VENTURING FOR OTHERS WITH HEART AND HEAD: HOW COMPASSION ENCOURAGES SOCIAL ENTREPRENEURSHIP
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姝 Academy of Management Review
2012, Vol. 37, No. 4, 616–640.
http://dx.doi.org/10.5465/amr.2010.0456
VENTURING FOR OTHERS WITH HEART AND
HEAD: HOW COMPASSION ENCOURAGES
SOCIAL ENTREPRENEURSHIP
TOYAH L. MILLER
Indiana University
MATTHEW G. GRIMES
University of Alberta
JEFFERY S. MCMULLEN
Indiana University
TIMOTHY J. VOGUS
Vanderbilt University
Social entrepreneurship has emerged as a complex yet promising organizational
form in which market-based methods are used to address seemingly intractable
social issues, but its motivations remain undertheorized. Research asserts that
compassion may supplement traditional self-oriented motivations in encouraging
social entrepreneurship. We draw on research on compassion and prosocial mo-
tivation to build a model of three mechanisms (integrative thinking, prosocial
cost-benefit analysis, and commitment to alleviating others’ suffering) that trans-
form compassion into social entrepreneurship, and we identify the institutional
conditions under which they are most likely to do so. We conclude by discussing
the model’s contribution to and implications for the positive organizational schol-
arship literature, entrepreneurship literature, and social entrepreneurship
literature.
Social entrepreneurship has captured the me- 2002). Social enterprises seek to create value for
dia’s attention and the public’s imagination. By customers, but instead of full remuneration go-
using market-based methods to solve social ing to investors, as is the case with commercial
problems, social entrepreneurship marries two ventures, the surplus benefits of organizational
distinct and ostensibly competing organiza- activity accrue primarily to targeted beneficia-
tional objectives: creating social value and cre- ries (Alvord, Brown, & Letts, 2004; Austin et al.,
ating economic value (Austin, Stevenson, & Wei 2006; Mair & Marti, 2006). It is this concern for
Skillern, 2006; Dees, 1996, 1998). Like charitable others that makes social entrepreneurship both
nonprofits, social enterprises seek to create so- admirable and theoretically problematic given
cial value (Peredo & McLean, 2006; Shaw & our current understanding of what motivates
Carter, 2007), but they employ a market-based entrepreneurship.
organizational form to sustain this value cre- To date, investigations by researchers from
ation (Hartigan, 2006; Hockerts, 2006; Lasprogata economics, psychology, and management into
& Cotten, 2003; Mair & Marti, 2006; Thompson, the motivations for market-based venture cre-
ation have focused primarily on the role of ra-
tional self-utility maximization (Licht, 2010) and
We thank special issue editor Joshua Margolis and three profit-seeking behavior (Baumol, 1990). Although
anonymous reviewers for seeing the potential in our paper research in the entrepreneurship literature has
and providing us with extremely constructive and thoughtful consistently suggested that entrepreneurs ex-
guidance throughout the review process. An early draft of hibit a preference for nonpecuniary rewards,
this manuscript was presented at the 2010 Research Collo-
quium on Social Entrepreneurship; we thank the partici-
such as the need for achievement (McClelland,
pants for their constructive feedback regarding that draft. Winter, & Winter, 1969), autonomy (Amit & Zott,
All the authors contributed to this article equally. 2001; Hamilton, 2000; Moskowitz & Vissing-
616
Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright
holder’s express written permission. Users may print, download, or email articles for individual use only.2012 Miller, Grimes, McMullen, and Vogus 617 Jorgensen, 2002), or a taste for variety (Åstebro & ars have suggested that compassion motivates Elhedhli, 2006) that enables them to bear the risk social entrepreneurship (Dees, 1998), the mech- and uncertainty associated with new venture anisms by which it does so remain poorly un- creation (McMullen & Shepherd, 2006), each of derstood (Short, Moss, & Lumpkin, 2009; Zahra, these preferences remains primarily self- Gedajlovic, Neubaum, & Shulman, 2009). By de- interested (i.e., oriented toward maximizing an veloping these mechanisms, we address this individual’s personal utility). Furthermore, this shortcoming and contribute to three areas of focus on self-interested and calculative motiva- management research. tors may ignore the role that emotion plays in First, to date, much work has focused on dif- conditioning entrepreneurial behavior (Baron, ferentiating social entrepreneurship from other 2008; Goss, 2008). In particular, emotions that are organizational forms in order to define the phe- prosocial motivate actions that are intended to nomenon (Austin et al., 2006; Dees & Emerson, serve the well-being of a group, even at the 2001), but one hitherto overlooked aspect is its expense of the individual actor. This effectively motivational antecedents. We examine the an- bypasses self-interested calculations and trans- tecedents of social entrepreneurship, specifi- forms apathy into social concern and action cally drawing out the theoretical relationship (Bowles & Gintis, 2002; Montada & Schneider, between social entrepreneurship and compas- 1989; Thomas, McGarty, & Mavor, 2009). sion (Dees, 1998) to fill a gap in the emerging Indeed, even though social entrepreneurship scholarly literature on social entrepreneurship. is likely to be at least partly based in self- By exploring the theoretical antecedents of social interest and a desire for social power (McClel- entrepreneurship, we offer a more thorough and land, 1994), prior research asserts that these mo- rigorous exploration of the affective and cognitive tives are insufficient. In early conceptualizations mechanisms underlying this relationship and of social entrepreneurship (e.g., Dees, 1998, the factors that have influenced the increasing 2007), scholars argued that the decision to start legitimacy of social entrepreneurship. such ventures is substantially motivated by the In addition to the social entrepreneurship lit- other-oriented emotion of compassion. This re- erature, we contribute to the entrepreneurship quires that scholars examine more closely the literature by elaborating on how new venture ways that people systematically incur substan- creation can be an expression of prosocial mo- tial costs to promote other people’s interests tivations and emotions that are focused on the (Camerer & Fehr, 2006; Rabin, 2002), employ alleviation of suffering. By focusing on social emotion in their decision making (Cardon, Win- entrepreneurship as an exemplar of other- cent, Singh, & Drnovsek, 2009), and recognize oriented entrepreneurial action, we challenge more explicitly that “the self-utility that may future studies of entrepreneurial motivation to accrue to the actor is affected by the utility ac- account for the role of prosocial gains, as well as cruing to others” (Licht, 2010: 839). self-oriented factors such as autonomy and sta- The purpose of this article is to