of​​the​​ultimate​​end.

The​​competitive​​means​​of​​marketing,​​such​​as​​the​​traditional​​4P’s​​taken​​into​​consideration in​​the​​research,​​can​​be​​interpreted​​to​​convey​​and​​create​​value​​for​​the​​customers​​and​​the stakeholders​​of​​the​​company.​​The​​presence​​of​​multiple​​stakeholders​​is​​recognised​​within the​​field,​​and​​the​​communication​​has​​to​​be​​customised​​for​​their​​needs,​​making​​the​​matters more​​complicated​​and​​also​​highlighting​​the​​importance​​of​​the​​subject​​of​​study​​especially with​​the​​lack​​of​​research​​about​​marketing​​within​​the​​phenomenon.​​The​​management​​of​​the product,​​price,​​place​​and​​promotion​​are​​under​​examination​​in​​the​​data​​with​​hopes​​of revealing​​information​​regarding​​how​​the​​offering,​​communication​​and​​distribution​​are managed​​and​​how​​these​​measures​​influence​​the​​overall​​value​​creation.​​Regarding marketing​​in​​social​​enterprises,​​a​​lack​​of​​knowledge​​still​​exists,​​making​​the​​use​​of​​case examples​​reasonable​​with​​the​​objective​​of​​accumulating​​information,​​even​​with​​the​​finding being​​context​​specific​​and​​dependent​​on​​the​​supporting​​environment​​and​​ecosystem.​​The research​​topic​​includes​​multiple​​themes​​related​​to​​the​​phenomenon​​and​​that​​support

reaching​​the​​objective​​of​​the​​thesis.​​Marketing​​is​​perceived​​in​​the​​thesis​​to​​be​​closely​​joined

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together​​with​​value​​creation,​​while​​marketing​​is​​not​​the​​only​​component​​in​​the​​value creation​​network​​within​​the​​company.​​In​​addition,​​networking​​is​​expected​​to​​be​​of importance​​in​​the​​social​​ventures,​​since​​they​​are​​characterised​​as​​having​​restricted resources,​​which​​ultimately​​has​​various​​impacts​​for​​the​​operation,​​most​​importantly​​the financial​​resources​​available​​that​​define​​the​​boundaries​​of​​what​​is​​possible.

1.2.​​Research​​problem​​and​​objectives​​of​​the​​study

The​​aim​​of​​the​​study​​is​​to​​map​​the​​state​​of​​social​​entrepreneurship​​in​​the​​European​​context as​​well​​as​​the​​dimension​​of​​customer​​value​​creation​​through​​the​​means​​of​​marketing.

Despite​​of​​the​​extensive​​amount​​of​​research​​in​​the​​field,​​research​​about​​the​​​marketing​​​in​​the field​​of​​social​​entrepreneurship​​was​​challenging​​to​​find,​​identifying​​a​​clear​​research​​gap​​in the​​field​​(Mitchell​​et​​al.​​2015).​​The​​lack​​of​​marketing​​related​​research​​regarding​​social enterprises​​lead​​to​​assumptions​​whether​​this​​might​​be​​partly​​due​​to​​the​​definitional fragmentation​​in​​the​​field​​and​​the​​wide​​range​​of​​business​​models​​varying​​between​​the for-profit​​and​​non-profit​​models,​​in​​addition​​to​​the​​varying​​emphasis​​between​​social​​and financial​​goals.​​The​​need​​for​​further​​research​​into​​the​​marketing​​in​​social​​enterprises​​was also​​highlighted​​as​​its​​correlates​​to​​the​​success​​of​​the​​venture​​(Peattie​​&​​Morley​​2008).

Furthermore,​​the​​marketing​​function​​is​​identified​​as​​one​​of​​the​​crucial​​processes​​for​​growth in​​both​​the​​non-profit​​and​​for-profit​​sectors​​(Kannampuzha​​&​​Suoranta​​2016).​​In​​addition, a​​lack​​of​​existing​​literature​​on​​the​​actual​​state​​of​​social​​entrepreneurship​​in​​Europe​​was recognised​​(The​​European​​Women’s​​Lobby​​2015),​​making​​studying​​the​​phenomenon​​in​​a European​​context​​even​​more​​compelling.

