Entrepreneurship And Public Service Management Definitions, Competencies, Obstacles

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Outline in relation to entrepreneurship and public service management definitions, competencies, obstacles.

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PUBLIC INTEREST AND NON-PROFIT
MANAGEMENT RESEARCH UNIT (PiN)
Entrepreneurship and Public Service
Management: Definitions, Competencies,
Obstacles and Examples
Nick Llewellyn, Charles Edwards,
Alan Lawton & Geoff Jones
1
00/3
ISBN 0 7492 9198 2

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Nick Llewellyn, Charles Edwards & Alan Lawton – The Open University Business
School
Geoff Jones - Said Business School, University of Oxford.
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Entrepreneurship and Public Service Management: Definitions,
Competencies, Obstacles and Examples
Contents
Preface ..................................................................................................................3
1. Introduction.....................................................................................................4
2. Methodology.................................................................................................. 12
3. Findings From The Practitioner Panels........................................................... 15
Task 1: Definitions. .......................................................................................... 15
Task 2: Competencies and Attributes. ............................................................... 21
Task 3: Examples & Obstacles. ......................................................................... 25
4. Discussion .................................................................................................... 29
5. Bibliography.................................................................................................. 38
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Preface
This paper reports key findings from two structured practitioner panel seminars,
convened at the Open University Business School (OUBS) as part of a three year
study assessing the meaning and significance of social entrepreneurship for the
practice of public management. The paper is based upon a systematic ‘content
analysis’ (Boyle, 1994) of field notes made during the panels by the research group.
The seminars were structured around issues emerging from a detailed literature
review already conducted into social entrepreneurship. Mirroring the structure of the
seminars, findings are presented around three themes: (a) definitions of
entrepreneurship, social entrepreneurship and innovation, (b) competencies that relate
to entrepreneurial public management and (c) obstacles to, and examples of, social
entrepreneurship. In the initial section of the paper we contrast traditional theories of
the entrepreneur with the way in which entrepreneurship has recently been linked to
social, rather than individual or economic goals. Methodology is then discussed,
exploring the way in which field notes were generated and analysed. In the
discussion section we argue entrepreneurship is entering the discourse of public
management whilst our data suggests entrepreneurial behaviours are playing a role
within the delivery of a range of public services. We also argue cultural and
structural organisational factors impact upon the way in which entrepreneurship is
enacted by public managers. Finally, a number of propositions are presented around
which we are attempting to generate theory in this area.
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1. Introduction
Economists and strategists have argued entrepreneurship plays a crucial role in the
efficient functioning of markets, facilitates the development of new technologies and
plays an integral role in the creation of wealth (Covin & Slevin, 1991). Whilst
sixteenth century definitions characterised entrepreneurship as an ‘act through which
captains of fortune hire mercenary soldiers to protect small towns’ (Martinelli, 1994),
contemporary discourses have tended to draw upon economic theory to define
entrepreneurship as an ‘act of new entry’ driven by the profit motive (Lumpkin &
Dess, 1996:136). This can mean: (a) entering new or existing markets with new or
existing goods and services or (b) launching a new venture either through the creation
of an entirely new organisational form or through the adaptation of an existing one.
A number of competing theories have arisen to explain the entrepreneurial act and
these are briefly discussed below. In addition, we discuss the trend of using
entrepreneurship to inform a particular style of management (Galbraith, 1992:75).
Finally, we apply these approaches to explore acts of entrepreneurship that are not
primarily motivated by individual profit, what has recently been called social
entrepreneurship (Waddock & Post, 1991).
Neo-classical economists see entrepreneurship as a force pushing markets back into
equilibrium. Through the possession of superior access to information the
entrepreneur is first to adjust expectations in response to changing environmental
conditions (Hayek, 1949). If adjustments are accurate, entrepreneurs win profits by
re-allocating resources whilst also giving direction to other less innovative economic
agents. In contrast to Hayek (1949), who felt entrepreneurship was synonymous with
market clearing, Leibenstein (1968) viewed entrepreneurship as the creative response
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to inefficiencies inherent in markets and firms. From this perspective, the
entrepreneur thrives on ‘others lack of effort’ and uses superior insights to fill gaps
that existing firms fail to identify because of their passivity. The act of
entrepreneurship is therefore associated with pro-activity, competitive orientation and
the desire to win super-normal economic profits. Finally, Schumpeter (1934)
identifies the entrepreneur as an innovator able to find ‘entirely new combinations’ of
resources. Through the process of ‘creative destruction’, new products or services –
introduced by the entrepreneur – disrupt the status quo of markets thus encouraging
new firms to enter and winning economic profits for the entrepreneur.
Economic approaches view entrepreneurship at the level of markets, involving
reallocations of resources that generate profit. The entrepreneur is characterised as
making decisions on ‘gut feeling’ (Casson, 1982), rather than worrying about fine
detail or costly marginal calculations. They take risks (Brockhaus, 1980) and employ
‘entrepreneurial judgement’. This has helped create the image of the maverick
entrepreneur (Chen et al., 1998), a loner (Peterson, 1995) who utilises an outsider’s
perspective to develop innovative approaches to existing problems. This stereotype
has been further grounded in psychoanalytic studies (de Vries, 1977) and studies of
psychological traits (Green et al., 1996) that have even identified ‘deviant’ aspects of
the entrepreneur’s personality. From this perspective, entrepreneurship defines the
‘whole person’ (de Vries, 1977), who is uninterested in the mundane task of
management.
Whilst most economists have addressed entrepreneurship at the level of markets,
strategists have located entrepreneurship within organisations and networks,
developing the ‘entrepreneurial orientation’ (Lumpkin & Dess, 1991) construct to
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explain why some organisations appear prone to act entrepreneurially. Authors have
linked the structural characteristics of organisations to the prominence of
entrepreneurship, e.g., Bridges et al., (1968) found increased hierarchy leads to low
levels of product entrepreneurship through increasing communication burdens.
Similarly, Hall (1996) found high levels of formalisation, e.g., rigid work procedures,
jobs descriptions, etc., was associated with low levels of entrepreneurship through
imposing limits upon innovative behaviour. In a broader study, Moon (1999) found
cultural factors such as values and ethics may significantly impact upon the
entrepreneurial activities of firms. Following this argument, some authors have even
questioned whether entrepreneurship can be viewed as an individual act. Covin &
Slevin (1991) feel entrepreneurship is ‘firm behaviour’ designed to increase overall
profits and returns to shareholders.
