Entrepreneurship In Asia: Social Enterprise, Network And Grassroots Case Studies

Social Enterprise, Network and Grassroots Case Studies

Stephen Dun-Hou Tsai, Ted Yu-Chung Liu, Jersan Hu, Shang-Jen Li

• Publisher: WSPC
• Year: 2014
• ISBN:
  9789814612760
• Topic: Biological Sciences
• Subtopic: Science General
• Index: Biological Sciences

This book focuses on the importance of entrepreneurship in sustaining the prosperity of society and uses the case studies from Taiwan, Japan as well as China, to provide an insight into Societal Entrepreneuring in Asia, and the construction of an entrepreneurial society. In order to provide a comprehensive and complete picture on entrepreneurship, the authors have also included both case studies of commercial endeavors as well as non-profit making business endeavours. These collective experiences would be invaluable to readers who are seeking to understand the role of entrepreneurship in Asian society.

Contents:

• Market Entry and Resource Acquisition Strategies for Social Enterprises (Jersan Hu, Leemen Lee and Zong-ying Zhou)
• Social Value Creation through Innovation of Social Technology (Tzu Yang Chang)
• Creating Social Value through Frugal Innovation (Anthony Kuo)
• Social Impact Measurement for Social Enterprise (Tzu Yang Chang, Gautam Kamath and Chien Hsien Lee)
• Reliability Bookkeeping for Non-Financial Transactions of the Social Network Organization (Yasuhiro Monden)
• A Horizontal Inter-firm Network of Small and Medium-sized Enterprises Specializing in Prototype Solutions: Business Model, Management Control, and External Effects (Naoya Yamaguchi)
• A Discussion of Community of Practice and the Construction of Organization Core Competence — A Case Study of BS Supplementary Education Group (Stephen Dun-Hou Tsai and Chih-Yu Lee)
• Pioneering Social Entrepreneurs in Japan: Financial Performance and Social Achievement (Akira Sawamura and Satoshi Arimoto)
• The Socially Constructed Industry Landscape through Entrepreneurial Practice Innovation: Health-Care Product Industry in China (Stephen Dun-Hou Tsai and Meng-Chen Wu)
• Contiguous Entrepreneurship in a Modern Food and Beverage Business Group — the Perspective of Complex Adaptive System (Shang-Jen Li)
• How Cultural Product Could Re-create the Representation of Region: A Story About Organizing (Ted Yu-Chung Liu and Jung-Chih Hung)
• Narrating an Entrepreneurial Process — A Case from Taiwan's Outlying Islands (Ming-Rea Kao and Shelley Hui-Yin Lin)

Readership: Researchers and professionals who are interested in understanding the importance of entrepreneurship in sustaining the prosperity of society.
Key Features:

• The book provides in-depth description of entrepreneurial case studies from Taiwan, Japan and China, and illustrates how entrepreneurship activity emerge and develop in these countries

1

Market Entry and Resource Acquisition Strategies for Social Enterprises

Jersan Hu

Fu Jen Catholic University

Leemen Lee

Fu Jen Catholic University

Zong-ying Zhou

Fu Jen Catholic University

1. Introduction

Over the recent decades, the overall economic and business performance, in Taiwan, has been marked by a moderate growth. The gross domestic product (GDP) has increased from 9.7 billion in 2000 to 14.098 billion TWD in 2010. The monthly average wages have increased from 41,861 to 45,771 TWD over the same period. Paradoxically, the number of low-income households has increased steadily, from 66,000 to 93,000 households, or a population growth of 156,000 to 223,000 over the same period. The population ratio rose from 0.7 to 0.97% which is in contradictory given the overall positive economic development. This shows that the job opportunities and salaries levels were not proportionately beneficial to all social layers. Knowledge-intensive works were offered higher income rewards than others while the unemployment level grew with the increasing number of job seekers. The income-increase for the affluent class substantially exceeds that of the low-income groups, leading to the polarized development in which “the rich get richer, and the poor get poorer.” The ambition of improving people’s living through the developing of a socially just economy did not materialize. Instead, there has been a more pronounced and unbalanced allocation of resources across the social structures.

