UNIVERSITY OF KWAZULU – NATAL
The influence of prosocial personality on the decisions and behaviours of social entrepreneurs.
A dissertation submitted in fulfilment of the requirements for the degree of Masters of Commerce in Leadership Studies
Graduate School of Business and Leadership
College of Law and Management Studies
Professor Shahida Cassim
Background of the study
There is a widening gap in academic research for social entrepreneurship between developed countries and developing countries (Littlewood and Holt, 2015; Urban, 2008; Rivera-Santos, Holt, Littlewood, & Kolk, 2014). Current research on social entrepreneurship is fragmented and focuses on contextual dimensions that influence social entrepreneurship in developed countries (Ghalwash, Tolba, Ismail, 2017). Earlier studies (Mair and Marti, 2006) suggest that social entrepreneurship has many facets and differs according to socioeconomic and cultural environments. Blacq and Janssen (2011) and Diochon and Ghore (2016) pointed out the importance of understanding the influence of local context on social entrepreneurship. As a result, studies drawn from the developed country perspective on social entrepreneurship may be inappropriate and ineffective in developing countries in terms of policy contextualization.
Responding to the call for better understanding the interplay of developing country context and social entrepreneurship, Rivera-Santos, Holt, Littlewood, & Kolk (2014) recently examined the influence of African contextual dimensions on social entrepreneurship in sub-Saharan Africa. Their research showed the importance of incorporating local socioeconomic and cultural environments in understanding social entrepreneurship by drawing on African contextual dimensions such acute poverty, colonial history, informality, and ethnic group identity to influence social entrepreneurship.
Our research acknowledges the existing studies that explore the developing country context (Aileen, Boluk, and Mottiar, 2014; Katzenstein and Chrispin, 2011; Nega and Schneider, 2014; Omerede, 2014; Littlewood and Holt, 2015, Rivera-Santos et al., 2015), however, research on social entrepreneurship in developing countries, and for the purposes of our research in South Africa remains limited. Our research recognises this limitation and aims to contribute to the existing academic research for South African social enterprises. The lack of theoretical and empirical understanding for South African social enterprises either by academics or policy-makers has implications for the development of social entrepreneurship (Littlewood and Holt, 2015).
In 2016, Gross Domestic Products (GDP) growth decreased to 0.4% down from 1.3% in 2015, making 2016 “the third consecutive year of negative per-capita growth and stagnating poverty” (Statistics South Africa, 2017: 1). Statistics South Africa (2017) indicated a 27.7% increase in national unemployment, with 50% of the country’s populations under the age of 35 struggling to enter the labour market resulting in 37.5% in youth unemployment. The ‘trickle-down’ effect of an economic downturn is often manifested in the areas of education, poverty, health, and crime.
Since the government has a limited capacity to meet the development needs of disadvantaged population and the business cannot provide for all those looking for employment and economic security (Urban, 2013; Littlewood and Holt, 2015), an institutional void is created where existing institutions are failing to meet the social market demands (Mair and Marti, 2006) and that where social enterprises emerge. Seelos ; Mair indicate that (2005: 48) “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”. Urban (2008) argues that with the focus on solving social problems and achieving economic sustainability, social enterprises can play a critical role in meeting the sustainable development challenges in South Africa.
Littlewood and Holt (2015: 12) noted that “opportunities for South African social enterprises, and the nature of the social needs addressed by them, reflects the country’s socioeconomic context and the institutional environment”. To demonstrate this, Shonaquip – a South African social enterprise that creates and sells disability equipment designed for rugged African terrain, and has a social mission of making this available in low-income communities (Littlewood and Holt, 2015). This social enterprise first developed its products to overcome challenges facing disadvantaged people with disabilities in the physical environment. Such challenges are in part linked to limitations in the physical infrastructure provided by the South African government, for instance, the poor condition of many road surfaces in townships and rural communities creates particular accessibility challenges for people with disabilities. An understanding of the influence of context is therefore critical for the development of the social enterprise sector and in South Africa (Kujinga, 2016).