The​​theory​​of​​value​​creation​​and​​social​​value​​creation​​are​​seen​​as​​important​​factors​​in understanding​​the​​competitive​​advantages​​of​​the​​social​​companies.​​Value​​created​​also​​has​​a linkage​​to​​marketing,​​the​​process​​of​​communicating​​these​​values​​to​​the​​network​​of

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stakeholders​​important​​to​​the​​success​​of​​the​​company.​​As​​marketing​​and​​value​​creation​​are connected,​​and​​marketing​​is​​recognised​​as​​a​​value-creating​​process​​(Morris​​&​​Lewis​​1995), marketing​​can​​also​​be​​seen​​as​​the​​communication​​of​​the​​value​​the​​company​​creates.

Therefore​​the​​value​​is​​important​​to​​recognise​​in​​order​​to​​investigate​​the​​marketing​​in​​social enterprises.​​As​​the​​phenomena​​of​​social​​entrepreneurship​​consists​​of​​various​​different business​​models​​from​​non-profit​​to​​for-profits​​and​​a​​framework​​of​​marketing​​in​​that​​context seems​​to​​be​​lacking,​​in​​this​​thesis​​I​​want​​to​​find​​out​​what​​kind​​of​​value​​social

entrepreneurship​​creates​​in​​the​​levels​​of​​the​​consumer,​​the​​business​​itself,​​and​​the​​society​​as a​​whole,​​in​​order​​to​​examine​​how​​the​​value​​can​​be​​created​​through​​marketing.​​As​​the​​field itself​​intersects​​a​​number​​of​​domains​​including​​entrepreneurial​​studies,​​social​​innovation and​​non-profit​​management​​(Dacin,​​Dacin​​&​​Tracey​​2011),​​and​​the​​social​​ventures​​include a​​wide​​range​​of​​actors​​with​​business​​models​​ranging​​from​​networks​​to​​non-profits​​to​​purely for-profits​​with​​social​​agendas,​​the​​phenomenon​​can​​not​​be​​fully​​grasped​​by​​adopting theories​​from​​merely​​one​​of​​these​​fields​​of​​study.​​Networking​​has​​to​​be​​taken​​into​​account as​​well,​​since​​it​​has​​been​​recognised​​as​​the​​very​​essence​​of​​social​​entrepreneurship,​​and especially​​relevant​​and​​important​​because​​of​​the​​often​​strict​​resources​​(Chell​​2007).​​The relationship​​with​​entrepreneurial​​and​​non-profit​​strategies​​has​​been​​studied,​​concluding​​that entrepreneurial​​goals​​may​​not​​be​​compatible​​with​​the​​goals​​and​​values​​of​​non-profit

organisations,​​and​​they​​were​​seen​​to​​have​​a​​possible​​degrading​​effect​​on​​a​​non-profit organisation’s​​values​​focus​​(Dart​​2004a),​​highlighting​​the​​differences​​and​​possible challenges​​in​​the​​strategies​​of​​social​​enterprises.

The​​research​​tries​​to​​sketch​​the​​conditions​​needed​​for​​success​​in​​the​​ventures,​​and​​how​​the interventions​​of​​marketing​​can​​impact​​the​​success.​​It​​is​​also​​interesting​​to​​analyse​​the communication​​of​​the​​value​​and​​the​​company’s​​offering,​​with​​additional​​interest​​on​​how the​​offering​​is​​constructed​​and​​how​​marketing​​is​​present​​in​​general​​in​​the​​processes​​and culture​​of​​the​​ventures.​​Within​​the​​secondary​​data​​there​​are​​31​​case​​companies​​with different​​motives,​​business​​ideas​​and​​business​​models,​​offering​​a​​diverse​​sample​​into​​the

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purposes​​of​​analysing​​further​​value​​creation​​from​​the​​perspective​​of​​marketing.​​These companies​​also​​reflect​​the​​state​​of​​social​​entrepreneurship​​in​​the​​European​​region,​​even with​​the​​number​​of​​cases​​being​​minor.​​​The​​object​​of​​interest​​is​​the​​value​​creation​​in​​the context​​of​​social​​entrepreneurship,​​and​​the​​thesis​​will​​be​​testing​​the​​previous​​deduction​​in the​​field.​​The​​central​​hypothesis​​is​​that​​value​​created​​through​​the​​means​​of​​marketing​​can enhance​​the​​success​​of​​the​​social​​objectives.​​​In​​order​​to​​sum​​up,​​the​​objective​​of​​the​​thesis is​​to​​unveil​​the​​world​​of​​the​​value​​creation​​drivers​​from​​the​​perspective​​of​​marketing.

