The meaning of being a social entrepreneur in the society of multiple transitions

Abstract

Purpose

The purpose of this paper is to critically evaluate the meaning of being a social entrepreneur in a society marked with multiple transitions. It aims to understand how theoretical concepts of social entrepreneurs, including common dichotomies between economic and social, collective and individual, reflect in social entrepreneurs’ rationale, values and identities.

Design/methodology/approach

The study used an exploratory and qualitative approach. Empirical data were gathered during 14 semi-structured interviews with Croatian social entrepreneurs. Thematic analysis was used as an analytical framework.

Findings

The findings suggest complexity of social entrepreneurs’ rationale and identities as they face challenges in balancing different goals. Democratic and participative governance appeared to be the weakest link of social enterprises. Identity of social entrepreneurs in the society of multiple transitions is fluid and changes through the continuum from pure social to pure commercial, from more related to civil society to more related to the market, from mostly individual to mostly collective.

Research limitations/implications

The main limits of the study are related to sampling strategy and the small sample size. Generalization is limited by the nature of qualitative research and relies on analytical and naturalistic generalization.

Practical implications

The findings of the study may contribute to ecosystem development that would be more suitable for social enterprise realities in a specific context.

Originality/value

This paper focuses on the individual level and provides rare insights into social entrepreneurs’ rationale, values and identities.

Citation

Vidovic, D. (2023), "The meaning of being a social entrepreneur in the society of multiple transitions", Social Enterprise Journal, Vol. 19 No. 3, pp. 237-255. https://doi.org/10.1108/SEJ-08-2022-0075

1. Introduction

During the past few decades, the concept of social entrepreneurship has been increasingly applied as a response to socio-economic gaps that contemporary societies have experienced. Today, as the world is confronted with new challenges due to the Covid-19 crisis and war, as well as the continuous threat of old challenges, such as climate change and rising socio-economic inequalities, even stronger expectations were set for social enterprises and social economy in general.

This paper’s approach follows the level of analysis that emphasizes the role of individuals (Thompson, 2002; Mair and Noboa, 2006; Bacq and Alt, 2018), because this micro level has been less represented in the relevant literature on social economy and social entrepreneurship in Croatia. Social entrepreneur as an individual was more often the topic in the United States (US) approach to social entrepreneurship, than in the European Union (EU) approach (Defourny and Nyssens, 2010; Petrella and Richez-Battesti, 2014). In previous studies on social entrepreneurship in Croatia, two other levels of analysis were more commonly applied, meso level with analysis and typology of social enterprises (Vidović, 2012; Vidović and Baturina, 2021) and macro level with mapping and analysis of social enterprise ecosystems (Vidović, 2019). Thus, insights from the perspective of social entrepreneurs would largely complement existing data.

This paper uses the term multiple transitions (Laranja and Pinto, 2020) to emphasize the complexity of changes of socio-economic and development paradigms that have occurred over short periods in post-socialist societies, such as Croatia. The literature has so far discussed some characteristics of social entrepreneurs with the intention of identifying how different they are from other entrepreneurs, on the one hand, and social agents, on the other. The paper adds to that discussion by identifying social entrepreneurs’ rationale, values and identities and understanding what it means to be a social entrepreneur in Croatia, as a society of multiple transitions.

The study uses an explorative, qualitative approach and semi-structured in-depth interviews, conducted with 14 social entrepreneurs during July–August 2021. Thematic analysis has been used for coding and analysis of the data. Some of the key findings indicate the complexity of identities of social entrepreneurs, with a continuum of identities, rather than dichotomy, but also that their core characteristics include focus on social change, action orientation and altruistic concerns.

The paper starts with a conceptual background of social entrepreneurs and emphasizes the main dichotomies discussed in the literature. Furthermore, it conceptualizes identities in the society of multiple transition and gives a short overview of the background and context regarding the social enterprise sector in Croatia. A methodological section, which explains and justifies the methodological approach, is followed by a presentation of the findings and a discussion. The last section presents conclusions, implications and limitations.

2. Who is a social entrepreneur?

The great popularity of social entrepreneurship in the past few decades has caused multiplication of definitions, approaches and understandings, often followed by a cacophony of similar concepts. The term social entrepreneur is used more often in the US and Anglo-Saxon context by emphasizing the role of individuals (Defourny and Nyssens, 2008). If social entrepreneurship is a broader concept that refers to an approach driving positive social change, and social enterprise is an organization doing commercial activities to achieve a social goal, then social entrepreneur may be understood as an individual, a person, who drives social change (Borzaga et al., 2020). In this paper, we will not go further into the details of different notions, semantics and schools (for that, see Petrella and Richez-Battesti, 2014), but rather focus more deeply on understanding the notion of social entrepreneurs and their rationale, values and identities. The sections below provide an overview of some of the main dichotomies discussed in the literature.

2.1 Social entrepreneur vs entrepreneur

Is a social entrepreneur just a type of entrepreneur? The basic definition of entrepreneurs states they are business owners who run a business. An entrepreneur is “a person who habitually creates and innovates to build something of recognised value around perceived opportunities” (Bolton and Thompson, 2000, p. 16). Some of the main features of entrepreneurs are seeking opportunities, generating innovation and taking risks (Sastre-Castillo et al., 2015, p. 250), as well as their business being grounded in a for-profit objective (Williams and Nadin, 2011, p. 119).

Social entrepreneurs are often seen as an entrepreneur by nature, except their priorities are different. While commercial entrepreneurs mostly seek personal interest and profit, social entrepreneurs are primarily oriented toward achieving social or societal goals, be it some sort of benefit for less powered groups or for larger benefit of society. Some authors discuss the differences between social and commercial entrepreneurs based on their “value” creation (Martin and Osberg, 2007; Petrella and Richez-Battesti, 2014). In that sense, entrepreneurs organize their value proposition around creating economic value or financial profit, while social entrepreneurs organize their action around creating benefits and well-being for a social group or society in general (Petrella and Richez-Battesti, 2014, p. 146).

