The dark side of social entrepreneurship.

Williams, Densil A. ; K'nife, Kadamawe A.K.

INTRODUCTION

The concept of social entrepreneurship is not a tidy one (Peredo & McLean, 2006; Mair & Marti, 2006; Seelos & Mair; 2005: Dees; 1998). There appears to be a blurring of the boundaries as to what constitutes a social enterprise and more so, social entrepreneurship as a concept. This is further mudded by the fact that a number of organisations that have questions surrounding their legitimacy but which carry out social functions, for example, criminal gangs, are sometimes categorised as social enterprises and fall under the rubric of social entrepreneurship. This situation appears to be most prevalent in societies that are low growth, with high levels of poverty, high unemployment, and large social dislocations. In these contexts, social enterprises tend to have a significant impact but it is not always clear whether or not the intent is really social, or is there another darker motive behind the benevolence being distributed under the guise of social entrepreneurship. It is these issues that have motivated the research presented in this paper.

The paper hopes to understand whether or not we can categorise all enterprises under the heading, social entrepreneurship once they are involved in creating social value in a community. Shedding light on this issue has serious implications for how we conceptualise the term social entrepreneurship and build a general understanding of the concept. To achieve the aims of this work, the paper is organised as follows: the next section will present a discussion on the definition of social entrepreneurship, and also social enterprises. This will be followed by a review of the context in which the study is focused. This review is important as it provides a better lens through which one can understand the problem that is being raised in the paper. Here, we will look at the social dislocation in Jamaica, in what are called garrison communities where a lot of the social enterprise activities take place but under questionable circumstances Following this, a discussion will be presented to show how the characteristics of the activities in these communities reflect the nature and characteristics of social enterprises. This will help us to draw conclusions about whether or not all social enterprises can be labelled under the theme social entrepreneurship. The paper will end with a discussion and some concluding remarks.

WHAT IS SOCIAL ENTREPRENEURSHIP

While the phenomenon of social entrepreneurship is not new, it appears that the language, i.e. the concept is just emerging. Entrepreneurship as a concept aimed at improving the economic development of nations, has gained significant amount of attention in the literature (Venkataraman, 1997; Shane & Venkataraman, 2000; Gartner, 1988 etc). However, entrepreneurship as a process aimed at reaching sections of society where the traditional markets have failed to reach or put another way, entrepreneurship which aims at transforming societies through social progress, has recently started to receive attention in the literature (Dees & Elias, 1998; Mair & Marti, 2006; Alvord et al, 2004; Seelos & Mair, 2006 etc). The newness of this phenomenon like in all other fields of study in their developmental stage, suffers from inconsistency in definition, and disjointed research findings, poor theoretical developments and its boundaries as they relate to other disciplines are still under-developed. At this stage in the development of the field, social entrepreneurship means different things to different people (Dees, 1998).

One group of researchers sees social entrepreneurship as merely reflecting non-profit initiatives that are geared to create value to those that the traditional markets will not reach (e.g. Bosche, 1998; Peredo & McLean, 2006). Others see it as using business principles to solve social problems. Indeed, Pomerantz (2003) noted that social entrepreneurship involves taking businesslike, innovative approach to the mission of delivering community services.

Other researchers have also attempted to coin a working definition of the concept. Indeed, Mair and Marti, (2006) have identified social entrepreneurship to be a process involving the innovative use and combination of resources to pursue opportunities to catalyse social change, and, or address social needs. This view of social entrepreneurship mirrors that of Pomerantz (2003). It really reflects basic business assumption which underlies the entrepreneurial process. Social entrepreneurship, it appears, narrows down to value creation using available resources in new ways. However, the value created is intended to create social change or meeting social needs (Bornstein & Davis 2010; Brooks, 2009).

Further, other scholars have seen social entrepreneurship as a field of enquiry, which provides a substitute for the market discipline that works in the field of business entrepreneurship. In other words, social entrepreneurship is not merely market/business entrepreneurship that is not working effectively or efficiently. Social entrepreneurship should have its own discipline and accountability with notions of value creation innovation and opportunity recognition similar to business entrepreneurship (Brooks 2009). In this regard, Dees (1998) offered the following insight on what social entrepreneurship should be by focusing on the attributes of a social entrepreneur. According to Dees (1998), social entrepreneurs play the role of change agents in the social sector by:

* Adopting a mission to create and sustain value

* Recognising and relentlessly pursuing new opportunities to serve that mission

* Engaging in a process of continuous innovation, adaptation and learning

* Acting boldly without being limited by resources currently in hand

* Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.