Whilst most economists and strategists approach entrepreneurship as the act of ‘new
entry’, Liebenstein (1968) also suggested entrepreneurship is exercised in the removal
of organisational inefficiencies. Developing this further, recent authors have
developed models of entrepreneurship that do not necessitate ‘new entry’. For
example, Moon (1999) describes three forms of managerial entrepreneurship:
process-based entrepreneurship that focuses upon the efficiency of intra-organisation
communications, behaviour-based entrepreneurship that focuses upon risk-taking and
finally product-based entrepreneurship that focuses upon the quality of the final
outcome. This work broadens the construct of entrepreneurship to define an overall
style of management oriented around risk taking and opportunity seeking. A number
of critiques question whether this broadening of the construct is useful. For example,
Foong, et al., (1997) argue organisational activities tend to be ‘problem-driven’ and
differ substantially from the ‘opportunity-driven’ behaviours of real entrepreneurs.
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They feel the term intrapreneurship provides a better description, although this
dichotomy is potentially difficult to operationalise in practice, particularly given the
existence of internal markets.
In summary, definitions of entrepreneurship have been addressed, which are
contested between a style of risk-oriented management and the more traditional view
of market entry. Whilst some authors see entrepreneurship as a result of individual
endeavour, others marginalise the individual and stress the importance of
organisational factors in the entrepreneurial process. Above all, traditional
approaches see entrepreneurship as a rational response to competitive pressures
designed to generate super-normal profits for individuals or organisations. Unlike
their sixteenth century counterparts concerned with the protection of civic society,
Schumpter (1942:137) argues the rational private entrepreneur is an ‘antiheroic’
figure who fails to ‘excite the collective enthusiasm’ compared to those that ‘defend
whole civilisations’ (Marttinelli, 1995). Unlike truly heroic figures, Schumpeter
(1942) felt the entrepreneur was motivated by selfish rather than philanthropic ends.
Whilst Schumpter was writing over half a century ago, his characterisation still has
resonance in the popular stereotype of the brash, uncaring figure that emerged in
1980’s Britain: whose only aim was to get-rich-quick.
Recently, studies have attempted to reclaim entrepreneurship away from this popular
stereotype by showing its relationship with civic and community needs. For example,
Cornwall (1998) argues entrepreneurship is an important ‘building block’ for the
development of communities. Whilst previous studies presented entrepreneurship as
a vehicle for escaping disadvantaged communities, Cornwall (1998) emphasises the
positive role private entrepreneurship can play in civic regeneration. Progressing this
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argument about the civic value of entrepreneurship, Waddock and Post (1991) and
Campbell (1998) address what they call social entrepreneurship, acts motivated
principally to create social benefit where firms and individuals are more responsive
and responsible to their communities (Giddens, 1997). For example, Waddock and
Post (1991) argue that a number of civic initiatives were fundamentally the result of
entrepreneurial behaviour designed to create social capital, e.g., the ‘Hands Across
America’ effort, ‘Drug-Free America’ advertising campaign, etc. In these cases, the
motive for entrepreneurial activity becomes blurred between personal and community
ends. This has lead to potential for ‘heroic’ figures to emerge, with Boyet (1996) and
Leadbeater and Goss (1998) focusing on key individuals responsible for catalytic
social change.
Entrepreneurship may also create social – rather than private – capital as an activity
relevant to the effective production, provision and delivery of public services (Boyet,
1996; Kim, 1996; Coulson-Thomas, 1998; J oyce, 1998; Osborne, 1998). As a result
of large-scale structural and managerial change in the public sector, authors such as
Moon (1999) argue entrepreneurial activities are vital to ensure quasi-markets
function efficiently. Ennew et al., (1998), applying the ideas of Casson, Schumpter
and Hayek to study General Practitioner fundholding, identified a range of
entrepreneurial behaviours GP’s reported in relation to quasi-market forces in
secondary care, e.g., price – quality arbritrage. Although the GP does accrue
financial benefits from their entrepreneurial act, they can generate indirect profits in
terms of self-esteem, gratitude from patients and improved status in relation to
performance indicators (Boyet, 1996). Clark & Newman (1997:120) have gone
further arguing entrepreneurial behaviour may be necessary within all public
organisations, as a result of sector wide change that has created ‘competitive
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relationships between providers in specific areas of welfare: between schools,
hospitals, social care providers and so on’. In these cases entrepreneurial behaviour
may be needed to respond to imposed competitive pressures, e.g., to improve quality
whilst eliminating red-tape and inefficiencies (Brynard, 1995).
Within these contested debates about public sector change, social entrepreneurship
has developed a symbolic quality. At one level, it clearly has resonance with New
Labour’s third-way, with its focus upon the revival of social democracy (Giddens,
1997:83; Leadbeater & Goss, 1998). Similarly, the rhetoric of innovation and
entrepreneurship is evident throughout the Labour government’s recent ‘modernising
government’ white paper. From this perspective, entrepreneurship is one mechanism
through which public sector organisations can become more responsive to community
needs, whilst giving more ‘voice’ (Barnes & Prior, 1995) to the public and greater
influence over the whole public service process. Perhaps more traditionally,
entrepreneurship - as the embodiment of laissez-faire competition - is simultaneously
located within the ideology of the new right where ‘the imperative of change
constitutes entrepreneurship as the antithesis of bureaucracy’ (Clark & Newman,
1997:45). In a 1993 speech Conservative Minister William Waldegrave described his
vision of creating an ‘entrepreneurial, competitive public service’ (quoted in
Marsland & Marsland, 1995:4) where managers had the right to manage. In a wide-
ranging critique, Clark & Newman (1997:38) argue the political right thrust
entrepreneurship forward as an agency to discredit administrative and professional
discourses in favour of the common sense language of business.