In other words, social entrepreneurs are eager to contribute to the well-being of a community or society (Martin and Osberg, 2007; Stoke et al., 2010; Bolton and Thompson, 2000). Some authors emphasized that many social entrepreneurs behave similar to commercial entrepreneurs, meaning there are not many differences between commercial and social entrepreneurs in aspects such as leadership, personal qualities, styles of work and capacity to generate or transmit innovative ideas (Sastre-Castillo et al., 2015, p. 354). A study, conducted on a sample of 389 respondents, showed that there is no difference in entrepreneurial attitude between commercial and social entrepreneurs (Sastre-Castillo et al., 2015, p. 363).

Furthermore, some authors discussed that social entrepreneurs might be equally as successful as commercial entrepreneurs (in terms of creating an economic value) (Massetti, 2009; Stoke et al., 2010). However, their engagement is focused on non-typically commercial fields – they respond to unaddressed social needs, primarily in the fields of education, employment, work integration, environment protection, health, etc. In other words, they are “more concerned with caring and helping than with ‘making money’” (Thompson, 2002, p. 413). Further to that, social entrepreneurs need to balance different goals, or focus on “achieving both economic efficiency and social purpose” (Petrella and Richez-Battesti, 2014, p. 143).

Contrary to the discussion that emphasizes commercial–social dichotomy, some authors argue that we can better understand this phenomenon in the continuum ranging from purely commercial to purely social entrepreneurship (Austin et al., 2006; Williams and Nadin, 2011) or purely philanthropic (Dees, 1998). Furthermore, entrepreneurial orientation and behavior may change over time, so one can begin as a social entrepreneur, but end up being more commercial, and vice versa (Williams and Nadin, 2011).

2.2 Social entrepreneur and social change

The question is then what differs social entrepreneurs from traditional, commercial entrepreneurs? It has been seen that even though social entrepreneurs share some important entrepreneurial characteristics with commercial entrepreneurs, what differentiates them is strong sensibility for social justice. They have a sense of the disbalance in the socio-economic system and recognize marginalization and exclusion of some social groups and do things that contribute to building a new balance and well-being (Martin and Osberg, 2007). However, unlike other socially sensible individuals, such as people involved with charities, social entrepreneurs are seen as not just altruistic, but radical “doers,” meaning they are oriented toward changing social structures. Some authors emphasize that dedication to social change is a distinctive feature of social entrepreneurs (Bornstein, 1998; Dees, 1998). One of the most quoted definitions given by Dees (1998) describes a social entrepreneur as a “change agent,” meaning someone whose activities deeply transform social structures. The EU approach to social entrepreneurship puts great emphasis on social value creation as a main and explicit objective. However, this issue drew some controversy (Petrella and Richez-Battesti, 2014), mainly because of the difficulties in measuring it, but also because of the obvious social benefits of (some) economic values.

It is also elaborated how social entrepreneurs tend not to protect their own interests, but to prioritize the common good, which is seen in their tendency to encourage collaboration, participation and inclusion of other stakeholders. Therefore, their role in social capital building is also recognized (Bolton and Thompson, 2000). For some authors, the key difference between commercial and social entrepreneurs is in their relation toward value; while social entrepreneurs give central focus to value creation, commercial entrepreneurs give more importance to value appropriation (Santos, 2012; Petrella and Richez-Battesti, 2014, p. 151). In other words, social entrepreneurs are oriented toward the common good and general interest, while commercial entrepreneurs are motivated by self-interest and fulfilling their individual needs. The moral aspect is often part of the notion of social entrepreneurs, and they are seen as persons with high ethical values (Mair and Marti, 2006; Drayton, 2002).

2.3 Individual vs collective

Social entrepreneurs may be understood as either a person or a collective. In the US approach, social enterprise is more often seen as an individual, rather than collective effort. Therefore, a social entrepreneur is often portrayed as an individual initiator and leader, the person who recognizes the problem, takes the risk and is led by their vision of social change. Furthermore, this approach tends to identify the key individual characteristics of social entrepreneurs that may explain what motivates them which, if not profit, is to engage with market activities. The question that motivates the curiosity of researchers is whether there is something fundamentally different in such individuals compared to traditional, “commercial” entrepreneurs (Massetti, 2009).

The approach focused on individuals describes social entrepreneur as a specific type of person characterized by the combination of social sensibility and proactive doing. Personal charisma and vision is seen as one of the key features of social entrepreneurs, and they are described as courageous and creative pioneers (Martin and Osberg, 2007), ethical visionaries (Bornstein, 1998) or charismatic leaders (Leadbeater, 1997). Successful social enterprise is thus, at least partly, the result of specific individual characteristics.

On the other side is the idea that leadership is a key element for social entrepreneurship or for social enterprise, regardless of whether the leader is an individual or a group (Defourny and Develtere, 1999). The understanding that a group, more often than an individual, is the initiator of social-entrepreneurial activity is the basis of the EU approach. In Europe, the emphasis has been on associative and cooperative form, rather than business venture (Defourny and Nyssens, 2008). This concept acknowledges the collective dimension of social enterprise on many levels: first, social enterprise is initiated by the group of individuals; second, governance has collective, democratic character; third, social enterprise is deeply rooted within the community and encourages participation and interconnectedness with other stakeholders. Democratic governance is particularly embraced, and by some authors only when:

[…] social entrepreneurship is led by participative and democratic governance processes that imply a diversity of stakeholders and resources, it can be seen as a building block for an alternative model (Petrella and Richez-Battesti, 2014, p. 154).

In other words, if the participatory dimension is lacking, social entrepreneurship tends to end up as “enterprises that make capitalism more human” (Petrella and Richez-Battesti, 2014, p. 154), but without transformative power.