The​​research​​questions​​of​​my​​thesis​​is:

“How​​can​​marketing​​support​​value​​creation​​in​​social​​enterprises,​​the​​social​​objectives​​of the​​company​​and​​the​​success​​of​​the​​venture​​in​​the​​context​​of​​European​​social

entrepreneurship?”

In​​order​​to​​form​​an​​overall​​picture​​of​​the​​phenomenon​​of​​social​​entrepreneurship​​and​​to answer​​the​​research​​question,​​the​​following​​three​​objectives​​will​​be​​examined:

1.​​What​​is​​social​​entrepreneurship​​and​​what​​kind​​of​​value​​does​​it​​create​​from​​the perspective​​of​​the​​society,​​the​​organisation​​and​​the​​individual?

2.​​What​​kind​​of​​roles​​does​​social​​entrepreneurship​​have​​in​​the​​European​​context?​​​​What​​is the​​role​​of​​governmental​​support​​in​​the​​value​​creation​​of​​social​​entrepreneurship?

3.​​What​​kind​​of​​practices​​can​​be​​found​​in​​the​​marketing​​of​​a​​social​​enterprise?

In​​order​​to​​reach​​the​​objectives​​and​​answer​​the​​research​​question​​the​​central​​theories​​in social​​entrepreneurship,​​value​​creation​​and​​marketing​​in​​the​​field​​of​​social​​entrepreneurship are​​examined.​​Theory​​has​​an​​important​​role​​in​​reaching​​the​​first​​objective​​of​​mapping social​​entrepreneurship​​and​​the​​value​​it​​creates,​​while​​the​​case​​company​​data​​makes​​it possible​​to​​make​​observations​​of​​the​​business​​ideas​​within​​social​​entrepreneurship​​creating different​​forms​​of​​value.​​The​​second​​objective,​​investigating​​the​​roles​​social

entrepreneurship​​takes​​in​​Europe​​and​​the​​governmental​​support​​is​​reached​​by​​combining

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the​​theoretical​​findings​​to​​the​​practical​​ones​​found​​in​​the​​empirical​​data​​from​​the​​case companies.​​The​​third​​objective​​contributes​​directly​​to​​the​​research​​question​​by​​examining what​​kind​​of​​practices​​are​​found​​within​​social​​entrepreneurship​​in​​order​​to​​answer​​the research​​question​​about​​how​​marketing​​can​​support​​value​​creation​​in​​social​​businesses,​​the social​​objectives​​of​​the​​company​​and​​the​​success​​of​​the​​venture.​​Recent​​relevant​​data​​from the​​MARCIEE​​(Marketing​​Communication​​Innovativeness​​of​​European​​Entrepreneurs) cross-country​​program,​​funded​​by​​Erasmus+​​program,​​is​​used​​as​​the​​main​​data​​in​​the

research.​​The​​gathered​​data​​is​​used​​as​​a​​means​​in​​the​​quest​​of​​constructing​​an​​understanding about​​social​​entrepreneurship​​and​​stakeholder​​value​​creation​​in​​the​​society,​​and​​it​​includes case​​companies​​from​​eight​​European​​countries.​​The​​program​​will​​be​​further​​introduced​​in the​​methodological​​chapter​​explaining​​the​​methods​​of​​data​​collection.