The above debates have located social entrepreneurship with broader ideological
discourses and some authors have argued this is a key feature that distinguishes it
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from other modes of entrepreneurship mentioned above. However, such
demarcations have proved unconvincing, failing to generate robust definitions in an
area that remains theoretically underdeveloped. For example, Leadbeater & Goss
(1998:16) feel there are three ‘ingredients’ that mark out social entrepreneurship as
distinct from other entrepreneurial activities: network collaboration, the influence of
politics and the ability to embed innovation in organisational processes. Yet these
distinctions do not resist closer scrutiny. For example, network collaboration is
repeatedly referenced as a critical factor determining private entrepreneurship (Covin
& Slevin, 1991; Ramachandran & Ramnarayan, 1993) and cannot be viewed as a
distinct feature of social entrepreneurship. Similarly, ‘managerial entrepreneurship’
in the private sector is primarily concerned with ‘embedding’ innovative products,
process and risk taking behaviours within organisations. Finally, it would appear
unsatisfactory to argue private entrepreneurship is not inextricably bound to a
particular ideological narrative, linked as it has been to laissez-faire and the belief in
free-markets. Whilst exploratory research is beginning to develop a descriptive
understanding of the way social entrepreneurship is enacted, we believe the
theoretical domain of social entrepreneurship remains under-developed.
In particular, pressing concerns emerge around three areas. Firstly, the need for a
clear definition that is grounded in empirical data. Our review of the literature
reveals social entrepreneurship is often loosely defined, informing a broad range of
activities, functions and outcomes, e.g., improving customer service (Boyet, 1996),
eliminating red-tape (Moon, 1999), creating social value (Leadbeater & Goss, 1998),
breaking free from administrative cultures (Ennew, et al., 1998), etc. Developing
theory requires rigorous definitions that are not over-general. Secondly, theory needs
to be developed that can identify organisational variables that influence
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entrepreneurship. Only Moon (1999) – in a survey of American organisations – has
addressed the theoretical relationships between organisational characteristics and
social entrepreneurship. Understanding these relationships may be of critical
importance to UK organisations wishing to develop more entrepreneurial approaches
to management. Thirdly there remains a need to clarify whether entrepreneurship is a
mechanism for solving a range of public sector problems or whether only a few
individuals with special abilities can be entrepreneurial. There remains a critical
point of conflict between views that a reliance upon heroic figures is insufficient to
secure adequate provision of public services (Clark & Newman, 1997) and the view
that maverick entrepreneurial figures are capable of transforming out-dated attitudes
and poor service performance (Boyet, 1996). This confusion is embodied in the work
of Leadbeater & Goss (1998) who argue explicitly against the notion of the ‘heroic’
social entrepreneur, whilst directly contributing to the stereotype by discussing five
inspiring individuals who transformed previously failing public services against all
the odds. It remains unclear whether social entrepreneurship is relevant for the
‘average’ public sector manager: is it a competency that the majority of public
managers can develop in response to a changing environment or is it a special
attribute possessed by a few heroic figures? This paper represents an initial stage of a
three-year project that aims to generate theory around these difficult and important
issues.
In summary, whilst social entrepreneurship remains contested and ambiguous at
theoretical and ideological levels, there is increasing evidence that those in education
(Boyet, 1996), health care (Ennew, et al., 1998) and local government (Clark &
Appleby, 1997), etc., are developing innovative and entrepreneurial techniques for
meeting community needs. Entering new markets, negotiating market forces and
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managing risk appear to be playing an increasing role in the practice of public
management. Entrepreneurship is central to current debates as it simultaneously has
resonance with both structural and cultural changes in the public sector. However,
the development of entrepreneurship as a mode of behaviour for addressing civic
concerns raises complex and significant questions that may play an important role in
developing ‘new public management’ into the next decade. In response to these
trends, panels were convened to inform upon the practice of entrepreneurship from
the perspective of practising managers. The panels were designed within an inductive
framework to explore definitions, competencies and organisational barriers as they
relate to social entrepreneurship. The seminars represent a ‘test of the water’ to see if
entrepreneurship was perceived to be of relevance whilst enabling the group to begin
the tentative process of theory generation. After the following section that addresses
methodology, the main findings are presented around three areas of interest
mentioned above.
2. Methodology
This paper is based upon data collected during two practitioner panels convened at
the OUBS on February 24
th
and March 9
th
1999. These were the first in an on-going
series of meetings. The panels were self-selecting, with participants responding to
adverts that reported plans to run seminars around social entrepreneurship. Although
initial plans were to convene just one panel, the strength of interest in the project led
to the creation of two: one for senior managers and one for middle managers. Each
panel consisted of individuals from diverse organisational backgrounds, drawing
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upon their experience of National Health Service trusts, local government, charities,
the prison service, the police force, etc.
The panels represent an important and integrated stage in the development of a three-
year research project into social entrepreneurship. This work began in the summer of
1998 with the development of a detailed literature review consisting of over 300
relevant items. This literature review generated an interest in a number of themes,
some of which have been discussed above. The group also convened a panel of
academics that met twice in 1998, consisting of other research groups working in the
field. The practitioner panels represent the first empirical phase of the research work.
They were designed to surface themes in the form of propositions to be explored
during in-depth case studies planned for the year 2000. As a precursor to this work
the group is currently undertaking a pilot case study into entrepreneurship within
local government. The final stage of the project will involve a large-scale
questionnaire to test the validity of theoretical propositions emerging out of the case-
study work. Hence, the aims of the practitioner panels should be understood in
relation to the overall project, the output of which will be a unique resource on the
practice, processes and theory of entrepreneurship in public services.
Specifically, the panels were organised chronologically into three sessions where
each group – of over twenty managers – was split into three sub-groups. Each session
was accompanied by a specific task that reflected the three key themes that emerged
from the literature review.
Session one: generate a one-sentence group definition of (a) entrepreneurship, (b)
social entrepreneurship and (c) innovation.
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Session two: you are a team from different public service organisations developing a
shared top management development programme. Title and describe the
programme’s six blocks, chosen to develop the most important public management
attributes and competencies for the new decade
Session three: (a) evaluate the extent to which entrepreneurship is relevant as an
approach to key challenges facing your organisations (b) evaluate the key obstacles to
entrepreneurship within your organisation.
Each session was lead by the practitioners in responses to the task. At least one
member of the research group was attached to each session to act as scribe, recording
points emerging from discussions on flip charts. This role involved researchers
continually generating verbal agreements with groups to ensure recorded points were
understood and phrased accordingly. In addition, researchers would capture
‘verbatim’ straight from discussions. Each session therefore generated three sets of
field notes, one from each of the three sub-groups. This process generated rich data
in the form of eighteen sets of research notes: from ‘panel one - session one - group
one’ through to ‘panel two - session three - group three’.
A shared template for recording the data was developed prior to the first panel and
each researcher was responsible for logging and then recording notes in this agreed
format. The data was then content analysed (Boyle, 1994) in the following way.