2.4 Social innovation

Social innovation is commonly associated with social entrepreneurship. From the perspective of the “social innovation school of thought,” social innovation is even seen as the core objective of social entrepreneurship (Defourny and Nyssens, 2010). Being innovative is emphasized by some authors as one of the key characteristics of social entrepreneurs. They are seen as those who are searching for innovative solutions to meet new needs (Petrella and Richez-Battesti, 2014). Furthermore, Dees wrote that commitment to continuous innovation in addressing social needs is one of the two most important features of social entrepreneurs (Dees, 1998).

These definitions imply that innovation is mostly or primarily an individual process. The literature on social innovation, however, emphasizes two aspects of social innovation. The first one is related to a new solution (whether product, service, methodology, technology, organisation or a combination of these) that is created to address social needs or social problems. The second is creation of new social relations and cooperation (Mulgan, 2006; Murray et al., 2010).

Furthermore, some authors see social entrepreneurs as structural change makers. For example, Reis (1999) writes about three waves of transformations: first, social entrepreneurs have introduced new ways of using economic value through innovations of social services and new organizational forms; second, they have transformed the usual model of dealing with social issues – from a philanthropic and one-dimensional approach to an approach which engages citizens and has multiple stakeholders; third, social entrepreneurs have introduced social investment to achieve sustainability.

3. Identities, hybridity and the society of multiple transitions

The identity is a social construct that individuals use to distinguish themselves from other individuals (Allen, 2011), but it also emerges as the product or output of competing, fragmentary and contradictory discourses (Tracy and Trethewey, 2005, according to Moore, 2012). Identities are grounded around a set of moral propositions that regulate values and behavior so identity is closely related to ideas of “right” and “wrong.” These moral propositions and norms are not absolute and definite, although they are made to appear timeless to ensure their inviolability from questioning (Schoepflin, 2001). The identities, values and norms are communicated in discourse. Identities are expressed through various discourses to ensure the recognition, cultural reproduction and maintaining of collective existence. As Schoepflin points out, there may be many discourses in complex communities and they may be contradictory – but there is also a space for innovation (Schoepflin, 2001). Therefore, new identities may be constructed and articulated. Times of conflict, crises, transitions and transformations reflect strongly on identities and they may be seen as contradictory due to opposite tendencies, such as one that wants to preserve the existing discourse and identity, and another that sees the upcoming change and the need for new identities (Schoepflin, 2001).

For the past few decades, contemporary societies have faced many challenges because of the socio-economic and environmental consequences of the dominant economic model. The recent global experience of pandemic made the demand for a transition toward a more sustainable and equal society even more urgent and the role of social innovation was needed more than ever before.

Now, the shift towards a new paradigm is unfolding, outlined mainly in the UN Sustainable Development Goals (SDGs) and the EU Green Deal as top-down policy frameworks. These policies have marked the transition towards a greener, more inclusive and more just society, but also digital transition toward more efficient government and less environmentally harmful business. Simultaneously, there is a shift coming from the bottom-up initiatives, self-organized citizens, social economy organizations and social enterprises that are “coming together to challenge conventional approaches and propose innovative solutions to major world problems” (Laranja and Pinto, 2020). This world of multiple transitions might be even more complex for (post)-transition societies, such as Croatia, where overall transformation of public, private and civil society sectors takes place from the early 1990s with a transition to liberal democracy and market economy.

As the sector of social enterprises becomes more recognized in the plural economy, alongside a public sector and a profit-driven private sector, but also a sector that emerges from the non-profit sector or civil society, the question of the social entrepreneur’s identity arises. Social enterprises are often described as a “hybrid” (Reis, 1999; Roper and Cheney, 2005; Eikenberry and Kluver, 2004; Dees, 1998), because of the contradiction of combining both profit and non-profit modus operandi, but also different legal and organizational forms, and different objectives (social, economic and environmental). In other words, the hybridity of social enterprise lies in its tendency to merge the borders of traditional sectors – public, private and third sector.

To a greater extent than in other sectors, social enterprise in Europe emerges from the third, non-profit sector (Noya and Clarence, 2007; Defourny and Nyssens, 2008), either seen as a concept that bridges the gap between a variety of forms in the third sector (Defourny and Nyssens, 2006) or as a newly coined term to differentiate the new model of economic activities from the traditional ones (Bacchiega and Borzaga, 2001). In either case, for social enterprises and social entrepreneurs emerging from the non-profit sector means that they have operated in a different (then market) set of values such as solidarity, trust, social capital, volunteering, charity, etc. The question is how does operating in a hybrid model reflect on the values and identities of social entrepreneurs? Some presume that it may be uncomfortable for social entrepreneurs to be identified as “entrepreneurs” (Thompson, 2002).

A study by Erpf et al. (2020) analyzed tensions experienced by social enterprises in post-socialist realities based on contrasting dimensions of that hybrid organisation. Some of their findings indicate that social entrepreneurship development in post-socialist society may be hindered by “historically inherent attitudes that non-profit initiatives should be altruistic rather than profit-oriented” and resilience to profit earning “because of historically-rooted negative attitudes to profit and being dependent on state aid” (Erpf et al., 2020, p. 20).

Previous studies on social entrepreneurship in Croatia showed that some social entrepreneurs felt uncomfortable being identified as social entrepreneurs (Vidović, 2012). Most of them emerged from civil society organizations and now “making money” on the market had made them feel they are not “good guys” anymore. A recent study showed that the status of “non-profit,” under which many social enterprises operated, is misunderstood and misused in the Croatian context, thus creating a certain burden for social entrepreneurs (Vidović, 2019). As a result, some of them urged to be recognized primarily as enterprises, because they perceived that would give them greater credibility in public. This discomfort indicates that hybridity is not easily understood in the complex context of multiple transitions. Moreover, identity remains largely unexplored in the context of social entrepreneurship research (Dacin et al., 2011; Moore, 2012). This paper intends to fill that gap and deepen previous findings by providing some insights from the perspective of social entrepreneurs.