1.3.​​Research​​approach​​and​​research​​methods

This​​thesis​​is​​a​​qualitative​​multiple​​case​​study​​utilising​​the​​deduction​​approach​​that​​views theory​​as​​the​​first​​source​​of​​knowledge​​and​​the​​starting​​point​​in​​forming​​hypotheses​​that​​are subjected​​to​​empirical​​study​​(Eriksson​​&​​Kovalainen​​2008:​​21-23).​​A​​qualitative​​approach is​​adopted​​because​​of​​the​​nature​​of​​the​​research​​question​​and​​since​​it​​is​​perceived​​suitable​​in researching​​social​​entrepreneurship​​as​​a​​phenomena​​as​​well​​as​​the​​concepts​​related​​to marketing.​​In​​addition,​​qualitative​​approaches​​are​​viewed​​as​​suitable​​for​​examining​​social entrepreneurship​​because​​of​​the​​pre-paradigmatic​​stage​​of​​the​​field,​​therefore​​making​​case studies​​especially​​valuable​​for​​the​​purposes​​of​​developing​​and​​complementing​​theory (Short,​​Moss​​&​​Lumpkin​​2009).​​A​​​descriptive​​analytical​​​approach​​is​​chosen​​since​​the thesis​​aims​​to​​describe​​and​​phenomenon​​and​​further​​analyse​​find​​findings​​regarding​​social entrepreneurship​​and​​especially​​value​​creation​​in​​the​​context​​with​​aims​​of​​theory

development​​being​​secondary.​​​​The​​main​​secondary​​data,​​received​​from​​the​​MARCIEE 2017​​study,​​includes​​31​​qualitative​​case​​company​​interviews​​with​​entrepreneurs​​from​​eight

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different​​European​​countries​​(Finland,​​France,​​Germany,​​Hungary,​​Iceland,​​Italy,​​Lithuania and​​the​​Netherlands),​​as​​well​​as​​10​​interviews​​with​​political​​or​​administrational​​decision makers,​​at​​least​​one​​from​​each​​participating​​country.​​All​​of​​the​​combined​​41​​interviews​​are analysed.​​​​The​​data​​analysis​​methods​​selected​​is​​content​​analysis,​​and​​the​​analysis​​is

conducted​​in​​two​​parts.​​Content​​analysis​​was​​chosen​​since​​the​​gathering​​of​​the​​data included​​translations​​and​​some​​of​​the​​meanings​​could​​have​​been​​changed​​and​​analysis methods​​aiming​​at​​studying​​the​​language,​​like​​discourse​​analysis,​​are​​not​​accurate​​enough for​​the​​purpose​​of​​the​​study.​​While​​the​​aim​​of​​the​​study​​is​​to​​map​​value​​creation​​by​​the means​​of​​marketing​​in​​social​​entrepreneurship,​​content​​analysis​​enables​​to​​focus​​the analysis​​in​​the​​phenomenon​​and​​the​​underlying​​concepts​​behind​​the​​interviews.

1.4.​​Definition​​of​​key​​concepts

Social​​entrepreneurship​​​is​​the​​development​​of​​innovative,​​mission-supporting​​or​​job creating​​ventures​​guided​​by​​social​​entrepreneurs,​​non-profit​​organisations,​​or​​non-profits​​in association​​with​​for-profit​​business​​models​​(Peredo​​&​​McLean​​2006).​​It​​refers​​to

companies​​that​​have​​social​​or​​societal​​objectives​​aiming​​at​​creating​​common​​good​​instead of​​purely​​financial​​goals.​​It​​can​​be​​summarised​​by​​the​​existence​​of​​social​​objectives​​that​​are reached​​by​​prioritising​​the​​reinvestment​​of​​the​​gained​​profits​​(European​​Commission 2013a,​​2017b;​​Satar​​&​​John​​2016).

Social​​innovation​​​can​​be​​seen​​to​​refer​​to​​the​​social​​change​​implemented​​in​​response​​to social​​needs​​and​​challenges​​(OECD​​2010:​​6).​​It​​can​​be​​defined​​as​​“innovations​​that​​are​​both social​​in​​their​​ends​​and​​in​​their​​means”,​​innovations​​that​​are​​open​​to​​territorial​​and​​cultural variations.​​They​​lead​​into​​different​​ways​​for​​thinking​​and​​acting,​​challenging​​the​​existing paradigms​​(Cajaiba-Santana​​2014).​​The​​social​​dimension​​in​​social​​innovation​​is​​seen​​in

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both​​the​​process​​and​​the​​social​​and​​societal​​goals,​​and​​the​​form​​of​​innovation​​can​​range from​​projects​​to​​process,​​strategy​​and​​governance​​(European​​Commission​​2013a).