When a particular item of text (an expectation, term or phrase, etc.) was referred to it
would be extracted from the notes and placed in a separate file with a title and memo
denoting an interpretation of its meaning. For example, the quotes ‘entrepreneurship
is a process rather than a single act’, ‘entrepreneurs carry people with them and
follow through’ led to the formation of the tentative memo ‘making it happen’. The
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memo reflected more than just a fleeting intervention, linking the essence of
entrepreneurship to the completion of a project. These initial memos were often
adapted during early stages of the analysis until they became increasingly useful tools
for making sense of the data (Rose, 1982). As a method for increasing robustness in
interpretive research of this type, authors (Rowan & Reason, 1982) have suggested
the use of inter-coder reliability checks and we applied such a technique to this
research. A single researcher had responsibility for generating all initial codes and
memos. These were then circulated between the group to evaluate congruence of
interpretation. It is recognised that inter-subjectivity is more likely between members
of research teams compared to complete strangers. However, the fact that a relatively
small number of items were challenged - and subsequently adapted with the
agreement of all researchers – gives a measure that the style of interpretation is
‘consistent’ (Holloway & Wheeler, 1996).
The aim of this procedure was to reduce the initial data set in such a way that allowed
themes and categories to emerge. In the final discussion section of the paper we
merge together key themes from the data analysis and the literature review to
generate a small number of propositions we feel may help stimulate the process of
theory development in the area. The following sections present key findings that
emerged through the process described above.
3. Findings From The Practitioner Panels
Task 1: Definitions.
The task of constructing simple definitions was designed to explore subtle
distinctions between inter-related terms, encouraging groups to address challenging
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questions regarding – for example – the relationship between innovation and
entrepreneurship.
At the level of the market, groups defined entrepreneurship through focusing upon
specific individuals. Entrepreneurs were viewed as ‘taking advantage of
opportunities’, ‘identifying niches’ and having ‘extra imagination’ when exploring
the external environment. Individuals were opportunist enough to identify unmet
needs, whilst being adept enough to actively ‘create or manufacture niches’. These
quotes tended to re-iterate themes in the literature around the individuals ‘special
abilities’ (de Vries, 1977). Entrepreneurs were viewed as ‘natural risk takers’
concerned with financial outcomes rather than social gain.
At the organisational level, individuals discussed the act of entrepreneurship in
relation to ‘charismatic leaders’ and ‘organisational transformation’. The panels
identified a rich picture of an entrepreneurial process with many organisational stages
each of which requires some level of risk taking, mould breaking and shaping. In
these instances, groups defined the essence of entrepreneurship as market entry, but
recognised the act takes time and may require individuals to possess an
entrepreneurial aptitude at numerous junctures. The groups also touched upon a
range of management skills within entrepreneurship (Moon, 1999) stressing
‘managing across boundaries’ and ‘political skills’ as crucial to entrepreneurial
success. The relevance of negotiation, political boundaries and departmentalism,
suggest respondents linked entrepreneurship to the processes of getting things done.
Indeed, some groups felt ‘making it happen’ was a key feature of their perceptions of
entrepreneurship. However, reflecting similar contrasts present in the literature, a
substantial number of panel members perceived entrepreneurship was more fleeting
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(‘inventing something new’, ‘identifying a solution and leaving others to implement’).
Hence, it could be argued respondents were identifying – without necessarily
knowing it – the distinction between classical entrepreneurship (Schumpter, 1942)
and managerial entrepreneurship (Moon, 1999).
The focus upon ‘making it happen’ informed demarcations between managerial and
entrepreneurial roles. Participants questioned whether entrepreneurs are special or
whether entrepreneurial behaviour is a fabrication, with individuals being
entrepreneurial when a role or situation demands it. Respondents felt
entrepreneurship required ‘enhanced decision making abilities’ and a willingness to
take risks, whilst recognising these attributes are increasingly required for general
management roles. Entrepreneurial ‘self confidence’ was reflected a number of times
in the panels, with respondents arguing entrepreneurs were more likely than managers
to have the ‘confidence to do things differently’ and ‘enough faith in themselves to
make risky decisions’. This is also reflected in a study (Chen et al., 1998) which
found that entrepreneurs (individuals who have recently undertaken a new business
venture) reported significantly higher levels of self-efficacy compared to managers.
What follows are three illustrative definitions of entrepreneurship generated by the
groups.
1. “Risk taking behaviour that identifies or creates a niche and then acquires or
applies resources to create wealth”
2. “Having the imagination to explore the environment and identify resources and
opportunities that can be combined in novel ways to generate and implement product
solutions”
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3. “Identifies and exploits an opportunity with the primary objective of generating
profits for distributions to those involved in the enterprise”
Many of the above issues were re-iterated in discussions around social
entrepreneurship, e.g., locating opportunities, taking risks, getting things done, filling
niches, etc. A key distinction between the concepts emerged around the motives of
the individual actor. Whist both private and social entrepreneurship involves the
quest for profit, social entrepreneurs locate ‘gaps’ in community needs and attempt to
create social rather than private benefits. Waddock & Post (1991) and Leadbeater &
Goss (1998) re-iterate this point, arguing broader community interests drive social
entrepreneurs. In addition, respondents viewed social entrepreneurship as a vehicle
for ‘problem-solving’, thus providing a distinction of possible theoretical importance
between traditional entrepreneurial activities which are viewed as opportunity seeking
(Foong, et al., 1997). The reference that ‘social entrepreneurship is done out of
necessity to solve problems’ is illustrative of the distinction.
A number of other distinctions proved elusive. Respondents frequently argued
‘responsibility’ was a differentiating feature of social entrepreneurship, before
recognising concerns for social responsibility are written into the mission statements
of private sector organisations, a point underlined by Cornwall (1998). Similarly,
managers referred to the importance of networks and agency relationships within
social entrepreneurship, whilst recognising the importance of networks within private
entrepreneurship, e.g., see Ramachandran & Ramnarayan (1993) and Peterson (1995).
Individuals pointed to the ‘identification of community needs’ as the key feature of
social entrepreneurship, whilst also recognising that both social and private
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entrepreneurs are ultimately concerned with satisfying the needs of ‘consumers’
(Clark & Newman, 1997).
