Deconstructing the Way in which Value Is Created in the Context of Social Entrepreneurship

• Date: 01 January 2018
• DOI: http://doi.org/10.1111/ijmr.12113
• Author: Martine Hlady‐Rispal,Vinciane Servantie
• Published date: 01 January 2018

International Journal of Management Reviews, Vol. 20, 62–80 (2018)

DOI: 10.1111/ijmr.12113

Deconstructing the Way in which Value

Is Created in the Context of Social

Entrepreneurship

Martine Hlady-Rispal and Vinciane Servantie1

Limoges University, IAE, CREOP Research Team, 3 rue Franc¸ois Mitterand 87031 Limoges, France, 1Los Andes

University,School of Management, Los Andes University, Calle 21 #1-20, Bogota, Colombia

Corresponding author email: martine.hlady-rispal@unilim.fr

According to existing literature, the core of social entrepreneurship (SE) knowledge is

evolving and, as such, it has made important contributions to theoretical definitions

and essential characterizations. However, more theoretical issues need to be addressed

before the SE field can be fully explained and understood. In particular, the authors

observe in the literaturethat, within empirical or conceptual studies, almost all authors

use the term ‘value’, but seemingly assume the dimensions of value rather than define

or analyse its connotations and components. This paper uses the value construct and

its multi-faceted dimensions to deconstruct the way in which value is created in the SE

context. The authors argue that an analysis based on value generation, value capture

and value sharing providesimportant insights into the specificity of SE research and can

facilitate future theorizing. Through the conceptual lens of this centralconcept of value

emanating from value theory and business model literature, the authors abductively

analyse and classify the studies, providing a practicalresource. The authors discuss the

phenomenon, presenting an integrativeframework that facilitates a clearer understand-

ing of the social value creation process and suggest future research areas as openings

for theory development in relation to valuecreation, its main components and flows.

Introduction

Followingover two decades of development, research

in the field of social entrepreneurship (SE) still af-

firms the need to develop firm theoretical ground

on which to assess its numerous manifestations (e.g.

Chell et al. 2010; Choi and Majumdar 2014; Doherty

et al. 2014). Since Dees’s (1998) seminal article, a

multitude of studies have clarified the boundaries and

The idea for this paper was inspired by the research agenda

of the GRPLab team at University of Bordeaux, France, of

which the authors are both part. Wethank International Jour-

nal of Management Reviews Editor Professor Oswald Jones

and the anonymous reviewers for their helpful guidance and

advice throughout the review process. We also wish to give

particular thanks to Professor Nicole Coviello for encourag-

ingustosendthepapertoIJMR and for her support and

orientation in the process of preparing earlier draft of the

paper.

goals of SE (Chell 2007) and integrated insights from

existing theories to extend SE understanding (Dacin

et al. 2011). On a general basis, most definitions,

such as those by Mair and Marti (2006), Austin et al.

(2006) or Nicholls (2008), relate to SE as the pro-

cess of identifying, evaluating and exploiting oppor-

tunities to create social value that can occur within

or across the non-profit, private for-profit and public

sectors. More specifically,SE involves innovative hy-

brid organizations that engage in ‘the dual mission of

financial sustainability and social purpose’ (Doherty

et al. 2014, p. 417). Their social entrepreneurs prior-

itize social value over economic value, even though

they actively seek commercial incomes in order to

diversify their sources of revenues (Dees 1998).

This paper uses the value construct to analyse the

way in which value is created in the SE context. The

different dimensions of value are embraced in the SE

literature, and almost all authors use the term ‘value’

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Deconstructing the Way in which Value is Created 63

to characterize social entrepreneurs, social enterprise

or the SE phenomenon. Described as the underlying

logic of SE (Choi and Majumdar 2014), social value

creation is one of the most broadly discussed in the

literature on SE (Austin et al. 2006; Dacin et al. 2011;

Kraus et al. 2014; Mair and Marti 2006). However,

social value creation is perceived as a multifaceted

and ambiguous aspect of SE that is complex to mea-

sure and to comprehend (Choi and Majumdar 2014).

