Kisielius Eimantas

PhD student,

Kaunas University of Technology, Department of Economics,

Gedimino St. 50, Kaunas LT-44239, Lithuania

Simanavičienė Žaneta

Prof. habil.dr.,

Kaunas University of Technology, Department of Economics,

Gedimino St. 50, Kaunas LT-44239, Lithuania

THE IMPORTANCE OF SOCIAL VALUE IN CONTEXT OF SOCIAL ENTREPRENEURSHIP

According to Weerawardena, Mort (2012) social entrepreneurship business initiatives challenging the existing social situations and discover new ways of creating social value. Social entrepreneurship can be distinguished from traditional businesses as well by the focus on social value creation, rather than the economic one and Certo, Miller (2008) suggests that social value creation is the primary social entrepreneurship target and generation of economic value helps to secure the initiative sustainability and financial autonomy. However, there is a contradiction, that it cannot be distinguished by value creation purpose, because according to Santos (2012), economic value creation action also creates social value to public due to the fact that such action allocate currently existing resources better. Social entrepreneurship value creation according to Driver (2012) is just the beginning of a huge change, which leads to a completely different understanding of capitalism. Author in interview with Michael Porter examines the importance of social entrepreneurship as a new phenomenon generating social value. Authors argue that social entrepreneurship is an important phenomenon for shared value (which include economic and social value to public) creation and for the whole capitalist system. Sundaramurthy, Musteen, Randel (2013) after carrying out an analysis of several selected successful examples in India found that there are three types of social value: the market leaders, the innovators, the innovation activists. However, these are only ideal theoretical types and in reality they are intertwined or linked.

Weerawardena, Mort (2012), present the concept that social entrepreneurship is also multi-dimensional phenomenon, which covers recognition of new opportunities how to create social value, with innovative and pro-active decisions and risk acceptance. Also in the model Sundaramurthy, Musteen, Randel (2013) highlighted partnerships and networking activities, although as the authors recognize that there is a need for establishment of theory, which could be verified in wider geographical coverage. The importance of partnerships and networking can be explained by Weerawardena, Mort (2012) view that intense competition exist and social entrepreneurship initiatives must look for new ways how to create social value and secure much-needed capital and this becomes available due to the partnerships.

Social entrepreneurship value creation is geared towards sustainable social problem solutions, rather than the organization's sustainable competitive advantage and this, according to Santos (2012) clearly distinguishes social entrepreneurship from the traditional business. Social entrepreneurship initiatives while creating value enable others, both internally and externally, rather than trying to control as in traditional business. However Auerswald (2009) states that often the concept of social value is too broad. After all Šinkovič, Šinkovič (2014) argues that social value is a dynamic phenomenon. Other authors, as Michael Porter in interview with Driver (2012) put more emphasis on the shared value, which is associated with the ability to jointly create economic value and provide benefits to society, or in other words - to create social value. The basis of shared value is the understanding that there are various ways to solve social problems and in the process economic benefits are created. Such approach according to the author directs capitalism to a different direction.

Thus, the social value is one element that helps to better distinguish social entrepreneurship initiatives from the traditional business. Social value creation is essence of such initiatives and only through innovation, innovative approach to social problem solving social entrepreneurship initiatives can ensure stability, competitiveness. At the same time social value is a broad, dynamic and complex element of social entrepreneurship phenomenon. Social value creation is inseparable from social entrepreneurship. Social entrepreneurship initiatives by social value offer create sustainable solutions for social problems.

After 8 interviews with selected social entrepreneurship experts in Lithuania it was found that it is difficult to measure the value created, as there are no unified measurement methodology, although social value is one of the most important evaluation criteria of social entrepreneurship initiative.

However, experts presented examples that in certain countries there has been a progress on how to measure the impact or social value of such initiatives and that it is appropriate to measure the long-term indirect effects or any damage minimized. Also one of the experts says that financial measurement techniques might be applied, the ones that are simpler than the social impact measurement techniques. Experts also mentioned the Porters concept of shared value creation.

Scientists should focus more on the research of social entrepreneurship initiatives and contribute to development of public awareness of such initiatives benefits. The public should also be an active and positive on social entrepreneurship initiatives, since the research showed the importance of communities and the public support for social initiatives. Thus, information and publicity about the successful social initiative cases and researches carried out on this subject is required.

References

1. Auerswald, P. (2009). Creating social value. Stanford Social Innovation Review. 7 (2):50-55.
2. Certo, S. T., & Miller, T. (2008). Social entrepreneurship: Key issues and concepts. Business horizons, 51(4), 267-271.
3. Driver, M. (2012). An Interview With Michael Porter: Social Entrepreneurship and the Transformation of Capitalism. Academy Of Management Learning & Education, 11(3), 421-431.
4. Santos, F. M. (2012). A positive theory of social entrepreneurship. Journal of business ethics, 111(3), 335-351.
5. Sinkovics N., Sinkovics Rudolf R. (2014). Social value creation: The noise at the intersection of literature bodies? 40th EIBA conference.
6. Sundaramurthy, C., Musteen, M., & Randel, A. E. (2013). Social value creation: a qualitative study of indian social entrepreneurs. Journal Of Developmental Entrepreneurship, 18(2), -1. doi:10.1142/S1084946713500118
7. Weerawardena, J., & Mort, G. S. (2012). Competitive Strategy in Socially Entrepreneurial Nonprofit Organizations: Innovation and Differentiation. Journal Of Public Policy & Marketing, 31(1), 91-101. doi:10.1509/jppm.11.034