Exam Questions Ch.14 Zacharakis Social Entrepreneurship

Questions for Chapter 14

True/False

1) The Global Entrepreneurship Monitor estimates that 5% of the population is either currently in the process of trying to start a social venture or is presently running one. (pg. 443)

2) Wicked problems can be defined by those that require multiple stakeholders and complex solutions. (pg. 444)

3) Social entrepreneurship is primarily concerned with profits. (pgs. 444-445)

4) Social entrepreneurship creates social value and/or social change. (pg. 445)

5) Process‐based definitions of social entrepreneurship focus on actions such as value creation, opportunity recognition, opportunity exploitation, and resource mobilization. (pg. 445)

6) Many social ventures are nonprofit organizations. (pgs. 445-446)

7) Corporate social responsibility most closely aligns with the Social Consequence Venture. (pg. 446)

8) Enterprising nonprofit (quadrant 4) focus primarily on economic mission and economic impact. (pg. 446)

9) Social purpose ventures (quadrant 3) are founded on the premise that a social problem will be solved, yet the venture is for‐profit and the impact on the market is typically

perceived as economic. (pg. 446)

10) Social purpose ventures are firms started with a specific social mission and do not care about making profits. (pg. 447)

11) Because social entrepreneurial ventures serve social ends they do not need to be financially viable. (pgs. 447 – 448)

12) Nonprofit organizations cannot be financially evaluated, because they do not produce financial profits. (pg. 448)

13) Hybrid ventures are those that pursue social and economic goals unequally. (pg. 449)

14) Hybrid social ventures have a revenue-generating component. (pg. 449)

15) Identifying an opportunity for a social venture always results from a deliberate process. (pg. 453)

16) It is possible to position a venture in all four of the specific typologies of ventures. (pg. 453)

17) The Timmons Model will be affected by the choice of Social venture type. (pg. 453)

18) Sometimes reducing the consequences of a social problem may not actually solve the problem. (pg. 454)

19) The ability to articulate a venture’s social values is helpful for evaluating its performance. (pgs. 454-455)

Multiple Choice

1) Why did Tricia Compas-Markman first start the DayOne Response? (pg. 443)

1. To earn an economic profit.
2. To make her invention commercially available.
3. To provide free water.
4. To complete a degree requirement.
5. Because she was incentivized by a government grant to do so.

2) What is driving the increase in social entrepreneurship? (pg. 443)

A. Increased awareness of social issues

B. Desire to avoid corporate taxes

C. Stabilization of environmental issues

D. Lack of opportunities for finding by traditional ventures

E. None of the above

3) According to the Global Entrepreneurship Monitor (GEM), what percent of the population is either currently in the process of trying to start a social venture or is presently running one? (pg. 443)

A. 4%

B. 5%

C. 6%

D. 7%

E. 8%

4) Which of the following is NOT one of the assumptions about creating new ventures that has recently changed? (pg. 443)

A. Until the 1990s, energy was relatively expensive

B. Labor was widely available and, in some countries, cheap.

C. Access to credit to start businesses was relatively easy.

D. The information needed to start a business was available with a computer, phone, and internet connection.

E. None of the above

5) In keeping with process-oriented definitions of social entrepreneurship; social wealth is defined broadly to include: (pg. 444)

A. economic, societal, health, and climatic aspects of human welfare

B. economic, societal, health, and environmental aspects of human welfare

C. diplomatic, societal, dental, and environmental aspects of human welfare

D. economic, spiritual, health, and environmental aspects of human welfare

E. economic, societal, health, and diversity

6) According to entrepreneur-centric definitions, social entrepreneurs are: (pg. 444)

A. The change agents for society, seizing overlooked opportunities by improving systems and inventing new approaches.

B. Create sustainable solutions to transform society for the better.

C. Constantly searching for superior ways to solve the problems that plague society.

D. Individuals with innovative solutions to society’s most pressing social problems.

E. All of the above.

7) Which of the following is essential in order to undertake a social venture? (pg. 445)

1. An existing organizational model.
2. Receiving funding from a foundation.
3. Recognizing an opportunity.
4. Identifying a paying customer.
5. All of the above.