While the main purpose of SE is to create social value,

an integrated framework that explains the main dis-

tinctive dimensions of value and their interactions

is still missing. Following Austin et al.’s (2006) ap-

proach, we offer a theoretical frameworkusing an an-

alytical model from commercial entrepreneurship re-

ferred to, in this review paper, as the ‘business model’

(BM). The BM has been used in trying to tackle the

issue of ‘total’ value creation (Amit and Zott 2001;

Zott et al. 2011). It refers to the logic of an organi-

zation, ‘the way it operates and how it creates value

for its stakeholders (Casadesus-Masanell and Ricart

2010, p. 197). Among the main components of value

examined by BM literature, value generation, value

capture and value sharing define what BMs seek to

explain (Shafer et al. 2005; Verstraete and Jouison-

Laffitte 2011a,b; Zott et al. 2011). This clarifica-

tion is useful for understanding how social ventures

evolve to produce social change (Hlady-Rispal and

Servantie 2016). We argue that it can also foster a

better understanding of the SE domain.

From this standpoint, we examine the SE literature

through the concepts of value and BM, extending pre-

vious reviews on SE. We thematically code and ana-

lyse academic articles published between 1991 and

2014. By establishing the concept of value as a central

concept and BM as an analytical grid, we aim to of-

fer a contextually relevant explanation of the process

of value generation, value capture and value shar-

ing, enabling readers to understand flows from one

dimension of value to another and, consequently, the

process of value creation. This review answers Choi

and Majumdar’s (2014) and Doherty et al.’s (2014)

call to develop theory on value within the SE field

and is guided by the question, ‘How is value created

in the context of social entrepreneurship?’

The relevance of linking value and BM

literature with SE research

Value literature can be found in management re-

search, including SE research. It exposes distinctive

understandings and aspects of the value concept

in very different contexts, and mentions complex

value processes (Bowmanand Ambrosini 2000, 2007,

2010; Gummerus 2013; Schmidt and Keil 2013).

However, as in the SE literature, there is little agree-

ment on what value creation actually is or how it

can be attained (Austin and Seitanidi 2012; Lepak

et al. 2007). In contrast, the BM literature incorpo-

rates the structuration of value, enabling the definition

and analysis of different dimensions of valueand their

interconnections. It provides a framework for under-

standing value flows and transactions that connect

activities in a systemic way (Amit and Zott 2001).

In so doing, the BM construct enlightens and pre-

dicts value creation processes (Amit and Zott 2001;

Casadesus-Masanell and Ricart 2010); it defines the

logic of the venture and the way in which value is

generated, captured or shared within a value network

(Shafer et al. 2005; Verstraete and Jouison-Laffitte

2011a,b; Zott et al. 2011). We therefore use value

definitions from the value literature, including SE re-

search, and the BM literature as a base from which to

analyse SE.

In the BM literature, value creation refers first to

value generation and value proposition. Value gen-

eration is enabled by human capabilities and organi-

zational resources required by the venture in order

to operate (Verstraete and Jouison-Laffitte 2011a,b;

Zott and Amit 2010). The SE literature argues that

value is created by a number of different actors, the

first being the social entrepreneur(s) in interaction

with other stakeholders (Hlady-Rispal and Servantie

2016; Seelos and Mair 2005). The actors’ values and

skills as well as the ways in which these actors are

linked have an impact on the degree of value genera-

tion (Bowman and Ambrosini 2010). Value proposi-

tion relates to the value that an entrepreneur wishes

to provide to a target market through an organiza-

tion (Anderson et al. 2006; Austin et al. 2006; Kraus

et al. 2014). It requires the analysis of ‘use value’,

what the organization believes its customers value

the most (Bowman and Ambrosini 2000; Covin et al.

2015), and the transmission of this to the differ-

ent stakeholders in order to receive resources and

skills that will create competitive advantage (Covin

et al. 2015). According to the value and BM litera-

ture, the expansion of value generation depends on

the relevance of the value proposition (Covin et al.

2015), the ways in which flows of information, re-

sources and goods are managed, and the choice of

a pertinent legal form of organization (Zott et al.

2011).

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