The issue of low skill and education level of many disadvantaged South Africans is a key national development challenge. This is evident in legislation such as the Skills Development Act (1998) and Skills Development Levy Act (1999), and policy documents such as the National Skills Development Strategy (2011). Empowering disadvantaged communities with skills and training can help combat some of the broader social problems they face such as economic exclusion, unemployment, crime and HIV/AIDS (Littlewood and Holt, 2015). For example, a social enterprise Learn to Earn (LtE), through its training centres in the Khayelitsha and Zwelihle Townships, provide training in a variety of fields including sewing, woodwork, baking, basic education, and life skills, and since its inception has trained over 9000 unemployed people (Littlewood and Holt, 2015). Through its business resource centres, LtE also runs entrepreneurship and business support programmes, engaging in informal markets and with informal economy actors. Social enterprises have the ability to innovatively address some of the long-standing issues within their locality in a resource-constraint environment so as to create social value for the suffering population.
In social entrepreneurship, the mission is to create social value for ‘the other’ rather than creating economic returns for the leader or shareholders. This can be broadly conceptualised as ‘pro-social motivation’. Peredo and Mclean (2006: 59) broadly define the role of a social value to “contribute to the welfare or well-being of a given community,” whereas Murphy and Coombes (2009: 326) imply “an underlying range of basic values that are desirable and important in a civilized society.” Brickson (2007: 866) in turn defines social value as “that which enhances well-being for the earth and its living organisms.”
What is common from these definitions is the “other-orientation” where a social enterprise undertakes altruistic activities to improve the conditions of the disadvantaged members in the community. Against this backdrop, it is important to define how social enterprises are understood to be in South African context. The Bertha Foundation (2014) sees social enterprises as, “business organisations that provide affordable services to the poorest communities, driven by a social mission as the core business” cited on Littlewood and Holt (2015b: 6). This definition associates social enterprises with their activity (social and economic services), their primary customers (disadvantaged population) and their mission (social value for the other). While Seelo and Mair (2005: 242) define social enterprises as “organisations that have created models for efficiently catering to basic human needs that existing markets and institutions have failed to satisfy”. This definition highlights the role social enterprises play in providing innovative solutions to the long-standing community issues that existing institutions have failed to meet.
Although there is no single definition for social enterprises, however, there are denominators. For example, central to both definitions is social value creation for ‘the other’, income generation to sustain the social value and the disadvantaged population as customers for social enterprises. Due to the vast social issues that communities face and the nature of customers, social enterprises have to be innovative – Shonaquip creates and sells disability equipment designed for rough surfaces to low-income communities living with a disability at a cheaper cost to compensate for the non-infrastructural provision thereby creating social value for local communities. According to the newly released report by Gordon Institute of Business Science (GIBS) (2018: 51) “the contextual-specific activities undertaken by South African social enterprises indicate a deep concern for meeting the actual community needs”. It is therefore important to understand what motivates an individual to pursue social entrepreneurship as a response to the existing social problems.
Earlier studies (Dees, 1998; Fowler, 2000) indicated that social entrepreneurship through ‘the other’ is a compassionate response to the unmet societal needs. According to Miller et al., (2012: 621) “Compassion is a prosocial emotion that connects an individual with a suffering community and produces sensitivity to the pain and needs of others”. This can be seen through the nature of the customers served by South African social enterprises. As compassion serves to direct one’s attention to others, it becomes a prosocial motivator that encourages an effortful response for the benefit of others (Batson, 1987 cited in Miller et al., 2012).
While several authors (Miller et al., 2012; Plaskoff, 2012; Kedmenec, Rebernik, Peric, 2015; Ernst, 2011; and GIBS, 2018) point to the role of compassion in social entrepreneurship, Miller and colleagues provided mechanisms under which compassion influences individuals to start social ventures. Miller and colleagues (2012:630) assert that “by serving as a prosocial motivator, compassion influences cognitive and affective processes (integrative thinking, prosocial cost-benefit analysis, and commitment) that, when combined with increased perceptions regarding the legitimacy of social enterprise, render it more likely one will pursue social entrepreneurship”.
Mair and Noboa (2006) earlier proposed an intention model for social entrepreneurship that points to emotional and cognitive factors to propel individuals to social entrepreneurship. ‘Empathy’ and ‘moral judgement’ creates perceived desirability while ‘social support’ and ‘self-efficacy’ creates perceived feasibility, and combined motivates a prosocial behavioural intention to social entrepreneurship (Mair and Noboa, 2006). Academic research on the role of emotional factors in the emergence of social enterprise is evidently increasing. Thus academic evidence exists to support the theoretical development of how prosocial emotion affects cognitive and affective processes in the emergence of a social enterprise.