Value​​creation​​​is​​a​​complex​​process​​because​​of​​its​​subjective​​nature​​(Lepak,​​Smith​​&

Taylor​​2007).​​It​​is​​perceived​​to​​be​​created​​in​​a​​process,​​and​​dependent​​on​​customer feedback​​and​​the​​continuous​​assessment​​of​​changing​​customer​​needs​​(Morris​​&​​Lewis 1995).​​Value​​can​​be​​created​​in​​multiple​​levels,​​with​​the​​individual,​​organisational​​and societal​​level​​often​​being​​the​​focus​​of​​analysis.​​In​​addition,​​the​​process​​of​​value​​creation differs​​based​​on​​whether​​the​​value​​is​​created​​by​​an​​individual,​​an​​organization,​​or​​society.

Value​​creation​​can​​also​​be​​divided​​into​​concepts​​of​​use​​value​​and​​exchange​​value.​​In

addition,​​value​​creation​​is​​often​​discussed​​jointly​​with​​the​​opposite​​concept​​of​​value​​capture enabling​​the​​assessment​​of​​the​​created​​value​​through​​the​​lens​​of​​value​​capture​​(Lepak​​et​​al.

2007).​​The​​creation​​of​​value,​​more​​specifically​​the​​creation​​of​​social​​value​​is​​main​​purpose of​​social​​entrepreneurship​​(Mair​​&​​Marti​​2006;​​Satar​​&​​John​​2016)​​with​​the​​ventures​​being based​​centrally​​on​​value​​creation​​(Konda​​et​​al.​​2015).​​As​​the​​market​​needs​​often​​guide​​the operation,​​the​​value​​is​​often​​co-created​​with​​the​​stakeholders,​​likely​​leading​​to​​stronger stakeholder​​relationships​​(Hillebrand​​et​​al.​​2015).

A​​concept​​as​​well​​important​​to​​social​​entrepreneurship​​is​​​entrepreneurial​​marketing​​​that is​​characterised​​as​​often​​flexible,​​unplanned​​and​​naturally​​occurring.​​Entrepreneurial marketing​​especially​​in​​the​​context​​of​​social​​entrepreneurship​​involves​​centrally​​the​​themes of​​opportunity​​recognition,​​entrepreneurial​​effort,​​entrepreneurial​​organisational​​culture​​and networking​​(Shaw​​2004).​​Overall,​​entrepreneurial​​behaviour​​often​​correlates​​to​​stronger marketing​​(Morris​​&​​Lewis​​1995)​​and​​customer​​orientations,​​where​​decisions​​are​​based​​on the​​needs​​of​​the​​customers​​(Dolnicar​​&​​Lazarevski​​2009).​​In​​addition,​​presence​​of

bricolage,​​“making​​do”​​and​​using​​and​​combining​​the​​resources​​at​​hand​​to​​create​​new purposes​​was​​recognised​​central​​in​​entrepreneurial​​behaviour​​(Di​​Domenico​​et​​al.​​2010).

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The​​opposite​​of​​entrepreneurial​​concept,​​in​​​non-profit​​marketing​​​the​​financial​​goal​​in​​the business​​in​​general​​is​​missing​​(Dart​​2004a),​​and​​the​​organisations​​often​​have

organisation-centered​​orientations​​in​​their​​marketing​​instead​​of​​operations​​deriving​​from customer​​needs​​per​​se​​(Dolnicar​​&​​Lazarevski​​2009).​​In​​addition,​​non-profit​​marketing​​is often​​identified​​to​​be​​lacking​​the​​required​​skills​​for​​executing​​sufficient​​marketing

strategies​​(Mitchell​​et​​al.​​2015),​​and​​the​​field​​is​​interpreted​​to​​move​​into​​more

customer-oriented​​and​​entrepreneurial​​practices,​​that​​have​​been​​recognised​​to​​enhance​​the capability​​for​​accomplishing​​their​​goals​​(Andersson​​&​​Self​​2015).

Societal​​marketing​​​considers​​the​​requirements​​of​​the​​company​​in​​addition​​to​​the​​society’s and​​the​​consumers’​​needs​​and​​long-run​​interest.​​The​​marketing​​strategy​​in​​societal

marketing​​delivers​​value​​to​​customers​​by​​either​​maintaining​​or​​improving​​both​​the consumers’​​and​​the​​society’s​​well​​being​​(Kotler​​&​​Armstrong​​2008:​​590).​​It​​differs​​from traditional​​marketing​​from​​the​​goal​​of​​communication,​​consisting​​of​​carefully​​targeted segments​​for​​the​​wanted​​change​​to​​occur​​(Madill​​&​​Ziegler​​2012),​​and​​the​​adoption​​of​​its elements​​is​​identified​​to​​lead​​to​​enhanced​​social​​and​​economic​​performance​​in​​the​​social businesses​​(Satar​​&​​John​​2016).​​The​​central​​concepts​​will​​be​​further​​explained​​in theoretical​​chapters​​2,​​3​​and​​4.

