Social Ventures: The Development of the Theory of Sustainable Contributive Advantage and Initial ...

136 Pages·2012·3.23 MB·English

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Åbo Akademi University Press | ISBN 978-951-765-668-9
Colleen Christina Robb (born 1978)
Bachelor of Fine Arts, 2000, Florida International University Master of Business
Administration, 2003 Florida International University Adjunct Professor,
Nova Southeastern University
Åbo Akademi University Press
Tavastgatan 13, FI-20500 Åbo, Finland
Tel. [phone]
E-mail: [email protected]
Sales and distribution:
Åbo Akademi University Library
Domkyrkogatan 2–4, FI-20500 Åbo, Finland
Tel. [phone]
E-mail: [email protected]
SOCIAL VENTURES

Social Ventures
The Development of the Theory of Sustainable Contributive Advantage
and Initial Empirical Tests
Colleen Robb
Åbo Akademis förlag | Åbo Akademi University Press
Åbo, Finland, 2012
CIP Cataloguing in Publication
Robb, Colleen.
Social ventures : the development of
the theory of sustainable contributive
advantage and initial empirical tests /
Colleen Robb. - Åbo : Åbo Akademi
University Press, 2012.
Diss.: Åbo Akademi University.
ISBN 978-951-765-668-9
ISBN 978-951-765-668-9
ISBN 978-951-765-669-6 (digital)
Painosalama Oy
Åbo 2012
ACKNOWLEDGEMENTS

As I sit down and remember all of the individuals in my life that have supported me in the
process of writing this thesis, it is somewhat overwhelming when I consider how many
individuals shared words of encouragement or helped me in the development of my
thinking around the topic of this thesis. It is with the greatest sense of humility that I use
this opportunity to thank those select few that helped me beyond any expectation I could
have of them.

First, I wish to thank my supervisors, Professor Malin Brännback and Professor Alan
Carsrud. Their skillful, enthusiastic and constructive support is invaluable. Malin’s
guidance and patience throughout the process from the very beginning provided me with
courage and ability to keep writing. Her analytical approach to the work contained in this
thesis helped tremendously in its development. For that I will forever be grateful.

Professor Alan Carsrud, who I first met as an MBA student in his class, introduced me to
the world of entrepreneurship and then to the world of social entrepreneurship. Alan
entrusted me with the administration of his entrepreneurship center at Florida International
University. It was there, that Alan encouraged me to consider pursuing a doctorate degree.
If it were not for his constant encouragement, I am not sure I would have entered into this
process. Since that time, Alan has become like a father to me in ways that are too
numerous to detail here. To both Alan and Danny, thank you for accepting me into your
family. I am honored to be in your lives.

Dr. Jill Kickul and Dr. Mark Griffiths, who reviewed my thesis, receive my sincere
gratitude. Jill and Mark introduced me to various statistical tools some years ago and
since then have both contributed to my growing interest in social entrepreneurship through
their constructive feedback at various conference presentations. I have benefited greatly
from their critical, but inspiring and supporting feedback.

I also want to thank Professor Ralf Östermark for his assistance in the Markov analyses
used in this research. I also gratefully acknowledge the financial support received by Åbo
Akademi.

I must also thank my parents, Jude and Susan Crouch, for their love, unfaltering support,
encouragement, and delight in helping me through this process. There is no greater reward
for a child than seeing a proud smile on their parents’ face. You both have always given
me that. I look forward to many more.

Finally, I must thank one person who contributed significantly, not only to the
development of this work, but also to my life. That person is my husband, Dr. Jeffrey
Stamp. I would not have found the strength to finish this thesis without your love and
support. I also would not be the person I am today without your impression on my life,
my soul and my heart. My deepest thanks go to you. This, you will always have.
ABSTRACT

This thesis attempts to fill gaps in both a theoretical basis and an operational and strategic
understanding in the areas of social ventures, social entrepreneurship and nonprofit
business models. This study also attempts to bridge the gap in strategic and economic
theory between social and commercial ventures. More specifically, this thesis explores
sustainable competitive advantage from a resource-based theory perspective and explores
how it may be applied to the nonmarket situation of nonprofit organizations and social
ventures.

