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Exploring Social Entrepreneurship

A Case Study about Legitimacy from a Consumer Perspective

Written by S. Bede

Paper category

Master Thesis


Business Administration>Entrepreneurship




Master Thesis: Corporate Social Responsibility and Value Sharing Principles The nature and definition of corporate social responsibility (CSR) has a long history, and CSR is still a widely discussed concept. David (1960) emphasized the influence of decisions and actions that affect the social system that people must consider. He mentioned the company and its obligations in the description. In addition, corporate social responsibility involves companies taking responsibilities beyond legal requirements (Vogel, 2005). This means going beyond the economic interests of the company to include moral aspects that affect the interests of stakeholders and other members of the entire social system (David, 1967). According to the economist Milton Friedman (1970), the sole responsibility of a company is to maximize profits and satisfy its owners and shareholders. Contrary to Friedman, Edward Freeman (1984) and his stakeholder approach elaborated on corporate responsibilities, including groups other than shareholders, which are also affected by the achievement of company goals. In addition, Grafström (2008) described the concept of corporate social responsibility as the resources that companies invest in society beyond their financial responsibilities. However, the real reason why the company did this has caused more controversy. Opinions are divided on whether the company invests in these resources because of the public and to some extent government requirements, because it strengthens the company’s brand in the eyes of consumers, or simply because corporate social responsibility is the company’s responsibility (ibid.). Since CSR is a broad term, researchers have no clear acceptance. As mentioned above, corporate social responsibility is usually measured in cash or time spent on volunteer work, rather than measuring the effect of actual impact (Porter and Kramer, 2011). The interdependence of the company and society indicates that there is a common value that needs to be created, and business choices can interdependently benefit the company and society, thereby promoting economic success and social progress (Bockstette & Stamp, 2011). This principle belongs to shared values ​​(Porter & Kramer, 2006). This principle requires that social policies and business practices are interdependent in order to promote the interests of both parties (Porter & Kramer, 2011). There are many concepts that conform to the dual value creation of finance and society, and social entrepreneurs are one of them (ibid.). 2.2 Social Entrepreneur-The Driving Force of Change The key component of social entrepreneurship integrates the practice of dual finance and social value creation (Mair & Marti, 2006). Their work is based on values ​​designed to promote economic success and social progress (Porter & Kramer, 2011), which runs counter to the company's main intention of maximizing profits and generating income for its shareholders (Friedman, 1970). Social entrepreneurship is becoming more and more popular because it attracts more and more talent, money and attention (Martin & Osberg, 2007). However, its actual meaning has become increasingly uncertain, which brings up the question of what activities it needs in practice. Therefore, social entrepreneurship adds to the confusion because it means different things to different audiences (Dees, 1998), leading to various activities in the name of social entrepreneurs (Martin & Osberg, 2007). The conceptualization of social entrepreneurs differs in method and content depends on who is viewing it, seeing different researchers and/or people adopting it (Dees, 1998). Some views are process-based, while others are entrepreneurial-oriented (Mair & Marti, 2006). One aspect of social entrepreneurship refers to a non-profit method that requires other funding strategies and sources of opportunity in creating social value (Austin, Stevenson, and Wei-Skiller, 2003; Boschee, 1998). Another approach aimed at solving social entrepreneurship is to look at it from a business perspective. It requires inter-departmental for-profit companies to provide services similar to social responsibility actions (Sagawa & Segal, 2000; Waddock, 1998). The third group believes that the method of social entrepreneurship is to initiate and develop social transformation by paying attention to the ease of social problems (Alvord et al., 2004). The above theoretical discussion shows that the concept of dual finance and social value creation makes inclusiveness possible, which in turn leads to an investigation of the organization's intentions. In order to bridge this gap, it becomes important for companies to seek credibility in their behavior and the legitimacy of their relationships with society. The following sections will detail the main points of legitimacy and how to maintain legitimacy audiences, such as their customers, in the most direct context. Organizations can use different methods to gain legitimacy, which will be further elaborated in the next section. Read Less