A closer look at these criteria which define a social entrepreneur shows that this ideal is not easy to be met and as such, it is the degrees to which the players in each sector achieve them that one can define the enterprise as social entrepreneurship.

Other scholars have also added more dimensions to the already fuzzy concept in order to derive a consensus on what really constitutes social entrepreneurship. In this regard, Peredo & McLean (2006) perceived social entrepreneurship as being exercised where a person or group of persons:

* aims to create social value either exclusively or in some prominent way;

* shows a capacity to recognise and take advantage of opportunities to create value;

* employs innovation, ranging from outright invention to adapting someone else's novelty in creating or distributing social value;

* is willing to accept an above average degree of risk in creating and disseminating social value; and

* is unusually resourceful in being relatively undaunted by scarce assets in pursuing their social venture.

These characteristics should help to distinguish social entrepreneurship from other forms of entrepreneurship. However, on closer examination, it appears that the first characteristic is the most important in making the distinction between social entrepreneurship and other forms of entrepreneurship. At the heart of social entrepreneurship is the need to create social value. In this regard, Seelos & Mair (2005) posited that social entrepreneurship creates new models for the provision of products and services that cater directly to basic human needs that remain unsatisfied by current economic or social institutions.

Social entrepreneurship it seems, like business entrepreneurship, fills a gap by looking at opportunities to improve systems, create solutions and invent new approaches. However, the distinction comes when one looks at the core objectives for the activity. For social entrepreneurship, the primary objective it is argued; is social value creation while economic value creation is a by-product that helps the enterprise to be sustainable and self-sufficient (Seelos & Mair, 2005). This primacy of social value creation led Seelos & Mair (2005) to further refine their definition of social entrepreneurship to mean entrepreneurship which creates new models for the provision of products and services that cater directly to the social needs underlying sustainable development goals such as the millennium development goals (MDGs). The authors went on to make an important point about social entrepreneurship which has resonance to the analysis represented in this paper. They noted that social entrepreneurship often create tremendous value when catering to very basic needs such as providing medicine or food which can be a matter of life or death for those who receive them. This is important, as most of the data provided in this analysis speak to ventures that act as social enterprises with the provision of food and medicine to the less fortunate as their major goal.

While the proposed definitions shed some light on the concept, they still do not provide the strong consensus on what really constitute social entrepreneurship. In most cases, the definitions are idealised notions of social entrepreneurship which cannot be operationalised. However, there seems to be some consensus that social value creation must be the primary objective in order for an entrepreneurial activity to be classified as social entrepreneurship. It is those activities that have as their goal, social value creation that this paper will critically analyse to determine whether or not they fit the categorisation of social entrepreneurship. This paper will take as a working definition of social entrepreneurship, activities which are targeted at persons who have a need but are unable to afford to satisfy this need by engaging in the traditional market activities. Indeed, at the heart of these activities is not the profit motive, but the willingness to serve the less fortunate in a society.

A CONTEXT FOR STUDYING SOCIAL ENTREPRENEURSHIP

Mair & Marti (2006) noted that social entrepreneurship has different facets and varies according to socio-economic and cultural environment. This section of the paper will examine the socioeconomic environment of Jamaica in order to critically analyse the nature and characteristics of social enterprises that are operated in economically depressed areas and more so, garrisons, to determine whether or not it is indeed legitimate to classify these enterprises as such.

As it relates to crime and violence and low economic growth, Jamaica finds itself in a precarious position. Jamaica is ranked in the top five countries in the world in business start-ups (GEM 2005, 2006) and in the top three in the world for homicides. As highlighted in the CCYD:

"Latin America and the Caribbean has the highest homicide rates of men between the ages of 1529 in the world (68.6per 100000); more than three times the global average of 19.4. Furthermore, it is estimated that young men in the 15 to 35 age group commit 80 per cent of the crime in the region ... Leading the region in this area is Jamaica, where the youth under age of 25 were responsible for 51 percent of all murders and 56 percent of all major crimes in 2000 (CCYD 2010, p. 67)." The CCYD further reports that crime and violence is linked to "poverty, unemployment, social inequalities, high unemployment, and limited business opportunities (CCYD 2010, pg 67)."