Currently, there is no academic research that looks at how prosocial elements such as compassion continues to influence the cognitive and affective processes once a social enterprise has been established (Miller et al., 2012). It is the intention of this study to explore prosocial personality and its basic elements and how it affects the decisions and behaviours of social entrepreneurs in a growing social enterprise.
Earlier studies (Dees, 1998, 2007; Fowler, 2000) have concluded that social entrepreneurship is a compassionate response to the prevailing social problems. Several scholars from psychology, management, and other fields of knowledge have contributed to the theoretical development of this proposition (Gallup & Platek, 2002; Mair & Noboa, 2006; & Miller et al., 2012,). Mair and Noboa (2006) developed an intentional model for social entrepreneurship where emotions like compassion and cognitive factors like moral judgement provide an impetus for prosocial behaviour that aggregates to social entrepreneurship.
Miller et al., (2012) provided the theoretical foundations to support how emotion/compassion influences the cognitive and affective processes for an individual to establish a social enterprise. Recently Rusken, Seymour, and Webster (2016) further provided explanations that show how sympathy and empathy act as precursors for other-oriented motivations, such as altruism and social justice in social entrepreneurs. Now that previous literature provides evidence as to why social entrepreneurs do what they do, what is missing from the literature is the theoretical explanation about how compassion and other prosocial emotions continue to influence the cognitive and affective processes once a social enterprise has been established.
Social enterprises, like their for-profits counterparts, go through an organisational life cycle where priorities, motivations, and values that drive individuals towards social entrepreneurship changes over time. For example, a social entrepreneur can initially prioritise a social mission over profit, but over time an increase in the social market demand with limited resources (human resources, skills, and finance) requires profits to be the main priority in order to compensate for market dynamics. The compromise to focus on profit is justified through reinvestments back to the organisation to provide more resources needed in order to increase the social value for customers (GIBS. 2018). As a result, integrative thinking and prosocial cost-benefit analysis combined with the commitment to alleviate the suffering of others (Miller et al. 2012) may dictate the cognitive and affective behaviours of a social entrepreneur.
GIBS (2018) found that social enterprises expect their organisation to grow in the next 12 months since inception. This will ensure that services rendered to communities improve and other products and services are designed to attract new customers. Human resources and financial resources become particularly important in order to allow for expansion.
Austin et al., (2006) argues that the economics of social enterprises often do not compensate their staff competitively as their commercial counterparts. The staff is often assumed to be driven by non-pecuniary desires but in reality, people need money to survive which ultimately affects the order of priorities within the organisation. According to GIBS (2018: 18), “Social enterprises rely heavily on the individuals who work for them, for both practical, operational purposes and for the emotional commitment of employees, which allows them to deliver at very low cost to beneficiaries”. As a result, leadership is required where interests of employees and customers have to be taken into account in order for social value to be created and sustained by the business stakeholders (employees and customers).
Social enterprises trade social services to fund their social mission, and in times of economic austerity, external funds are needed. GIBS (2018) found that social enterprises rely more on corporate social investment (CSI) from businesses, while donations from other third party entities are also accepted. The challenge here is that partnership requires that the interests of both parties to be satisfied where funders have their own priorities which could affect the manner in which services are delivered (mission drift). Again, leadership is required to the social entrepreneur to make correct decisions and actions that will reflect the prosocial intentions and balance the interests of the organisation and all relevant stakeholders. Our work will contribute to social entrepreneurship research by providing insights into the influence of prosocial motives at the individual and organisational level. This work will also respond to the call for limited research on the role of prosocial elements in social entrepreneurship with the focus on South Africa.
This research aims to explore how prosocial personality influences the cognitive and affective behaviours of social entrepreneurs.
• To understand the components of prosocial personality in social entrepreneurship.
• Identify the challenges faced by entrepreneurs in a growing social enterprise.
• Explore how prosocial personality influences the cognitive and affective behaviours of social entrepreneurs.
• What is prosocial personality and what is its key components?
• What are the challenges faced by entrepreneurs in a growing social enterprise?
• How does prosocial personality along with the key components influence decisions and behaviours of social entrepreneurs?