explore how tus (Ageev, Gratchev, & Hisrich, 1995; Herron & compassion may be responsible for encourag- Sapienza, 1992; Kolvereid, 1996; Shane, Kolver- ing social entrepreneurship—the process of eid, & Westhead, 1991). In addition, we contrib- launching a hybrid organizational form that cre- ute to the study of emotions in entrepreneurial ates social value through market-based meth- action, a topic often ignored in the literature ods. Compassion is characterized by its other- (Cardon et al., 2009; Goss, 2005). In doing so we orientation and emotional connection linking an uncover how compassion, as an other-oriented individual to a suffering community (Goetz, Kelt- emotion, plays a cognitive and affective role, ner, & Simon-Thomas, 2010; Lazarus, 1991; Nuss- influencing the way entrepreneurs think, calcu- baum, 1996, 2001). Compassion serves as a pow- late and analyze personal costs, and commit to erful motivator of action, compelling individuals organizing for a cause. to alleviate others’ suffering (Batson & Shaw, Finally, prior research on compassion in pos- 1991; Omoto, Malsch, & Barraza, 2009). Thus, itive organizational scholarship (POS) has fo- compassion serves as a prosocial motivating cused exclusively on the role of compassion emotion (i.e., the desire to benefit others), in con- within existing organizations, such as how indi- trast to proself motivators (Bierhoff, 2005; De viduals display compassion toward suffering Dreu, Weingart, & Kwon, 2000). Although schol- colleagues (Dutton, Worline, Frost, & Lilius, 2006;
618 Academy of Management Review October
Frost, Dutton, Worline, & Wilson, 2000) and how sues using market-based mechanisms as social
compassion can contribute to collective capabil- entrepreneurship and the corresponding new or-
ities (Kanov et al., 2004). This work, however, has ganizations as social enterprises (Austin et al.,
tended to ignore compassion’s possible influ- 2006; Dees, 1996, 1998). For example, Piramal Wa-
ence on whether and how an organization is ter Private Limited attempts to overcome the sig-
founded in the first place. By considering how nificant challenges of getting potable water to
compassion might serve to motivate a broader the most impoverished communities in India.
range of activities and responses, including the Piramal Water has organized around the mis-
founding of a new organization intended to ad- sion of “sarvajal,” meaning “water for all,” to
dress social issues and alleviate others’ suffer- create a solar-powered, unmanned “water ATM”
ing, we extend prior studies that have begun to that dispenses clean water for a very small fee.
examine how decision making is influenced by Social enterprises like Piramal Water are dis-
other-orientation (De Dreu, 2006; Grant & tinguished by their focus on creating social
Berry, 2011). value, such as getting potable water to impov-
The remainder of the article proceeds as fol- erished communities (Peredo & McLean, 2006;
lows. First, we contextualize our theorizing by Shaw & Carter, 2007), through organizations that
discussing the unique and challenging nature rely on commercial, market-based approaches
of social entrepreneurship as a solution for ad- (Hartigan, 2006; Hockerts, 2006; Lasprogata &
dressing social problems. Second, we propose Cotten, 2003; Thompson, 2002)—for example,
that compassion acts as a prosocial motivator charging a small fee for the water. Social value
by way of its other-orientation. This emotional creation occurs when an organization “achieves
connection to others fosters integrative solu- an equivalent social benefit with fewer dollars
tions to seemingly intractable social problems, or creates greater social benefit for comparable
distorts cost-benefit analysis in other-serving cost” (Porter & Kramer, 1999: 126). A social ben-
ways, and encourages the commitment needed efit is a solution to a social problem that accrues
to undertake demanding and difficult re- to society or a targeted segment of the popula-
sponses. Third, we show how the effects of com- tion, as opposed to an individual or specific
passion, when combined with the perceived le- organization (Thompson, 2002).
gitimacy of social entrepreneurship, increase
the likelihood of launching a social enterprise.
The Challenge of Social Entrepreneurship
In other words, we argue that compassion elicits
a set of cognitive and affective processes con- Despite the increased attention given to social
ducive to social entrepreneurship and, in tan- entrepreneurship, the phenomenon remains
dem with the perceived legitimacy of social en- rare (Light, 2006), perhaps because it presents
trepreneurship, encourages the choice to found very distinct and poignant challenges (Chell,
a new social enterprise. Finally, we discuss the 2007; Elkington & Hartigan, 2008; Hemingway,
theoretical and empirical implications of our 2005; Leadbeater, 1997). First, social entrepre-
proposed model. neurship can be viewed as particularly arduous
because it “demands that entrepreneurs fuse
together key elements of different logics that
SOCIAL ENTREPRENEURSHIP
may have little in common and may even be in
Scholars and practitioners alike are increas- conflict” (Tracey, Phillips, & Jarvis, 2011: 60). Spe-
ingly attending to hybrid organizations that cifically, social entrepreneurship combines mar-
seek to apply market-based solutions to social ket-based organizing, where resources are ac-
issues such that benefits accrue primarily to quired by promising direct financial returns that
targeted beneficiaries, as opposed to owners are achieved by realizing the organizational
(Alvord et al., 2004; Austin et al., 2006; Mair & goal of creating economic value, with charity-
Marti, 2006). A social issue refers to “a putative based organizing, where resources are acquired
condition or situation that is labeled a problem by promising donors indirect social returns that
in the arenas of public discourse and action are achieved by realizing the organizational
[e.g., poverty, illiteracy, unemployment]” (Hil- goal of creating social value (Battilana & Do-
gartner & Bosk, 1988: 53–54). Scholars increas- rado, 2010). The combination of these ap-
ingly refer to these efforts to address social is- proaches is clearly evident, for example, in so-2012 Miller, Grimes, McMullen, and Vogus 619
cial enterprises that look to make advanced required to engage in institution building for
technologies available to impoverished commu- their relevant stakeholders (e.g., educating po-
nities—those at the “base of the pyramid” (Pra- tential consumers, financiers, governmental
halad, 2005). For example, the treadle pump and agencies, etc.; see Kerlin, 2006). In sum, social
the drip irrigation technology products offered entrepreneurship can be viewed as challenging
by IDE India provide impoverished rural farmers because it requires marrying two ostensibly
with affordable methods for improving their eco- contradictory organizational goals in environ-
nomic position, but using market-based meth- ments where even basic institutional infrastruc-
ods rather than charity-based methods. Such a ture may not be in place.