These problems are even more pervasive in garrison communities. Garrison communities, which Stone (1986) observed as military strongholds that are centred around political tradition, cultural values, beliefs, myths and socialization, came about as a result of political parties setting up housing projects in specific areas and populating them with supporters. These supporters chase out the non-political supporters at gun point, and all movements are monitored by gang leaders. These communities are maintained by violence towards the citizens and party political values by the gang leaders. The arrangements in these communities have kept people in a persistent state of poverty for a long while (Henry-Lee, 2005; Harriott 2003; Figueroa & Sives, 2002). Due to the lack of opportunities for upward social mobility for the citizens who live in these communities, some are normally drawn to the criminal gangs, which carry out philanthropic activities and act as protector of the community. These gangs generally sell violence as a business and use the proceeds to deliver "social value" to the communities. Indeed, Harriott, (2003) noted that:

"Violence has become a business, a field of entrepreneurial activity. There are now groups and individuals who sell violence as a service (this is what the protection racket is about), or who employ it to extort money from their victims. Those who control groups of armed men may exploit this as an economic asset by dominating an area and forcing persons who operate businesses within the areas under their control to pay tax".

These gangs it appears; try to legitimize their activities by structuring their operations similar to those of social enterprises. Social entrepreneurship given its flexibility to address both social and economic issues provides a meaningful vehicle to resolve some of the many problems which beset the garrison communities such as; ineffective national and community security service from the state, poor waste management, inconsistent electricity supply, lack of health clinics, limited potable water among others. More specifically, through its inclusive approach, social entrepreneurship can enhance the social capital that youth would find within gangs, through the development of partnerships and social networks. Indeed, within the context of developing countries, it provides a mechanism to adequately replace the socio-economic role being played by the leaders of gangs, which is not being satisfied by the state institutions. Gang leaders are very powerful in garrison constituencies and they operate as the real entrepreneurs behind most of the enterprises which deliver social services in these communities. Their motivation however is not really social value creation but instead, to ensure the loyalty to political values and beliefs in order to maintain the garrisons. This is what has contributed to the blurring of the lines between genuine social enterprises and violence as a business, which is used to fund social enterprises that deliver social value in garrison communities. This generally happens because it is not always easy to separate the gang leader from the entrepreneur, since both tend to exhibit similar entrepreneurial traits.

LINKING THE ATTRIBUTES OF ENTREPRENEURS AND GANG LEADERS

Chell et al (1991) argued that the image and motivational factors for entrepreneurs are similar to that of a criminal. Further, Van Duyne (1993) argued that both organised criminals and legitimate entrepreneurs operate in a similar manner. Scott (2008) pointed out that, attributes such as a desire for independence and autonomy, and a willingness to disregard rules and conventions lead people to both engage in criminal activity, and similarly to start businesses. Cassons (1982) further argued that it is normally only organised crime which qualifies as being entrepreneurial. Harriot (2007) also supported this view. Organised crime is seen as Jamaica's main crime problem; Harriott (2007: pg 36) noted that organised crime is Jamaica's number one problem because "... it has made a successful business not just of crime but violent crime".

Further, Fairlie (2002) argued that those who engage in illegal activities tend to have a strong desire for self employment and determination that is often realised in the drug trade. Also, Baumol (1990) opined that the number of start-ups in business depends a lot on the incentives offered for entrepreneurship. He noted that in countries where there is an absence of meaningful incentives people with the desire and talent to become entrepreneurs often turn to crime. This argument finds resonance in the context of many developing countries. In most developing economies, there is no robust entrepreneurship policy which guides the development of start-ups worse yet, a robust incentive schemes. When this is the case, the implication for entrepreneurship can be disastrous. Williams (2006) argued that a resultant effect is that entrepreneurs often commence their operations informally and may continue to do so even when it is established.

