THE INTERNATIONALIZATION PATHWAY OF SOCIAL
ENTREPRENEURS: CONCEPTUALIZING THE SOCIAL COSMOPOLITAN
by
M.J. PATER
University of Groningen Faculty of Economics and Business
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The internationalization pathway of social entrepreneurs: conceptualizing the
social cosmopolitan
Abstract
Despite the emerging interest for social entrepreneurship as solution of international social issues, previous literature did not regard sufficiently to the internationalization process of social entrepreneurs. The purpose of this paper is to conceptualize the internationalization pathway of social entrepreneurs and to discover its explaining mechanisms. I illustrate this peculiar pathway along five dimensions by qualitatively analyzing four social enterprises and contrasting it with existing models. The empirical evidence suggests that the social mission is the primary context in which internationalization decisions are taken.
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INTRODUCTION
Social entrepreneurship is often described as a process whereby the creation of a new firm leads to social wealth enhancement in a way that the society as well as the entrepreneur benefit (MacMillan, 2005). During the last 20 years, the number of social entrepreneurs (SEs) has increased considerably (Alter, 2006; OECD, 2000). Both academics and practitioner communities have rapidly developed institutions to foster a thriving environment for social entrepreneurship. According to Global Entrepreneurship Monitors’ Report on Social Entrepreneurship, about 3.2% of the population in Western-Europe is currently employed in a for-profit social enterprise (GEM, 2009). Consequently, social entrepreneurship research merits great attention (Short, Moss & Lumpkin, 2009).
In previous literature, scholars have mainly focused on SEs that are community, regional or national in scope (Marshall, 2011). However, a rising global wealth disparity; market, institutional and state failures; a mounting concern for the global environment and technological advances have led social opportunities to globalize (Austin et al., 2006; Kerlin, 2009; Zahra et al., 2008). Therefore, an increasing number of international SEs emerge. Traditional internationalization theories assume that firms first expand domestically before gradually increasing their foreign commitment (Johanson & Vahlne, 1977). In contrast, since the 1990s several theories emerged suggesting types of rapidly internationalizing SMEs with a global outlook. Such ‘born globals’ or ‘international new ventures’ challenge the idea that firms internationalize incrementally through a series of evolutionary stages (McKinsey and Co., 1993; Coviello & Munro, 1995; Oviatt & McDougall, 1994).
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context is relatively complex, adding a social aspect engenders only greater complexity (Dart, 2005). As a result of their social agenda, SEs often assess a context fundamentally different. An inhospitable environment may not be attractive for commercial reasons, but it often intensifies the need for social development (Austin et al., 2006). Further, in contrast with commercial opportunities, social opportunities are abundant and often outstrip the resources available to address them. Consequently, SEs are often pulled into rapid (and international) growth in order to meet the social needs encountered (Dees, Anderson & Wei-Skillern, 2004).
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The article is structured as follows. First, I review and integrate the relevant findings on social entrepreneurship and the internationalization pathway. Based on the review, I outline the theoretical framework that is adopted throughout the study. Next, the method for this study is explained after which the findings are presented. Based on the findings, six propositions are systematically developed and discussed. I conclude by reflecting upon the research limits and implications.
THEORETICAL BACKGROUND Social entrepreneurship
Social entrepreneurs are often renowned for their ability to launch organizations that serve a range of social needs, improving social welfare and advancing human development around the world (Elkington & Hartigan, 2008; Zahra et al., 2008). Nevertheless, there is no scholarly consensus on what social entrepreneurship specifically implies. Most scholars recognize that social entrepreneurs leverage resources to generate some ‘social value’. ‘Social
entrepreneurs are one species in the genus entrepreneur. They are entrepreneurs with a social mission’ Dees (2001:2). Considering that the social entrepreneurship field has grown the last
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one extreme the non-profits purely focused on social goals and at the other end the traditional for-profit firms (Peredo and McLean, 2006; Dees and Elias, 1998).
