Abstract.

The authors are

preoccupied with analyzing the
process of social entrepreneurship
and the implications and the
influence of Corporate Social
Responsibility (CSR) on social
entrepreneurial process. We will SOCIAL ENTREPRENEURSHIP
base our researches on two AND SOCIAL RESPONSIBILITY:
perspectives of social entrepre-
neurs and of founds. This study COMPARATIVE STUDY
was inspired from a model
developed by Professor Rob John
in collaboration with Skoll Center
for Social Entrepreneurship and
Oxford Said Business School. Our Cătălina Silvia MITRA (CRIŞAN)
research has as a main purpose to Babeş-Bolyai University, Cluj-Napoca
identify the way that NGOs and Mihail Kogălniceanu street, no. 1,
enterprises representative see their Cluj-Napoca, Romania
social implication and also their e-mail: [email protected]
relation trough partnerships and
collaboration. This research is of
particular relevance by providing Anca BORZA
an insight about the way that Babeş-Bolyai University, Cluj-Napoca
different types of collaboration Mihail Kogălniceanu street, no. 1,
between social organizations and Cluj-Napoca, Romania
companies increase social impact. e-mail: [email protected]
Considering the lack of empirical
studies in this field, we believe that
this research has a great
importance most of all because it
offers the possibility to make a
comparison between Romanian
perceptions regarding the social Management & Marketing
entrepreneurship with Rob John Challenges for the Knowledge Society
research (2007) which can be (2011) Vol. 6, No. 2, pp. 243-254
considered a reference model.

Keywords: corporate social

responsibility, enterprises, NGOs,
social entrepreneurship, social
impact, social problems.
Management & Marketing

1. Introduction

Social Entrepreneurship

Even if there are major differences between social entrepreneurship and CSR
we can say that both of them have a significant role trough social value creation
process. This research paper underlines how social value can be amplified trough
collaborations and partnerships established between firms and social mission
organizations. Social entrepreneurship is addressed to social problems caused by the
failure of public institutions in addressing social needs (Hartigan & Bilimoria, 2005).
Some definitions limit social entrepreneurship to nonprofit organizations (Lasprogata
& Cotton, 2003), while others describe social entrepreneurship as for-profit companies
operated by nonprofit organizations (Wallace, 1999), or organizations that create a
firm at a financial loss (Baron, 2007). Still others equate social entrepreneurship to
philanthropy (Ostrander, 2007), while some scholars embrace broader definitions that
relate social entrepreneurship to individuals or organizations engaged in
entrepreneurial activities with a social goal (Certo & Miller, 2008; Van de Ven,
Sapienza & Villanueva, 2007; GEM, 2009). Social entrepreneurship is a process that
can provide viable solutions to problems with the purpose to improve access to social
services, health education and local labor exploitation, reducing all forms of
discrimination by providing jobs to people in need (Borza et all, 2009). In Romania,
social entrepreneurship (social economy) is “the generic term used to refer to a group
of people gathered to assume an active economic role in the process of social
inclusion, e.g. social enterprises, NGOs (foundations and associations) and other non-
profit organizations that have an important role in management and strengthening
activities” (Definition of Ministry of Labor, Family and Social Solidarity).
Located in the social context, the entrepreneurs are innovators of society, an
accepted definition and used by many organizations that sustain social
entrepreneurship. Social entrepreneurs focus on systemic social change that disregards
institutional and organizational norms and boundaries; they look for sources of
resources and alliances exploiting a range of organizational forms from charities to not
for profit to commercial venture (Nicholls, 2006). The social entrepreneur seeks to
achieve social goals by developing new combinations of goods, services and methods,
incorporating a high degree of innovation (Hatten, 2009).

