How Social Entrepreneurs Respond to Enterprise Failure

Abstract

Given that little research examines how social entrepreneurs respond to venture failure, the first aim of this conceptual paper is to explore the cognitive, affective and behavioural responses of social entrepreneurs to the demise of their organisations. The second aim is to explore four factors that contribute to these responses: values, motives, personality, and identity. The third aim is to compare responses to failure in social entrepreneurship to failure in commercial entrepreneurship. Literature was sought that focuses on responses to commercial and social entrepreneurship failure, supported by studies in management, organisational behaviour and social psychology. Despite the paucity of empirical research into how failure social entrepreneurs experience failure, we argue that the dual goals of social entrepreneurs (financial and social) place a more significant burden on them than commercial entrepreneurs when their enterprises fail. While negative responses are common, more constructive reactions are possible. The nature of the responses and their underlying factors are captured in a new model of responses to failure in social entrepreneurship, propositions are presented and several directions for future research are indicated.