tightly integrated combination of social and
economic value creation differentiates social
Motivating Social Entrepreneurship
entrepreneurship not only from traditional
modes of entrepreneurship (Emerson & Twersky, Traditional rational and self-oriented expla-
1996) but also from traditional modes of respond- nations of founders’ motivations also seem in-
ing to suffering (e.g., charities). adequate for explaining why an individual
Second, social entrepreneurship can be would engage in the process of creating a social
viewed as challenging because of the markets enterprise that poses such significant chal-
and contexts in which it is implemented (Mair & lenges and uncertainty (Carsrud & Brännback,
Marti, 2006). Social entrepreneurship typically 2011; Grichnik, Smeja, & Welpe, 2010). For exam-
emerges in contexts where markets are per- ple, early entrepreneurship research empha-
ceived to have failed (McMullen, 2011) or where sized that entrepreneurs are motivated by finan-
there are significant institutional voids (Austin cial returns as compensation for their personal
et al., 2006; Dart, 2004; Haugh, 2005; Mair & Marti, risk taking (Casson, 1982; Kirzner, 1985; Knight,
2009; Seelos & Mair, 2005). The social entrepre- 1921; Schumpeter, 1934). More recent work has
neur must bear not only the risk involved with criticized this view as overly narrow (Carsrud &
launching a new enterprise but also the risk Brännback, 2011; Katz & Gartner, 1988), suggest-
associated with constructing new institutions ing that motivations for venture creation may
that might support such an enterprise (Dacin, reflect individual values and intrinsic satisfac-
Dacin, & Matear, 2010). For example, microcredit tions (Ageev et al., 1995; Herron & Sapienza,
organizations (e.g., Grameen Bank and BRAC) 1992), such as increased job security, a more
provide the poor with the working capital balanced workload, and autonomy (Kolvereid,
needed to start entrepreneurial ventures. In ad- 1996). Others point to status, prestige, continued
dition to the capital market innovation, the so- learning, and creative control as motives of the
cial entrepreneurs who first created microcredit choice to create a venture (Shane et al., 1991).
organizations had to do more than just start a Still other work has attended to emotional moti-
venture. They also had to engage in institutional vations, such as passion, happiness, joy, anger,
entrepreneurship by altering existing cultural, and fear, as influencing entrepreneurial action
economic, and regulatory institutions (Dacin et (Cardon et al., 2009; Grichnik et al., 2010; Welpe,
al., 2010; Mair & Marti, 2009; McMullen, 2011). Spörrle, Grichnik, Michl, & Audretsch, 2012).
Culturally, microcredit operations had to over- However, these motivations are often grounded
come stereotypes about the poor by demonstrat- in meeting (or failing to meet) self- or venture-
ing their ability to repay loans. Economically, related objectives (Cardon et al., 2009; Welpe et
microcredit organizations had to develop tech- al., 2012). Despite these substantive contribu-
nologies and distribution systems that could tions to our understanding of the motivations
overcome the physical barriers to deliver prod- that underpin venture creation, the motiva-
ucts and services efficiently to geographically tional effects of prosocial emotions remain
remote rural populations. Finally, to increase underexplored.
stability and lower transaction costs, micro- Social entrepreneurship, as noted, comprises
credit organizations had to help establish cen- a particular subset of entrepreneurial activity,
tral monitoring agencies, such as the Micro- wherein the products and services attempt to
credit Regulatory Authority in Bangladesh. address social problems (Mair & Marti, 2006). As
However, even in environments where the infra- such, several scholars have suggested that com-
structure exists, social entrepreneurs are often passion may act as a prosocial and emotional620 Academy of Management Review October
motivator of social entrepreneurship (Dees, 1998, others, acts as a prosocial motivator of cognitive
2007; Fowler, 2000), but they have left the mech- and affective processes that are considered pre-
anisms by which it does so undertheorized. Al- conditions for undertaking social entrepreneur-
though we acknowledge that compassion likely ship. These processes include (1) increasing in-
motivates social entrepreneurship in concert tegrative thinking, (2) inducing prosocial
with other, more self-oriented motives, our pur- judgments regarding the costs and benefits of
pose in this article is not to highlight the con- social entrepreneurship, and (3) fostering com-
stellation and configuration of individual moti- mitment to alleviate others’ suffering. Further,
vations that distinguish the founding of social these compassion-triggered processes increase
enterprises from other organizational forms. the likelihood of social entrepreneurship by en-
Rather, our purpose is to hone in on the role of abling individuals to do something so arduous
compassion in encouraging this growing and
and challenging. We once again acknowledge
important subset of entrepreneurial activity that
that such processes in isolation do not suffi-
currently lacks a strong theoretical foundation
ciently predict social entrepreneurship over the
(Short et al., 2009).
choice to found a more traditional nonprofit or
Figure 1 depicts our model of how compassion
encourages an individual to engage in social for-profit organization. We posit, however, that
entrepreneurship. Note that we refer throughout such processes, when used in institutional set-
the article to instances of compassion that are tings that are perceived to be conducive to so-
generalized to broad social problems and is- cial entrepreneurship, increase its likelihood. In
sues, as well as to suffering communities, as other words, increases in the perceived legiti-
opposed to isolated cases of individuals in pain. macy of social entrepreneurship channel the
Specifically, we argue that compassion, through compassion-driven processes toward social
other-orientation and emotional connection with entrepreneurship.
FIGURE 1
How Compassion Encourages Social Entrepreneurship2012 Miller, Grimes, McMullen, and Vogus 621
COMPASSION the suffering of another as a significant part of
his or her own scheme of goals and ends” (2001:
Compassion is a prosocial emotion that con-
319). As compassion serves to orient one’s atten-
nects an individual with a suffering community
tion to others, it becomes a prosocial motivator
(Goetz et al., 2010; Lazarus, 1991; Nussbaum,
that encourages an effortful response for the
1996, 2001) and produces sensitivity to the pain
benefit of others (Batson, 1987). Specifically,
and needs of others (Nussbaum, 1996; Ortony,
Omoto and colleagues (2009) found that em-
Clore, & Collins, 1988). Compassion is a specific
pathic concern generates other-oriented action
manifestation of the broader feeling of empathy
but does not carry with it a corresponding ex-
(Decety & Jackson, 2006; Kanov et al., 2004; Nuss-
pectation of reward for oneself. In fact, compas-
baum, 1996; Solomon, 1998), which, unlike com-
sion motivates actions to alleviate others’ suf-
passion, can be experienced in relation to an-
fering even at a cost to oneself (Batson &
other’s joy as well as another’s suffering. Upon
Shaw, 1991).