The poverty that emerged during the economic development process is distinct from the extant concept of poverty; the phenomenon is similar to what is stated in Dixon et al. (1998): “a form of global poverty is taking shape through the social economic effect of capitalist globalization, affecting every corner of the world,” including poor work, unemployment, and resource gap within the disadvantaged groups, coupled with the relative poverty caused by rising living costs and misallocation of social wealth. This is distinctive from the traditional definition of economically disadvantaged groups of the “aged, disabled, ailing, and minors.” In the era of knowledge economy and globalization, the disadvantaged population in the “new poverty society” may see their situation worsen gradually. As the mid-age unemployed workers or single-parents are also the sources of income for their households, their being unemployed not only affects their health insurance payment, the financing of the education of their children, but also affects the employment of their dependents, thus creating a ripple effect on the society.

Some social groups cast their hope on the government institutions and the businesses. The social mechanism in capitalism encourages businesses to offer products and create employment for profit. However, business operation has its blind spots which are the pursuit of profit-maximization, private capital returns, rational cost-benefit analysis, while downplaying the effects of individual or social structure factors of employment. The needs of low-income populations and those in rural areas are neglected, resulting in the phenomenon of “market failure” (Hu & Chen, 2009). The weak business performance is also attributable to the government’s public resource distribution or social policies. Hence, “government failure” occurs because of the bureaucracy in the complexity of the policy making, and the rigidity of regulations often hinders the delivery of public welfare.

In order to make up the gap of public welfare insufficiency, market failure, and the “voluntarism failure” resulting from the limited donations to non-profit organizations (NPOs), a new type of “self-sufficient organization which blends social service value and management capacity” — social enterprise — is thus extolled with the expectation of meeting the neglected needs of the society. The OECD (1999) stated that social enterprise is equipped with the unique functions of innovative social institutions, including (1) social enterprise takes the form of a business, keeps an autonomy distant from the state, yet deliver the behavioral value of social service; (2) social enterprise provides employment, advances needs in social service, and makes up the market exclusion and discrepancy in social welfare supply as a result of rapid economic development; (3) other than the managers, the members of a social enterprise include its volunteers and funders. Volunteers can assure the non-profit nature of the enterprise and strengthen the trust of government and customers upon social enterprise. However, since social organizations or enterprises serve the disadvantaged market, it is difficult to attract business resource, and also bears risks in venture development which are higher than regular commercial ventures. The unfavorable conditions that social entrepreneurs face should be taken into account in order to design a more adaptive entrepreneurial model or market entry mode. Hence, this study focuses on exploring various social entrepreneurship models that overcome the difficulties in market development and resources mobilization. Hopefully, the study may contribute to make up for the over-emphasis of commercialization in entrepreneurship theory and the insufficiency of the literature on social entrepreneurship.

2. Theoretical Background

2.1. Opportunity seeking in social entrepreneurship

Zahra et al. (2009) believed social entrepreneurship is the action and process of discovering, defining, and exploiting opportunity. Peredo and McLean (2006) found the following features of social entrepreneurship: social entrepreneurship is an individual or a group of individuals who (1) exercise excellent methods and their combination to create social value; (2) recognize and take advantage of the opportunity to create social value; (3) practice innovation; (4) accept and bear risk; and (5) are not discouraged by the limitation of current resources.

Dees (2001) pointed out that the difference between a social entrepreneur and a business entrepreneur is that a social entrepreneur focuses on the social mission. When a social entrepreneur finds and evaluates an opportunity, social mission is the vital evaluation criteria. The context of social entrepreneurship Dees recognized includes: a social entrepreneur plays the role of a change agent in social sector; the mission he adopted is to create and maintain social value; he pursues the new opportunity to accomplish his mission; he integrates sustainable innovation, adapts and learns in the process, would not be limited to existing resources, possesses a strong sense of responsibility of creating outcome; in operation goal, social entrepreneurship values non-monetary social value or social service far more than regular businesses, and before management challenges, it also bears more expenses in social responsibility than commercial organizations.