Notwithstanding the large amount of conceptual and (to a lesser degree) empirical contributions, several authors still criticize and question the relevance of studying social entrepreneurship at all (Austin et al., 2006). Some argue that all entrepreneurs create social value, for example by creating employment and generating tax revenues (Mair, 2006). Since some scholars challenge the need for a specific social entrepreneurship domain, advocates have been urged to stress SEs’ distinctiveness. First, the explicit social mission remains the fundamental distinguishing factor for most researchers. Traditional entrepreneurs might act in a socially responsible manner, but their efforts are only indirectly attached to social issues. Such a difference manifests itself at the managerial level and influences performance measurements adopted (Austin et al., 2006). Traditional entrepreneurs are ultimately assessed by their financial results while SEs pursue a double bottom line. Social yields are hardly quantifiable and subject to perceptive differences (Austin et al., 2006). Due to this, acquiring financial resources could be more difficult for SEs (Smallbone et al., 2001). Besides, several authors contend that a social mission adds complexity to the organization in general (Dart, 2005; Zahra et al., 2008, Chen, 2012).
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present. In other words, in this article I neither study non-governmental organizations (NGOs) nor profit-seeking enterprises with a flavor of corporate social responsibility.
The social entrepreneur is studied in a wide variety of contexts, for example, looking into an SEs’ institutional (Stephan & Uhlaner, 2011) or geographical context (Zahra et al., 2009).
Recently, some authors also started to study the SE in an international context (Chen, 2012; Marshall, 2011). Due to a rising global wealth disparity; market, institutional and state failures; a mounting concern for the global environment and technological advances, social opportunities are globalizing (Austin et al., 2006; Kerlin, 2009; Zahra et al., 2008). Numerous SEs recognize those needs on a global scale and are able to overcome cultural and psychic distance in the pursuit of social and economic value (Zahra et al., 2008). Yet, scholars have not studied the process of internationalization of SEs. In order to learn how SEs internationalize, I now first discuss the internationalization pathway theory for traditional entrepreneurs after which the research framework is established.
Internationalization pathway
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internationalized firms deal with a liability of foreignness; the assumed inferior knowledge and experience in a foreign market compared to local firms. Over the years, however, Johanson & Vahlne (2009) replaced the liability of foreignness by the liability of outsidership. The traditional view of entry, i.e. overcoming knowledge barriers, has become less important than the network a firm is embedded in, in the entry market. The stage models also assume that firms internationalize first to psychic as well as geographical close countries; which are the markets firms are supposed to understand best (Johanson & Vahlne, 1990).
In contrast, according to several studies, some entrepreneurs turn international shortly after they are founded (McKinsey, 2003; Coviello & Munro, 1995; Oviatt & McDougall, 1994). This phenomenon appears to be rather inconsistent with the previously discussed stage models (Knight & Cavusgil, 1996). Moreover, numerous firms seem to be ‘born global’ and have an international focus from the outset. The rise of such firms is propelled by economical and social globalization, sophistication of individuals’ entrepreneurial skills and technological innovations (Knight and Cavusgil, 1996). This perspective is complemented by the born-again global approach. This approach considers firms which also internationalize rapidly, but only after a few years of domestic expansion and a critical event that led to a sudden change (Bell et al., 2001).
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driver of internationalization, including a global vision and mind-set; prior international experience and entrepreneurial personality (Bakr, 2004; Rialp et al., 2005b). But also the organizational capabilities, knowledge intensity and strategic focus are deemed important (Rialp et al., 2005). Previous literature, however, ignored to address firms’ underlying mission as a factor of the internationalization approach. Though all firms adopt slightly different missions, one fundamental distinction can be made: the difference between missions of traditional and social entrepreneurs. Since the ‘social’ characteristic is the most distinct aspect of SEs compared to traditional entrepreneurs (Nicholls & Cho, 2006, Austin et al., 2006), specific features of SEs’ internationalization pathway may be explained by this social aspect. In this study I focus on five features of SEs internationalization pathway, which are now explained in the research framework.
Research framework
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existence and variance in internationalization commitment, Bell et al. (2003) rather focus on explaining the actual process of internationalization.
The modified stage model defines an internationalization pathway by six dimensions: motivation, pattern, pace, entry mode, strategic approach and method of financing (Bell et al., 2003). Since the primary aim is to establish how SEs internationalize (focusing on the process), I exclude the dimension motivation, considering that this precedes the actual process and rather explains the other dimensions. This dimension is later discussed to understand why the process of SEs unfolds as such. The framework of Bell et al. (2003) has been adopted previously in other studies, for example, in examining the internationalization pathway of Chinese Family Firms (Chen, Dong & Xu, 2009). Several authors separately highlight dimensions like entry mode (Peterson & Welch, 2002; Brouthers, 2002), pattern (Vermeulen & Barkema, 2002), financing (Okeahalam & Wood, 2008; Smallbone et al., 2001) and pace (Oviatt & McDougall, 2005). In the following part I briefly explain the five dimensions.