noticing the pain and suffering of others, indi-
Compassion can also make individuals par-
viduals may experience compassion, which elic-
ticularly attuned to social issues by first making
its suffering along with those in need and a
others’ suffering personally relevant (Batson &
desire to relieve this suffering. This desire is
Shaw, 1991; Lewin, 1935) and then by generaliz-
similar to prosocial motivation, which Grant de-
ing this concern to others suffering from similar
fines as “the desire to expend effort to benefit
circumstances (Nussbaum, 2001; Ortony et al.,
other people” (2008: 49). Specifically, we posit
1988). The specific target of compassion—for ex-
that compassion acts as a prosocial motivator
ample, a homeless street child— becomes a
fundamentally through its other-orientation and
symbol or embodiment of a broader social issue,
emotional connection to others that are suffer-
such as homelessness or poverty (Hilgartner &
ing (Clark, 1997; Kanov et al., 2004; Nussbaum,
Bosk, 1988). Transfer of compassion occurs when
1996, 2001; Solomon, 1998). That said, we also
the attention to another’s distress promotes a
acknowledge the potential for compassionate
generalized inclination to aid others, including
behaviors to reinforce positive self-directed feel-
potential recipients who may not have served as
ings, which economists have labeled the “warm-
the original source of concern (Barnett, Howard,
glow” effect (Andreoni, 1989).
King, & Dino, 1981). This generalizability of com-
passion links specific suffering to a broader fab-
ric of suffering (Coke, Batson, & McDavis, 1978;
Compassion and Other-Orientation
Hoffman, 1976). The result is not simply a desire
Compassion is other-oriented because it di- for any solution but for a solution that has the
rects one’s attention from self-concern to con- potential to reach such a scale that it may im-
cern for others and their suffering (Nussbaum, pact the generalized population that is suffer-
2001; Solomon, 1998; White, 1999). First, compas- ing. If compassion extends only to a particular
sion leads observers to understand what it feels individual and does not generalize to others
like to experience others’ pain as a result of sharing a similar plight, then social enterprise
either a vicarious response to affective cues is likely to be considered a disproportionate and
from others (e.g., mimicking the expressions of unnecessary response. A strong social issue
others; Hoffman, 1981) or intentional role taking concern stemming from other-orientation would
(e.g., imaginatively transposing oneself into the appear to be a necessary precondition for choos-
feeling and thinking of others; Batson, Early, & ing social enterprise as a compassionate re-
Salvarani, 1997). This other-orientation en- sponse to others’ suffering. Therefore, we focus
hances one’s awareness of others’ vulnerable on instances of compassion that are triggered
circumstances and gives a deeper appreciation by and directed toward broader social issues,
of their context (Dutton et al., 2006; Frost et al., rather than individual and isolated cases of
2000; Lilius et al., 2008). At the same time com- suffering.
passion increases one’s belief in the signifi-
cance of others’ suffering and one’s understand-
Compassion and Emotional Connection
ing of the issues contributing to it (Nussbaum,
2001). Nussbaum suggests that “in order for com- Compassion is also defined by its emotional
passion to be present, a person must consider connection to others— one suffers with others622 Academy of Management Review October
and feels their pain (Blum, 1980). Emotions are be unfair (Bagozzi & Pieters, 1998), and it moti-
like “a lens that colors thoughts, actions, percep- vates commitment until the problem is resolved
tions, and judgments” (Goodwin, Jasper, & Pol- (Batson & Shaw, 1991; Lewin, 1935). In fact, evo-
letta, 2001: 10), and they become important in the lutionary approaches to compassion suggest
awareness, recall, and analysis of problems and that its emotional dimension is tied to the need
decisions (Baron, 2008; Frijda, 1988; Goss, 2008). to promote cooperative norms and connection
Compassion is a longer-term emotion (Goodwin with other nonfamilial ties (Goetz et al., 2010;
et al., 2001), which, through the distinct feelings Nussbaum, 1996, 2001).
of suffering with another, supplies information Although compassion is not a forward-looking
about one’s interests and helps channel action aspiration (Folger & Salvador, 2008), acting com-
(Ford, 1992; Izard, 1991). The intense feelings that passionately may provide personal benefits
accompany compassion (e.g., sadness, outrage) (Andreoni, 1989). Because compassion produces
can signal the depth to which one cares about a positive and shared identity with a suffering
an issue, jolt any feelings of ambivalence, and group (Thomas et al., 2009), when individuals act
override contradictory desires (Ford, 1992; on behalf of the group, they are likely to experi-
Gould, 2004). The emotion of compassion com- ence positive feedback, emotional energy, and
municates feelings toward the subject in ways enthusiasm (Collins, 1993). The intrinsic satis-
that rational language might not (Ekman, 1993; faction of acting compassionately and helping
Gould, 2004). others may itself be a source of personal utility.
Emotions are also important because they can Such personal utility may reinforce actors’ com-
add immediacy to issues, supplying energy to passionate efforts, yet this does not discount the
propel an individual forward (Ford, 1992; Frijda, notion that compassion serves fundamentally
1988). Compassion involves an emotional en- as a prosocial motivator. Rather, it suggests that
ergy that is transacted with another during the a second-order warm-glow effect can reinforce
empathic response (Figley, 1995) and that influ- compassionate individuals’ behaviors (An-
ences whether and how a person will act (Bat- dreoni, 1989).
son & Shaw, 1991; Frijda, 1988; Lazarus, 1991).
Compassion also ties an individual to a proso-
COMPASSION-TRIGGERED COGNITIVE AND
cial goal by eliciting an emotional feeling of
AFFECTIVE PROCESSES
suffering that the individual wants to relieve
(Batson & Shaw, 1991; Lewin, 1935). As a result of Through other-orientation and emotional con-
this distress, people will work to reduce others’ nection to others, compassion produces proso-
suffering as a way to regulate their own emo- cial motivation that has been tied to a variety of
tions. In sum, the emotional connection to others affective and cognitive processes relevant to so-
is an important aspect of compassion. cial enterprise. Below we argue that compassion
Compassion is also relational in its emotion- specifically increases the likelihood of social
ality, which creates a connection between indi- entrepreneurship by encouraging higher levels
viduals and suffering communities. As an indi- of integrative thinking, a more prosocial form of
vidual engages in compassion, a deepened weighing costs and benefits, and commitment to
bond emerges with those with whom compas- alleviating others’ suffering.