4. Brief contextual background

The concepts of social entrepreneurship, social enterprise and social entrepreneurs (often used interchangeably) in Croatian discourse emerged around the middle of 2000, even though the roots and tradition of similar practices dates back in history and are related to associations, mutual aids, charity, cooperatives and different voluntary engagements (Vidović, 2012, 2019). At first, social entrepreneurship emerged within the non-profit or civil society sector as a coping strategy for gaining financial sustainability. During the past two decades, interest in social enterprises has gradually grown. This is evident in the progress of almost all parts of their ecosystem – among organizations and the individuals who founded social enterprises, as well as among academics, intermediaries, financial institutions and policy makers.

Year 2015 marked the peak of that progress, when the national strategy for social entrepreneurship development for the period 2015–2020 was adopted. According to Galera and Salvatori (2015), Croatia was at that time classified as being in a stage of “progressive emergence.” Although it had made great promises regarding the creation of a more supportive environment for social enterprises, which was welcomed with great enthusiasm (OECD, 2017), the strategy failed to implement what had been proposed and left social entrepreneurs and other stakeholders disappointed. The most important consequences are related to the fact that no institutional, legal, financial or fiscal frameworks for social enterprises were built, thus leaving social entrepreneurs without a consistent, reliable and supportive environment for their ventures.

Most commonly, social enterprises in Croatia operate as associations (those which pursue activities of general interest and are engaged in economic activities), cooperatives (both social cooperatives and traditional cooperatives pursuing social aims) or companies (both those established by associations and those pursuing social aims and operating with a non-distribution constraint). There are no official data on the number of social enterprises, but a few mapping studies with different methodologies estimated that there are between 90 or 95 (Šimleša et al., 2015), 147 (Turza, 2014) or 526 social enterprises (Vidović, 2019). Nevertheless, the overall universe of social enterprises is not marked with significant expansion as it suffers from serious fluctuations. A certain number of social enterprises, often new ones, disappear regularly after the funding they rely upon ends, indicating the lack of their deep market-related roots and long-term sustainability.

Besides an unsupportive environment, the overall understanding of social entrepreneurship in Croatia is not very supportive either. The hybridity of their social mission and economic performance (being non-profits gaining resources in the market) is not well understood among the public, who tend to express their ambiguity, distrust and suspicion towards associations, cooperatives and social enterprises (Vidović, 2012, 2019). Some other weaknesses and threats to the sector include administrative barriers, corruption in public procurement, significant dependency on grants and public funds, as well as low levels of entrepreneurial skills and a culture of apathy and powerlessness (Vojvodić and Šimić-Banović, 2019, p. 119). Such conditions reflect the challenging environment for social enterprises and indicate that offering firm concepts, definitions and understanding would be overly simplistic.

5. Methodological approach

This study is led by the following research question: what is the perception of social entrepreneurs about being a social entrepreneur? The question determines the use of an explorative, qualitative approach. The main method of data collection was semi-structured, in-depth interviews, conducted with selected social entrepreneurs. The purposive sampling strategy was used for selection of participants, based on researchers’ judgment to ensure diversities of social entrepreneurs, but also to get information-rich informants. Attention was paid to a balance between male and female social entrepreneurs, but few other criteria were used to ensure heterogeneity in terms of region, type of entity and role in organization.

Data was collected during July and August 2021 with 14 social entrepreneurs from Croatia. The sample was structured from seven female and seven male social entrepreneurs. Because of the restriction on physical contact due to Covid-19, interviews were held either online (via Zoom platform) or by telephone, and were recorded and transcribed. On average, interviews lasted 38 min (shortest 26 min, longest 78 min). Ethical codex for social science research was applied, particularly principles of confidentiality and anonymity. For that purpose, participants’ names were removed and replaced with codes from SE1 to SE14 (see Table 1).

Key conceptual aspects discussed in the literature review were used as a thematic framework for interviews. Findings were analyzed by thematic analysis strategy driven by the research question and more top-down approach (Braun and Clarke, 2006) and theoretical, rather than inductive (Maguire and Delahunt, 2017). Several key themes were identified:

1. identities of social entrepreneur;

2. perception of differences from commercial/traditional entrepreneurs;

3. perception of relation between social and economic dimensions;

4. perception of relation between individual and collective;

5. perception of the social entrepreneur as a leader;

6. perception of (social) innovation; and

7. motives for being a social entrepreneur (see Table 2).

In terms of generalization in a qualitative study, analytical and naturalistic generalization were applied. Analytical generalization involves “reasoned reasoning” about the extent to which one study’s findings can be taken as a guide to what can be expected in another study, while naturalistic generalization rests on personal experience ranging from tacit knowledge of what is to expectations and explicitly assumed knowledge (Kvale, 1996, pp. 232–233).

6. Findings

In this section, the findings are presented and organized according to the thematic framework. Table 2 shows a summary of the main categories identified within each theme. More detailed findings and discussion for each topic will follow below.

6.1 Identities

Being a social entrepreneur is the most important identity for only a part of the respondents, not necessarily for all social entrepreneurs. Some of them acknowledge that they are being regularly recognized as social entrepreneurs by others, but they rather identify themselves differently. For those for whom the social entrepreneur is the most important identity, not only do they understand it as a set of moral propositions, but also ethically superior: “All entrepreneurs should be social entrepreneurs” (SE13).

Referring to what it means to be a social entrepreneur, two directions can be identified. On the one hand, being a social entrepreneur is associated with a request to own a company or act on the market through the company. On the other, broader perspective, social entrepreneurs are seen as “change agents that seek solutions” and those who “create change in communities.”