Pattern
The internationalization pattern concerns the sequence in which SEs internationalize. Patterns are often expressed in terms of psychic and geographical distance (Johanson & Vahlne, 2009).
Pace
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Entry mode
Entry mode concerns the method of foreign expansion, including (respectively to the degree of international commitment) exporting (indirect or direct), contractual agreement (licensing or franchising), joint venture (alliance, minority or majority), acquisition and greenfield investment (Kumar and Subramaniam, 1997).
Strategic approach
The strategic approach of an internationalization pathway is expressed by Bell et al. (2003) as the degree to which the pathway is ad hoc or systematic. Some firms are more reactive while others implement a planned approach (Crick & Spence, 2005).
Financing
The method of financing describes the type of debt firms use to finance the internationalization process. Respectively to entrepreneurs’ preference, those can be categorized in the following
types: retained earnings, private equity, informal capital, bank credit, financial market, venture capital and government (Myers and Majluf, 1984).
In the modified stage model, Bell et al. (2003) project expected pathways associated with traditional, born global and born-again global firms along its five dimensions (see Table 1). In the discussion I then compare to what degree the pathways of SEs correspond with those of traditional, born global and born-again global firms.
Table 1 Expected pathways associated with gradualist, born global and born-again global models (Bell et al.,
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Gradualist approach Born global Born-again global
Pattern Incremental, domestic expansion first, psychic close markets
Concurrent, simultaneously domestic and international expansion
Domestic expansion first, followed by rapid growth after critical event
Pace Gradual, single market at a time
Rapid, multiple markets at the same time
Late but rapid, multiple markets at the same time Entry
mode
Conventional, low commitment:
agents/distributors/export
Flexible and network based, medium commitment: licensing, joint ventures, FDI
Networks, existing channels of partners or clients
Strategic approach
Ad-hoc and opportunistic, reactive to new opportunities
Structured, planned approach, expansion of global networks
Reactive in response to critical event, more structure thereafter
Financing Boot-strap into new markets
Self-finance via rapid growth, venture capital or initial public offerings
Capital injection by ‘parent’, refinancing
METHOD
Due to the limited attention for the internationalization pathway in social entrepreneurship literature, this study is exploratory in nature and could best be defined as theory development/expansion. As deeper theoretical knowledge seems required, a qualitative approach and a multiple-case study is adopted (Eisenhardt, 1989a; Yin, 1984).
Research setting
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retrospective in nature and based on open-ended interviews. In order to strengthen the grounding of theory, I triangulated the data collection by combining the interviews with selected archival data (Eisenhardt, 1989). Basic background information of the case firms is provided in Table 2.
The case firms were sampled theoretically rather than statistically. Three of the four cases are selected from an exemplary project of the Dutch organization Maatschapelijk Verantwoord Ondernemen (MVO)1. Those firms participated in a project called ‘Frontier Expanders (loosely translated from ‘Grensverleggers’). This project aims to promote international social entrepreneurship in the Netherlands by means of story blogs of a few SEs. The fourth case does not participate in the project but is member of MVO. All firms operate in rather different sectors and have internationalized to a variety of countries. The selected case firms were required to satisfy a few criteria: (a) the firms are independent; (b) the firms have a sustainable for-profit nature; (c) social values belong to the company’s objective either prominently, equally or chiefly next to the economic objectives; and (d) firms expanded their business and/or operations internationally. Those criteria were checked before any data collection process began.
Data collection
The data gathering process involved in-depth semi-structured interviews at each case firm. The seniority of the four interviewees was considered to capture the most relevant information. All interviews were conducted through video-conference and took about 45-60 minutes. First, I introduced myself and the topic of research, continuing with a request to tape-record the interview and process all information in this article (Emans, 2004). The interviews were retrospective in nature and started with some general questions on the company’s history.
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After that, I specifically inquired the social objectives and internationalization process, following the dimensional structure presented before.
Some archival data was collected to check any retrospective bias. First, the website of the firms often provided detailed historical records of international milestones. Also the blogs written for the ‘Frontier Expanders’ project offered a profound insight in the experience of internationalizing (MVO, 2010). Finally, in some cases the grant application forms were available for further inspection.