According to Bryman (2004: 413), research methods refer to the techniques, procedures, and processes that the researcher will undertake in conducting the research, which includes data collection techniques. Meanwhile, research methodology refers to the systematic mechanisms that will be put in place to get to the core of the problem being investigated by the researcher.
For the purpose of this research, a qualitative research method will be used. Qualitative research is understood to be a research method that is explanatory of a phenomenon that is being studied with the aim of developing a clear descriptive picture of what is being studied. As a result, qualitative research is in-depth in its description of the phenomenon being studied. This is especially so in that qualitative research is more epistemological (in that it deals with the meaning that we have come to ascribe to cultures, human behaviour, etc.). Creswell (2014) argued that qualitative research seeks to explore and comprehend what individuals or groups have constructed in their realm. This was further emphasised by Bryman (2004), who observed that qualitative research has to do with the behaviour of individuals, groups or systems with the aim of understanding why a certain behaviour or norm is ascribed to environmental patterns.
Qualitative research, therefore, is an appropriate research method to achieve the purpose of this study which is to explore how prosocial personality along with it elements, influences the decisions and behaviours of social entrepreneurs. Qualitative research will allow the researcher to ask an explorative question like ‘how does empath’, ‘why do individuals’ which are more in-depth.
Research methodology refers to the systematic mechanisms that will be put in place to get to the core of the problem being investigated by the researcher. In qualitative research, there are five research designs that can be used to gather information, these include, Narrative research, Ethnography, Case studies; Grounded theory, and Phenomenological research (Bryman, 2012). For the purposes of this research, ethnographic research methodology will be used. Creswell (2007: 242) defines ethnography as “a study of intact cultural or social group (or individual or individuals within the group) based primarily on observations and a prolonged period of time spent by the researcher in the field. The distinct group of people usually have been together for an extended period of time, having similar attitudes, values, beliefs, and behaviours. The ethnographer listens and records the voices of informants with the intent of generating a cultural portrait (Creswell, 2007).
The ethnographic study requires the researcher to do the following i.e.
• Immersed in a social setting for an extended period of time;
• Makes regular observations of the behaviour of members of that setting;
• Listens to and engages in conversations;
• Interview informants on issues that are not directly amenable to observations or that ethnographer are unclear about (or indeed for other possible reasons);
• Develops an understanding of the culture of the group and people’s behaviour within the context of that culture;
• And writes up a detailed account of that setting
Source: Bryman (2004: 444)
Ethnography as a research method is growing in importance in social entrepreneurship. A recent study by Mauksch, Dey, Rowe, ; Teasdale (2017) aimed at exploring the potential gains from an increased use of ethnography in social entrepreneurial studies noted the importance of ethnography as opposed to interview-based inquiries and qualitative, case-based explorative designs in social entrepreneurship research.
Mauksch et al., (2017) shows how ethnography can provide a clear sense of the ‘everydayness’ of social enterprises instead of the accepted assumption that social enterprises are ‘pre-ordained’, ‘ready to use’ organisations in a secluded environment. This is important to understand as researchers because we are concerned about the ordinary experiences of social entrepreneurs and how they interact with the wider geopolitical actors that influence their organisations.
Previous studies on social entrepreneurship often used qualitative interviews to collect data. However, Denzin and Lincoln (2005) criticise qualitative interviews as subjective – only shows the researcher’s point of view (etic) while the respondents are merely passive actors towards the end of the researcher. According to Creswell (2007: 242), “etic refers to the type of information being reported and written into ethnography when the researcher reports his or her own personal views”. Furthermore, when conducting interviews, the researcher does not get much information because respondents only answer what is asked. As a result, ethnography offers a holistic perspective as it is linked to the lived experience of the ethnographer where information is collected through the viewpoint of the subjects (emic). Creswell (2007: 242) defines emic as “the type of information being reported and written into ethnography when the researcher reports the views of the informants”. The researcher as a participant observer has the advantage of being immersed in the culture over an extended period and therefore in a position to discover the ‘hidden’ meanings that would have otherwise been overlooked in interview-based inquiries and qualitative, case-based explorative designs. As a result, ethnography is appropriate for our research and is seen as a preferred methodology to collect information for this research.
Data collection techniques
The research will use ethnography as a research methodology. For the purpose of this research, two data collection methods will be used, i.e. participant observation and semi-structured interviews.