Haugh’s (2007) model of non-profit venture creation includes six stages: (1) identifying opportunities; (2) articulating ideas; (3) owning ideas; (4) mobilizing stakeholders; (5) exploiting opportunities; and (6) reporting to stakeholders; it emphasizes recognizing social needs and encouraging people in discovering venture opportunities. Bornstein (2007) conceives social entrepreneurs as “transformative” forces, that is, “People with new ideas to address major problems who are relentless in the pursuit of their visions, people who simply will not take ‘no’ for an answer, who will not give up until they have spread their ideas as far as they possibly can.” However, this model lacks the insights of practical social venture action and management system design.

Guclu et al. (2002) stated the two stages in social entrepreneurship: the first stage is “generating promising ideas” and is followed by “developing promising ideas into attractive opportunities.” Even in the first stage, the “promising ideas” are not readily available; it takes the personal (social) experiences of the entrepreneur to identify social needs and the various social assets that can be harnessed to address those social issues. Following the new concepts that emanated from promoting social change, the balanced perspectives in valuing social needs and problem-solving capacities have also emerged. The second stage emphasizes the theory of transforming “promising ideas” into social impact that social value, and then design the operating model and business strategy accordingly. Guclu et al. highlighted that what social entrepreneurship needs are a concrete business philosophy, a managerial system, and social resources to fuel the social venture.

2.2. Resources integration in social entrepreneurship

The establishment backgrounds of social enterprises may be different, but they may be classified into two main categories: (1) commercial ventures by philanthropic organizations (NPO for profit) and (2) commercial business enterprises with social purposes (PO for social purpose). Personal experiences and background of the entrepreneur will certainly delineate the social assets and social needs realization of the venture organization. To strengthen the business operation capacity or to effectively identify social needs, entrepreneurs must strive to acquire the lacking social venture resources. A social venture, just like any regular business, not only requires resources like operating capital, facilities, technologies, and management, when identifying social needs and devising solutions to social problems, it also needs to involve resources that identify more with social engagement. Kretzmann and McKnight (1993) called it “neighborhood assets map,” which stresses the necessity of social enterprises’ need of diverse forms of social institutions and assets, especially social assets.

Social capital is a capacity of managing resources; it enables businesses to acquire, integrate, reorganize, and transfer resources (Blyer & Coff, 2003); or a capacity of actualizing business goal through the intangible resources of social relationships. Yang (2007) believed that there are four features in social capital: (1) basic features emphasize the strength, contact frequency, and the chains among individual staff members in the organization’s social relationship; (2) specific features emphasizes the content of interpersonal (including colleagues, friends, and association members) relationship, e.g., identification, attitudes, including trust, respect, trade, obligation, cooperation, and expectations to collaboration; (3) generalized features emphasize the relationship between the individual and the general public (the strangers), including acceptance of collective norms, abiding common rules, and the trust on strangers; (4) the last feature is the structural features of social relations, including the concentration of relationship within specific social groups.

Lin (1999) believed that the resource owned by the social entrepreneur is related to the entrepreneur’s social status or social structure positioning. The entrepreneur’s initial social status positioning has a significantly positive correlation with the social resources available to the venture. Also, the entrepreneur can obtain and utilize better social resources to enhance the success rate of the venture. This demonstrates the impact of the entrepreneur’s social status, social relations, and work experience on venture mobility.

Westlund (2003) classified external social capital into three categories: (1) production-related capital, including the contacts with suppliers, product users, and R&D collaborators; (2) environment-related capital, including the contacts with local/regional environment and policy makers; (3) market-related, including trade mark and customer relations.

Although academics still have divergent definitions of the attributes of social capital, a common understanding is that, unlike the commercial business resources, more extensive and functional resources are the sine qua non resources to address the specific social problems that social enterprises face.

3. Method

Based on the challenges entrepreneurs face in identifying market needs and operation resource required, this study takes as its research subjects the social enterprises with distinct venture processes and resource acquisition approaches. Proceeding with in-depth case studies and cross-case comparisons, the aim of this study is to induce the market entry modes and resource acquisition strategies in the case of social entrepreneurs.