1.5.​​Structure​​of​​the​​study

The​​first​​chapter,​​introduction,​​defines​​the​​research​​problem​​and​​the​​objectives​​of​​the​​thesis.

Chapters​​2,​​3​​and​​4​​introduce​​the​​main​​theory​​regarding​​the​​phenomenon.​​Chapter​​2 discusses​​social​​entrepreneurship,​​beginning​​from​​the​​central​​concepts​​within​​the phenomenon​​in​​addition​​to​​the​​main​​characteristics.​​The​​various​​business​​model,​​the entrepreneurial​​ecosystem,​​support​​from​​the​​government​​as​​well​​as​​the​​themes​​of​​social innovation​​and​​sustainable​​development​​are​​also​​discussed.​​After​​laying​​the​​grounds​​of

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social​​entrepreneurship​​as​​a​​phenomenon,​​Chapter​​3​​focuses​​specifically​​on​​the phenomenon​​in​​the​​European​​context​​and​​contributes​​to​​answering​​the​​main​​research question.​​The​​aim​​of​​Chapter​​3​​is​​to​​examine​​the​​existing​​literature​​about​​the​​state​​of​​social entrepreneurship​​in​​Europe,​​and​​the​​support​​from​​the​​European​​Commission​​and​​other actors.​​The​​final​​theoretical​​chapter,​​Chapter​​4,​​discusses​​the​​themes​​of​​value​​creation​​and marketing​​in​​social​​enterprises.​​Marketing​​is​​examined​​from​​the​​perspective​​of​​relevant theories​​related​​to​​entrepreneurial,​​non-profit​​and​​societal​​marketing,​​ending​​up​​to​​findings related​​to​​marketing​​and​​marketing​​communications​​in​​social​​enterprises.​​Finally,​​a

theoretical​​framework​​is​​presented​​in​​order​​summarise​​the​​central​​theories​​related​​to​​the research​​problem.

Chapter​​5​​explains​​the​​methodology​​of​​the​​study​​and​​presents​​data​​collection,​​data​​analysis and​​case​​criteria​​as​​well​​as​​discusses​​reliability​​and​​validity​​of​​the​​research.​​In​​Chapter​​6, empirical​​findings​​are​​discussed.​​First,​​the​​case​​companies​​and​​country​​specific

characteristics​​are​​briefly​​introduced.​​The​​findings​​are​​organised​​in​​three​​main​​themes regarding​​marketing​​and​​networks,​​industrial​​dynamics​​and​​the​​importance​​of

governmental​​support,​​in​​order​​to​​analyse​​further​​the​​aspects​​of​​how​​marketing​​can​​support the​​value​​creation​​and​​how​​value​​is​​created​​by​​the​​means​​of​​marketing​​as​​the​​fourth​​theme.

Finally,​​Chapter​​7​​summarises​​the​​main​​findings​​and​​discusses​​the​​conclusions​​further.

Managerial​​implications​​and​​limitations​​of​​the​​research​​are​​also​​presented.

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2.​ ​SOCIAL​ ​ENTREPRENEURSHIP​ ​AS​ ​A​​PHENOMENON

The​​second​​chapter​​investigates​​social​​entrepreneurship​​as​​a​​wider​​phenomenon.​​The chapter​​aims​​to​​give​​insights​​to​​social​​entrepreneurship​​as​​a​​field​​of​​research,​​the​​central characteristics​​of​​social​​entrepreneurship,​​as​​well​​as​​to​​the​​competitive​​ecosystem​​and​​the support​​the​​ventures​​receive​​from​​the​​governmental​​sector​​and​​other​​actors.​​Other​​central concepts​​related​​to​​the​​phenomenon,​​such​​as​​sustainable​​development,​​are​​also​​presented, since​​their​​concepts​​relate​​closely​​to​​social​​entrepreneurship​​which​​contributes​​directly​​to internationally​​recognised​​goals​​of​​sustainable​​development​​among​​others​​(Seelos​​&​​Mair 2015).