sion is exchanged—a relationship develops in
which the individual is more readily available
Compassion and Integrative Thinking
to appreciate the other’s context and to feel the
other’s experience of suffering in a similar way Research on motivated information process-
(Nussbaum, 1996). Emotions such as compassion ing suggests that the other-oriented nature of
shape individuals’ social identities such that compassion will bias the way individuals
they begin to view their situation as inter- search for and evaluate information regarding
changeable with that of a suffering group and how to solve an issue (De Dreu, Nijstad, & van
even begin to feel that they are a part of that Knippenberg, 2008; Ford, 1992). Compassion, be-
group (Nussbaum, 2001; Thomas et al., 2009). The cause of its other-oriented and emotional na-
emotional connection of compassion can result ture, serves as a prosocial motivator that en-
in a moral outrage that facilitates a goal of re- courages one to search for solutions that
moving sources of suffering that are judged to promise collective gains rather than cater to sin-2012 Miller, Grimes, McMullen, and Vogus 623
gular interests. This is consistent with research Compassion and Prosocial
on how prosocial motives impact whether indi- Cost-Benefit Analysis
viduals integrate diverse information from oth-
Traditionally, decision making has been con-
ers in their efforts to solve problems (De Dreu et
sidered a function of rational cost-benefit anal-
al., 2008) and whether they are more likely to
ysis, where an individual is motivated by self-
incorporate the ideas of others who are different
interest and calculative assessments of the
(Weingart, Bennett, & Brett, 1993). Prosocial mo-
likelihood of accomplishing goals (Gould, 2004).
tivation can also increase attention to informa-
According to such models, an individual will
tion about others’ perspectives such that an in-
dividual can better understand the issue from choose to engage in activities when the per-
their perspective and identify more ways to help sonal benefits outweigh the personal costs. We
them effectively (De Dreu, Koole, & Steinel, 2000). argue that the other-oriented and emotional na-
In turn, this enhanced perspective taking in- ture of compassion challenges such a tradi-
creases cognitive flexibility, willingness to take tional atomistic analysis of the costs and bene-
risks, and openness to complexity, all of which fits of possible actions. Compassion results in a
expand the individual’s access to ideas and po- more prosocial cost-benefit analysis where oth-
tential solutions (Grant & Berry, 2011). The other- ers’ outcomes are valued more highly (Goetz et
oriented nature of compassion also increases al., 2010; Nussbaum, 1996, 2001), thereby increas-
an individual’s ability to make broad and cre- ing the perceived benefits of acting to alleviate
ative associations (Polman & Emich, 2011). others’ suffering.
Higher levels of integrative thinking enable an- Compassion’s other-orientation shapes the
alogical reasoning and facilitate transfer of so- evaluation of the importance of another’s suffer-
lutions from one context to another (Thompson, ing and the need for intervention. For example,
Gentner, & Loewenstein, 2000; Vosniadou & compassion emerges from judgments that suf-
Ortony, 1989). fering individuals are undeserving of their lot in
Compassion may also promote more integra- life, which Nussbaum (1996) refers to as the
tion of various perspectives to address a social “judgment of nondesert.” Viewing others’ suffer-
issue because it results in less advocacy of a ing as unfair and unjust leads the compassion-
single perspective that could create conflict be- ate individual to characterize beneficiaries as
tween ostensibly competing goals. Increased more needy and worthy of help, increasing the
prosocial motivation specifically engenders perceived benefits of acting on their behalf (Bat-
consideration of a wider array of actions to re- son & Shaw, 1991). The increased weight placed
dress others’ suffering (Polman & Emich, 2011). on the needs of others encourages a prosocial
Some evidence for this comes from studies that cost-benefit analysis where the individual
show that other-oriented motivation reduces the views benefits more broadly (i.e., benefits do not
tendency to search for self-confirming informa- need to accrue directly to the individual doing
tion. For example, De Dreu and colleagues (2008) the calculation), reducing the importance of
suggest that the tendency to bias one side of an clear individual benefit, which is necessary in
issue is enhanced when one has a proself as more traditional formulations (Quiggin, 1997).
opposed to a prosocial motivation, and Carne- Similarly, the weighting of benefits that accrue
vale and Probst (1997) suggest that proself ori- to others may motivate actions that might other-
entations are more prone to black and white wise be avoided because of the significant costs
thinking. Furthermore, Beersma and De Dreu incurred by the actor (Batson & Shaw, 1991). In
(1999) found that prosocially motivated negotia- other words, high levels of compassion increase
tors engage in more integrative problem solving the perceived benefits of acting and the per-
and arrive at more integrative agreements. ceived costs of not acting and decrease the rel-
Taken together, this research suggests that, as a ative weight of the costs of acting.
type of prosocial motivation, compassion causes The emotional connection inherent in compas-
greater receptivity to diverse information, which sion further increases the perceived benefits as-
facilitates recombination of new ideas or ap- sociated with alleviating the pain and suffering
proaches for solving problems. This greater of others. An emotional connection to others and
openness to different ideas, in turn, allows for their suffering creates vivid images (Loewen-
more integrative thinking about solutions. stein, 1996; Metcalfe & Mischel, 1999) and “moral624 Academy of Management Review October
shocks” (Jasper, 1998) that lower emotional in- important and to increase their willingness to
vestment in the current established order, in- invest time and energy in thinking about and
crease indignation toward it, and create the de- acting on ways to help others, as well as to do so
sire to “go the extra mile” to change it (Lawrence consistently over time (Grant, 2008).
& Suddaby, 2006; Voronov & Vince, 2012). Emo- An emotional connection to others’ suffering
tional connection to others creates a moral com- affects one’s identity, thereby clarifying actions
pulsion or genuine concern for others’ suffering as identity relevant and increasing the emo-
(De Dreu & Nauta, 2009) such that it triggers tional energy of acting in accordance with that
motivated information processing, where an in- identity. Prosocially motivated individuals may
dividual attends to, encodes, and retrieves infor- perceive acting to improve others’ lives (e.g., by
mation consistent with others’ goals and needs reducing their suffering) as more congruent with
(De Dreu, 2006; De Dreu et al., 2008). Thus, com- their core values, and, thus, they may commit to
passion leads to a wider search for and consid- having a positive impact because acting on
eration of the benefits of acting. At the same those values reinforces a key identity for them
time it also generates an “emotional tax,” in the (Grant & Campbell, 2007). That is, compassion
form of guilt in not aiding the suffering commu- and emotional connection to others’ suffering
nity, which serves as an additional cost (Elster, can create a prosocial identity—images of the
1998). Last, an emotional connection with others’ self as helpful, caring, and benevolent—that in-
suffering can alter individuals’ stances toward dividuals are motivated to verify and enact
risk such that they will undertake risks because (Grant, Dutton, & Rosso, 2008). Incorporating an-
those risks are consistent with their compas- other’s suffering into one’s identity can increase
sionate values and emotional appraisals (Ka- one’s commitment to others (Aquino & Reed,
han, 2008). This may also occur because emo- 2002; Flynn & Brockner, 2003; Frost et al., 2000).