8) What is the most social impact focused type of social venture? (pg. 446)

1. Enterprising nonprofit
2. Traditional venture
3. Hybrid
4. Social purpose
5. Social consequence

9) ______ focus primarily on economic mission and economic impact. (pg. 446)

1. Enterprising nonprofit ventures
2. Traditional ventures
3. Hybrid ventures
4. Social purpose ventures
5. Social consequence ventures

10) Financial performance is the primary metric for which of the following? (pg. 446)

1. Enterprising nonprofit venture
2. Traditional venture
3. Hybrid venture
4. Social purpose venture
5. Social consequence venture

11) The popular term, corporate social responsibility, most closely aligns with the _____. (pg. 446)

1. Enterprising nonprofit venture
2. Traditional venture
3. Hybrid venture
4. Social purpose venture
5. Social consequence venture

12) ______ are founded on the premise that a social problem will be solved, yet the venture is for‐profit and the impact on the market is typically perceived as economic. (pg. 446)

1. Enterprising nonprofit ventures
2. Traditional venture
3. Hybrid ventures
4. Social purpose ventures
5. Social consequence venture

13) Which of the following companies would be considered a traditional venture? (pg. 446)

A. Habitat for Humanity

B. Save the Children

C. Ben & Jerry’s

D. Doctors without Borders

E. None of the above

14) What experience best qualified Jim Poss to start Big Belly Solar? (pgs. 447-448)

1. Preparing a business plan
2. His knowledge of the trash industry
3. His studies in social entrepreneurship
4. All of the above
5. None of the above

15) What aspect of many large companies’ social impact has garnered the largest amount of negative media attention in recent years? (pg. 449)

A. Corporate social responsibility initiatives

B. Supply chain operations

C. Employee incentive plans

D. Advertising campaigns

E. None of the above

16) Why is a Hybrid a form of social entrepreneurship? (pg. 449)

1. It creates both social and economic value.
2. It is able to make a profit.
3. It competes with for-profit companies.
4. Schumpeter created the first model.
5. It can be organized anywhere worldwide.

17) Tom’s shoes give away one pair of shoes to someone in a developing country for every pair of shoes sold for a profit in a developed country. Which typology is this? (pgs. 446 – 450)

A. Hybrid

B. Social Purpose

C. Social Consequence

D. Traditional Venture

E. Enterprising Non-Profit

18) Which of the following is NOT a principle of the UN Global Compact? (pg. 450)

A. Businesses should support and respect the protection of internationally proclaimed human rights.

B. Undertake initiatives to promote greater environmental responsibility.

C. Elimination of election financing practices that favor large donor contributions.

D. Elimination of discrimination in respect of employment and occupation.

E. None of the above

19) What would be the typology of a venture that is focused on increasing the supply of affordable housing that uses a business model designed to lowers the cost of producing housing so that it can sell homes at a price more lower income families can afford? (pgs. 446 – 450)

A. Hybrid

B. Social Purpose

C. Social Consequence

D. Traditional Venture

E. Enterprising Non-Profit

20) One reason to become a Certified B Corporation is to; (pg. 451)

A. Create a material positive impact on society and the environment

B. Expand fiduciary duties of directors that requires consideration of non-financial

interests

C. Signal its commitment to economic and social impacts

D. A & C only

E. All of the above

21) Which of the following changes will impact all three portions of the Timmons Model? (pgs. 451 – 453)

A. A change in the venture mission

B. A change in the venture’s impact

C. A change in both the venture’s mission and impact

D. Only the shift from a traditional venture to another quadrant

E. Any of the above

22) Why is it difficult to measure the impact of social ventures. (pgs. 453-454)

A. Social problems are complex

B. Social problems often have multiple stakeholders

C. Different groups usually agree on the best approach

D. B & C only

E. A & B only

23) What are the three components of a Triple Bottom Line (TBL) objective statement? (pg. 454)

A. Economic, Environmental, & Spiritual

B. Political, Environmental, & Social

C. Economic, Environmental, & Social

D. Economic, Organizational, & Social

E. Economic, Environmental, & Pragmatic

Open Ended

1) Why might different countries have different needs for social entrepreneurship? (pgs. 443 – 444)

Governments can have very different mandates to meet the needs of their citizens.

• Governments in very poor or highly corrupt countries can neglect serving some social needs entirely. Poor countries can present entrepreneurial opportunities to meet the most basic needs, such as food and shelter.
• Some governments prefer that social needs be served by the market, and will only provide support for those proven to be unable to meet their own needs. Countries such as the U.S. provide opportunities to help those not already being served by either the government or the market.
• Each of these cases can result in different levels and types of social entrepreneurship.

2) What would be some ways to identify social entrepreneurship opportunities? (pgs. 443-444)

• Witnessing extreme social deprivation.
• Examining the consequences of economic disparity.
• Imagining how to improve delivery of social services.
• Determining how to organize a venture as a cooperative.

3) What are the four types of entrepreneurial ventures? (pg. 446)

• Traditional
• Social Purpose
• Social Consequence
• Enterprising nonprofits.