2.1.​​Social​​entrepreneurship​​as​​a​​field​​of​​research

Social​​entrepreneurship​​has​​become​​an​​increasingly​​significant​​domain​​of​​enquiry​​in academic​​research​​(Di​​Domenico,​​Tracey​​&​​Haugh​​2010),​​partly​​because​​of​​the​​broader observation​​that​​in​​order​​to​​achieve​​the​​innovations​​the​​societies​​require,​​actors​​who prioritize​​the​​social​​needs​​are​​needed​​in​​addition​​to​​science​​and​​research​​and​​development functions​​(OECD​​2010:​​6).​​The​​field​​is​​also​​assumed​​to​​have​​the​​ability​​of​​solving​​social problems​​(Satar​​&​​John​​2016),​​which​​is​​arguably​​the​​main​​purpose​​of​​social

entrepreneurship​​to​​begin​​with​​(Shaw​​2004).​​The​​roots​​of​​social​​entrepreneurship​​were established​​in​​the​​end​​of​​the​​1970s,​​and​​the​​field​​developed​​as​​a​​consequence​​for​​the decline​​in​​economic​​growth​​followed​​by​​increased​​numbers​​of​​unemployment.​​Public revenues​​began​​to​​grow​​slower​​while​​the​​public​​expenditures​​were​​increasing​​at​​a​​faster rate​​(Borgaza​​&​​Defourny​​2001),​​and​​the​​public​​sector​​faced​​external​​pressure​​to​​transform their​​operations​​into​​more​​business-like​​direction​​(Zietlow​​2001).​​One​​solution​​was​​to begin​​privatising​​social​​services​​in​​order​​for​​other​​actors​​to​​find​​solutions​​for​​the​​unmet

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needs,​​allowing​​a​​growth​​in​​demand​​for​​these​​types​​of​​services​​(Borgaza​​&​​Defourny 2001),​​setting​​the​​ground​​to​​the​​rise​​of​​social​​entrepreneurship.

Possibly​​because​​of​​contributing​​to​​greater​​good,​​ideologically​​social​​entrepreneurship​​has been​​presented​​in​​the​​literature​​in​​a​​positive​​way​​(Runcan​​&Raţă​​2014:​​144).​​The​​appeal​​for the​​phenomena​​is​​especially​​strong​​among​​strongly​​socially​​aware​​people,​​deriving​​from their​​skepticism​​towards​​the​​ability​​of​​governments​​to​​address​​social​​problems​​such​​as environmental​​issues,​​poverty​​and​​social​​exclusion​​(Dacin​​et​​al.​​2011).​​It​​has​​been presented​​as​​practice​​responding​​to​​a​​set​​of​​global​​crises​​with​​innovation​​at​​the​​systemic level​​(Nicholls​​2010),​​but​​the​​scholars​​have​​also​​recognised​​a​​lack​​of​​a​​solid​​empirical foundation​​of​​the​​actual​​outcomes​​(Andersson​​&​​Self​​2015),​​and​​also​​the​​functioning​​and managerial​​aspects​​have​​been​​left​​with​​little​​attention​​(Satar​​&​​John​​2016).

While​​the​​subject​​has​​gained​​interest​​in​​the​​academic​​research​​for​​the​​past​​couple​​of decades,​​it​​has​​been​​criticised​​to​​be​​underdeveloped​​in​​terms​​of​​knowledge​​and​​thought when​​compared​​to​​the​​conventional​​business​​(Peattie​​&​​Morley​​2008),​​and​​its​​role​​on economic​​development​​is​​seen​​to​​be​​riddled​​with​​well​​as​​theoretical​​inconsistencies​​in addition​​to​​the​​definitional​​controversies​​(Satar​​&​​John​​2016;​​Peattie​​&​​Morley​​2008).