Hence, whilst social entrepreneurs have to negotiate different boundaries, take
different risks and work within different networks the conceptual nature of the tasks
were felt to be quite similar, although the character of the public-private entrepreneur
may differ substantially. The main distinction revolved around the motives of actors.
Rather than homo economicus, the social entrepreneur was viewed as addressing the
needs of others, with the best interests of the community in mind. This underlines a
theme developed by Boyet (1996) regarding the ambiguous nature of the ‘profits’ that
flow to social entrepreneurs. The panels highlight the need for theoretical
clarification of the set of personal benefits that flow to individuals as a result of social
entrepreneurship. A better understanding of the incentives and motives that generate
social entrepreneurship may then be of value to organisations attempting to encourage
this mode of behaviour. The following quotes illustrate typical definitions of social
entrepreneurship.
1. “Social entrepreneurship is entrepreneurship but with the primary objective of
generating social benefits, i.e., the benefits from enterprise are primarily intended to
be received by society”
2 “Entrepreneurship in a ‘public service’ context is intended to generate value for
society”
3 “Driving the process of utilising the energy and creativity of the community to
support them to identify needs and solutions to meet those needs”
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Finally in this section, definitions of innovation are considered. Innovation had arisen
in previous discussions about entrepreneurship, hence groups tended to identify their
task as locating differences between innovation and entrepreneurship. In these
discussions innovation tended to be viewed as the ‘creative’ component of the
entrepreneurial process, the ‘spark’ that moves things away from ‘traditional
thinking’ through identifying ‘new ways around old blockages’. Respondents
questioned whether innovation could also include ‘borrowing or even stealing’ ideas.
This certainly has resonance with Schumpeter (1934) who identifies ‘more talented’
entrepreneurs who make initial innovations that other less adventurous entrepreneurs
follow before the ‘wave of innovation recedes’. Groups also felt innovation may be
context specific. A new technology that represents radical innovation within one
particular organisation may simultaneously represent ‘developmental’ innovation
(Osborne & Flynn, 1997) in another. This underlines the point that social
entrepreneurship and innovation may be context specific, re-iterating the need to
ground theory within context specific measures of organisational structure and
culture.
A repeated theme emerged regarding whether innovation involved ‘seeing the job
through’ or the ‘initial creative idea’. Innovation was more typically represented as a
cognitive process, as something that unexplainably ‘comes in a flash of inspiration’.
It was argued on a number of occasions that innovators ‘just have the idea before
moving on to something else’. Interestingly, some respondents attempted to link
together entrepreneurship and innovation arguing innovation was the ‘act of doing’
where as entrepreneurship was the motive or attribute that lead the willingness to take
risks and cross boundaries, etc. The following quotes illustrate typical definitions
provided by the groups:
21
1. “Adopting free-thinking non-traditional approach to bring about change from the
old to the new”
2 “Creative thinking resulting in the development of something new, applied to
produce something concrete, with the intention of generating stakeholder benefits”
3 “Making a creative idea into a unique response to an opportunity, the practical
side of creativity”
In summary, the initial session accessed subtle distinctions between innovation,
entrepreneurship and social entrepreneurship. Reflecting the papers main interest in
the entrepreneurship construct, the following table summarises the distinctions
between social and private entrepreneurship.
Categories Judgement
and risk
Making it
happen
Types of
profit
Innovation Exploiting
opportun-
ities
Social
entrepreneur
ship
Community
level risk.
J udgement on
social needs.
Negotiating
politicial
agency networks.
Creating social
capital.
Solving social
problems
Doing more
with less.
Combining
community
resources.
Limit to
market entry.
Spot gaps in
social needs.
Private
entrepreneur
ship
Risks mainly
to individual.
J udgement on
profit.
Overcoming
financial
limitations.
Spanning industry
networks
Creating
personal profit
Solves market
centred
problems
Champion of
new ideas.
Invention of
new methods.
Filling gaps
& niches.
Entering new
markets.
Table one. Comparing social and private entrepreneurship.
Task 2: Competencies and Attributes.
The second task was designed to explore the competencies and attributes perceived to
be most relevant for future management of public services. Whilst there was a
22
methodological concern that managers may have perceived pressure to discuss
competencies relating to risk-taking or innovation, etc. However, this is not reflected
strongly in the following table that provides a simple content measure of the ten most
frequently mentioned terms during these discussions.
Block Title in Rank Order No of references % references
1. Strategic leadership 22 16.06
2. Interagency working 18 13.14
3. Coping with change and ambiguity 16 11.68
4. Ensuring probity & ethics 15 10.95
5. Performance management 14 10.22
6. Innovation and risk 12 8.76
7. Customer Focus 12 8.76
8. Accountability & governance 10 7.30
9. People management 10 7.30
10. Managing political relationships 8 5.84
Table two. Rank order of important public management attributes &
competencies
The session involved groups initially ‘brainstorming’ key issues, which were then
recorded by the relevant researcher. The six blocks were then formed, in response to
the task. The ‘number of references’ in table two was calculated by adding: (a) the
number of times the issue was included in the final list of six and (b) the number of
times the issue was recorded in the preliminary discussions. It is presented as a
simple but hopefully insightful overview of the discussions.
Whilst it is noticeable that risk-taking and innovation were not the most commonly
referenced competencies or attributes, it is clear the environment in which the
managers operate was perceived to be competitive, continually changing and
ambiguous. Respondents indirectly informed upon a context where entrepreneurship
may be necessary, were organisations need to develop an entrepreneurial orientation
to their strategic environment (Moon, 1999). Managers perceived change was the
‘new constant’ and required individuals to continually develop fresh strategic
23
perspectives to existing problems. For example, one respondent reported ‘…change
will always be with us now, managers need to want change and be able to make it
work’. The competencies associated with change were an ability to cope with
ambiguity and uncertainty in decision making, often considered to be typical
entrepreneurial traits (Green et al., 1996).
Strategic management and leadership emerged as the most commonly referenced of
the six ‘block’ units. Associated competencies related to an ability to identify
competitive threats and opportunities, in the same way private sector entrepreneurs
analyse the market place for niches and gaps (Casson, 1982). The role of partnership
and inter-agency working emerged as the key emerging approach for addressing
community needs and strategic opportunities. Competencies associated with making
boundary spanning relationships work included ‘communication skills’ and the ability
to ‘negotiate hard’. Managers’ propensity to take risks emerged around this point,
associated with uncertainties inherent in forming often short lived partnerships.