Corporate Social Responsibility

Corporate Social Responsibility (CSR) brings many benefits and can be

considered as an important lever in supporting social entrepreneurship (Austin 2007,
Austin et all, 2006, Austin, et al., 2004, Austin & Reavis 2002, Austin, 2000). CSR
implies commitment to improve the society through business practices (Kotler & Lee,
2005). The approach given by the International Business Forum (2003) assumes that
corporate social involvement means the investment in established partnerships with

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non-profit and public sector in order to create healthy and favorable conditions,
targeting both the community needs and objectives of the business. CSR policies help
the firm to fulfill the economic and social responsibilities to ensure the wellbeing of
the firm and also it’s the social welfare (Hockerts, 2007). CSR implies commitment to
improve the society through business practices (Kotler & Lee, 2005). Companies that
deal with their social responsibility in a forward-looking manner ensure that CSR
becomes an integral aspect of their corporate governance (Brăteanu et all, 2011:87).
CSR is a concept which refers to a supposed duty which all companies (as
social entities) should have towards all parties involved in their activity (Deaconu et
all, 2011, p. 113). It refers to „business decisions" that pass beyond the economic and
technical interests of the organization (Carroll, 1991). Social involvement is a
corporative integrative function of the company involving practices that contribute to
the establishing of positive relationships to the communities and to society at various
levels (Waddock, 2004). The approach given by the International Business Forum
(2003) assumes that corporate social involvement means the investment in established
partnerships with non-profit and public sector in order to create healthy and favorable
conditions, targeting both the community needs and objectives of the business.
Businesses can contribute to the solving of these types of problems through
partnerships, which is either through a department of an entrusted organization, as a
department within the corporation or by a team of representatives of different
companies (Wills, 2009).
Although definitions abound, we can say that two main directions can be
highlighted, these being the contribution of own resources or voluntarily attracted ones
to social development (community) and the networking with targeted groups
important for business and key factors for the company (employees, customers,
suppliers, nonprofit organizations, public authorities, the media). All CSR approaches
have in common the idea that organizations have responsibilities regarding the social
well-being.

2. Research methodology

Interdisciplinary character of our research is confirmed by two relevant

models. For example, the literature suggests that there are differences in the structures
of cross-sector relationships ranging from formal agreements (Austin, 2000) to
informal loose collaborations (Berger et al, 2004). Moreover, implementation tends to
occur through discrete phases or steps. The model developed by Tracey et all (2005)
deals with four distinct forms of cooperation between enterprises and organizations
with social mission, (charitable contributions, the enterprise internal projects,
collaborations and partnerships), giving simultaneously an overview of the interface
area of Corporate Social Responsibility and social entrepreneurship. Also Seitanidi
(2008) emphasizes the existence of three forms of partnership across sectors, namely:
public-private partnerships, public-non-governmental organizations and private

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Management & Marketing

partners and NGOs. According to Bryson, Crosby and Middleton-Stone (2006),

partnerships can be categorized into five directions: outcomes and accountabilities,
contingencies and constraints, structure and governance, initial conditions; process.
Professor Rob John, supported by the Skoll Center for Social Entrepreneurship at
Oxford Said Business School has treated in detail the relationships between
organizations and social entrepreneurs who assist them.
This research emphasizes an empirical study on NGOs and enterprises with
the objective of analyzing the perceptions of partnerships of these two organizations.
The survey had a structured form and was based on two questionnaires adapted to
enterprises and NGOs considering the criteria of social entrepreneurship (Borza et al,
2009). The data collection process was made indirectly through e-mails and was
implemented at top management level of businesses and NGOs.

3. Setting the method of sampling

This study was inspired by a model developed by Professor Rob John in
collaboration with Skoll Center for Social Entrepreneurship and Oxford Said Business
School and was conducted in November 2006 - February 2007. The objectives of this
research were to determine the peculiarities that characterize the collaboration of
social entrepreneurs with organizations that provide funding and support to them
(John, 2007). The term used to define the activity that sustains social economy is
“Venture Philanthropy” (V.P.) and refers to the charity principles of venture capital
and long-term investments and other forms of support given. Organizations involved
in the study are focused heavily on sustaining social objectives by charities, social
enterprises and businesses. The research was based on interviews with 20 social
entrepreneurs who received help from V.P. and analysis of 34 organizations focused
on giving grant funds. Countries of origin of the organizations were: United Kingdom,
Germany, Spain, Italy, Netherlands, Switzerland etc.
Starting from the Rob John model, we developed two studies in N-W area of
Romania, one on NGOs and other on enterprises (Mitra et all, 2010a, b). Based on the
belief that social entrepreneurship is a complex process that can occur in various
forms of organizations we choose to investigate two types of organizations and was
conducted in July 2008-October 2009. Thus, we made a research on active NGOs in
the range of N-W area of Romania and simultaneously was conducted a random
probabilistic sampling. Using the Taro Jamane method, we established a sample of
394 enterprises, excluding family associations and individuals and 234 NGOs as
sample base. From enterprise we obtained 79 of the questionnaires and from NGOs 76
questionnaires.
Both researches used the following criteria which offered the possibility of
comparison:
At the level of the organizations that offer support we analyzed:
ƒ Organizations (companies, foundations, networks that support social
entrepreneurship);