Data analysis
First, I analyzed all data case by case, triangulating the interview data with information obtained from other sources. After the within-case analysis, I was able to cross-analyze and compare the findings in light of the theoretical framework. This analysis followed the pattern-matching logic; comparing the predictions of Bell et al. (2003) with the present findings. The five dimensions of the theoretical framework were adopted to operationalize the internationalization pathway and compare the findings thematically.
FINDINGS
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Table 2 Company profiles
Firm Industry Est.
(Int.)
Employees* Social mission° Type of
internationalization Soil & More Agriculture,
engineering
2007 (2007)
10 home 53 abroad
Environment, Energy Joint Venture (equal), franchising
BBROOD Food and beverages 2008 (2011) 60 home 25 abroad Int. Development, Health, Education Joint Venture (majority)
SaintBasics Clothing and textile 2008 (2008) 4 home 0^ abroad Int. Development, Environment Contractual agreement, export Ielgat Agribusiness 1993 (2009) 8 home 42 abroad Int. Development, Health, Education Joint Venture (minority) * Number of employees.
° According to the classification of Clark and Ucak (2006).
^ Since SainBasics uses contractual agreement, there are no employees contracted abroad.
Within-case analysis
Soil & More
Soil & More runs composting projects since 2007 in countries like Egypt, Mexico (2007), Kenya, Ethiopia (2009), India (2010) and Brazil (2011). The owners have developed a superior method of composting in which soil fertility for agricultural purposes can be optimized. More specifically, Soil & More collects locally available biomass and transforms it into high standard compost.
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social intent. In Mexico, the partner of Soil & More was ‘social entrepreneur of the year’ in 2009. Due to the relative complexity of composting projects and local markets in general, local collaboration is considered essential. Composting projects in complex markets involves a high investment in time and money, causing Soil & More to pursue a franchising model of their unique composting method.
Though Soil & More is for-profit in nature, they employ a rigid social value proposition, including: (a) sustainably cultivate agricultural soil fertility, (b) reduce water scarcity and carbon dioxide emissions and (c) further research on soil fertility and composting projects.
Country selection is based on the need of composting projects; specifically in developing countries where soil fertility problems are the most prominent. In countries like Egypt Soil & More can effectively reclaim land and reduce water scarcity by their innovative composting method. Soil & More has internationalized to a diverse range of geographical and psychic distant countries. The interviewee recognized that there is no long-term planning involved and that the internationalization pattern is merely determined by local requests. Soil & More has received domestic and foreign governmental financing for two of their international projects, though the experience was not always very positive. For the project in Mexico, the promised support was never disbursed. In Table 3 the internationalization pathway of Soil & More is summarized.
Table 3 Internationalization pathway Soil & More
Pattern Pace
Pattern follows local request where soil fertility problems exist. Soil & More currently expanded to geographic and psychic distant countries.
Soil & More has internationalized since inception, and so far expanded to six countries on three continents.
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Soil & More employs the equal joint venture method for international expansion. Future expansion could also employ a franchising model.
Soil & More has experience with governmental subsidies though the international expansion is mainly financed by private equity and bank loans.
Strategic approach
There is no long-term strategic plan; Soil & More’s strategic approach is quite reactive. They react opportunistically upon local request.
BBROOD
BBROOD started in 2008 with a bread shop in Amsterdam with a focus on special sourdough bread and sandwiches. The products are produced at the shop floor with high-quality and biological ingredients. Currently, BRROOD has grown to six shops in Amsterdam, two shops in The Hague and one in Haarlem. Those shops are all fully owned but it is planned to expand further with a franchise formula as well. BBROOD has several social projects in their shops, for example, offering psychic challenged people an opportunity to learn and work in a bread shop. Since 2009, the owner-manager aimed to launch a BBROOD-shop in Kampala, Uganda. The first shop opened in 2011 and a second shop followed early 2012. Though the shops are ultimately for-profit, BBROOD also aims to (a) share knowledge and educate a craft to vulnerable people, (b) supply healthy food on the market and (c) raise industry standard in terms of hygiene and labor standards.
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Uganda. The owner-manager has run a project for six months in Uganda for Bake for Life in 2007. Through Bake for Life, a reliable partner was found to establish a joint venture. A local partner is considered essential because of Uganda’s legal, political and social complexity. Because BBROOD considers it important to maintain control over the company, it owns a majority share in the joint venture.
