Keywords

7.1 Introduction

Social Micro, Small, and Medium Entrepreneurship (SMSME) is a growing global trend. The proposed research is very timely and crucial for the efficient renewal and outstanding performance of the SMSMEs. İrengün and Arıkboğa (2015, p. 1187) defined social entrepreneurship as a sustainable and revolutionary problem-solving approach led by an entrepreneur who understands social issues. The idea is to explain the phenomenon from an entrepreneurial perspective and focus on entrepreneur sustainability and business renewal. Despite the novelty of the extant studies on SMSMEs, there is still a gap in understanding the effects of social vision, financial return, innovation, social networks on sustainability. Iwueke and Nwaiwu (2014) press for a better understanding of entrepreneurship relationship with national development and find in their study that low creativity and innovation are affecting sustainable development in Nigeria as social entrepreneurship contribution to sustainable development is not yet feasible. The earlier study examined both SMEs and SMSMEs. Prabawani (2013) reviewed the literature on SME’s sustainability and proved that the sustainability concept has been misused due to its broader scope and highlighted the danger of the ignorance of environmental hazards. Ebitu, Glory, and Alfred (2016) also itemized the significant factors that cause setbacks on SMSMEs as finance, lack of managerial and marketing skills, research, development, innovation, and lack of paying attention to the minutest details.

Innovative entrepreneurship education assessment, tax policies and entrepreneurship sustainability, and factors that are responsible for SMEs internationalization were examined by Sanusi et al. (2017), Aribaba et al. (2019), Adebayo et al. (2019), Gbadegeshin et al. (2019). Thus, the present study attempts to answer the following three questions: What are the effects of social vision and social networks on SMSME sustainability, and what lessons can we learn from SMSMEs sustainability and business renewal relationship? This study employs structural equation modeling to analyze data collected from SMSMEs. This chapter shows social vision, social networks as the factors that are responsible for social entrepreneurship sustainability, and the mediation role of financial return. The result of this project has the potential to transform sustainable business practices.

This study has the potential for turnaround and managerial implications for Nigerian society. Overall, the renewal of SMSMEs will catalyze economic growth and a surge in productivity through a new generation of entrepreneurs. The research discusses the theoretical and managerial implications and proposes future research. Section 7.1 introduces the subject of investigation, Sect. 7.2 chronologically reviewes earlier literature on social entrepreneurship, Sect. 7.3 discusses Social Entrepreneurship Dimensions, Sect. 7.4 explains the methodology adopted for the chapter while Sect. 7.5 presents the results in details, and explains theoretical, managerial implications, limitations, and suggestions for future studies.

7.2 Social Entrepreneurship

Work on social entrepreneurship has been evolving for more than a decade. The concept of social entrepreneurship, taken in a global aspect, has been interpreted in several equally unique ways: The first studies that examined the concept of social entrepreneurship took it as a management of several scenarios as seen from the creation of social value (Boschee 1998; Austin et al. 2012). Secondly, other studies came to add to the previous work by seeing social entrepreneurship as the concrete result of socially responsible enterprises because of their desire to maintain the sustainability of actions and activities (Deakin and Allwinkle 2007; Sagawa and Segal 2000). Later, studies like Alvord, Brown, and Letts (2004) and Daskalaki, Hjorth, and Mair (2015), which pointed out that social entrepreneurship is a measure of social problem solving, leading any entity to a sustainable social transformation complements previous works. Several studies have discovered the links between some terms that define entrepreneurship. Therefore, we have the industrial, the exemplarity, the transformation, and the development with the direct consequence of creating social value (Mair and Noboa 2006; Ukpabi et al. 2019). In light of this, social entrepreneurship and its socio-technical components, such as internal processes and expected results, contribute to a clear discernment of entrepreneurship.

Thus, social entrepreneurship is therefore a description of the works of social organizations and enterprises working for social rather than lucrative ends. British humanitarian organizations such as Victorian private hospitals are among the forerunners of the social entrepreneurship movement (Shaw and Carter 2007). During the eighteenth century, when the real understanding of social entrepreneurship took shape, the owners of powerful companies were very worried about the well-being of their employees in view of the difficult living conditions they faced: poor working conditions, poor educational situations, and even gloomy cultural environments. Social entrepreneurship has therefore taken on another facet by integrating into several sectors and areas of everyday life: education, community development, social economy, and even the church (Rey-Martí et al. 2016). This is how the so-called social enterprise has therefore identified itself as a potent weapon capable of solving social, economic, and cultural problems since it is devoted to social and societal development.