The Schumpeterian idea of an entrepreneur can be easily linked to the attributes of the leaders of criminal gangs who organise their activities along the line of social enterprises. Indeed, Schumpeter (1934) identified three main motivational factors for entrepreneurial action; 1) the desire to found a private kingdom or dynasty, 2) the will to win fight and to conquer, and 3) the joy and satisfaction from creation and problem solving. Smith (2009) argued that the Schumpeterian idea of the entrepreneur as creative destructor and Kirzner idea of the entrepreneur as an opportunist trader are theories which are helpful in ascribing entrepreneurial status to criminal behaviour. He further argued that the Schumpeterian entrepreneur is a unique and creative individual who develops new products, services and techniques which innovate the way in which people operate in a given environment. This does suggest that there is some special quality in the behaviour of the individual. These attributes and characteristics seem to suggest that like a legitimate entrepreneur, leaders of criminal gangs can also be classified as entrepreneurial and therefore, their enterprises can be seen as entrepreneurial enterprises. This is where the blurring of the line occurs when one views the idea of social entrepreneurship within the context of garrison communities. Can social enterprises which are funded by resources from organised crime be categorised as social entrepreneurship? Has the attempts to define social entrepreneurship taken this contextual situation into consideration? These are important questions that must be settled in order to build a general understanding of the concept. The aim of this conceptual paper is to bring these ideas on the table in order for theorists in the area to view social entrepreneurship through a different lens.

The case below presents anecdotes of enterprises operating in a garrison community in Jamaica in order to reveal some of the social value creation which these enterprises are engaged in and to show how easily one could conflate the actions of these enterprises with the concept of social entrepreneurship.

THE SOCIAL ENTERPRISE PHENOMENON IN VULNERABLE COMMUNITIES

In garrison communities in Jamaica, the basic needs of most citizens remain unmet. There is a high level of unemployment, high levels of illiteracy, poor sanitation, poor housing stocks, poor security among other things. Most of these basic needs are unmet due to inadequate state support and because the citizens cannot afford to pay for the product or services which are offered by the market. For example, high level of illiteracy exists because parents are unable to afford to send their children to school, poor sanitation exists because households cannot afford the costs of water or building proper infrastructure to dispose of waste etc. Given resource constraint and in most cases, poor management at the national level, formal institutions fail to provide these services to these vulnerable communities. This thus leaves a gap which criminal gangs operating under the guise of social enterprises, fill. They will use social enterprises to fill the gap left by the absence of traditional markets to meet the needs of the poor and the vulnerable. However, their main motivation is not necessarily social but to maintain power and control over these communities. This is where it becomes difficult to draw the line between social enterprise and illegal enterprises carryout social roles.

CASE 1: ABC CORPORATION

Background

ABC Corporation emerged out of the political/ historical experience of Jamaica. It started as an informal entity within an inner-city garrison community in Jamaica. The current 'CEO' is the son of the deceased gang leader (Don) of a reputed nacro-criminal group of the community, who was also a strong man for a political party. Within this relationship the 'Don's main focus was to ensure political support for the political party. For this he would receive pay-outs in the form of cash and/or contracts. Under his father's 'ruler-ship' the network expanded to become a transnational entity that engages in the international narcotic trade. The revenues generated from both sources were used to support the members of the organisation as well as the general community members.

Upon the death of his father, the older brother of the current CEO succeeded the position of the Don but was soon killed. After the death of his brother, he resigned from his work in the formal economy and took up his current portfolio as the new Don/CEO/President. During the tenure of his brother and father the organisation became one of the biggest transnational organisations in the region, having arms within the Jamaican Diaspora. As the new Don/CEO his primary mandate was to formalize the family business. From the onset he registered several companies; while still operating informally in both legal and illegal activities. As the CEO for both sets of enterprises he created a cadre of support and network within both the formal and informal economies. He communicated to the stakeholders a new vision of self-governance, economic independence and sustainable community development, with a clear understanding of the path of decision making and rule of 'law'.

Enterprise--Formal and Informal

ABC Corporation registered construction, security and trading companies, albeit not in the Don's/CEO's name but he sits on the board of some of these entities. Additionally, he constructed several plazas in and around the surrounding communities which were offered to the community members to operate their businesses. The security services bolstered his network within the formal sector in particular the wharf and piers in Jamaica. This network created a critical platform which facilitated the transnational narcotic trade.

