The Social Performance and Responsibilities of Entrepreneurship

Entrepreneurial behavior enacts change. An entrepreneur may start up a company that, when entering a market, broadens consumer choice and intensifies competition for market share among providers. Furthermore, entrepreneurship can drive the introduction of new products, improved versions of old products, efficiency gains in production processes, innovative business models, and paradigm-shifts in corporate culture. It is straightforward that such fruits of entrepreneurial spirit can result in social benefit: new products that please consumers, a disruption of an established competitive balance among incumbents that drives down prices, technological change that extends production possibilities, and so on. However, this circumstance is not to say that entrepreneurship is necessarily bound to make some positive contribution to social welfare.

In highlighting productive and unproductive (even destructive) roles of entrepreneurship, Baumol (1990) notes that

if entrepreneurs are defined, simply, to be persons who are ingenious and creative in finding ways that add to their own wealth, power, and prestige, then it is to be expected that not all of them will be overly concerned with whether an activity that achieves these goals adds much or little to the social product. (pp. 897-898)

Entrepreneurial behavior guided by self-interest may channel into whichever activities maximize private gain, even if they include socially harmful rent-seeking, dirty tricks against rival companies, deceptive marketing, tax evasion, and (perhaps more subtly) even the promotion of intensified rivalry in economic relationships to the possible detriment of social cohesion.

This reality presents a question: What are, and what factors determine, the effects of entrepreneurship on corporate social performance? The extant literatures on social and environmental entrepreneurship have highlighted and evaluated an emergent tendency for entrepreneurship guided by a stated intention to build-in a regard for social and/or environmental issues as a core component of adopted business models. Has this tendency made entrepreneurship, and corporate conduct in general, more socially beneficial? More generally, is entrepreneurial behavior socially productive, and how might institutional reform promote a channeling of entrepreneurial spirit away from less-than-productive endeavors?

This special research forum provides varied insights to the impacts of entrepreneurial behavior on social welfare and the responsibilities of entrepreneurs in relation to social and environmental issues. Following a commentary essay from William J. Baumol (2015), the forum is comprised of two research papers. In “Small Business Social Responsibility: Expanding Core CSR Theory,” Laura J. Spence (2015) explores social responsibilities in the distinctive entrepreneurial context of small business. In “Heading Towards a More Social Future? Scenarios for Social Enterprises in Germany,” Henning Engelke, Stefanie Mauksch, Inga-Lena Darkow, and Heiko von der Gracht (2015) address the evolution of social enterprise.

Ten manuscripts entered the editorial process for this special research forum, which drew upon the expertise and diligent efforts of the following reviewers: Shawn Berman, Stephen Brammer, Elena Cavagnaro, Jean Clarke, Paul Godfrey, Jean-Pascal Gond, Johanne Grosvold, Carola Hillenbrand, Stefan Hoejmose, James Mattingly, Marguerite Schneider, Sanjay Sharma, Vasanthi Srinivasan, and Andrew Wicks. The guest editors express appreciation for their indispensable role in bringing this special research forum to fruition.