BBROOD has no long-term plan considering its international activities, nor has it a explicitly formulated strategy. Therefore, the external move to Africa could be considered ad hoc, following the whims of a young social entrepreneur. Currently requests from the Philippines and Eastern-Europe are considered as well. The initial move was somewhat erratic but gained more structure after governmental support was awarded. Half of the initial start-up costs were funded by a so-called private sector investment of the Dutch ministry of economic affairs. In Table 4 the internationalization pathway of BBROOD is summarized.
Table 4 Internationalization pathway BBROOD
Pattern Pace
Uganda, despite it psychic distance, meets BBROOD’s social and economic value proposition. It has a market for bread and there is a significant need for social improvement.
BBROOD internationalized after three years of expanding domestically. Significant commitment in time and money is devoted to foreign opportunities.
Entry mode Financing
BBROOD has entered Uganda with a majority joint venture with a local firm. The network was very important to establish this joint venture.
BBROOD has received a grant that funds 50% of the start-up costs in Uganda. Besides, BBROOD is mainly funded by informal investors to expand.
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No strategic plan was available. The approach seems rather intuitive and not explicitly planned.
SaintBasics
SaintBasics is a company and brand for organic underwear, established in 2008. They set up sourcing and production in Bangladesh and India. These partners are found through a network relationship supported by government agencies. SaintBasics currently sells through their own web shop and several online and offline retailers/resellers. SaintBasics has been awarded the 4th price for most sustainable brand in the Netherlands in 2011. Sales are primarily in the Netherlands but SaintBasics plans to export to Belgium and Germany soon. Besides campaigning for the need of organic clothing in the Netherlands, SaintBasics also aims to (a) raise local industry standards in Asia, (b) care for the environment by using only organic material and (c) provide development opportunities to involved locals through micro-finance and coaching projects.
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help of the government turning up in India and Bangladesh was a systematic process. In Table 5 the internationalization pathway of SaintBasics is summarized.
Table 5 Internationalization pathway SaintBasics
Pattern Pace
SaintBasics markets to psychic close countries while it sources from relatively geographical and psychic distant countries.
SaintBasics is international since they are established through sourcing. For sales, they first expanded domestically.
Entry mode Financing
SaintBasics employs low commitment entry modes for both sourcing and marketing. In Asia they work on a contractual project basis and in Europe with exporting and licensing.
The internationalization process of SaintBasics is primarily funded by private equity and by bank credit in case of cash flow deficits. Government support was only non-financially.
Strategic approach
The international strategic approach of SaintBasics turned to be more systematic with government support and is still vague for the long-term.
Ielgat
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also invest themselves in new beekeeping farms. In 2010, Ielgat started a joint venture with a Filipino company. Currently, The Philippines imports almost 95% of all honey products and local production is often of poor quality. Ielgat aims to build a professional beekeeping and honey industry in The Philippines. Similar initiatives are now undertaken in Russia and Tunesia. Though the foreign branches are for-profit, their aim is to (a) provide quality bee products on the market, (b) transfer knowledge and expertise of beekeeping, (c) contribute to the environmental awareness in the industry, (d) foster research on apiculture and (e) create employment with fair wages.
The Philippines is chosen since the bee industry is in its infancy and Ielgat could really make a difference in people’s lives there. Through an international network of beekeepers, Ielgat was able to connect with a local company and now owns and invests 20% in the joint venture. To foster and promote further research on beekeeping, Ielgat also partnered up with a university in The Philippines. Now project requests followed from Russia and Tunesia, but those projects are still in its infancy. In order to finance the project in The Philippines, Ielgat has applied for a government subsidy. This subsidy was granted in 2011 and finances a significant part of the investment. In Table 6 the internationalization pathway of Ielgat is summarized.
Table 6 Internationalization pathway Ielgat
Pattern Pace
Ielgat has expanded and plans to expand to a variety of psychic distant countries like The Philippines, Russia and Tunesia.
During the first years of existence Ielgat was only active in the Netherlands. Recently they have internationalized promptly but not hasty.
Entry mode Financing
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countries complex environment and in order to deploy an already existing network.
for an important part by governmental subsidies. Still, they invest themselves and operate for-profit.