The advent of the third sector marked a turning point in the evolution and popularization of social entrepreneurship. Non-profit organizations realized that they needed professional and effective management skills and efficient business to achieve their goals. Thus, new laws and regulations have emerged to define the functioning and regulations that govern so-called social enterprises. The aim here was to provide assistance to unemployed people with below-average professional standards (Borzaga and Santuari 2003; Nyssens 2007). In the United States, foundations and business schools have revived the social entrepreneurship movement. This is the case of the prestigious Harvard Business School, which was the initiator of the successful “Social Enterprise Initiative” movement in 1993 and intended to highlight perennial ideas and social change, with considerable long-term impact.

Mair and Noboa (2006) reveal in their work that social entrepreneurs are driven by a desire to positively change the society in which they live. This change is due to the several existing incongruities which would prevent the blossoming of their social vision. This is not the case for profit-oriented entrepreneurs where the environment of a capitalist society encroaches on the social character. Eckhardt and Shane (2003) made a discovery that social entrepreneurs categorize each social value to the different social opportunities associated with it. In the entrepreneurial social environment, the importance of any social opportunity implies the set of values and gains associated with the initiative.

7.3 Social Entrepreneurship Dimensions

7.3.1 Social Vision

To be an agent of social change, the social entrepreneur needs social vision to see opportunities beyond the present and to extend the stewardship arm to the needy (Barendsen and Gardner 2004; Dees 1998; Keogh and Polonsky 1998). The social vision differentiates social entrepreneurship from other types of entrepreneurship (İrengün and Arıkboğa 2015). Many factors serve as an influencer of the social vision of an entrepreneur. Significantly, it is the personal and previous experience of the social entrepreneur and their distinct personality characteristics that define their behaviors/actions (Nga and Shamuganathan 2010). These defined behaviors connect to transformative events (Barendsen and Gardner 2004), which shape the attitude towards meeting social needs. Moen et al. (2004) found that a parent’s education and fathers’ occupation has a significant relationship with entrepreneurial attitudes as these individuals see a need to be met. Perrini and Vurro (2006) also noted that being exposed to multicultural contexts or directly experiencing a social challenge can further motivate an entrepreneur’s social vision. These experiences make an entrepreneur to begin to see possible areas to change in the social system (Perrini and Vurro 2006) through the application of their knowledge to chart a different course from the existing situation (Dees et al. 2001). From a developing economy point of view, recognizing the challenges in starting and sustaining a business in Nigeria and the experience of the entrepreneur, the social vision of such an entrepreneur will be essential in seeing opportunities and meeting a need in the society. Nga and Shamuganathan (2010) noted that these formed values are based on personality and experiences and play an essential role in driving social entrepreneurial decision making. Thus, personality traits may influence the intentions and the way the individual acts. It is therefore hypothesized that:

  • H1: Social vision as a social entrepreneurship dimension positively relates to SMSME sustainability.

The intersectoral nature of social entrepreneurship and the challenges in being a sole social entrepreneur caught the attention of researchers, and Prabhu (1999) identified the importance of networking and cooperation with different stakeholders to ensure that the vision of the enterprises is achieved. Social entrepreneurs need a strong ability to establish and manage multiple relationships (Perrini and Vurro 2006). The ability to build and maintain external relations is also critical to establishing legitimacy and credibility for the enterprises (Prabhu 1999). Importantly, the context of social entrepreneurship is also worth considering. Wheeler et al. (2005) found that the active network and unity towards a common purpose achieved through local enterprise networks found to facilitate the generation of sustainable outcomes in developing countries. Alvord et al. (2004) further concluded that making an effort to build capacity and extend networks can positively influence the success of the social enterprise. Findings from (Nga and Shamuganathan 2010) also show that agreeableness, as a personal trait of the entrepreneur, which connotes helpful, trustworthy, and affectionate agreeable people who prefer cooperation over competition (İrengün and Arıkboğa 2015), positively influences the success of the social entrepreneurship. This situation, therefore, puts the responsibility on the social entrepreneur to reach out, identify and build networks to achieve the social vision. It is hypothesized that:

  • H2: Social vision as a social entrepreneurship dimension positively relates to social networks.