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 Social entrepreneurship and social responsibility

ƒ Financial aid (typology of financial instruments used, annual

expenditure made for the non-profit status they were granted welfare
organizations);
ƒ Non-financial services (including types of services and modalities of
provision);
ƒ Degree of involvement (length of partnership, consistency relationship);
ƒ Effectiveness and impact (measured results of financial aid and non-
financial assistance).
At the level of social organizations we analyzed:
ƒ Organization (types of social enterprises which run their business, stage
of development, areas of activity and staff and personnel policy);
ƒ Financial and non-financial aid received (typology of financial and non-
financial instruments used and their usefulness);
ƒ Degree of involvement (the type of relationship between partners);
ƒ Effectiveness and impact (measuring the results of financial aid and
non-financial assistance).
The hypotheses of Rob John model and the research from Cluj:
1. There is common trend of increasing concern for social involvement in
both cases.
2. A common trend concerns the fact that financial aid takes the form of
grants and donations.
3. Relations between social funds and entrepreneurs emphasized by Rob
John’s model are much stronger compared with those established
between businesses and NGOs.
4. Social implication of enterprises is a practice that can start from the
experience of other companies.
5. Citizen’s perception of enterprises social involvement is marred by
mistrust.

4. Research results
We will present our research results with Rob Jon’s research (2007) of NGOs
and commercial enterprises in N-W area of Romania vs. Rob John’s model made in
collaboration with Oxford Said Business School and the Skoll Foundation (2007). As
we follow, the common aspects of these two studies will be presented in the table.

Table 1
Comparative analysis of Rob John Research and commercial enterprises in Cluj
Rob John Model, Oxford, Skoll Research on commercial enterprises
Criteria
Foundation (2007) from Cluj
Organizations 34 organizations that are providing 79 companies: SA-13.16%, 63.8%-SRL,
founding; 2% associations, 1.1% Other;
94% of organizations designed to Most of the companies included in the

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Rob John Model, Oxford, Skoll Research on commercial enterprises

Criteria
Foundation (2007) from Cluj
provide support were founded 10 survey, which are socially involved were
years ago or even less, 68% of founded after 1990.
which were founded in the last five
years.
Financial Charity subject to economic Aid is provided in the bulk form of financial
support principles are relatively few and not aid: grants and donations of both
complex being at the beginning; individuals and NGOs to facilitate their
Financial instruments used show work;
that most aid was in the form of I found no situation where companies have
grants; lent or invested.
Loans and investments were widely
used.
Non-financial They have a close relationship with Provision of food and clothing and offering
services social entrepreneurs and are carried jobs to those in need, but they have
through innovative models used to acquired a much lower percentage than
support social causes; the financial aid form;
Most of these organizations support The main groups were: persons with
the process of social disabilities (53.43%) children and young
entrepreneurship, followed by youth people (43.30%), local community
and children, education and health. (52.6%).
The main services provided are
consulting services (strategic
consultancy, management,
corporate governance), accounting,
financial services, fundraising
consultants, information technology,
marketing and communication.
Degree of Organizations involved in providing 74% of a total of 59 valid responses were
involvement funds engage in partnerships with specified that would not make a
social organizations such continuity partnership with NGOs.
of relationships however is different; From those enterprises that would involve
Approximately 65% of organizations social, they have chosen as a means of
establish partnership relations in collaboration as it follows: 15% like the
two, three years with social idea of partnership, 20% would work long
organizations and the rest have term with an NGO, 10% would create a
established relationships after 4 foundation on its own initiative, 35% have
years and 75% of respondents indicated that it would require only that the
claimed that they would engage in NGO would be the beneficiary, 10%
sustained social organization believed it would work only if the social
leaders while the rest would not do activities would be complex, and only 10%
this; would work to increase social impact; The
Usually the benefits obtained are benefits of collaboration with NGOs: image
social and image and very little as of the company (43%), improve
financial benefits. relationship with the social sector (38%),
increase of success (32%).