The CEO extended the security service to the informal sector as well. It is argued that he organised the entire market system in the downtown Kingston area, ensuring that both buyers and sellers were safe. It is also believed that he also organised the parking and transportation network establishing a quasi 24hrs shopping area. Carting services, parking services and security services were organised to ensure the safety and smooth operations in the market area. Additionally, funding was provided for members of the communities who had interest in establishing business. Formal business service providers were invited to the community to establish their centres to support MSME development within the community. A deliberate effort was made to convert all empty and abandoned lots into commercial spaces that were made available to community members.

Social Intervention Activities

At the heart of ABC's operations was community buy-in and loyalty, as such there was a deliberate move to establish community programmes. These programmes include:

* Establishing of the ABC youth club which focuses on youth empowerment and development with emphasis on conflict resolution and violence prevention

* Kids programme--emphasis being on back to school, providing school fees and scholarships, books, uniforms, bags, shoes and lunch.

* Golden age programme for the support of the elderly, providing food, medication, clothes etc.

* Financial and other support were offered to those in the popular culture in particular dancehall. As such, events were organised, this created an opportunity for community members to engage in weekly commercial activities. Music studios were also erected and permission was granted to those in the music and film industry to shoot videos to support the music and film industry.

* There was an articulated community safety and security programme which sought to ensure that there was no crime in the community and that conflicts were resolved 'justly'. The community developed the reputation as being the safest community in the country and a place that persons from anywhere in the world could attend an event without any fear of harm. Persons who were victims of crime could report the incident and the issue would be resolved and all possessions were returned, without fear of future victimization.

* Urban agriculture programme was also supported to include animal husbandry and farming. Farming equipment and financial support was offered for these ventures. There is a strong emphasis on supporting ventures operated by women, in particular mothers. It was expressed that an underlying philosophy in the community is 'even if the child could not go to school for the day, he/she must not go to bed hungry'.

* Finally, persons from the community that became incarcerated were supported financially and materially while in prison. Additionally, their families, in particular their children, were supported so as to ensure that they could consistently attend and school.

The CEO of ABC is now incarcerated and receives strong support from his community. While incarcerated, he is still acknowledged as the 'President/CEO'.

DISCUSSION

Are all social actions truly aimed at creating social values or do they have other motivations? Can we classify all enterprises that deliver social services under the rubric of social entrepreneurship? These are the questions that must be considered carefully, if we are to better understand the concept of social entrepreneurship.

In some context, indentifying a social enterprise is not an effortless task. Seelos & Mair (2005) for example, identified a number of enterprises which are classified as social enterprises. These include the Institute for One World Health (USA), which delivers medicine to persons in need in developing countries. Large philanthropic organisations and governments provide much of the initial funding for this activity in which the organisation is engaged. Another institution is Sekem; which pioneered biodynamic agriculture in Egypt. Sekem developed a new system of plant protection for cotton, which has led to a ban on crop dusting through Egypt. Profits from Sekem are used to fund institutions such as schools, adult education centre, a medical centre among other things. Also, possibly the most known social enterprise is the Grameen Bank which grants unsecured loans to the poor in rural Bangladesh. The bank supplies credit to those who would not qualify as customers of established banks.

The cursory look at the above enterprises begs one to ask the question, what do these enterprises have in common with the ABC enterprise described above? A closer reading reveals that like ABC enterprise, which operates in a garrison community in Jamaica, these enterprises fill a gap in the market where traditional institutions fail. Social mission seems to be their overall goal although they are organised using similar principles to traditional businesses. On the surface therefore, one could easily aggregate all these enterprises under the common classification of social enterprise and the discipline of social entrepreneurship. However, closer examination suggests that this can be a dangerous route to take as there are characteristics of ABC that would blur the line between social enterprise and violence as a business which is used to fund social activities.