7.3.2 Financial Return

For organizations like social entrepreneurs that use business methods to achieve social goals, financial viability is a challenge (Mayer and Scheck 2018). The financial perspective for social entrepreneurship is shaped by the need to seize opportunities and compete for scarce resources to generate economic returns (Nga and Shamuganathan 2010). Even though social enterprises are not profit-oriented, it is essential to be mindful of the financial viability of enterprises to achieve the enterprises’ social vision. Flockhart (2005) suggested that social enterprises ought to find a way to improve their financial return to be suitable for better partnerships and new sources of social finance. Achleitner et al. (2014) analyzed the financing structure of social enterprises. The study found that social enterprises have a strong financing structure, a diversified financing structure which often promises stability in terms of cash flows to the business was recognized, this, however, can result in conflicts which either originate from the capital providers’ different return requirements or the design of financing instruments. Not surprising therefore to see Perrini and Vurro (2006) asked perhaps social enterprises can take up not for-profit ventures to sustain their vision and Brown (2006) suggesting the possibilities of equity finance for social enterprises through liquidation rights, income rights, appreciation rights, voting rights, and transfer rights. Provided the financial return is guaranteed by generating enough revenue and attract enough investment to cover expense, there are prospects of filling the social needs gap. It is therefore hypothesised that:

  • H3: Financial return as a social entrepreneurship dimension positively relates to SMSME sustainability.

7.3.3 Innovation

Social innovation unlocks value by creating a platform where capabilities, products, processes, and technologies are synergized via sustainable solutions (Auersweld 2009; Phills et al. 2008). The innovative ability to explore the social need gaps represents the starting base for an entrepreneur to innovate and be sustainable (Perrini and Vurro 2006). Moen et al. (2004) noted that the essential characteristics of a successful entrepreneur depend on the imagination ability, highlighting the value of innovation in remaining commercially, showing innovativeness of the idea and to evaluate social impacts (Perrini and Vurro 2006). This innovation also adds credibility to the enterprises as there is a recognized fit between opportunities and social need (Shaw and Carter 2007). This ability to innovate involves “intentionally identify[ing] a solution to a specific problem or need because of diverse motivations, including financial rewards” (Dorado and Haettich 2004, p. 6). Prabhu (1999) also argued that the motivation to improve societal values is the driving force for innovation, exploring ways to penetrate unconventional “bottom of the pyramid markets” which may not be served by the bigger and more commercially focused companies (Nga and Shamuganathan 2010). They are motivated to improve the social system by tapping into unmet social needs; these individuals can recognize a social need and stimulate entrepreneurial ideas and innovations to make a social impact (Perrini and Vurro 2006). Social Entrepreneurs innovate processes and technologies to create a social and strategic fit for products and services. In the context of a developing country like Nigeria, it is anticipated that social entrepreneurs will make innovative efforts to reach out and engage with the underdeveloped and unchartered markets. This study therefore hypothesized that:

  • H4: Innovation as a social entrepreneurship dimension positively relates to SMSME sustainability.

7.3.4 Social Networks and Sustainability

From the structural perspective, social networks provide a system whereby the mission of the entrepreneur is embedded and disseminated. Network ties enable a vibrant sharing of information and knowledge to create more innovative and relevant solutions to service the benefit of the wider community (Chen and Wang 2008; Nahapiet and Ghoshal 1998; Shaw and Carter 2007; Thompson and Doherty 2006). The network enhances the social capital of the entrepreneur which has been described as “the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit” (Nahapiet and Ghoshal 1998, p. 243). Accordingly, Nahapiet and Ghoshal (1998) posited three interrelated dimensions of social capital: structural (the overall pattern of connections between actors), relational (the kind of personal relationships people have developed with each other through a history of interactions), and cognitive (those resources providing shared representation, interpretations, and systems of meaning among parties). The active participation in networks induces collective learning and fosters a better understanding of social community norms (Nga and Shamuganathan 2010) which can create a platform for sustainable solutions through a synergistic combination of capabilities, products, processes, technology, and human resources (Dwivedi et al. 2019; Auersweld 2009; Nga and Shamuganathan 2010). Engaging with a social network is crucial to entrepreneurs as they can benefit from valuable information being shared, work source, innovation, financial, and personal support (İrengün and Arıkboğa 2015). A social entrepreneur should be able to tap into their social network and explore the combination and exchange of intellectual and social capital (Littunen 2000). Taking into consideration that when the communication channels between the social entrepreneurs are open, the trust amongst themselves increases, the social needs can be openly and easily stated, and resolutions can be found out (İrengün and Arıkboğa 2015) and, therefore it is hypothesized that:

