PhD Title:
How can Effectuation Theory support the development of New Social Enterprise in Ireland?
PhD Importance and Key Contribution:
At 3% of GDP, Ireland’s Social Enterprise sector lags behind the mean of 6% in Europe. This potential for doubling in size, equates to 32,000 jobs and an economic contribution of €1.4Bn (Forfás, 2013). Increasing co-operation between social enterprise and commercial enterprise offers significant potential for value creation, increased employment and societal benefit (Borzaga & Santuari, 2014). Porter & Kramer (2011) state that “A whole generation of social entrepreneurs is pioneering new product concepts that meet social needs using viable business models”.
Many social entrepreneurs have excellent ideas, but lack resources, training, and business experience. They require a framework which enables them to test their idea, develop viable business models, build networks, and commercialise their venture (Dees, 1998). It is suggested that effectuation (Sarasvathy, 2001) may provide such a framework. Based on the study of expert entrepreneurs who built successful ventures, it is simple enough to be applied by social entrepreneurs with limited business experience, and focuses on developing ventures using limited resources by building stakeholder networks.
The research will evaluate how effectuation can support the creation, development, and networking of self-sustaining social enterprises in Ireland.
Theoretical Base:
The research focuses on the convergence of two distinct areas of study:
Social Enterprise: The characteristics of social enterprise are: trading for a social purpose, generating income from trading activities, separation from government, and re-investment of the surplus in the social objective (Forfás, 2013).
Effectuation Theory: A framework which enables entrepreneurs to make optimal use of existing resources, limit and manage risk, build networks and new opportunities, manage adversity, and control the outcome (Read & Sarasvathy, 2005; Sarasvathy, 2001).
Research Questions & Method:
1. How can effectuation support the creation and development of self-sustaining social enterprises?
2. How can effectuation help social enterprises to develop networks for open innovation and co-creation?
It is intended to adopt a mixed-methods approach (Saunders & Lewis, 2012). Positivist methods will be used to quantify and qualify suitable ventures for further investigation. Creation and development of these ventures will be further examined using interpretivist methods.
Findings (if relevant):
n/a
Implications:
It can be argued that there has been no research to date which examines how Effectuation can support the development of both Social Enterprises and Shared Value initiatives. By determining how effectuation can be used to develop self-sustaining social enterprise and shared value initiatives, this research will ensure that socially beneficial ventures are better equipped to succeed, establish networks, become profitable, and generate value, employment, and societal benefits.
References:
Borzaga, C., & Santuari, A. (2014). New Trends in the Nonprofit Sector in Europe: The Emergence of Social Enterprises. Accountability and Social Accounting for Social and Non-Profit Organizations (Advances in Public Interest Accounting, Volume 17) Emerald Group Publishing Limited, 17, 89-110.
Dees, J. G. (1998). Enterprising Non-profits. Harvard Business Review, 76(1), 54-67.
Forfás. (2013). Social Enterprise in Ireland: Sectoral Opportunities and Policy Issues. Retrieved from https://www.djei.ie/en/Publications/Publication-files/Forf%C3%A1s/Social-Enterprise-in-Ireland-Sectoral-Opportunities-and-Policy-Issues.pdf
Porter, M. E., & Kramer, M. R. (2006). Strategy & Society. Harvard Business Review, 84.
Porter, M. E., & Kramer, M. R. (2011). Creating shared value: Redefining capitalism and the role of the corporation in society. Harvard Business Review, Jan.
Read, S., & Sarasvathy, S. D. (2005). Knowing what to do and doing what you know: Effectuation as a form of entrepreneurial expertise. The Journal of Private Equity, 9(1), 45-62.
Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of management Review, 26(2), 243-263.
Saunders, M., & Lewis, P. (2012). Doing research in business and management : an essential guide to planning your project. Harlow [etc.]: Financial Times Prentice Hall.