tions “help the normal decision-making process Individuals become more committed to goals
by narrowing down the options for action, either that fulfill the core values of their identity (e.g.,
by discarding those that are dangerous or by alleviating others’ suffering; Gagné & Deci,
endorsing those that are advantageous. Emo- 2005). In addition, acting in a manner that alle-
tions serve an adaptive role in speeding up the viates others’ suffering minimizes discrepancies
decision-making process” (Shiv, Loewenstein, & between one’s actual self and one’s ideal self
Bechara, 2005: 91). In sum, the emotional connec- (Higgins, 1987), which furthers commitment. Ac-
tion that characterizes compassion overrides a cording to Collins (1993), individuals are moti-
traditional mode of processing costs and bene- vated to maximize their overall flow of emo-
fits and thereby gives way to a prosocial cost- tional energy, and connections with others are
benefit analysis that overcomes the typical in- the primary vehicle through which this energy is
dividual’s reluctance to engage in activities created. Compassion creates emotional ties that
with higher personal risk (Wu & Knott, 2006). serve as symbols of group membership and en-
courage one to focus on the goal of alleviating
suffering within that group such that the allevi-
Compassion and the Commitment to
ation of suffering produces emotional energy
Alleviating Suffering
(Goetz et al., 2010; Goss, 2008). In turn, the emo-
Commitment is defined as a stabilizing force tional energy reinforces commitment to those with
that acts to sustain behavioral direction even whom one is connected (Collins, 1993; Goss, 2008;
when there is no expectation of equitable re- Thomas et al., 2009). In sum, emotional connection
ward (Scholl, 1981). Compassion, as a prosocial to others’ suffering has the capacity to reinforce
motivator (Bierhoff, 2005), enhances dedication desirable aspects of a prosocial identity that is
to a cause (Thompson & Bunderson, 2003) or oriented toward the alleviation of that suffering.
moral principle (Shamir, 1990), commitment to
the people who benefit from one’s efforts (Grant,
COMPASSION-TRIGGERED COGNITIVE AND
2007), and willingness to continue in the face of
AFFECTIVE PROCESSES AND
negative feedback (Meglino & Korsgaard, 2004).
SOCIAL ENTREPRENEURSHIP
When prosocially motivated through other-
orientation and emotional connection, individu- We previously described how compassion
als are more likely to see others’ goals as more elicits a set of cognitive and affective processes,2012 Miller, Grimes, McMullen, and Vogus 625
including integrative thinking, prosocial cost- 2006; Harding, 2004; Hartigan, 2006; Hibbert,
benefit analysis, and commitment to alleviating Hogg, & Quinn, 2005; Lasprogata & Cotten, 2003).
others’ suffering. In this section we build on this Thus, integrative thinking enables the reconcil-
foundation to argue how these processes, in turn, iation of seemingly competing objectives in the
facilitate engaging in social entrepreneurship. form of a “double bottom line” that tightly cou-
ples and accounts for financial and social objec-
tives (Austin et al., 2006).
Integrative Thinking and
Two examples of the implications of holding
Social Entrepreneurship
double bottom line objectives include (1) refram-
Compassion contributes to an individual’s ing profit as a means of increasing the sustain-
ability to process information in a more integra- ability of ambitious organizational solutions to so-
tive fashion. Integrative thinking entails reject- cial problems and (2) reframing beneficiaries as
ing framing issues and choices as “either/or,” customers rather than as recipients of gifts. First,
thus allowing for a more flexible and holistic integrative thinking can produce the view that
view of problems and potential solutions (Mar- profit is a means of increasing organizational vi-
tin, 2007). For example, Plambeck and Weber ability and sustainability by stabilizing revenue
(2009) found evidence that when CEOs process and risk exposure (Carroll & Stater, 2009; Froelich,
issues as simultaneously positive and negative, 1999; Mair & Marti, 2006). Profits generated from
which is to say integratively (Weick, 1998), they the sale of goods and services may be perceived
are able to promote action that is broader and as evidence of more efficient use of resources
more flexible. Specifically, integrative thinking (Dees & Emerson, 2001; Gronbjerg, 1992; Massar-
consists of an ability, first, to see possibilities sky & Beinhacker, 2002) and better continuity, pre-
beyond the status quo (Boles, Croson, & Mur- dictability, and controllability of funds than char-
nighan, 2000; Stasser & Titus, 1985) and, second, itable donations (Carroll & Stater, 2009; Gronbjerg,
to envision collective benefit from synthesizing 1992). In offering advice from his social entrepre-
seemingly competing interests (De Dreu & Car- neurship experience, social entrepreneur Paul
nevale, 2003). Each of these effects of integrative Kewene-Hite articulates an example of how inte-
thinking makes social entrepreneurship more grative thinking might lead an individual to form
likely by enabling reconciliation of ostensibly a social enterprise:
competing organizational objectives (i.e., creat-
If you’re going to deal with recycling or cleaning
ing economic value versus creating social up streets or waterways, don’t just think in terms
value). That is, social entrepreneurship rests on of pulling refuse out of the waterways and dis-
a distinctive version of integrative thinking that posing of it, but puzzle through how you can turn
results in an organization that simultaneously that refuse into something commercially viable.
creates economic and social value. Although so- If you’re pulling out metals or plastics, recycle
them in a way that’s good for the environment
cial entrepreneurship is a function of a particu- and for the venture (quoted in Goldsmith, 2010).
lar form of integrative thinking, it does not mean
that other organizational forms do not similarly As Kewene-Hite suggests, the additional and
rely on integrative thinking. innovative step of converting “waste” into val-
Integrative thinking is a critical antecedent of ued products requires a specific form of integra-
social entrepreneurship because it enables an tive thinking that entails transforming a social
individual to combine social and economic problem into a revenue-generating product or
goals (Emerson & Twersky, 1996; Tracey et al., service that can help make an organization
2011). Traditionally, social value creation has self-sustaining.