Respondents also expressed that other identities fit what they perceive about themselves, ranging from identities that are more immersed in civil society, such as activist, founder or member of a non-profit organization and educator, to those identities that more fit to the market sector, such as entrepreneur, innovator or leader.

As for the outer perception, it is commonly recognized that only actors from the social enterprise sector and their ecosystems identify them as social entrepreneurs. For others and the public in general, being a social entrepreneur is not recognized identity.

6.2 Perception of relation to commercial/traditional entrepreneurs

6.2.1 Similarities.

Respondents expressed different understandings of what distinguishes social entrepreneurs from the traditional or commercial entrepreneur. For some, there is no significant difference, and “social entrepreneurs are entrepreneurs in their roots” (SE3, SE8). However, this perception is focused primarily on economic performance, which in both cases relies on “same skills, same functions” (SE8). This approach emphasizes the need to distinguish social entrepreneurs from all other social change agents (that are not involved in economic activities), but also to acknowledge the value of the economic aspect of social entrepreneurship: “If we want to make a change, we need to act entrepreneurially, through the venture” (SE14).

But, how do social entrepreneurs understand the meaning of entrepreneurial behavior? For respondents, entrepreneurial means concrete contribution by “doing something more or creating added value” (SE1) or “producing something good” (SE12). Implementation is seen as an important aspect that distinguishes them from those “who only have an idea” (SE10) or “those who stand still in their lives” (SE11). Acting entrepreneurially is not only seen as “doing business,” but behavior that reflects on social reality and needs, and responds to it by “creating new program to meet needs” (SE6), seeking solutions or “solving existing problems” (SE11). Entrepreneurs see themselves as “not agreeing to the status quo” (SE13) and propulsively moving forward.

Furthermore, entrepreneurial behavior includes taking risks, adapting and being prepared for failure. This refers to readiness to “get out of the comfort zone” (SE2) and “enter into uncertainty” (SE2), which means entering the market and acting according to market rules. This risk is also seen as “dancing on the edge” (SE4) or “sailing in a wavy sea” (SE7). In other words, entrepreneurship is perceived as challenging, and as such, it is not for everyone, but “for a small number of adventurers” (SE6). Finally, the ability to generate revenue, to employ others and ensure financial sustainability are seen as key characteristics that distinguish social entrepreneurs from other change agents: “you need to secure market placement” (SE3), to “sell something you created” (SE9) and at the same time to “hire people” (SE3) or “to hire yourself” (SE12).

6.2.2 Differences.

Commonly understood, social entrepreneurs are more than just entrepreneurs. Traditional entrepreneurship is understood as based on profit maximization “at the expense of everything else’’ (SE1). By contrast, social entrepreneurship is seen as different in several aspects:

• in terms of purpose: “What matters to us is a positive impact on society and the environment, not profit itself” (SE11) or “Social entrepreneur works, not for himself, but for general interest” (SE13);

• in terms of the use of profit: “(he) doesn’t put it in his pocket” (SE7);

• in terms of concern for people: “the difference is in involving others, the wider community” (SE7), “people matter in social enterprise” (SE12), “(it) gives better opportunities for those with lower chances” (SE5); and

• in terms of concern for resources: “seek for solutions in a sustainable manner, by taking care of resources” (SE8); “taking care about short supply chains” (SE9).

A moral dimension is also something that distinguishes social from commercial entrepreneurs, as they have been perceived as people with a set of moral values such as altruism and caring for others, sustainability, justice, solidarity, transparency and creativity. It is widely perceived that social entrepreneurs bring greater value to society, and that they are persons of greater integrity and morality than commercial entrepreneurs: “Social entrepreneurs are those who walk the talk” (SE7, SE10, SE13).

6.3 Perception of relation between social and economic dimensions

6.3.1 Complementing.

Commonly, social entrepreneurs do not perceive these two dimensions as contradictory, but rather complimentary: “these goals are not contradictory, if you have a good product, and you solve a social problem” (SE2); “Ideal social entrepreneur balances between rationality, meaning economic, financial goals, and visionary, meaning social goals” (SE2).

However, when it comes to practical experience, balancing different goals is challenging for many social entrepreneurs. It is seen as “difficult and painful” (SE2), or “it was difficult at first until it is learned” (SE11). The reason for that lies in the insecurities and risks that market brings: “When you work in a civil society organisation, then you are completely committed to social goals, and entering the market sometimes requires decisions that call into question social goals” (SE2). Furthermore, social entrepreneurs find it difficult to monetize social values: “The most difficult thing is how to charge for those added value things, such as environmental aspects […] and they sometimes require a great amount of time, and that costs” (SE14).

6.3.2 Prioritizing social.

In practice, difficulties in balancing both goals result either with social goals being put aside, at least temporarily, or with sticking to social goals but ending up in illiquidity and debts. Those who “prioritize” the social dimension, do that at the expense of greater economic prosperity: “Decisions are not always economically wise and opportune. Sometimes solutions are sought at the expense of economic logic. People are important” (SE7).

But even in those situations, respondents tend to do things differently than “business as usual.” For example, a civil society organization takes a loan to settle down debts of the spin-off company, or cooperatives collectively reduce wages for all employees (directors and governing body members included) to prevent layoffs. Another demonstration of sticking to a social dimension, not uncommon among social entrepreneurs, is refusing business cooperation or business opportunities if a company operates in a conflicting way to a particular social enterprise’s values and principles. “I would rather reduce my ambition not to harm the idea, than to compromise and sell in a way I do not want” (SE10).