It is proposed that a social value-orientation of sustainable competitive advantage, called
sustainable contributive advantage, provides a more realistic depiction of what is
necessary in order for a social venture to perform better than its competitors over time. In
addition to providing this realistic depiction, this research provides a substantial theoretical
contribution in the area of economics, social ventures, and strategy research, specifically
in regards to resource-based theory. The proposed model for sustainable contributive
advantage uses resource-based theory and competitive advantage in order to be applicable
to social ventures. This model proposes an explanation of a social venture’s ability to
demonstrate consistently superior performance.

In order to determine whether sustainable competitive advantage is in fact, appropriate to
apply to both social and economic environments, quantitative analyses are conducted on a
large sample of nonprofit organizations in a single industry and then compared to similar
quantitative analyses conducted on commercial ventures. In comparing the trends and
strategies between the two types of entities from a quantitative perspective, propositions
are developed regarding a social venture’s resource utilization strategies and their possible
impact on performance.

Evidence is found to support the necessity of adjusting existing models in resource-based
theory in order to apply them to social ventures. Additionally supported is the proposed
theory of sustainable contributive advantage. The thesis concludes with recommendations
for practitioners, researchers and policy makers as well as suggestions for future research
paths.
SAMMANFATTNING

Den här avhandlingen avser att öka den teoretiska, operationella och strategiska
förståelsen för frågor inom socialt företagande, socialt entreprenörsskap och nonprofit
affärsmodeller. Denna studie strävar också efter att överbygga klyftan mellan sociala och
kommersiella företag inom strategisk och ekonomisk teori. Mera specifikt utforskar den
här avhandlingen begreppet bestående konkurrensfördel från ett resursbaserat teoretiskt
perspektiv för att klargöra huruvida begreppet kan tillämpas på nonprofit organisationers
och sociala organisationer situation som inte verkar kommerciellt.

Det föreslås att en social värde-orientering av begreppet bestående konkurrensfördel,
skulle benämnas bestående kontribuerande fördel. Bestående kontribuerande fördel utgör
en mera realistisk beskrivning av vad som behövs för ett socialt företag för att prestera
bättre än konkurrenterna. Genom att utveckla denna begreppsram bidrar avhandlingen
väsentligt till teoribildningen kring sociala företag ur ett resursbaserat perspektiv. Den
föreslagna modellen för bestående kontribuerande fördel utnyttjar resursbaserad teori och
föreslår att det klassiska begreppet konkurrensfördel ersätts med bestående kontribuerande
fördel för att tillämpas explicit i kontext av sociala företag. Med hjälp av modellen kan
man beskriva hur ett socialt företag kan skapa grunden för en fortgående framgång.

För att avgöra om bestående konkurrensfördel kan tillämpas på både sociala och
traditionella företag utförs en kvantitativ analys på ett stort urval nonprofit organsiationer
inom en enskild branch i USA. En motsvarande analys görs med kommersiella företag och
resultaten jämförs. På basis av resultatet utvecklas förslag till det sociala företagets
strategier för utnyttjande av resurser och deras eventuella inverkan på ekonomisk
prestation.

Belägg för en omarbetning av existerande modeller inom resursbaserad teori för
tillämpning på sociala företag presenteras, som stöds av initiala empiriska studier, för en
teori om bestående kontribuerande fördel. Avhandlingen avslutas med rekommendationer
för praktiker och forskare samt med förslag till framtida forskning.
LIST OF FIGURES

Figure 1: Catalytic social entrepreneurship process (depicted from Waddock and 16
Post, 1991)
Figure 2: Opportunity creation process (Guglue, Dees, and Anderson, 2002) 17
Figure 3: Social and commercial entrepreneurial process framework (adapted from 18
Meyskens and Robb-Post, 2008)
Figure 4: Relationship between social entrepreneurship and the 19
private/public/voluntary sectors (Venture Pragmatist, 2010)
Figure 5: The cornerstones of competitive advantage (Peteraf, 1993) 32
Figure 6: Inclusive and exclusive frameworks for social and commercial 37
entrepreneurship
Figure 7: Social venture example in inclusive and exclusive frameworks 38
Figure 8: Social value matrix 40
Figure 9: Firm value creation mix 42
Figure 10: The generation of rent (adapted from Barney and Clark, 2007) 44
Figure 11: The generation and conversion of social rent 47
Figure 12: Relationship between social value, social impact, and social rent 49
Figure 13: Sustainable contributive advantage model 51
Figure 14: Categorization schema of firms by efficiency and growth (adapted from 60
Davidsson et al., 2009, Brännback et al., 2009)