Competencies and attributes did not only inform upon the process through which
external opportunities were identified and then met. Managers also highlighted the
changing style of management identified by Clark & Newman (1997), towards what
might be a more called an entrepreneurial style of public management. Being
‘innovative and willing to go down new paths’, seeing the ‘whole picture’,
‘continually learning and adapting processes’ and ‘living with uncertainty’ appeared
to part of an overall change in the way managers perceived necessary competencies
and attributes. Resonance is found here in discussions of ‘managerial
entrepreneurship’ (Moon, 1999) with participants stressing the importance of
‘customer focus’ competencies and attributes. For example, Vice President Gore
24
(1993) stressed four principles of entrepreneurial management including: customer
satisfaction, the empowerment of employees, the promotion of cost-efficient
performance and the reduction of red-tape. Key competencies emerged during the
panels around all these four areas, with respondents discussing ‘customer
involvement’, ‘team empowerment’ and ‘performance management’, etc., thus
describing the principles outlined by Gore (1993).
However, this style of management emerged against concerns for ‘probity and
stewardship’ and the need to promote ‘civil society’. In the first instance, managers
discussed the need the develop competencies in financial management as a way of
ensuring probity, whilst perceiving ‘governance’ as a key challenge of the next
decade. Secondly, managers stressed the need to develop more robust linkages with
communities. Associated competencies related to the process of consultation and
participation, through which democracy could be ‘re-made’, following the arguments
of Giddens (1997).
In summary, the data suggests a broader range of competencies facilitate social
entrepreneurship than those typically identified by the literature. As would be
expected a willingness to take risks and an ability to cope with uncertainty emerged
strongly, however competencies around negotiation, probity and community
involvement suggest a complex multifaceted and distinctive process. Theoretically, it
would be important to uncover the hierarchy of competencies that support social
entrepreneurship and enable managers to better take advantage of strategic
opportunities. It addition, it would be important to know whether the relative
importance of particular competencies differs with context, e.g., the importance of
25
negotiation skills may differ with the degree of connectivity within a particular
agency network.
Task 3: Examples & Obstacles.
The final task was designed to access the relevance of entrepreneurship as a problem
solving mechanism for public organisations and to discover whether common barriers
were perceived to detract from entrepreneurial orientation. Respondents were asked
to list the main issues and challenges facing their organisation before being asked to
evaluate the extent to which entrepreneurial behaviours might provide a solution.
There was clearly a potential for such a line of questioning to exert pressure upon
participants. Hence, the research group were conscious not to suggest
entrepreneurship was or was not a solution. It was presented as an open question for
managers to refute or accept as they wished. As it transpired, after listing major
challenges, virtually every participant from across the two panels was able to give
examples of entrepreneurial behaviour already applied to particular problems. Over
thirty examples were collected of different types of entrepreneurship which were
categorised in the following way: ‘economic’ social entrepreneurship (market level
interventions in response to external incentives and opportunities), social ‘managerial
entrepreneurship’ (adopting customer focused styles of entrepreneurial management
discussed above) and innovation (a hybrid where particularly creative solutions are
developed to existing problems faced by the organisation). In the following section,
illustrative examples of each type are provided.
Respondents referenced classical economic acts of entrepreneurship which emerged
in direct response to market incentives. For example, a manager from a regional
26
ambulance service identified four key challenges facing the organisation: increasing
work-load (more calls), cost reduction pressures, competition from other services and
a changing focus of service (from transportation, to paramedic services, to the
delivery of clinical performance). He perceived that entrepreneurship was of
relevance in adapting the service to reflect market incentives. The competitive
external environment forced the organisation to reflect upon its core business, which
was no longer felt to be the transportation of patients, but the handling and
management of incoming telephone calls. The organisation recognised the value of
this competency in the external market place and opportunistically placed bids to
operate the University of Industry call centre service. This simple example possesses
a number of characteristics typical of classical entrepreneurship. It required an
‘external focus’ (Covin & Slevin, 1991) and a special ability to ‘identify
opportunities’ (Schumpeter, 1934), e.g., the University of Industry only becomes an
opportunity when the core competency of the organisation is conceptualised as call
handling. As with the classic economic definitions, this behaviour involved market
entry and was motivated by the financial returns that would accrue to the
organisation. Similar examples of this type of entrepreneurship were: a charities’
‘business & benevolence’ initiative that involved selling tailored insurance policies to
over 55’s whilst using the profits to fund their advice service and a county councils’
attempts to devolve residential care for the elderly to individual enterprises where
managers act as ‘local entrepreneurs’ adapting services to niches and opportunities
identified in the market place.
In addition, respondents talked in more general terms about the need for
entrepreneurial thinking and styles of management in attempts to address key
problems and issues facing their organisation. For example, one individual from a
27
county council argued ‘we are only going to meet such challenges if some form of
entrepreneurship takes place, for example taking risks with new inter-organisational
arrangements’. The theme of accepting risks and managing uncertainty was repeated
frequently. An individual from a mental health trust argued ‘the only way to survive
is to take risks’. Respondents also discussed examples where risky decisions were
needed to make things happen, with one individual needing to begin recruiting nurses
to run a service, whilst being uncertain of the degree of financial support she would
finally receive for this activity. These examples inform entrepreneurial styles of
management discussed by authors such as Brynard (1995) and Moon (1999).
However, managers also argued that ‘it is not all about risk’ instead entrepreneurial
styles of management required individuals to ‘think outside the box’ and develop
‘lateral thinking’. In these situations groups tended to reflect upon what they had
previously defined as ‘innovations’
Innovations were listed where existing services had been adapted in new ways to
meet demands and community needs. For example, in a separate National Health
Service direct programme, a manager reported the emergence of a General
Practitioner out-of-hours co-operative programme where a 24hour nurse-led helpline
was developed to cover a specific geographical area. The project represents an
innovative use of ‘new combinations’ (Schumpeter, 1942) of resources designed to
meet community needs, whilst also reducing the pressures on GP’s and accident and
emergency departments. However, the move was not without problems including the
training of staff, restricting the service to the target population and the fact that
income to GP practices will decrease, as the service becomes more successful. A
similar example emerged with a housing association adapting the process of
assessment prior to relets. Instead of costly and time consuming surveyors reports,
28
the association developed its own approach designed to be more sensitive to the needs
of residents, whilst also including standard surveyor type information. The majority
of examples linked innovation to the development of networks and partnership. For
example, a manager discussed the development of an innovative joint venture
between the local NHS, the local authority and the voluntary sector to promote better
‘access to services’. Similarly, a manager from the youth justice service / board
discussed an initiative to bring together all agencies (National Health Service, Local
Education Authority, Police, Probation, Voluntary Sector, etc.) into a single team
with a single co-ordinator.