  • H5: Social networks as a social entrepreneurship dimension positively relates to SMSME sustainability.

7.4 Methodology

7.4.1 Questionnaire Adaptation

This research started with a literature review and adapted the scale for social vision, social networks, financial return, innovation, and sustainability from Nga and Shamuganathan’s (2010) study. It utilized 5-point Likert Scales, 1 = disagree through to 5 = strongly agree. These validated scales comprise multiple items. The single item measures have the limitation of building a robust model and advancing the model performance, but the multiple-items model can positively influence the model’s reliability. The SMSME sustainability demographics centers on education, size of entrepreneurship, contact person position in the company, starting a business, year of establishment, income, number of employees, and barriers. Simultaneously, the Likert Scale focuses on social vision, financial return, social networks, innovation, and sustainability variables with multiple items under each construct. This study utilized Statistical Package for the Social Sciences (SPSS) version 24 to run frequency analysis for data cleaning and demography statistics and SmartPLS version 3.2.8 for Partial Least Square data modeling for measurement, structural equation modeling, and hypotheses testing with Bootstrapping.

7.4.2 Data Collection Procedure and Demographic Analysis

The data for this chapter was collected at the firm level with questionnaires through the Qualtrics online survey platform. The structured questionnaires target the SMSMEs in Nigeria. Similar research has used the SMSMEs survey in Nigeria (Ogbo et al. 2019; Aribaba et al. 2019). The type of SMSMEs that is relevant for this study was indicated in the questionnaire and used conditional statement with Qualtrics Skip Logic to exclude those that did not meet the set criteria. For the sake of privacy, the participants were asked to click a consent button to ensure that this study has the participant’s permission to their information. Thirty-Seven (37) SMSMEs participated in the survey, and the data was collected between August 27, 2019 and October 2, 2019. Peng and Lai (2012) confirmed that the data collected at the firm level could be a minimum of 20 participants.

The participants in this survey are well educated. The higher percentage of them were bachelor’s degree holders (49%), master’s degree holders (32%), high school/diploma (14%), and Ph.D. (5%). Regarding the entrepreneurship size, small entrepreneurship dominates the study (62%), medium-sized entrepreneurship (24%), and micro (14%). Concerning the positions of the survey participants, the owner and manager had the highest frequency (70%), seconded by the owners (16%), and participants at managerial level (14%). The reasons for starting SMSMEs are independence (16%), trying out an innovative idea (38%), higher earning potential (11%), other reasons (5%), and lack of a job (3%). The most frequent year of establishment of MSME is 4–6 years (41%), 1–3 years (24%), above 11 years (19%), less than one year (11%), and 7–10 years (5%). The average year of establishment is 7 years, which indicates that the SMSMEs that participated in the survey are well experienced. Annual revenue of SMSMEs between 501,000 and 1,000,000 had the highest frequency (49%), followed by less than 500,000, and the least is more than 1,000,000 (16%). The present exchange rate is 1 USD = 362 NGN. In the Nigeria context, the margin SMSMEs is based on the number of employee(s) they have. For instance, 1–9 employees represent micro-entrepreneurship, 10–49 depicts small entrepreneurship, while 50–249 employees are the determinant of medium entrepreneurship. The number of employees in SMSMEs that participated in this study is less than 5 (70%), one employee (16%), less than 10 (11%), and 10–49 (3%). The micro- and small-, medium-sized entrepreneurship dominate this study. From the opinion of the SMSMEs in this study, the main barriers to starting a business in Nigeria are finance (51%); bureaucracy (27%); language, knowledge and skills, with the same frequency (8%); legal barrier and others (3%).