been considered inconsistent with or even dia- Second, integrative thinking can result in
metrically opposed to profit maximization (Dart, viewing beneficiaries as customers rather than
2004; Eikenberry & Kluver, 2004), yet integrative passive recipients of a gift (Yunus, 2010). Con-
thinking suggests the possibility of using one sider, for example, Dignified Mobile Toilets
objective (i.e., profit) as a means of furthering (DMT), a social enterprise that offered the first
the other objective (i.e., social value creation). mobile toilet service in Nigeria. DMT was the
As a result, economic and social value creation result of thinking about how to deliver a neces-
can be viewed as mutually reinforcing, as op- sary service in a manner that was self-sustain-
posed to mutually exclusive, processes (Cho, ing and would simultaneously lift providers out626 Academy of Management Review October
of poverty. Each toilet serves 100 people per day formation processing is necessary for motivat-
at a cost of $.10; 60 percent of the revenue goes to ing social entrepreneurship. Reframing daunt-
the toilet manager and 40 percent returns to the ing conditions as opportunities and possibilities
company to sustain operations. This illustration helps to overcome a key barrier to engaging in
does not suggest that integrative thinking is ab- social entrepreneurship. Although social entre-
sent in traditional efforts to provide sanitation to preneurship often requires substantive societal
those without it; rather, it highlights a particular reforms, an individual’s emotional connection
form of integrative thinking that balances com- with sufferers in desperate need of such reforms
mercial viability with solving social problems. may override the associated and considerable
personal risks.
In addition, engaging in a prosocial cost-
Prosocial Cost-Benefit Analysis and
benefit analysis can also make one less respon-
Social Entrepreneurship
sive to information that challenges beliefs in the
Social entrepreneurship is exceptionally chal- feasibility, desirability, or viability of the social
lenging, since the entrepreneur not only must enterprise’s value proposition. As such, one is
attempt the founding of an organization but also less likely to perceive risk. In this way a proso-
must work to establish an infrastructure that cial cost-benefit analysis may motivate social
supports the organization (Austin et al., 2006; entrepreneurship by affecting well-known cog-
Mair & Marti, 2009; Seelos & Mair, 2005). Often, nitive biases, such as the availability heuris-
new markets and new distribution channels tic—predicting the likelihood of an outcome
must be erected, old cultural stereotypes must based on how easily an example can be brought
be challenged, and innovative revenue streams to mind (Tversky & Kahneman, 1974). For exam-
must be uncovered in the context of minimal ple, the perceived benefit may be a function of
disposable income (Mair & Marti, 2009; McMul- recalling a readily available example like
len, 2011). In purely economic terms, the per- Grameen Bank. Alternatively, the broader con-
sonal risks of such an approach are high and the sideration of benefits may lead to a biased
benefits unknown, rendering the objective plau- search for evidence resulting from confirmation
sibility of the associated action quite low. As bias—seeking and overweighting information
such, a rational cost-benefit analysis is unlikely that confirms preexisting beliefs (Nickerson,
to yield sufficient motivation to create a social 1998). For example, when considering whether to
enterprise. We have argued that a prosocial form a social enterprise, an individual’s confir-
cost-benefit analysis fundamentally changes mation bias may lead the individual to only
this calculation. investigate successful organizations (e.g.,
The prosocial distortion of cost-benefit analy- Ashoka award winners, Grameen Bank) at the
sis means individuals internalize benefits to expense of a more balanced search that would
others, which results in envisioning a broader produce more accurate estimates of the likeli-
array of possible benefits (Grant & Berry, 2011). hood of success. As a result, a prosocial cost-
For example, an individual is more likely to benefit analysis may be rooted in cognitive bi-
view nonexistent markets and institutional ases that make forming a social enterprise
voids as opportunities rather than threats (Dut- likely, even when it may be inappropriate. In
ton, 1993). Employing a traditional cost-benefit sum, we argue that a prosocial cost-benefit anal-
analysis, an individual would deem such con- ysis serves as a precondition to engaging in the
texts as requiring disproportionate financial in- challenging process of social entrepreneurship.
vestment for minimal financial return, whereas
with a prosocial cost-benefit analysis, the indi-
Commitment to Alleviating Suffering and
vidual would recognize the various social ben-
Social Entrepreneurship
efits that might supplement any financial re-
turns. Along similar lines, the focus on benefits Prior research has shown that social entrepre-
to others would suppress the consideration of neurs are especially committed to serving soci-
the considerable personal risks or costs in terms ety (Austin et al., 2006; Elkington & Hartigan,
of time, resources, and emotional energy (Batson 2008). Indeed, scholars have asserted that creat-
& Shaw, 1991; Quiggin, 1997; Shiv et al., 2005). ing a market-based organization to solve social
This prosocially oriented form of motivated in- problems requires exceptional commitment in2012 Miller, Grimes, McMullen, and Vogus 627
order to overcome the difficulties of combining comprise necessary preconditions for predicting
ostensibly competing objectives within contexts an individual’s choice to engage in social entre-
of institutional voids (Dees, 1998; Mair & Marti, preneurship, but the decision to specifically
2009). We posit that commitment to alleviating a found a social enterprise also, importantly, de-
social problem operates through two mechanisms pends on the degree to which the individual
that increase the willingness to provide the time perceives social entrepreneurship as a legiti-
and energy needed to respond to this challenge. mate means to achieve his or her desired ends.
First, commitment allows for greater persis- Once the individual makes the choice to found
tence and motivation to act on another’s behalf, an organization, he or she must decide what
thereby fostering the search for more creative so- form it should take. More specifically, legiti-
lutions. Making decisions consistently with re- macy, which refers to the congruence of an idea,
gard for others (i.e., commitment to alleviating organization, or organizational form with social
their suffering) results in more creative and flexi- laws, norms, and values (DiMaggio & Powell,
ble thought processes than does making decisions 1983; Scott, 2008; Suchman, 1995; Weber, 1978),
to benefit the self (Polman & Emich, 2011). Creativ- shapes the decision to adopt an organizational
ity and flexibility are essential for forming a social form, such as social enterprise. Tolbert, David,
enterprise because such enterprises entail a novel and Sine (2010) argue that institutional theory
combination of existing approaches. provides an important theoretical lens for un-
Second, commitment to alleviating suffering, derstanding why individuals choose a particu-
identification with the beneficiaries of such ef- lar form because it provides a framework for
forts, and a self-image as “helper” may result in describing the sociocultural processes through
creating a social enterprise because one delays which ideas and forms emerge and develop le-
attending to possible risks (Goss, 2005). Identify- gitimacy (Suchman, 1995).