Throughout discussions about the practice of social entrepreneurship, common
obstacles emerged. Though the content analysis procedures mentioned above, these
were broken down into three over-arching categories: structure, culture and the
external environment. Organisational structure was seen as restraining
entrepreneurial activity particularly ‘protectionist hierarchies’, ‘inappropriate job
designs’ and ‘departmentalism’ were referenced a number of times. However,
perhaps the largest barriers were seen as being cultural. This was a broad category
which included: ‘lack of trust between managerial groups’, breaking the ‘mind-set of
officers’, moving from ‘risk-adverse cultures’ and removing ‘organisational
complacency’. As Moon (1999) and Hall (1996) found a diverse range of factors may
impact upon the ability of organisations to develop an entrepreneurial orientation.
Finally, respondents reflected external pressures in the form of restrictive ‘regulatory
frameworks’, ‘over-lawyered administrative systems’ and ‘political obstacles’.
Further research needs to address the relative importance of particular barriers and
enablers to social entrepreneurship. Such research could focus organisations on those
29
issues most relevant to encouraging and freeing-up entrepreneurial resources and
potential.
4. Discussion
This paper has reported key issues emerging from two practitioner panel seminars.
The panels were designed to generate empirical data around three simple research
questions. The overall aim was to merge together an initial set of data with themes
from the literature to form a number of propositions that may help develop theory.
The following discussion addresses the implications of the research both for public
management and for our on-going work, leading to the presentation of a number of
general propositions.
The initial prerogative within the mode of theory generation we have adopted is to
develop an explicit definition of what will ultimately represent the dependent variable
in our model. If we are to explore the competencies, organisational characteristics
and market conditions related to social entrepreneurship, it is important to have a
sound set of measures - grounded in empirical data and existing research – that
adequately identify and account for social entrepreneurship. It emerges from the
panel data and existing research that such measures are likely to draw upon a mix of
activities, processes and possibly outcomes.
In part, the participating managers defined entrepreneurship as an activity, making an
interesting distinction between internal corporate activities and externally focused
ventures that often require the participation of multiple organisations or the creation
of a new organisational forms through partnerships. This distinction is underlined by
Zahra (1993) who distinguishes between a number of entrepreneurial acts many of
30
which were referenced by managers participating in our study: administrative
(removing red-tape), opportunistic (identifying niches), imitative (replicating
innovative products and ways of working), acquisitive (purchasing existing
organisational forms) and incubative (new venture management). Such distinctions
would appear to be extremely important within the process of theory generation. It
may be highly misleading to treat entrepreneurship as a single act, demanding a
singular set of competencies and skills.
In addition to the focus on specific acts, managers also felt the essence of
entrepreneurship resided in the processes through which entrepreneurship is
conducted. By entrepreneurial processes we mean the methods, practices, techniques
and decision-making styles employed, what Lumpkin and Dess (1996) call
‘entrepreneurial orientation’, e.g., taking risks, being pro-active & competitive,
experimenting with new technology. At the level discussed by Lumpkin and Dess
(1996), the entrepreneurial orientation construct defines firms pre-disposition to enter
new markets. For example, they argue entrepreneurial acts – the entry of new
markets - are more likely if key actors have a high propensity to take risks. However,
the focus on process also encourages a view of entrepreneurship as social
construction. In contrast to the more objective view that entrepreneurship is a
discrete act defined in relation to explicit criteria, it can be argued that
entrepreneurship resides in a series of social constructions used to identify
entrepreneurs as ‘outsiders’, ‘mavericks’, ‘risk takers’, etc. In our research, we
attempt a degree of pluralism between these two positions by attempting to measure:
(a) the prominence of different entrepreneurial activities within the public sector, e.g.,
administrative entrepreneurship, incubative entrepreneurship, etc., whilst also (b)
31
measuring the different dimensions of entrepreneurial orientation to inform the way
in which entrepreneurship is typically undertaken in the public sector.
Finally, participating managers attempted to capture entrepreneurship by reflecting
key outcomes. This reflects Moon’s (1999) measure of managerial entrepreneurship
that focuses upon external customer service. Moon (1999) assumes that
entrepreneurial activities will have such a distinctive impact upon organisational
performance that it is possible to employ proxy measures, e.g., customer satisfaction
or the level of red-tape. Such assumptions are problematic as they involve locating
and disassociating ‘entrepreneurship’ from other organisational process in order to
measure its specific impact upon certain outcomes, e.g., service quality. Whilst this
presents considerable methodological difficulties, Moon’s (1999) work does stress the
relationship between entrepreneurship and organisational performance and we
develop these ideas in a following section.
The above sections have reflected themes from the literature and the practitioner
panels around definitions of social entrepreneurship and - reflecting our need to
clearly define our dependant variable - these issues are summarised in the following
propositions.
Proposition 1:There are four salient and distinct dimensions of social
entrepreneurship: opportunistic, administrative, network and imitative.
Proposition 2:There are four salient and distinct dimensions of a social
entrepreneurial orientation: risk taking, pro-activity, competitive aggression and
innovation.
32
Proposition 3:Organisations with higher levels of social entrepreneurial orientation
will – in general - be more likely to engage in entrepreneurial activities.
Proposition 4:There are likely to be distinctive relationships between certain
dimensions of social entrepreneurship and particular dimensions of social
entrepreneurial orientation, e.g., between opportunistic entrepreneurship and
propensity to take risks.
Hence ‘social entrepreneurship’ emerged as being multi-dimensional with
implications for individual managers who are expected to develop a distinctive
entrepreneurial orientation. Interestingly, the panels also identified the
entrepreneurial manager through reference to distinctive motives, e.g., the desire to
create social value. This is also addressed in existing representations of social
entrepreneurs (Waddock and Post, 1991; Leadbetter and Goss, 1998). However,
despite apparently altruistic motives, it was recognised that social entrepreneurship
can generate intangible profits (Boyet, 1996) for individuals through self-
actualisation, improved status, enhanced self-efficacy (Chen et al., 1998), etc. The
issue of motive appears critical – through under-developed - in discussions of social
entrepreneurship and could be particularly important for organisations attempting to
create environments that foster risk taking. This interest in motive – stemming from
the data and the literature – is captured in the following proposition.