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 Social entrepreneurship and social responsibility

Rob John Model, Oxford, Skoll Research on commercial enterprises

Criteria
Foundation (2007) from Cluj
Efficiency and 85% of respondents claimed that Social impact assessment does not
impact measured the effectiveness of present an intense concern for social
social impact and how social enterprises involved, but of those who
services are provided but there is no have such a method, most have specified
clear measurement tools for this that the amounts allocated and the scope
purpose; of the results give an idea of social
One organization noted that a involvement.
survey conducted annually on the
degree of satisfaction gained from
achieving social investment

Social entrepreneurship research included providing information on:

Table 2
Comparative analysis of research Rob John (2007) and NGOs from Cluj
Research Alec Reed, Oxford Said
Criteria Business School, Skoll Research of NGOs from Cluj District
Foundation (2007)
Organizations 20 social entrepreneurs who work in 76 NGOs: 64% associations, foundations -
organizations such as non-profit 28%, SC-4%, Other 4%;
organizations, social enterprises, Are mostly oriented counseling, social
commercial enterprises with social service and welfare.
objectives and environmental
charities.
Financial Regarding the performance of social The main sources of income of NGOs are:
support entrepreneurs, they said that the donations, their economic activities, state
non-financial services had a much subsidies and financing projects;
greater impact than the financial Another aspect to note is that there are
services. organizations that undertake economic
activities to cover 1 to 100% of total
revenues;
Most donations come from foreign
sources;
Among the activities that generate the
highest revenue were recorded for:
education 62.3%, 29.6 counseling, health
32.4%, manufacturing 18%, tourism
18.3%, 17% arts, religion 11.3%, 12.7%
recycling.

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Management & Marketing

Research Alec Reed, Oxford Said

Criteria Business School, Skoll Research of NGOs from Cluj District
Foundation (2007)
Non-financial The services received by social Non-financial aid received by NGOs in the
services entrepreneurs were counseling, form of volunteering, donations in goods,
governance, consulting services for but I’ve noticed that many NGOs get
fundraising. support in the form of consultancy,
especially for fund raising campaigns
Degree of Most of the social entrepreneurs The idea of association and establishing
involvement have launched invitations to partnerships is not pre approved;
representatives of the funds as part For approximately 75% of respondents,
of the board of directors, only 14% local councils have a major role;
agreed to be part of the Organizations with social purpose are not
administration board, and a share of considered very important, about 41% of
41% agreed to participate in respondents appreciated the support from
meetings. them is important in a small and very small
One respondent considered the way.
relationship with the fund as a bad, I noticed that supporting the business
ending it by conflict and many environment is, for 65% of respondents,
problems. assessed as important in a small and very
small extent.
Aid granted by banks, customers, and
consulting firms is more significant than
that given by investors and suppliers.
Impact and Impact of social entrepreneurs is Most don’t have a well established method
efficiency pursued but with not strong to track the social impact.
evidence. NGOs appreciate its impact from the
Very few were those who said they number of people helped and the amounts
had a person in the company awarded.
responsible for tracking results and
or that polls conducted in this regard

Following this comparison we can draw some conclusions identifying the

position that both organizations support social organizations and social organizations
that address social issues:
We can see a common trend of increasing concern for social involvement in
the businesses aimed at providing funding and in both cases this is relatively recent.
This illustrates a positive trend towards the awareness of issues of social involvement.
A common trend concerns the fact that financial aid takes the form of grants
and donations. Although Alec Reed's study refers to the use of loans and investments
(found in an early stage), among companies in Cluj has not been noticed any such
issue. In the first case of non-financial services are represented by consultancy and
services compared with Romanian companies which provide non-financial aid and can
take the shape of donations, food, clothing and jobs.