7.4.3 Quality Criterion of Measurement Model

The study examined the quality of the measurement and structural model based on the proposition of the existing authors. This study benchmarks the factor loadings criteria of Fornell and Larcker (1981). All the items loaded well on their corresponding construct and loaded between moderate and very strong (0.63–0.95). The reliability of the measurement of the study utilized was examined with composite reliability, and the values were above the thresholds of 0.70 (Bagozzi and Yi 1988). In addition, the Average Variance Extraction (AVE) met the standard of 0.5 (Heir et al. 2011). This study data analysis shows discriminant validity as the constructs utilized and supposedly not to related are unrelated.

7.4.4 Evaluation of Structural and Mediation Model

This chapter formulated five hypotheses and tested it with SmartPLS through Bootstrapping and confirmed the variables that are responsible for MSMEs sustainability. Will social vision positively relate to SMSME sustainability that is, social vision -> SME sustainability (Beta = 0.16, t = 0.55, p > 0.05) and will social vision positively relate to social networks, (Beta = 0.46, t = 3.00, p < 0.05). Will financial return positively relate to Sustainability (Beta = 0.22, t = 1.20, p > 0.05) and innovation positively relate to sustainability (Beta = 0.37, t = 1.34, p > 0.05). Lastly, the social networks positively relate to sustainability, (Beta = 0.33, t = 2.11, p < 0.05). The hypotheses (H2 and H5) were accepted, while hypotheses (H1, H3-H4) were not accepted. The relationship between social networks and sustainability has the highest prediction value (Fig. 7.1 and Table 7.1). The path coefficient of determination for social networks is 18%, while sustainability explained 72% variance (Fig. 7.1).

Fig. 7.1
A framework of the relationship between social networks and sustainability includes social vision, financial return, and innovation.

Tested hypotheses conceptual framework

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Table 7.1 Result of tested hypotheses
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The financial return is central to social vision, social networks, innovation, and sustainability, and it was used as an intervening construct between social vision and sustainability to create a mediating effect as proposed by Hair, Hult, Ringle and Sarstedt (2016). The study used a bootstrapping approach to test the proposed hypotheses. It was hypothesized that social vision relates positively to sustainability through the intervention of financial return (H6b) Social Vision -> Sustainability (Beta = 0.56, t = 2.87, p < 0.05). Also, social vision indirectly relates with financial return (H7), Social Vision -> Financial Return (Beta = 0.51, t = 3.18, p < 0.05), while financial return intervenes between social vision and sustainability (H8b), Financial Return -> Sustainability (Beta = 0.33, t = 1.83, p > 0.05). The intervention was not significant, and the result indicates partial mediation. The coefficient of determination of the mediation model for sustainability is 61%, while the financial return is 26%. The R2 falls between moderate and weak criteria (Table 7.1 and Fig. 7.2). The direct relation in the intervention model (0.73) is stronger than the indirect relationship (0.56). This relationship shows that financial return partially mediates the effect of social vision on sustainability.

Fig. 7.2
A diagram of the relationship illustrates that financial return partially mediates the effect of social vision on sustainability.

Result of simple mediation analysis

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7.5 Discussion

Though social entrepreneurship is one of the catalysts of poverty reduction and sustainable development, its impact on developing countries is not rapid in comparison to traditional entrepreneurship. Between 1985 and 2019, the Nigerian poverty rate has been undulating and has emerged as one of the leading countries globally where about 90 million people, who constitute 45 % of the entire population, find it difficult to have access to basic needs of life such as balanced diet food, portable healthcare, less expensive education, and sanitation (Abdullahi 2019). Poverty has become a sui generis challenge, and it was listed as number one on Sustainable Development Goals (SDGs). According to Abdullahi (2019), investment in girls’ education, health, and wellbeing, enhancement of economic opportunities, and technology integration are ways to end poverty in developing countries, among others (Muhammad 2019). Social entrepreneurs’ intervention is crucial to the SDGs’ objectives to end poverty.