4) How might a social entrepreneur be different from a classical entrepreneur? (pgs. 446 - 450)

• The social entrepreneur is dissatisfied with a social problem, not a business problem, and driven to change it.
• The social entrepreneur is primarily motivated by a social, rather than an economic, mission.
• The social entrepreneur typically meets the needs of those unable to pay for the certain goods or services.
• The social entrepreneur can face a more difficult task in evaluating his or her success than the classical entrepreneur.

5) Discuss some reasons why, given the choice, a social purpose venture may be able to have a larger impact than an enterprising non-profit. (pgs. 447 – 449)

• Social purpose ventures can return profits to shareholders which may allow it to attract more capital than an enterprising non-profit.
• Additional capital may be needed to scale the business to the size needed to have a social impact.
• The ability to incentivize some workers with stock options and other types of performance incentives may matter more in certain instances, and would be difficult to do with solely salary and intrinsic motivations.
• You may be able to do more good by helping more people a little, than helping fewer people a lot. Scale might enable this, even at the expense of returning some portion of retained earnings to shareholders as capital gains or dividends.

6) Discuss the interplay between the typology of any given venture and the Timmons model (pgs. 446 – 451)

• The relationship between the ventures mission and its impact will be a powerful driver of the types of people your venture will attract.
• Different people are motivated by different things, and it may be a challenge to attract people to a social or for profit venture is they are not currently predisposed to do so.
• An often cited example is Steve Jobs recruitment of John Sculley to join apple, in which Jobs asked Sculley (CEO of Pepsi) "Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?" Jobs successfully recruited Scully, but after some time it became clear that bottom-line considerations still motivated Scully greatly.
• In keeping with the Jobs-Scully analogy, some objectives are simply not suited to certain types of ventures. Solving a problem that is too small for a government solution, but not profitable enough for a for-profit company to undertake, is obviously the role many social enterprises play.
• The Gates Foundation exists, in part, because Bill Gates would not have been able to achieve his social goals through Microsoft, a for profit company.
• Resources play a large role in the type of venture chosen where, for example, part of the reason Habitat for Humanity is a volunteer service organization is that it lacks the sources of funds to increase the supply of affordable home by solely economic means, but is able to mobilize free labor and negotiate favorable financing support in order to not charge homeowners interest.

7) Given what is understood about the objectives of different typologies, discuss some likely differences between boards of traditional ventures and enterprising non-profits. (pgs. 446 – 451)

• In enterprising non-profits many of the board members will likely be economic stakeholders, although in a different sense.
• Many non-profit board members are serious donors, and make donation from their personal wealth, in addition to fund-raising for the venture.
• These board members can be expected to take a larger and more personal role, in the governance of the non-profit.
• Strategic playing will greatly involve, but often subordinate, the CEO.
• CEO’s will often be responsible for the strategic execution, and operational level planning for the venture. One example of this would be the Girl Scouts or America, in which the organizations direction is firmly set by the board, with input from the CEO, but in which the CEO is far from the dominant figure that exists in other firms such as General Electric.

8) What are the differences between measures of success for social ventures, as compared to for-profit companies? (pgs. 453 – 455)

• Social ventures consider social and/or environmental impacts in addition to economic gains
• Success measures for social ventures may a broader set of stakeholders, across a greater number of sectors in many cases.
• Some measures of success are interconnected as trade-offs, such as social purpose ventures that will trade-off some economic profits in order to sustain its social impact.

9) How might a social venture be more economically profitable than a for-profit company? (pgs. 449 – 451)

• Customers may demand a heighted sense of social accountability and will not do business with a company that ignores this aspect in their operations.
• Creating environmental and social value may attract greater number of customers who are less sensitive to economic prices because of the sense of value they gain from doing business with a social venture (i.e., Tom’s shoes)
• Social ventures may incur costs to implement efficiencies that avoid negative environmental externalities that may become severe liabilities to other firms if legislative changes come suddenly designed to reverse such externalities.

10) Why would shifting from one type of venture to another be challenging? (pgs. 451-453)

• Strategy and resources must be aligned according to the type of venture chosen.
• Changing a venture type should be in response to a change in strategy, perhaps as a result of a shift in resources.
• Shifting venture types has legal, tax, personnel, and other implications.
• Shifting venture types should be directly tied to moving to a superior way accomplishing your objectives.

11) How might Triple Bottom Line be reflected in your venture’s objectives? (pg. 454)

• Social, economic, and environmental results do not encompass all possible objectives, but they come close
• Stating what you seek to accomplish in terms of these three categories can assist you in maintaining balance as time moves on.
• By measuring financial outcomes, you can better measure your financial capacity to achieve social outcomes.
• If your customers have high expectations as to your social outcomes, then setting and meeting appropriate goals here could mean that your customers continued (as customers and stakeholders) to support you financial (doing business with you).