6.3.3 Prioritizing economic.

On the other hand, those who “prioritize” the economic dimension are more focused on economic achievement and business strategy. The logic behind this is that social enterprise sustainability depends on liquidity, and being illiquid means compromising both social and economic goals: “In practice, first money, then people, then the environment. If it is different, then there is no full commitment to social entrepreneurship” (SE8). The pressure to ensure economic stability is often related to sacrificing other objectives, usually environmental: “We take care of both [goals]. But we will pack something in a paper bag only if it is low cost” (SE12); “It is common that they will withdraw from an environmental or social goal, for example installing solar panels, and decide to do something that is faster, easier, cheaper” (SE9).

Generally, the economic dimension should be taken “more seriously” (SE1), and “should not be something casual” (SE3). Respondents implicitly recognize that “competitiveness” is necessary, even though the term is not used explicitly. The underlying understanding is that the products for market need to be of quality and competitive, contrary to the common practice of many non-profits entering the social enterprise field with poor-quality craft products. Furthermore, respondents perceived that ideally social enterprise should rely less on donations and grants, as many of them, operating as civil society organizations, still do. Generating their own revenues is seen as extremely important: “We are not humanitarians, a social enterprise relies on itself” (SE11).

6.4 Perception of relation between individual and collective

6.4.1 Embracing collective.

On the one hand, there is an understanding that collective is necessary, and that without it, social enterprise is not what it should be. In other words, social enterprise is seen as a collective enterprise, and it is believed that successful social enterprise is based on co-creation and co-ownership.

Collective is commonly understood as teamwork, where “operational team” (SE6), “organizational structure” (SE7) or “a team that implements the vision” (SE14) refer to a social enterprise’s members or employees. Collective is rarely perceived in a broader sense, including wider community, suppliers and users.

Respondents emphasized the importance of horizontal communication and decision-making processes, as opposed to vertical, hierarchical organization. Some informants emphasized the role of the collective as a mechanism of social control that serves to protect the social enterprise system from individual interests. Respondents mentioned that the collective is important so that “an individual does not lose a track […]” (SE7), to “disperse management to protect workers” (SE8) or that “there is a risk, if everything depends too much on the individual” (SE13). Furthermore, the collective dimension means greater focus on general interests and the common good: “Social entrepreneurs need to prioritize between different interests […] particular, individual and general […] and general interests are always more important than individual interest, even if they contradict the interest of the founder” (SE13).

6.4.2 Embracing individual.

On the other side, some understand social entrepreneurship as more of an individual undertaking, where others are merely colleagues that help to implement the idea. The individual dimension commonly refers to a leader, the one who initiates the change and who directs the actions of others: “Usually, a person is the initiator, the locomotive pulls, and that’s OK” (SE7); “The individual is important, he pulls all the strings” (SE12).

Acknowledgment of the individual dimension is also seen as important for anticipating greater and clearer responsibilities of all members or employees. If social enterprise is seen only through the collective dimension, then individual responsibilities become blurred, and that “obscures what each person’s jobs and roles are individually” (SE8). For some respondents, if the collective dimension is overemphasized, that leads to failure of social enterprise: “It is crucial that the individual initiates and leads, because if social enterprise starts from the collective, it will almost certainly be unsuccessful” (SE9).

6.4.3 Democratic governance.

Although the importance and role of the collective dimension is generally recognized, collective is commonly understood more as a “teamwork” or “puzzle” of various knowledge and skills that complement each other, but much less in terms of co-ownership and participatory democratic governance. Moreover, this participatory dimension was sometimes explicitly criticized as non-existent: “There is no democratic governance” (SE9); “Collective governance is weak” (SE3).

The common experience of social entrepreneurs is that participatory democratic governance is difficult to achieve in practice, and thus, it remains an elusive ideal. What exists as a practical demonstration of the participative dimension is: “listening to each other and seeking answers together” (SE8), “respecting the opinions of others” (SE11) or “participating in consultations and agreements” (SE14). Some respondents argued that the logic of business requires quick decisions, and in that sense, insisting on collective decision-making is a burden, thus rarely practiced.

6.5 Leadership

Leadership was recognized as an important aspect of social entrepreneurship, but what kind of leader is a social entrepreneur? There are few categories identified: a role model, empathetic persona and collective leadership.

6.5.1 Role model.

A leader is seen as one who initiates things to happen, the one who has a vision of “where to go” but also a person who motivates others toward the goal they set. A leader needs to ensure that others share the idea and vision. Individual leaders manage to “pull everything together” (SE5), they are seen as a “role model for others” (SE3), or the one who “walks the talk, so, when others see it, they can follow him/her” (SE13). A leader is seen as an individual, who should have many skills (management, finance, administration, etc.) and the one who is more exposed and the most responsible. “The leader needs to bite hard in the market and ensure the well-being of the social enterprise” (SE12).

6.5.2 Empathetic persona.

A particularly important feature of a social entrepreneur as a leader, pointed out by all informants, is that they have a “feeling for people,” have “good relationships with people” or are oriented toward “serving people.” A leader in social entrepreneurship is described as a person whom “people can trust” (SE2) and with whom “others feel secure” (SE3). Respondents emphasized that this “human factor” or “patience and empathy” is key for social enterprise, in particular because of the fact that social enterprises are often enrolled with vulnerable social groups. Furthermore, the role of a leader is seen in creating a “healthy working atmosphere in a team” (SE11), “providing good conditions for employees” (SE14), “respecting each person and their capabilities” (SE11), “jumping in and taking care of others” (SE4) and also “caring for the wider community” (SE12). For some, being “focused on people” is a quality that should be more important than market performance.

6.5.3 Collective leadership.

Some respondents have understood leader as the “first among equals” (SE4), emphasizing the “horizontal structure of social enterprise’s governance” (SE1) or that social enterprise is based on “shared leadership” (SE6). Collective leadership implies the idea of shared responsibility, and control over individual interests and power concentration. It has been rarely mentioned that co-ownership in social enterprise may play an important role in greater members’ responsibility and commitment, because “then success depends on all of them” (SE9).