Strategic approach
The strategic approach of Ielgat is semi-systematic. There is no specific focus or plan for one continent but they rather act upon project requests through their network. Once a project starts, it is planned in more detail.
Cross-case analysis
All four case-firms operate in rather different industries and have internationalized to a variety of countries. This part integrates the findings and compares it to traditional and born global theories of internationalization. It follows the dimensional structure adopted before.
Pattern
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partners through their respective sector associations. Criteria for country selection include the presence of an unfulfilled social need and the ability to cooperate locally.
Pace
Though most of the firms under investigation internationalized soon after their inception, the expansion so far, is often limited to only a few foreign operations. The pace aspect demonstrates a mixture of the gradual and born global approach; though the firms internationalize rapidly, they do so by a single market at a time. Ielgat is the exception, since it started to internationalize only after two decades and therefore tends to overlap more with the born-again global approach. The firms internationalized relatively quickly since they recognized that most of the social value could be generated abroad. However, due to the relative complexity of social projects in psychic distant countries, resources were allocated for a single market at a time.
Entry mode
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sourdough bread baking for BBROOD) and aim to maintain a certain level of quality and mission orientation.
Strategic approach
The strategic approach of the case-firms’ internationalization pathway tends to overlap with the gradualist approach. The international expansion often follows from a local request, triggering the entrepreneurs to react opportunistically, even while the domestic market is not completely served yet. Though the social mission statements often convey international aspirations, the actual process is rather reactive and ad-hoc. None of the case firms had a long-term international plan, explaining partly why the firms are active in multiple diverse countries. Soil & More, for example, could have chosen to focus on Africa (and benefit of a geographical learning curve and network) but instead acted upon local requests as diverse as from Asia, South-America and Africa. Governmental support may aid the firms to structure a specific international project, but not the overall international strategic approach.
Financing
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record and developments in distant countries, attracting finance is relatively difficult’. Local as
well as foreign governments are found financially as well as non-financially supportive to some degree. However, none of the cases anticipates to fully rely on subsidies or grants.
DISCUSSION
The pathways discovered demonstrate a mixture of the gradualist and born-global approach of internationalization. It can be suggested that SEs follow a distinct pathway compared to traditional entrepreneurs. First, I discuss the process and complement the findings with relevant literature. After that, I discuss the explaining mechanisms of this specific process.
The internationalization process
Pattern
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assessment. An inhospitable context may be very adequate for an SE to pursue its goals, while it is highly unsuitable for traditional firms.
Proposition 1: SEs tend to take less regard of psychic distance in internationalizing if
the social value is created abroad.
Pace
The internationalization pace seems to be a combination of the gradualist and born-global approach. Though the firms under investigation all internationalized soon after their inception, the expansion so far, is often limited to only a few foreign operations. Dart (2005) contends that having a social mission adds complexity to the organization. It could be suggested that this added organizational complexity confronts SEs with more difficulties to internationalize extensively. In other words: the social mission of SEs promotes them to internationalize soon, but delays the pace of expansion thereafter. Kalinic & Forza (2011) propose a mix of those features and suggest a rapid process of internationalization into unknown markets where strategic focus is the main determinant of success. This pace aspect is more similar to the findings in this study, where the social mission can be seen as an important element of the strategic focus.
Proposition 2: SEs tend to internationalize soon after inception if the social value is
created abroad, but the pace of internationalization thereafter tends to be more incremental due to added complexity from the social intentions.
Entry mode
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international for-profit SEs seek collaboration to acquire significant knowledge of social, cultural and economic systems of the countries where they want to deliver social value. Collaboration is required to overcome liability of outsidership.
Proposition 3: SEs tend to internationalize with medium level of entry mode
commitment as delivering social value often requires local collaboration.
Strategic approach
The strategic approach of the case-firms matches the gradualist approach. SEs recognize social opportunities and formulate missions to create value upon those opportunities (Marshall, 2011). However, despite this mission statement, no international strategic plans are available. These results suggest a similar conclusion as Austin et al. (2006) formulate; international growth of SEs often lacks adequate planning. This could be partly caused by the abundance of social opportunities and the belief of SEs that their approach to deliver social value is superior (Austin et al., 2006).
Proposition 4: SEs tend to plan their internationalization opportunistic, reactive and
ad hoc.