Proposition 5:There is a positive relationship between the individuals willingness to
engage in entrepreneurial activities and the intangible profits that are expected to flow
33
from the entrepreneurial act. These will include: improved status (improved
promotion opportunities) and self-efficacy (through increased individual
performance).
Exploring the role of the individual further, it may be a mistake to assume that the
individuals propensity to behave in an entrepreneurial manner will remain the same
over time. Not only may individual motives change, but also the adoption of
entrepreneurial modes of behaviour – what has been called entrepreneurial orientation
- may require individual managers to foster new competencies. Managers attending
the panels perceived developing competencies associated with entrepreneurship, e.g.,
taking risks, dealing with uncertainty, etc., might enable them to better understand
and cope with the uncertainties that were increasingly becoming part of their job.
However, it would be a mistake to assume a generic set of entrepreneurial
competencies existed, as different entrepreneurial activities - identified in proposition
one - may require different skills and attributes.
Proposition 6:Social entrepreneurship has an associated hierarchy of competencies.
These may include negotiation and communication competencies, the ability to cope
with risk and the ability to cope with uncertainty. Evidence of these competencies is
likely to be positively related to the degree of entrepreneurial activity.
Proposition 7ifferent dimensions of social entrepreneurship (opportunistic,
imitative, network, etc) are likely to be associated with specific competencies
(negotiation and networking, coping with risk, etc.)
34
Whilst the data suggested individuals with particular motives and competencies are
likely to be key to social entrepreneurship, our data also suggests social
entrepreneurship will be influenced by organisation. Any theoretical model emerging
out of our data needs to reflect these distinctive levels of analysis, between individual
and organisational factors. The success of social entrepreneurship may be a function
of ‘hard’ organisational obstacles, e.g., overly hierarchical work structures,
particularly rigid formalised procedures, etc., and ‘softer’ issues such as
organisational politics and entrenched values. In addition, initial evidence suggests
social entrepreneurship co-exists – perhaps awkwardly – with concerns over probity,
accountability and the promotion of civil society. This may imply the practice of
social entrepreneurship becomes constrained or stifled, although this is an area for
additional research. These themes are captured in the following propositions.
Propostion 8: Different dimensions of social entrepreneurship are influenced –
although not necessarily in the same way or to the same degree - by a hierarchy of
structural organisational variables including: formalisation and centralisation.
Propostion 9: Different dimensions of social entrepreneurship are influenced -
although not necessarily in the same way or to the same degree - by a hierarchy of
cultural variables including: embedded professional values, departmentalism,
concerns for probity, etc.
35
Implicit in the above sections – and much of the literature - has been an assumption
about the relationship between entrepreneurship and performance. Whilst economists
and strategists have argued entrepreneurship plays a crucial role in the efficient
functioning of markets, facilitates the development of new technologies and plays an
integral role in the creation of wealth (Covin and Slevin, 1991), it is still not clear
whether these bold prescriptions hold true in the pubic sector (Clark and Newman,
1997). This emerges as a key area needing empirical research. Research needs to
evaluate whether entrepreneurship has any predictive value, whether high levels of
social entrepreneurship are associated with improvements in organisational
performance or managerial effectiveness. These concerns are captured in the
following propositions.
Proposition 10: High levels of social entrepreneurship are positively related to
revenue generation by the organisation.
Proposition 11: High levels of social entrepreneurship will be positively related
to high levels of service and product quality.
Finally, it should be recognised that we have used the generic term ‘public sector
management’ to conveniently simplify the broad variety of public and voluntary
organisations that participated in the research. These organisations differ historically
and legally. Theoretical development in this area must recognise that entrepreneurial
activity will be influence by this broader political and legal status. This is supported
by Bozeman (1987) who developed the concept of ‘publicness’ to understand how
36
organisational approaches are shaped by linkages with political and economic
authority. In developing propositions twelve and thirteen we reflect Moon’s (1999)
argument that the degree of government influence in organisational activities will
tend to reduce entrepreneurship.
Proposition 12: A high degree of publicness will detract from entrepreneurship
and risk taking behaviour through creating excessive bureaucracy and accountability
checks.
Proposition 13: Organisations are likely to develop high levels of
entrepreneurship when they face lower levels of legal constraints
The propositions above reflect key findings emerging from the panels, supported by
the literature. Each proposition can provide the basis for generating a larger number
of hypothesis that could be tested within a large population. In addition, the research
also gives insights into problems of ‘doing’ research into public entrepreneurship and
it is important to reflect these methodological concerns. In convening panels around
‘social entrepreneurship’ we accept an influence was exerted upon participants,
focusing them upon entrepreneurship as opposed to other worthy constructs. The
panels were also ‘self-selecting’, which may imply responses are not typical of a
larger population. However, the inductive methodology of the workshops was
designed to address these issues, as a technique for surfacing participants’ rich and
detailed perceptions of issues, without imposing a rigid and inevitability contested
conceptual framework upon particular sessions.
37
It is also necessary to address whether entrepreneurship simply provides managers
with a convenient and desirable mechanism for post-hoc rationalisation. After all, the
popular stereotype of the entrepreneur is formed around the ‘maverick’ figure, the
opposite of the bureaucrat (Galbraith, 1992). It might be argued the panels
encouraged individuals to reflect favourably upon their own actions allowing them to
present themselves in a positive light to other panel members. The existence of a
popular stereotype type adds an additional complexity to inductive qualitative
research. However, the skilled qualitative researcher is able to use such a stereotype
to their advantage as a common reference point, a kind of ‘hermeneutic object’ in its
own right (Hollis, 1994) that facilitates the clarification of subtle meanings. In
addition, the group went to lengths to probe examples of entrepreneurship presented
in session three in attempts to explore whether respondents were making superficial
responses.
In conclusion, the practitioner panels represent an exploratory and preliminary stage
in development of a detailed three-year project. Whilst the panels developed high
quality data, they represented an initial stage in the creation of a rigorous project
methodology. The panels suggest avenues for future research whilst also proving rich
sources of data on social entrepreneurship. They have allowed for theoretical and
methodological development that will provide a useful grounding for case studies to
be conducted next year.
38
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