Ethnic identification shapes managerial practice, write Diane Holt, Ans Kolk, David Littlewood and Miguel Rivera-Santo

Littlewood, David

Rivera-Santos, Miguel

LSE Research Online

12/14/2015African data can bring fresh insights to management andsocial entrepreneurship studiesblogs.lse.ac.uk /businessreview/2015/12/14/african-data-can-bring-fresh-insights-to-management-and-social-entrepreneurship-studies/In recent times social entrepreneurship has proliferated globally, yet research into the phenomenon stilllags behind its practice, particularly in the developing world, and especially in Sub-Saharan Africa. In this blog post,we discuss what we know, what we don’t, and what we can learn from studying social entrepreneurship in Sub-Saharan Africa. Our research: a) highlights the important role of the environment in informing socialentrepreneurship and its varied manifestations globally; b) provides insights on the nature of social entrepreneurshipand enterprises in Sub-Saharan Africa; and c) shows that African data can provide insights for wider understandingof social entrepreneurship.What social entrepreneurship actually is remains the subject of heated debate amongst both academics andpractitioners. It has been defined as the pursuit of sustainable solutions to neglected problems, with positiveexternalities. Yet within wider definitional debates the role of the environment (i.e., the context within which socialenterprises operate and in which social entrepreneurship occurs) has hitherto received limited attention.The characteristics of the environment create the social needs and opportunities pursued by social entrepreneurs.They may also determine the legal recognition and forms adopted by social enterprises. Environment characteristicsare also likely to affect things like the possible emergence of these enterprises (e.g. through the relativeeffectiveness of government actions and quality of infrastructures, different formal and informal institutions,particular cultural preferences etc.) but also the wider characteristics of such ventures.This study draws upon a unique dataset of social enterprises from across 19 Sub-Saharan African countriescollected as part of the Trickle Out Africa Project . We take a first step in addressing gaps in our knowledge of socialentrepreneurship in this area of the world and enhance our understanding of relationships between environmentalcharacteristics and social entrepreneurship. We seek to answer the question: How do environmentalcharacteristics influence social entrepreneurship in sub-Saharan Africa? This geographical area provides adynamic canvas on which to address this question.Whilst recognising significant variation across and within them, countries in Sub-Saharan Africa are typicallycharacterised by:high levels of povertygovernment and market failurescorruptionlarge informal economieslingering colonial influences, andstrong ethnic group identities.Such an environment is therefore likely to create many opportunities for social enterprises to emerge in new andcreative forms that reflect this institutional variability and these constraints.In our research we use four predominantly African environmental characteristics: acute poverty (levels of poverty),informality (the prevalence of the informal economy), colonial history (colonisation by Britain versus othernations), and ethnic group identity (the relative strength of ethnic/tribal identity). We empirically explore theirinfluence on aspects of social entrepreneurship, notably self-perception as a social enterprise and social ventures’1/3choice of activity with two very different types of social business model identified, namely selling a product orservice versus transferring knowledge, training, or consulting.FindingsWe find statistically significant relationships between ethnic group identity and acute poverty, which influence bothself-perception as a social enterprise and the kinds of activity social ventures choose. Colonial history onlyinfluences self-perception as a social enterprise, and informality has no significant influence on socialentrepreneurship.Our research suggests that environmental characteristics influence the nature of social entrepreneurship in Sub-Saharan Africa. These findings have implications for research, policy and practice.For one thing, we respond to calls in the literature for a better understanding of the relationship between socialenterprises and their environments. This can help us to understand why different types of social enterprise existaround the world and help us to settle debates about what social entrepreneurship is. African social enterprisesseem to be different from those typically found in the developed world – especially in their views of profit vs. socialmissions, their business models, their strategies, and their connections to the networks surrounding them – but alsovary across African contexts. We need further research contrasting social enterprise models in different parts of theworld to gain further insights.In certain contexts social entrepreneurs may not perceive themselves to be (and self-identify as) socialentrepreneurs, despite having all the characteristics noted in the literature. This has significant implications forresearch data collection where self-perception has been widely used as a strategy to identify participants, but alsofor policy interventions targeting social entrepreneurs.Our study furthermore reinforces the argument that culture, in this instance ethnic identification, plays an importantrole in shaping managerial practice. Researchers, policy makers and managers in Africa and further afield should becognisant of the implications of this finding.Finally, our research helps to expand knowledge of social entrepreneurship in Sub-Saharan Africa, but alsohighlights the insights African data can bring to the wider social entrepreneurship literature and indeed managementstudies in general. African data, whilst difficult to collect, may help relax implicit contextual assumptions in ourunderstanding of management, and we hope that it will encourage researchers to better integrate African insightsinto management theories.♣♣♣Notes:This post is based on the authors’ paper Social entrepreneurship in sub-Saharan Africa. Academy ofManagement Perspectives 29:72-91 doi:10.5465/amp.2013.0128 (2015).The authors gratefully acknowledge the financial support of the Economic and Social Research Council(RES-061-25-0473 awarded to principal investigator Diane Holt).Further information on the Trickle Out Africa Project can be found at trickleout.netThis blog post represents the views of its authors, not those of LSE Business Review or the London School ofEconomics.Featured image credit: Women receive help from the Danish Refugee Council to set up smallbusinesses hdptcar CC-BY-2.02/3Diane Holt (dholt@essex.ac.uk) is a reader in management at Essex Business School at theUniversity of Essex, UK. Her research interests focus on business models associated withsustainable development and poverty alleviation, especially within sub-Saharan Africa, as well asissues associated with sustainability topics more broadly. Ans Kolk (akolk@uva.nl) is a full professor at the University of Amsterdam Business School in theNetherlands. Her research focuses on international business in relation to societal topics,particularly poverty and development; partnerships; voluntary standard-setting, disclosure, andaccountability; and climate change and energy.  David Littlewood (david.littlewood@sheffield.ac.uk) is a lecturer in strategic management atSheffield University Management School, UK. His research interests include corporate socialresponsibility, sustainability, corporate reputation management, and social entrepreneurship andinnovation, geographically focused on the developing world and particularly sub-Saharan Africa. Miguel Rivera-Santos (mrivera@babson.edu) is an associate professor of strategy andinternational business at Babson College in Wellesley, Massachusetts. His research examines theimplications, for organizations and communities, of bridging the gap between different institutionalcontexts, especially in the context of subsistence markets.Copyright © 2015 London School of Economics3/3

African data can bring fresh insights to management and social entrepreneurship studies

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