On closer examination, one will recognise that the resource accumulation to operate these enterprises provides some clues as to whether or not we are talking about violence as a business which tries to legitimize the operations through social enterprises or, genuine social enterprises which are aimed at social value creation. The business model for Grameen, Sekem and One World Health is very clear. These enterprises raise funds for their initial activities mainly from philanthropic organisations and in some cases governments. These funds are then used to provide a service to a section of the market which is not reached by the traditional institutions using traditional business principles when supplying this service. The profits from these enterprises (e.g. in the case of Sekem) are then used to supply services which meet the unmet needs of the citizens in the society or community. ABC enterprise, like Sekem, provides a service to meet the unmet needs of the citizens in the community (e.g. funding school programmes, building adult learning centre, providing medical care etc). However, the resources used to fund ABC enterprise is not as transparent as in the case of the other corporations listed above. Importantly, from the descriptive case above, the data show that the enterprise is run by a single individual who is referred to as the don or gang leader in these garrison communities. Numerous scholars on crime and violence and poverty in the garrison communities in Jamaica have highlighted the role of dons or gang leaders as the protector of these communities through his control of resources gained from engaging in the business of violence (Harriot, 2003; 2007; Stone, 1986, Figueroa & Sives, 2002; Henry-Lee, 2005). The owner of ABC enterprise does not have a history of running profitable enterprises and has no known stock of wealth from which to fund the social initiatives which are undertaken. The suspicion is that the drug trade has provided a source of fundsto operate the enterprise and thus provide social services to the poor in the community. The main aim of ABC is not to meet the unmet needs of the citizens but to maintain control over the communities and to get the citizens to pledge loyalty to him and the values of his political party. This is typical of the don who is identified in Stone, (1986). Therefore, since it appears that the real motivation is not to create social value but to maintain power and control over the vulnerable, where does one draw the line between the truly social enterprise and criminals who fund enterprises which carry out a social goal but with the real aim of maintaining power and control? Indeed, on the surface, ABC enterprise appears to be similar to a Grameen, One World Health, Sekem in that it provides a useful service to those that are not being reached by traditional institutions, but a closer reading of its operations and governance shows that it does not fit neatly into the rubric of social enterprise and by extension, the model of social entrepreneurship.

CONCLUDING THOUGHTS

The burgeoning field of social entrepreneurship is an important area, especially in a developing country context where markets are not always efficient and a large number of persons are left on the periphery because the traditional markets do not find it profitable to meet their unmet needs. Social enterprises will help to fill those gaps by providing services which traditional institutions shun, but applying sound business principles in the provision of these services. The main criterion of what should be considered social enterprises is the intention to create social value to transform the lives of the poor and persons who cannot afford services provided by traditional institutions. However, it does not appear that all enterprises that offer social services can be neatly classified as social enterprises and by extension fit into the theme of social entrepreneurship. It appears that context plays an important role in determining whether or not an institution that offers a social service is, indeed, a social enterprise. The motivation for offering the service is a critical variable that one has to take into consideration when ascribing social enterprise status to an institution.

The data presented above show that it is not always clear when one tries to determine whether or not an enterprise fits into the field of social entrepreneurship although it carries out a social function. While some enterprises deliver social services to a community, the motivation may not always be benign. In the context identified above, control and loyalty motivates social enterprises which operate in the garrison communities in Jamaica. The real aim is not to transform the lives of the poor through value creation. This is why garrisons have such high levels of poverty although the poverty rates in Jamaica have seen a down trend since the 1990s (Henry-Lee, 2005).

It is therefore important that if the field of social entrepreneurship is to move forward, it will have to take into account, the darker side of the concept since this can distort any attempt to build a general theory to explain the phenomenon. It is important that researchers do not conflate social activities that are funded by resources gained from the business of violence with social activities that are aimed at truly creating social value and transforming lives using social entrepreneurship. It is important that these issues are taken into consideration since the field is in its nascent stage and one does not wait until it matures. This will help to make clear, the definition

of what really constitutes social enterprises. This issue is still not fully settled in the field. This paper has provided another lens through which to view the issues surrounding social enterprises and social entrepreneurship in general. Context does play a role in this regard.

AUTHOR'S NOTE

Densil Williams is a senior lecturer of International Business in the Department of Management Studies. Kadamawe K'nIfe is a lecturer in Entrepreneurship in the Department of Management Studies.

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Densil A. Williams, University of the West Indies, Mona

Kadamawe A.K. K'nife, University of the West Indies, Mona