6.6 Perception of (social) innovation

6.6.1 Innovation.

Innovation is generally seen as inseparable from social entrepreneurship, as the former is seen as doing things in a new, different way; “Things need to be done differently, that’s the meaning of social entrepreneurship” (SE2), “the problem can only be solved in another, new way” (SE9), “because someone goes into something that is not mainstream, there are automatically new solutions applied” (SE13). Innovativeness of social entrepreneurs is recognized in terms of addressing social needs in community, i.e. “social entrepreneurs are those who recognize problems in the community and propose and create new solutions in real context” (SE8), but also in terms of creating new products “for market competitiveness” (SE12). Innovative action is considered desirable even when it is not about “big” innovations, because “it is about behavior that is more adaptable, more resistant to challenges” (SE7).

Some respondents’ opinion is that not all social entrepreneurs are necessarily innovators. In particular, it should not be expected that social enterprise is related to radical innovation: “it doesn’t have to bring some grand and mega innovation” (SE1). On the contrary, it is acceptable that social enterprises “replicate good solutions from others and adapt them to their local communities” (SE7).

6.6.2 Social innovation.

A common perception among respondents is that the collective plays an important role in innovation. In this understanding, although the individual gets inspiration and an idea, it is not possible to develop the idea without the collective: “It’s our story that we all create together” (SE6), “It is always the group where innovation takes place” (SE11), “Idea development and implementation is always collective” (SE13).

It is emphasized that the idea itself arises on an individual level, but solutions are created through the team because it can activate “different knowledge and disciplines coming from people in the team” (SE8). The understanding of the collective as an innovator includes the involvement of users and the wider community, “it is important to listen to users, and what they need” (SE11).

6.7 Motives for being a social entrepreneur

6.7.1 Social change.

The dominant motive among respondents is the urge to do things in different ways and to make a change. “What drives me is the idea that something new and different is possible” (SE8). Commonly, this drive is rooted in the perception that the socio-economic system is deeply unfair and needs to be transformed. “The world is not good enough, something needs to be done” (SE4).

Social entrepreneurs desire to be part of the change: “I want to see society more fair and just, to create new value” (SE3) or to “direct my knowledge and skills to the common good, to general interest” (SE13). They also perceive their role in motivating and including others in change they initiate: “I want to motivate, inspire that things can be done differently” (SE9) or to “demonstrate to myself and others that it is possible to work differently in Croatia” (SE3).

Being social entrepreneurs is often perceived as a calling, not just a job: “I see the disadvantages of the current system and I want to change it. I don’t see anything more important than doing that” (SE13). Many underlined creativity, imagination and utopian ideas of imagining a different society: “Why would I do that, if it is not a utopia, if it is not impossible” (SE10).

6.7.2 Altruistic concern.

The main motivation for some social entrepreneurs is related to people and desire to help others, by doing something “that can be useful to others” (SE11). In that sense, great focus is placed on vulnerable, marginalized groups and their social and work integration, or generally “improving their lives” (SE12). It is emphasized that a huge driver can be the feedback they receive from users and “how their lives have improved thanks to our programme” (SE2).

6.7.3 Income.

Some emphasized income generation as a main motive, and it is seen as a tool for achieving a social mission: “Money is a driver, but only to achieve social goals “(SE1). It is understood that the economic dimension is only instrumental for social entrepreneurship, but still inevitable.

7. Discussion

Social entrepreneurship is seen as a mixture of different modus operandi, social and economic. Commonly, social entrepreneurs identify themselves not only as social entrepreneurs, but with other identities that they perceive (sometimes) more acceptable. The reason for that is partly to do with the fact that social entrepreneurship is still not recognized from the side of “outer” actors. Variations of self-identities reflect the dichotomy between the non-profit sector and the market sector. However, these identities, as understood by respondents, are not separate or confronting, but they intertwine with each other at the individual level.

Even though there is a strong theoretical acknowledgment of both dimensions, as the core principles of social enterprises (social objective as a main purpose, and economic activities as a means for achieving it), in their practical application, respondents expressed two different perspectives on how they balance both dimensions in day-to-day decision-making. In this regard, there is a difference between social entrepreneurs – some of them are reluctant to put social objectives aside, even in cases of financial instability. Erpf et al. (2020) call this attitude a “profit resilience,” as the profit pursuit is seen as less important. On the other side, some social entrepreneurs consider ensuring financial liquidity to be the precondition for achieving their social mission. They can be described as “profit tolerant” (Erpf et al., 2020). In general, there is a perception that goals need to be balanced, but doing that on a daily basis seems to be a challenge for social entrepreneurs. It is more likely that balancing is achieved on a long-term basis. Thus, rather than a dichotomy, a continuum from pure social to pure commercial (Williams and Nadin, 2011) or pure philanthropic (Dees, 1998) may better explain social entrepreneurs’ rationale and behavior.

The causes of such inconsistency are probably the result of several factors. One is an unsupportive environment in Croatia, which lacks any kind of substantial incentives, such as fiscal or any other financial support (Vidović, 2019). This means that social enterprises are often in a position whereby they are solely reliant on their own capacities and so are often forced to make decisions based on financial sustainability and to postpone the social dimension, at least temporarily. On the other side, many early-stage social entrepreneurs in Croatia, particularly those emerging from civil society organizations, lack entrepreneurial, managerial and financial skills, which results in their poor market performance. Thus, some of them still draw their legitimacy from social and moral sources rather than from business performance (Vuković et al., 2017).

This may be understood as a pattern that is common in other transition economies in Europe as well. A recent study showed that the most widespread social enterprise model in these societies is so-called “entrepreneurial non-profit social enterprise” (Defourny et al., 2021). This model emerges from the non-profit, civil society sector and does not rely on the majority of its resources being gained from the market, but rather uses a combination of diverse resources – market, state subsidies, donations, volunteering, etc. Relying purely on economic performance is not fully rooted yet because being non-profits makes these social enterprises eligible for EU-supported programs and funds, which are perceived as easier to acquire than market revenue. However, what makes it entrepreneurial is the fact that they bear a significant level of risk, though not necessarily market risk (Defourny et al., 2021, pp. 277–278).