The essence of this chapter is to examine the relationship of the latent variables of social vision, social networks, financial return, and innovation with sustainability based on the suggestion of Valle et al. (2018) to further examine the interconnection of five dimensions of social entrepreneurship. This chapter reveals that social vision is the highest predictor of social networks. The ability to identify the social needs of the people necessitates social networks through knowledge sharing and caring to improve the social strata of the lower class in the welfare hierarchy. Social networks significantly relate to social entrepreneurship sustainability. The result indicates that combining efforts of different social entrepreneurship can foster sustainability. Hence, the ecosystem of social entrepreneurs is crucial. The mediation of financial return makes the relationship of social vision and sustainability significant, which was insignificant in the general model, though the financial return is not the main goal of social entrepreneurship. Nevertheless, an intervention of financial return can influence the relationship of social vision and sustainability. The mediation of financial return between social vision and sustainability can facilitate the business renewal of social entrepreneurs.

7.5.1 Theoretical Contributions

This chapter provides important theoretical contributions. First, it provides information on new methods for understanding the factors that contribute to understanding the effects of social vision and social networks on SMSME sustainability. Second, it provides an essential understanding of structural relationships that may exist between the social vision, social network, financial return, innovation, and SMSME sustainability. Third, it contributes to the literature by deepening the concepts of social entrepreneurship in developing countries, where social and economic conditions are not stable.

From previous results, social vision, along with social network, financial return, innovation constructs, contribute to the formation of the SMSME sustainability variable at 72%. Indeed, the sustainability of a business, whether micro, small or medium, is highly subject to the fact that it can see the opportunity in a futuristic dimension, with prospects for social change around the business. This result is related to the work of Brooks (2009). In addition, SMSME sustainability supports social networking strongly, be it relational, structural, or cognitive. The work of Chen and Wang (2008) reinforces this to the extent that it demonstrates that an enterprise designed via social networking contributes to dissemination and sharing of information, which can, in turn, create innovative and ingenious solutions for the benefit of communities. The study also provides information on the importance of the structural relationship that exists between the social and social network vision. Indeed, the social vision positively influences social network, which is also proven in the work of (Nga and Shamuganathan 2010). It is, therefore, an essential predictor of SMSME sustainability, which itself is densified and solidified by the creation of active social networking.

7.5.2 Managerial Implications

From a managerial perspective, the current study recognizes the influence of social vision, social networks, and financial return on social entrepreneurial sustainability and offers implications for stakeholders. First, for a prospective social entrepreneur, those thinking of starting a social entrepreneurial venture, it is essential to identify a social need to be met, ensuring it is unique and innovative enough to guarantee its sustainability. It is not just about having the social vision and zeal to start a venture but having a bigger picture of its prospects right from the beginning. Second, for those that are running a social enterprise, the social vision is essential and should remain relevant. It should be the motivating factor to carry on with the innovation. No doubt, the financial return may not be coming as anticipated. It is, therefore, vital to make use of social capital and rely on the network. This further highlights an implication for an entrepreneur to build their social capital and ensure they remain innovative.

Third, for the social entrepreneur at large, the need for a support group is proposed. This development will serve as an avenue for prospective and present social entrepreneurs to engage, share ideas, and support each other. It will be a platform to share innovative ideas and build social capital. Importantly members can come together and help themselves in times of need. They can share ideas, skills, and resources like a trade association which will represent the interests of social entrepreneurs. This association builds on the theory of social capital as a form of social network for ensuring sustainability. Lastly, policymakers have a role to play in ensuring sustainable social enterprises in the country. While this is not just limited to the government, they can significantly contribute by providing a sustainable environment for entrepreneurs. These social enterprises are meeting social needs. The right support mechanism should be put in place as a policy to support them. This mechanism could mean having access to discounted resources such as office space, technical equipment, or opening a bank account.

7.5.3 Study Limitations, Plan for Future Study, and Conclusion

This study creates an opportunity for future researchers to extend the dimensionality of social entrepreneurship, but the study is not without limitations. The chapter only focuses on social entrepreneurship in the context of a developing country, but since the poverty scope is beyond a single country, there will be a need for future researchers to extend this study to other African countries. Researchers can use the multigroup analysis technique to compare demographics variable based on five entrepreneurship dimensions. The mixed methodology will also add additional flavor to social entrepreneurship dimensions study.