ing with beneficiaries corresponds with commit- Here we describe a particular series of insti-
ment such that inaction becomes attached to tutional changes that have led to the increased
shame, guilt, or other negative emotions, and, legitimacy of the social enterprise form. This
therefore, inaction becomes implausible increased legitimacy does not fully determine
(Bowles & Gintis, 2002). In turn, the emotions of an individual’s choice to engage in social entre-
commitment distort one’s willingness to con- preneurship; rather, it increases the social ben-
front information that indicates potentially efits of that choice and the social costs of choos-
greater risks of failure associated with starting ing alternative forms (Zuckerman, 1999). In this
a social enterprise. Commitment to alleviating section we first describe the conditions that
suffering also delays one’s willingness or abil- have given rise to the legitimacy of social enter-
ity to confront the possibility that social entre- prise. We then describe how an individual’s per-
preneurship may not be a plausible or desirable ceptions regarding social enterprise’s legiti-
way to help those who are suffering (Brockner, macy interact with integrative thinking,
1992; Staw, 1981). In other words, when an indi- prosocial cost-benefit analysis, and commit-
vidual becomes committed to a course of action ment to alleviating others’ suffering.
or ideal, that individual may avoid or explain
away information that refutes the initial choice.
The Emerging Legitimacy of Social Enterprise
Thus, higher levels of commitment to alleviating
others’ suffering would also make an individual Scholars have offered various typologies of
more likely to engage in social entrepreneurship legitimacy (Aldrich & Fiol, 1994; Archibald, 2004;
because the individual would be less responsive Scott, 2008), yet Dart (2004) argues that a distinc-
to information challenging his or her beliefs in the tion between pragmatic and moral legitimacy is
feasibility or viability of the social enterprise. particularly useful for understanding the in-
creased legitimacy of social enterprise. Prag-
matic legitimacy is based on effectively serving
LEGITIMACY, COGNITIVE AND AFFECTIVE
individual interests and meeting goals (Such-
PROCESSES, AND
man, 1995). It is strongest when powerful and
SOCIAL ENTREPRENEURSHIP
high-status individuals endorse a form. Moral
The compassion-based cognitive and affec- legitimacy, alternatively, is based on prevailing
tive processes described in the prior section social norms and values within a larger social628 Academy of Management Review October system. It encompasses society’s value-based Second, the social sector is now composed of judgments of whether an activity is “the right an increasingly eclectic group of interests, each thing to do” (Suchman, 1995: 579). This differs with its own pragmatic claims regarding the from pragmatic legitimacy’s focus on specific, most effective and efficient means of solving powerful interests (e.g., funders) that make social problems. For individuals and organiza- claims on whether an activity serves their inter- tions that operate in these organizational envi- ests (Suchman, 1995). ronments, these divergent interests may repre- Specifically, we argue that the pragmatic le- sent an unstable tension between competing gitimacy of the social enterprise is increasing modes of organizing, which institutional theo- owing to (1) the increasing demands of powerful rists refer to as “institutional contradictions” funders and consultants for greater accountabil- (Seo & Creed, 2002). Such tensions often serve as ity and (2) the growing presence of multiple com- the basis for institutional change and the in- peting interests that make claims on the “social creased legitimacy of innovative and novel or- sector.” We also argue that the moral legitimacy ganizational forms, especially those better able of the social enterprise is increasing owing to (1) to address ostensibly competing interests (Do- public disillusionment with governmental and rado, 2005; Levy & Egan, 2003; Rao, Morrill, & philanthropic interventions and (2) a “band- Zald, 2000; Seo & Creed, 2002). The increased wagon effect” resulting from high-profile social “marketization” of the social sector, for example, entrepreneurial successes. reflects one of the ways that social sector orga- Pragmatic legitimacy of social enterprise. nizations are attempting to remain responsive to First, philanthropists, venture capitalists, social multiple interests that differently prioritize so- sector consultants, and other resource providers cial and financial effectiveness (Salamon, 1993). have begun pushing for increased accountabil- This marketization includes both growing com- ity from organizations that provide solutions to petition from for-profits looking to win govern- social problems (Bendell, 2006; Grimes, 2010; ment contracts to address social problems and Nicholls, 2009). This increase stems from a prag- significant reforms and actions signaling the matic interest in encouraging social sector orga- active embrace of for-profit values, routines, and nizations to demonstrate evidence of multifac- methods. The social enterprise form has also eted (i.e., social and financial) returns and gained pragmatic legitimacy because it simi- sustainable operations (i.e., a greater proportion larly aligns with the divergent interests of the of charitable dollars going toward investments social sector. rather than overhead expenses). Many resource Moral legitimacy of social enterprise. Several providers are no longer satisfied with what they changes in the social sector are also contribut- presume to be a charitable one-way transfer of ing to the growing moral legitimacy of social funds (Moody, 2008). These providers prefer to enterprise. Within the United States, for exam- invest in organizations that are capable of de- ple, there is growing public disillusionment livering proof of effectiveness via performance with long-term effectiveness of traditional so- measures or revenues generated at the point of cial sector solutions (Lounsbury & Strang, 2009; service delivery (Miller & Wesley, 2010), in com- Zahra et al., 2009). Growing distrust of the U.S. parison with charitable nonprofits, which often federal government “to do the right thing,” for rely on informal ways of demonstrating quality example, is at its highest level in recorded his- (Glaeser & Shleifer, 2001; Grimes, 2010). From the tory, where recent polls suggest that nearly perspective of these stakeholders, market-based 90 percent of the public espouses such views methods provide clearer, measurable “proof” of (Zeleny & Thee-Brenan, 2011). Similar senti- value creation through the sale of goods (Miller ments have been expressed by the public to- & Wesley, 2010; Tracey et al., 2011; Young & ward other traditional solutions to social issues Salamon, 2002). In other words, when a customer (Clayton, 2006). These shifts in public sentiment purchases a good, the organization’s approach toward greater disillusionment do not appear to to creating value is measurably accounted for be tied to any substantive changes in traditional and validated (Priem, 2007). This adds to the charitable organizations or their services; increased legitimacy of market-based solutions rather, several scholars have provocatively and to social problems (Young & Salamon, 2002), publicly suggested that they are tied to chang- such as those provided by social entrepreneurs. ing values and norms within society regarding
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