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 Social entrepreneurship and social responsibility

Relations between social funds and entrepreneurs emphasized by Rob John’s

model are much stronger compared with those established between businesses and
NGOs. Actually this believe is sustained by the involvement V.P representatives in the
board of directors of social organization, unlike the situation of the undertakings
included in the survey that indicated only a rate of 26% that would agree to establish
partnerships with NGOs. Instruments used to measure social impacts are unclear in
both cases. The vast majority of services received by the social entrepreneurs were
non-financial, in the case of Romanian NGOs particular importance is given to
financial aid that mostly come from foreign sources.
Social implication of enterprises is a practice that can start either from the
existing theory in the field or from experience of other companies, although most
aspects are learned from the experience of conducting business as a result of social
responsibility programs. Certainly social involvement is achieved gradually from
initiatives that do not involve too many resources but which may lead in time to
support social entrepreneurship through the creation of organizations that work
effectively for social causes.
Citizen’s perception of enterprises social involvement is often marred by
mistrust and suspicion which is a challenge for many companies. Unfortunately the
desire to be competitive puts an intense pressure on the Romanian enterprises that
consider social involvement to expensive. Thus, when social involvement does not
have a positive contribution to company's development, social responsibility is
minimized or even eliminated. Somehow justified in the context in which businesses
conduct activities aimed at profit and less to the charities. To support the involvement
of social enterprises must have economic stability, any social involvement, requiring
the mobilization of resources that can be allocated for other purposes affecting
business prosperity. Relationship between social and financial performance affects the
competitive advantage held by the company arising from social responsibility
programs undertaken. In social responsible programs are undertaken by large
enterprises wishing to gain a competitive advantage but it cannot be sustained if small.
We present a model designed to support social entrepreneurship that can work
both for social organizations and trade organizations that address social involvement
at a complex level. We can say that businesses can contribute significantly to support
social entrepreneurship although they have a mission-oriented corporation. We
developed a model that reflects up to this point our view on the manifestation of social
entrepreneurship.

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Management & Marketing

Figure 1. Social entrepreneurship model

Figure 1 reflects our vision of the organizations involved in addressing social

problems and how it can be done. As we can see companies can help sustain social
entrepreneurship, a factor which triggered the process of social entrepreneurship. This
can manifest itself as collaborations, partnerships, or even by creating an organization
with social mission. Not all organizations that promote social mission falls under
social entrepreneurship, but only those which meet the data social entrepreneurship
(Borza et all, 2009). Finally organizations bring substantial benefits to the society by
creating social value. The benefits are mutual for both social organizations,
organizations promoting social entrepreneurship and businesses. If the first two will
get a considerable advantage in support of social mission, the last will get some
advantages that will be transposed in greater benefits for the economic activity.

5. Conclusions
Corporate social responsibility is a useful tool in support of social
entrepreneurship process even if the factors underlying these policies are not entirely
of a social nature. Not all approaches to corporate social involvement may influence
the social entrepreneurship. Issues affecting corporate social responsibility policies
adopted by companies are dependent to:
ƒ motivation underlying nature of corporate social responsibility policy;
ƒ existence in enterprise culture;
ƒ typology of corporate social engagement tools that companies use in the
steps of social participation;
ƒ nature of the relationship between enterprise and social organization;

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 Social entrepreneurship and social responsibility

ƒ continuity and sustainability of the relationship;

ƒ benefits gained by both parties and social impact.
We believe that corporate social responsibility is considered a tool of social
entrepreneurship which triggered the process that can bring substantial benefits both
from the support and from the social impact, and these cannot be neglected.
Social entrepreneurship can take various forms of organizations, but in our opinion
NGOs and their various forms of association provide the best conditions, because of
the facilities provided by the law.
Based on these two researches we conclude that NGOs have better chances to
promote social entrepreneurship starting with the fact that these have first of all a
social mission. Also we can say that social entrepreneurship can be sustained by the
companies through CSR (partnership, collaboration, founding a organization with a
social mission). Corporate social responsibility and social entrepreneurship have
distinct conceptual approach, but interferes in the area of recovery of social
opportunities.

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