3.1. Multiple case comparisons

The case study approach can be classified into four research design combinations: based on its context situation and the clarity of theory context, there are embedded theory verification and holistic theory exploration; based on the expected degree of theory generalization, there are single-case or multiple-case approaches (Yin, 2003). This study aims to thoroughly observe the venture process (models) and resources portfolio of social enterprises under various resource conditions. To provide evidence of the various venture models, this study adopted the corresponding cases to build a generalized theoretical framework; therefore, this study employed multiple case — based (embedded) theory as its research tool.

The study, through comparison of various venture processes, aims to reach the double objectives of learning the causal or narrative analysis of the case firms and building the generalizability of various behavior models (Hammersley & Gomm, 2000). This kind of knowledge is a form of generalization, not scientific induction but naturalistic generalization, arrived at by recognizing the similarities of objects in and out of context and by sensing the natural variations of happenings. It is both intuitive and empirical (Stake, 2000).

3.2. Selection of cases

The three requirements of the research sampling are: first, they must represent an authentic entrepreneurship not a transformation of an established business. Second, social utility or social service must be upheld as one of their goals. Third, the entrepreneurship or entry in business modes for each case must be distinct from the others. This study selected a sample of nine social enterprises. Through interviews and observation, we have concluded that these case firms not only met the previous three requirements, their operations designs have also reached a sufficient level of stability thus making them the adequate examples for studying the differences in social entrepreneurship/venture process.

The industry and the capital input of the nine firms selected are described in this section. The nine cases constitute to some extent a general picture of the social enterprises in Taiwan (Table 1). Most of these firms are traders of traditional products or traditional service providers, produce farming and sales, as in case firm 2; food and beverage production, as in case firms 1, 4, 6, and 7; community care and cleaning, as in case firm 9; service industry, as in case firm 3; case firm 8 is the only one in the media communication industry. From the perspective of industrial capital (labor, land, technology and equipment, and capital), the most needed is technical labor, as in cases 1, 3, 4, 7, and 9; followed by operating system, as in cases 2, 3, and 8; next would be land or community, as in cases 2, 5–7, and 9.

3.3. Data collection

This study probes into the entrepreneurial experiences of the nine cases with the inquiries include: the social service philosophy of the firm, the target group, the motives underlying their specific entrepreneurial choices and paths, how the social entrepreneurs integrate business management and social service, the business challenges in the venturing process, how relevant are the entrepreneur’s prior experiences or expertise, what kinds of social or business knowledge the entrepreneur pick up later on. The approaches to obtaining data include lectures, interviews, and on-site observation.

(1) Lectures

In managing Taiwan Social Enterprise Innovation and Entrepreneurship Soci...

Table of contents

• Cover
• Halftitle
• Editions
• Title
• Copyright
• Japan Society of Organization and Accounting (JSOA)
• Editorial Board
• Content
• Preface
• About the Editors
• List of Contributors
• 1.  Market Entry and Resource Acquisition Strategies for Social Enterprises
• 2.  Social Value Creation through Innovation of Social Technology
• 3.  Creating Social Value through Frugal Innovation
• 4.  Social Impact Measurement for Social Enterprise
• 5.  Reliability Bookkeeping for Non-Financial Transactions of the Social Network Organization
• 6.  A Horizontal Inter-firm Network of Small- and Medium-sized Enterprises Specializing in Prototype Solutions: Business Model, Management Control, and External Effects
• 7.  A Discussion of Community of Practice and the Construction of Organization Core Competence — A Case Study of BS Supplementary Education Group
• 8.  Pioneering Social Entrepreneurs in Japan: Financial Performance and Social Achievement
• 9.  The Socially Constructed Industry Landscape through Entrepreneurial Practice Innovation: Health-Care Product Industry in China
• 10.  Contiguous Entrepreneurship in a Modern Food and Beverage Business Group — the Perspective of Complex Adaptive System
• 11.  How Cultural Product Could Re-create the Representation of Region: A Story About Organizing
• 12.  Narrating an Entrepreneurial Process — A Case from Taiwan’s Outlying Islands
• Index