Participant observation – According to Creswell (2014: 445), “is a qualitative research methodology where a researcher attempts to participate fully in the lives and activities of members, thus becomes a member of the group or organisation or community”. This allows the researcher to share the experiences by not merely observing but also feeling it. This approach is unstructured in it execution and is linked with anthropology and ethnological studies. It is often referred to as ‘theories grounded in concrete human realities’. In participant observation, data will be collected using the daily reflective diary. It is in this diary where the observed data will be written over a period of two months, where three days will be spent with each respondent.
• Unstructured interview – interviews that have no specific set of questions even though the researcher may have certain topics to cover. Unstructured interviews also allow a researcher to change the order of questions, depending on the flow of the conversation (Saunders, Lewis, Thornhill, 2009).
The researcher chose to use unstructured interviews because of the explorative nature of the research objectives. Since there is limited research on the influence of compassion in social entrepreneurship in South Africa it is difficult for the researcher to have predetermined set of questions. Unstructured interviews enable the researcher to have informal conversations about a certain topic in order to gather as much information as possible on the issue. Respondents may show subjective feelings and/or reveal personal perception about the particular subject (emic). The subjectivity of the data collected can be balanced through the researcher’s subjectivity gained from a prolonged period of time spent with the informants. A tape recorder will be used to collect the data from the respondent and will later be transcribed using Microsoft word office.
A population can be understood to be inclusive of all people or items with the characteristics that the researcher wishes to understand (Cooper and Schindler, 2003), and a sample is a subset of a population (Creswell, 2009). This research will use Judgemental sampling method. Judgemental sampling (also known as availability sampling) is a specific type of non-probability sampling method that relies on data collection from population members who are conveniently available to participatthe e in study (Creswell, 2007). According to Hall and Roussel (2016: 26), “judgemental sampling refers to individuals who volunteer their time to participate in the study”. This sampling method is time effective and convenient which is important for this research given the time constraints.
Approximately 15 social entrepreneurs will be targeted for our research. These social entrepreneurs were part of the University of Kwa-Zulu Natal (UKZN) Champions Programme. These individuals were pre-selected to the program and it is known that they were propelled by a ‘heart-set’ or ‘compassion’, or ’empathy’ to start their social ventures. The aim of the research is to explore how prosocial personality continues to influence the individual decisions and actions once a social enterprise has been launched. Therefore, it is appropriate to purposefully select the previous ‘champions’ who are now running their own social enterprises.
Data analysis is a process of inspecting, cleansing, transforming, and modelling data with the goal of discovering useful information, informing conclusions, and supporting decision-making (Creswell, 2007). This research will use Nvivo software to analyse the transcribed text from the unstructured interviews and daily reflective journal. Nvivo is a software tool that organises qualitative data from various data sources and supports the rigorous systematic analysis (Creswell, 2007). Nvivo is capable of analysing raw and unstructured data types from various data sources including Microsoft Word, PDF, and Microsoft Excel, audio, and social media outlets.
Nvivo has some analytical tools that help the researcher to organise data into simple and logical themes. Nvivo is used to understand perceptions, identify concepts, key ideas, and interesting patterns and extract useful knowledge to support your decision making. This software also allows the researcher to analyse the words used by respondents to describe their emotions, attitudes, and behaviours (Berg, 2009).
This qualitative data analysis software is appropriate for this research unstructured interviews and reflective field notes will be used as data sources. The software will be able to analyse texts from these sources in order to understand the words they use to describe how prosocial personality traits influences their decisions and behaviours in their growing social enterprises.
Month/Year Description Outcome
June 2018 Submit final draft of research proposal for comments Receive final comments for research proposal
June 2018 Proposal presentation and ethical clearance submission Research approval and get ethical clearance
July 2018 Submitting gatekeepers letter to the supervisor Awaits supervisor’s response
July – August 2018 Write chapter 1 and chapter 2 Submit to supervisor for comments
August 2018 Chapter 3 Make final submission to supervisor
September 2018 Get ethical clearance and start fieldwork Data collection
October 2018 Fieldwork Acquisition of fieldwork data
November 2018 Content analysis of fieldwork data (Chapter 4) construct themes and structure arguments Make submission to the supervisor
December 2018 Chapter 5
Attend to queries about the dissertation Awaits supervisor’s comments
January 2018 Send intention to submit letter
Send to editor and make final submission Await for approval
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