Financing
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tend to look further than traditional creditors. This is in line with the finding of Smallbone et al. (2001) that the most SEs require (to varying degrees) grant support during the start-up phase.
Proposition 5: Public support is important for the internationalization of social
enterprises.
More empirical and statistical support for those five propositions might complement existing literature with even more evidence that SEs are substantially different from traditional entrepreneurs. However, the propositions are not meant to be exhaustive or definitive. The degree to which they explain the differences can vary, depending on what way the social and economic objectives are balanced. Still, the formulated propositions provide the basis with which I continue to explain the mechanisms of SEs’ internationalization pathway; referring back to the ‘motivation’ dimension of Bell et al. (2003)
Explaining mechanisms of SEs’ internationalization pathway
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and employ global social networks to expand the benefits of their efforts. Such firms, despite their entrepreneurial for-profit basis, often win public support for their international cause, either financially or non-financially.
More specifically, ‘social cosmopolitans internationalize because of a social mission.’ Creating social value is the leitmotiv; the reason why social cosmopolitans enter foreign markets. They do so based on entrepreneurial principles to organize and manage a venture sustainably.
‘They cultivate a global awareness while they act regionally to address unfulfilled social issues.’ Social cosmopolitans recognize the global issues like a rising global wealth disparity and
a deteriorating global environment. However, they are not global heroes who will attack those problems definitively. Rather, social cosmopolitans act regionally to address the social issues targeted, in order to effect the most impact.
‘These entrepreneurs internationalize young and overcome psychic barriers easily in the pursuit of social improvement.’ Social cosmopolitans tend to take less regard of psychic distance
since they assess contexts fundamentally different. Their cosmopolitan view allows them to merely neglect country borders as barriers, rather: international differences are opportunities. Social cosmopolitans internationalize young, though it could also occur in a born-again global fashion.
‘Social cosmopolitans are opportunistic;’ implying that they are reactive to opportunities
or project requests and are unspecific in their long-term international strategy. The formulated social mission is the primary context in which decisions are taken. ‘…often leverage specific
knowledge at hand;’ social cosmopolitans meet unfulfilled social needs abroad with resources
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benefits of their efforts.’ Due to their cosmopolitan view, they are in connection with extensive
global networks of likeminded. Compared to traditional entrepreneurs, a strong network is even more important because social cosmopolitans discern more constraints to mobilize resources.
‘Such firms, despite their entrepreneurial for-profit basis, often win public support for their international cause, either financially or non-financially.’ It is often complex to pursue a
double bottom line and therefore it often confuses financiers. Alternative financiers like governments are more prone to value the social mission and therefore often support either financially or by knowledge and network connections.
Concluding, internationalized SEs can be conceptualized as social cosmopolitans, referring to their unique style and motivation for internationalizing.
CONCLUSION
This research investigates the internationalization pathway of social entrepreneurs and its explaining mechanisms. Through a qualitative multiple case-study and by adopting a dimensional analysis, I propose that SEs have a distinct internationalization process. Besides describing the actual process, I also looked specifically into the explaining mechanisms of this specific pathway. The main determinant is the social nature of SEs. Based on five propositions emerged from the analysis, I conceptualize internationalized SEs as social cosmopolitans. Such a type of entrepreneur is characterized by a strong social orientation and a global outlook. I expect that this concept can serve as guidance for future research.
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models like the born global or gradual approach of internationalization. Further, this study adopted an adapted theoretical framework based on Bell et al. (2003), it could be suggested that this adapted framework could be enhanced in future research towards the internationalization process of social cosmopolitans. Avenues for further research include to dig deeper into the five dimensions of the internationalization pathway, in order to strengthen the findings. Further, one might be able to distinguish different pathways based on the type of social mission, considering the classification of Clark and Ucak (2006).
In a globalizing world where social issues are pertinent on a global scale, firms that aim to offer solutions for those issues might need to cross international borders. This research is descriptive in nature, rather than prescriptive; it was not intended to provide any clear cut answers and manuals, though the results could be used for future comparative analyses. It is important to understand how social cosmopolitans act and what their rationale is for such behaviour. Though this study did not include a comparative performance analysis, it can be suggested that deploying strong networks and seeking public support seem to be valuable for an internationalization pathway. Social cosmopolitans are fairly opportunistic which is perhaps caused by the abundance of social opportunities. Still, long-term strategic planning might prove to be important for internationalization efforts.
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