Despite​​of​​the​​missing​​consensus,​​the​​field​​is​​presented​​as​​a​​new​​model​​of​​systemic​​social change,​​political​​transformation​​and​​empowerment,​​and​​the​​solution​​for​​unmet​​needs​​and social​​issues​​(Nicholls​​2010;​​Zietlow​​2001)​​that​​traditionally​​have​​been​​within​​the

responsibility​​of​​the​​non-profit​​sector,​​and​​according​​to​​some​​scholars​​the​​consequence​​of for-profit​​business​​and​​corporate​​laws​​that​​enable​​the​​issues​​to​​form​​(Sud,​​VanSandt​​&

Baugous​​2009).​​Some​​scholars​​have​​expressed​​concerns​​that​​adopting​​of​​entrepreneurial values​​and​​approaches​​in​​the​​sectors​​normally​​covered​​by​​non-profits​​may​​harm​​democracy because​​of​​the​​impact​​on​​non-profit​​organisation’s​​ability​​in​​creating​​and​​maintaining​​a strong​​civil​​society​​(Eikenberry​​&​​Kluver​​2004).​​Adopting​​commercial​​approaches​​and utilising​​market-based​​models​​in​​management​​may​​also​​cause​​contradictions​​with​​the​​social

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mission​​(Weerawardena​​&​​Mort​​2006;​​Weerawardena,​​McDonald​​&​​Mort​​2010).​​In​​other words,​​it​​seems​​that​​the​​fear​​accumulates​​from​​social​​enterprises​​adopting​​too​​many entrepreneurial​​practices​​that​​guide​​them​​further​​from​​the​​social​​motives.​​This​​pressure​​for adopting​​entrepreneurial​​practices​​may​​stem​​from​​the​​external​​environment,​​and​​may ultimate​​lead​​to​​the​​poorest​​no​​longer​​being​​served​​(Elkington​​&​​Hartigan​​2008:​​38).​​When at​​the​​same​​time​​many​​public​​services​​are​​privatized,​​the​​ultimate​​fear​​is​​the​​decline​​on service​​quality​​and​​rise​​of​​customer​​costs,​​a​​traditional​​issue​​when​​discussing​​privatisation in​​general.

Nicholls​​(2010)​​recognised​​that​​there​​is​​no​​definite​​consensus​​about​​the​​meaning​​of​​the actual​​term​​of​​social​​entrepreneurship,​​and​​the​​research​​agenda​​is​​not​​clearly​​defined.

Following​​Kuhn’s​​teachings,​​he​​argued​​that​​the​​field​​is​​in​​a​​​pre-paradigmatic​​stage​​​lacking an​​established​​epistemology​​and​​including​​uncertainty​​and​​debate​​about​​the​​legitimate methods​​and​​solutions​​appropriate​​to​​the​​new​​area​​of​​study.​​The​​pre-paradigmatic​​stage​​was also​​recognised​​in​​the​​field​​of​​social​​innovation​​(Cajaiba-Santana​​2014),​​a​​concept​​closely attached​​to​​social​​entrepreneurship.​​In​​practice,​​the​​pre-paradigmatic​​stage​​forms​​barriers​​to cross-disciplinary​​dialogue​​and​​advances​​in​​the​​field​​(Dacin,​​Dacin​​&​​Matear​​2010),​​and decelerates​​theory​​development​​in​​the​​organisational​​sciences​​(Dacin​​et​​al.​​2011).​​The​​stage is​​speculated​​to​​exist​​in​​social​​entrepreneurship​​since​​the​​definitions​​are​​developed​​in different​​domains​​in​​the​​non-profit​​to​​for-profit​​range​​(Short​​et​​al.​​2009),​​clarifying​​also​​the lack​​of​​research​​into​​the​​practices​​utilised​​in​​the​​field.

Because​​of​​the​​pre-paradigmatic​​stage,​​the​​field​​suffers​​from​​the​​phenomenon​​of​​multiple terms​​lacking​​definitions​​in​​addition​​to​​the​​confusions​​between​​the​​terms​​(European

Commission​​2013a;​​Peattie​​&​​Morley​​2008;​​Madill​​&​​Ziegler​​2012).​​The​​terms​​have​​found out​​to​​have​​different​​meanings​​in​​for​​example​​between​​Europe​​and​​the​​United​​States

(OECD​​2010:​​186),​​and​​the​​definitions​​also​​vary​​in​​a​​national​​level​​across​​Europe​​(Dacin​​et al.​​2011).​​In​​general,​​the​​definitions​​often​​focus​​on​​four​​key​​factors;​​the​​characteristics​​of