Building networks to mobilize resources

Master thesis - Summary Maastricht University MSc International Business 11 January 2013 Tom Peeters nl.linkedin.com/in/tmjpeeters Supervisor: Ir. B. Dormans Second reader: Dr. W. Letterie

How Dutch social entrepreneurs use networks to mobilize resources for their social enterprises related to media literacy.

Key words: Social entrepreneurship, Social capital, Networks, Resource mobilization

School of Business and Economics Sharing Success

1-pager / Abstract This multiple-case study advances research on social entrepreneurship and social capital examining how these entrepreneurs use their network to mobilize human and financial resources. Investigating seven Dutch cases predominately related to media literacy, the study proposes a model for future research including that (i) partnerships mediate the relationship between networks and financial resource mobilization; (ii) social entrepreneurs start a network themselves to foster resource mobilization; and (iii) the moderators trust, reputation, engagement in mission, opportunity identification and central network position positively moderate the relationships studied here. Besides these theoretical implications, the study demonstrates practitioners how to deploy their network to influence resource flows at the benefit of their social venture, especially indicating that starting networks themselves may be a successful way to mobilize their resource-mix.

Tom Peeters

School of Business and Economics Sharing Success

Background & Research question •  Social entrepreneurs address social needs and create both social &

economic value. •  Gaps in current academic research*:

–  Social entrepreneurship is an embryonic research field –  How social entrepreneurs build and leveraging networks is not well studied. –  Resource mobilization (or acquisition) is particularly challenging for social

entrepreneurs as they operate in resource-constrained environments •  Research question: How do social entrepreneurs use their network

to mobilize human and financial resources for their social enterprises? •  Relevance of study:

–  Theoretical: Fits in current theoretical frameworks* and extends geographical scope (Dutch research scope is rare).

–  Political: EU incorporated policies concerning social enterprises; social economy is 10% of the European economy based on GDP; Netherlands has gaps to close on # of social enterprises for “Europe’s 2020 strategy”

–  Practical: Supports social entrepreneurs & social managers to understand how they can mobilize resources by making use of their network.

* See e.g. Austin, Stevenson & Wei Skillern (2006), Dacin, Dacin, & Tracey (2011) and Seymour (2012,p.150) Tom Peeters

School of Business and Economics Sharing Success

‘Social venture’ organizational form

Table adapted from Dees (1998)

Continuum of organizational forms

Purely Social Hybrid: Social Venture Purely Commercial

Motives Appeal to good-will Mixed motives Appeal to self-interest

Methods Mission driven Mission and market driven Economic value creation

Goals and priority Impact only: Social value

creation

Impact first: Social and

economic value creation

Finance first: Economic value

creation

Key Stakeholders

Beneficiaries Pay nothing Subsidized rates / mix of full

players & those who pay nothing Pay full market rates

Capital Donations & grants Below market capital / mix of full

players & those who pay nothing Market rate capital

Workforce Volunteers Below market wages / mix of

volunteers & fully paid staff Market rate compensation

Suppliers Make in-kind donations Special discounts / mix of in-kind

donation & full price Charge market prices

Tom Peeters

School of Business and Economics Sharing Success

Research methodology •  Research design: Multiple-case study •  Unit of analysis: social venture •  Selection of cases (purposeful selection): based on e.g. legal form

(“stichting”), social mission serves social need, and financial structure shows venture undertakes core tasks in business context.

•  Data collection: semi-structured interviews with social entrepreneurs (primary data), unstructured interviews with experts (primary data) documents & achieves

•  Data analysis: field notes, coding (i.e. categorizing strategy), and flowcharts (i.e. connecting strategy), with computer assisted qualitative data analysis (MAXQDA)

•  Ensure adequate quality of research design: –  Construct validity: triangulation, interviews were recorded, transcribed

later, and verified with informants for interpretations errors –  Internal validity: rival explanations were taken into account –  External validity: multiple case study research was based on replication

logic, and is not based on (statistical) generalization to populations

Tom Peeters

School of Business and Economics Sharing Success

Theoretical implications (1) Theoretical implications (see model on next page) •  Social entrepreneurs use their network to mobilize volunteers (i.e. human

resources), and revenues of sales and grants (i.e. financial resources) successfully.

•  Partnerships mediate the relationship between network and financial resource mobilization.

•  Social entrepreneurs start a network to mobilize human and financial resources successfully.

•  Trust, reputation, engagement in mission, opportunity identification and centrality positively moderate the relationship between (i) networks and resource mobilization, (ii) networks and partnerships (used for resource mobilization), and (iii) partnerships and resource mobilization.

Key limitations •  Grouping & generalizing moderating effects: Although data clearly indicated the

importance of the moderators stated above, moderators were not investigated per case per relationship, but were grouped and generalized.

•  Amount of data & informants per case: Not in all cases, secondary data could not back up all interview’s findings

•  Self-reported data bias: e.g. selective memory and attribution; bias; though rather limited due to highly biased cases being offset by less biased cases

Tom Peeters

School of Business and Economics Sharing Success

Theoretical implications (2) Model for future research

Network(i) Personal networks; (ii) Network of social

venture; (iii) Formalized networking (clubs)

Human Resources- Volunteers

Partnerships

Moderators 1. Trust

2. Reputation3. Engage in mission4. Opportunity identf.

5. Centrality

Start a network

Financial resources - Revenue of sales

- Grants

Enhances Centrality

Weak ties & Strong(er) Ties

Tom Peeters

School of Business and Economics Sharing Success

Practical implications •  Social entrepreneurs should start networks themselves

–  … to mobilize human & financial resources. By starting networks, they position themselves at the centre of the network, while at the same time forming a large network of weak and stronger ties enabling them to mobilize resources more successful at the benefit of their social venture.

•  Social entrepreneurs should share their social enterprise’s mission and

aim to create engagement in their network –  … instead of getting involved in a ‘service provider - customer relationship’,

to foster human &financial resource mobilization (“co-creation”)

•  Social entrepreneurs should generate ideas and proactively drop these into their network. –  This fosters human & financial resource mobilization because other network

actors possessing resources, being connected to resources, or being able to allocate resources, can acknowledge their ideas and help to realize them.

Tom Peeters

School of Business and Economics Sharing Success

Keep in mind, social entrepreneurship is largely a matter of connecting to the right nodes into a network, who have,

allocate or refer to the desired resource-mix.*

Help, I need resources!

Grant

Volunteer

Money

Board member

Tom Peeters * See e.g Steyaert & Hjorth (2006, p. 48)