The overall perception is that social enterprises are mostly non-profits that rely on external funding, which may be the reason why some respondents among social entrepreneurs consider themselves as primarily entrepreneurs. In other words, they see themselves as equal to other actors in the market, and economic value generation as their main modus operandi. According to Vidović (2019), for some social entrepreneurs, it is crucial to be recognized as entrepreneurs and to draw their legitimacy from economic performance.

Individual and collective are recognized as complementary dimensions, like two sides of the same coin. However, individuals seem to play a greater role than the collective in social enterprises, and that is often accompanied with certain charismatic characteristics (Stubbs and Vidović, 2017). Furthermore, democratic governance, which is the main aspect of the third, participative dimension of social enterprise, is recognized as a most challenging aspect. This finding is not surprising considering the underdeveloped civic political culture, domination of subject political culture and overall democratic deficit in Croatia, particularly among youth (Ilišin et al., 2017). Recent studies show that after three decades of post-transition exposure to democratic processes, not only that commitment to democracy did not grow, but the democratic gap is even bigger with more citizens expressing dissatisfaction with democracy (Čular and Šalaj, 2019).

Treasuring solidarity and collectivistic values are still challenging in other post-socialist transition economies. Even though the strong traditions of those values were present within philanthropy, associations, mutuals and cooperatives prior to their transition first to a socialist regime, and then to a market economy (Ciepielewska-Kowalik et al., 2021), those values suffered from suppression and lately from the absence of an institutional framework and lack of political support (Borzaga et al., 2020, p. 41). As a result of long-term neglect, their role in transition economies is structurally weakened.

Contrary to the weak role it plays in governing and decision making, the collective is more recognized, respected and embraced in the innovation process. Social enterprises thus may have an important role in stimulating social innovation on a larger scale.

8. Conclusions

The study has a few limitations. It is a small study, created in a Croatian context, and the applicability of findings to other countries characterized by multiple transitions may be questioned. The other issue concerns the sample size and sampling strategy; however, this is arguably justified, given the modest size of the social enterprise sector in Croatia.

This study’s findings suggest complexity of the social entrepreneur’s rationale and identities. Some of those findings are in line with theoretical concepts and findings of previous research studies, but in some respects, they contradict. Findings showed that social entrepreneurs face many challenges in balancing two different goals – income generation and social mission, but also in addressing some core dimensions of social enterprise, such as participative governance. Democratic and participative governance generally appeared to be the weakest link of social enterprises, which indicates that it is difficult to see social entrepreneurship in Croatia as a “building block for an alternative model” (Petrella and Richez-Battesti, 2014, p. 154). The identities of social entrepreneurs appear fluid and ever-changing. They change through various continuums, from “more social” to “more commercial,” from “more related to civil society” to “more related to the market,” and from “mostly individual” to “mostly collective.” In other words, in their day-to-day decisions, social entrepreneurs are moving closer or moving away from the ideal of social entrepreneur, as it is defined in theoretical frameworks. This fluidity is related to the multiple transitions context that does not provide reliable and supportive conditions (institutions, processes, legislation and values) for being a social entrepreneur.

Such contexts often influence general perceptions of a hybrid nature of social enterprise as controversial. “Presenting itself as a hybrid integrating both dimensions and navigating between the social and economic missions could be challenging for a post-Socialist society” (Erpf et al., 2020, p. 22). As a result, social entrepreneurs learn to continuously adapt and operate flexibly.

To understand social entrepreneurship in the society of multiple transitions, one should take a much broader approach and acknowledge that they operate in a complex and non-consolidated environment. The social entrepreneur’s realities are a mix of both Anglo-Saxon and EU conceptual approaches, and do not fit a single ideal. Therefore, definitions of social entrepreneur and related concepts need to be flexible and inclusive, rather than rigid, and accept all variations within the social enterprise continuum and look at their long-term social impact.

Table 1.

Main characteristics of respondents

Code	Characteristics
SE1	Female, financial manager, Ltd founded by civil society organization (CSO), non-founder, Central/North
SE2	Male, financial manager, Ltd founded by CSO, non-founder, South/East
SE3	Male, manager, cooperative, non-founder, North
SE4	Female, director, Ltd founded by CSO, founder, East
SE5	Female, director, cooperative, non-founder, Central/East
SE6	Female, director, CSO, founder, South
SE7	Male, manager, cooperative, founder, Central
SE8	Male, director, Ltd founded by CSO, founder, North/Central
SE9	Female, financial manager, CSO/ cooperative, non-founder, Central/North
SE10	Female, director, Ltd, founder, Central/North
SE11	Male, director, Ltd, founder, South/West
SE12	Female, director, Ltd founded by CSO, non-founder, South/East
SE13	Male, director, cooperative, founder, Central
SE14	Male, director, Ltd, founder, South

Source: Author’s own creation

Table 2.

Summary of the main themes and categories

Themes	Categories
Identities of social entrepreneur	Self-identity
	Social entrepreneur
	Other identities
	Outer perception
Perception of relation to commercial/traditional entrepreneurs	Similarities
	Differences
Perception of relation between social and economic dimensions	Complementing
	Prioritizing social
	Prioritizing economic
Perception of relation between individual and collective	Embracing collective
	Embracing individual
	Democratic governance
Perception of the social entrepreneur as leader	Role model
	Empathetic leader
	Collective leadership
Perception of (social) innovation	Innovation
	Social innovation
Motives for being a social entrepreneur	Social change
	Altruistic concern
	Income

Source: Author’s own creation