Growth and social entrepreneurs: the challenge of conciliating economic and social values

Abstract

Purpose

This research aimed to describe the phenomenon of the growth of enterprises in the vision of social entrepreneurs.

Design/methodology/approach

This is a qualitative study developed joining eight social entrepreneurs in four organizations, two cooperatives and two associations. Data were obtained in semi structured interviews. Data were analyzed with interpretativist and the classical content analysis.

Findings

The main findings indicated the growth phenomenon presented in five categories: growth intentions, growth meanings, support of other organizations and participation in networks, strategies and difficulties. The results of the research have shown that the growth for the social entrepreneurs is a collective phenomenon, characterized by search of economic value and empowerment.

Research limitations/implications

The main limitation of the research was study only two types of organizations, one garbage cooperative and two association.

Practical implications

The results can help managers of social incubators and stakeholders because it was evidenced the efforts and difficulties that social entrepreneurs face to survive and to search growth.

Social implications

Our findings may contribute to the formulation of public policies oriented to social entrepreneurs.

Originality/value

This paper presents the first theoretical contribution about the growth in a specific context, the context of social entrepreneurs.

Citation

Pelizza Vier Machado, H., Gaiotto, S.A.V. and Rovaris Machado, M.C. (2021), "Growth and social entrepreneurs: the challenge of conciliating economic and social values", Revista de Gestão, Vol. 28 No. 1, pp. 1-21. https://doi.org/10.1108/REGE-02-2019-0033

1. Introduction

Social entrepreneurship encompasses business situations focused on social challenges and social value creation (Apetrei, Ribeiro, Roig & Tur, 2013; Nicolopoulou, 2014). It refers to a type of entrepreneurship characterized by the search for and promotion of social transformations (Mair & Martí, 2006). The existence of social vulnerability boosts the existence of this sort of venture, which usually relies on a few resources (Montgomery, Dacin & Dacin, 2012) and constantly mobilizes to operate in the market (Austin, Stevenson, Wei-Skillern, 2012). According to Austin et al. (2012), one of the central characteristics of this type of enterprise is social mission.

Considering they rely on few resources, social and solidarity enterprises face several difficulties in the market, such as the lack of legitimacy, visibility (Corrêa & Teixeira, 2015; Freitag, Camargo Filho, Borges de Carvalho & Borges, 2015; Gaiger, 2015; Nicolopoulou, 2014) and qualification (Godói-de-Sousa, Nakata & Caladão 2014). Besides, the shortage of resources contributes to the low confidence of these entrepreneurs (Nicolopoulou, 2014; Urbano, Toledano & Toriano, 2010), which may affect venture growth. When this sort of venture grows, it grows at a very slow pace (Austin, Gutiérrez, Ogliastri & Reficco, 2006; Leitch, Hill & Neergaard, 2010).

We consider relevant to emphasize that company growth depends on the role of entrepreneurial agency (Wright & Stigliani, 2012) because entrepreneurs are leading actors of growth and must, therefore, present intentions, prospects and motivations for growth, which shall influence the rhythm and the amount of growth (Davidsson, Achtenhagen & Naldi, 2010). We emphasize that entrepreneurs have different growth intentions and aspirations (Mitchelmore & Rowley, 2013).

Regarding social entrepreneurs, it is necessary to consider the challenges they face and the shortage of resources; therefore, it is important to know what entrepreneurs understand as growth. Considering that growth is largely perceived as the addition of financial resources and profit, as pointed out by Leitch et al. (2010), and that social or social enterprises focus on social value creation, what is the perception of growth for such entrepreneurs?

The need to know the different meanings of business growth for entrepreneurs is highlighted by Seifert & Vizeu (2015). Accordingly, subjective conceptions on companies' growth are important because entrepreneurs can analyze growth in different ways (Mckelvie & Wiklund, 2010). The meaning of business growth for social entrepreneurs is an area little explored in the literature; it does not appear among the listing of main study fields according to the bibliometric study of Sassmannshausen & Volkman (2013). The field is also little explored in solidarity economy enterprises, as shown by Alves, Flaviano, Klein & Pereira (2016) when carrying out a bibliometric study on the most explored themes in solidarity economic; business growth does not appear in such listing.

The general aim of our research is to understand the business growth phenomenon from a social entrepreneur perspective. As specific objectives, we intend to identify the meaning of growth for social entrepreneurs, as well as the existence of growth intentions and how entrepreneurs plan on accomplishing them. Finally, we identify the difficulties faced and support received by these ventures. Thus, our study presents as scientific contribution an approach on growth in a specific context, namely in social or solidarity venture.

This paper is structured in five sections that approach, respectively, the literature review on growth and social and solidarity entrepreneurship, the methodological procedures adopted by us in order to carry out the qualitative analysis and the findings, followed by an analysis regarding the field research.

2. Literature review

2.1 Considerations on social entrepreneurship

The field of social entrepreneurship focuses on social enterprises, which are studied under three strands. One of them considers social enterprises as non-profit initiatives that search for resource or management alternatives to create social value. Another strand understands social enterprises as socially responsible business practices committed to partnerships (Mair & Martí, 2006). The third regards social entrepreneurship as a way to alleviate social problems while catalyzing social transformation. In short, social enterprises are the ones that aim for social problems' solution (Montgomery et al., 2012).

According to Mair & Martí (2006), social entrepreneurship is a process that results from the continuous interaction between entrepreneurs and the context in which they are inserted. Austin et al. (2012) warn that the context for social entrepreneurs is inhospitable and requires additional efforts from them, especially when compared to commercial entrepreneurs. Such efforts refer to a process of social identity that social entrepreneurs create in order to deal with the challenges they must face (Dacin, Dacin & Tracey, 2011). Social enterprises differ from commercial enterprises due to some peculiarities. Among them, we highlight social value creation, reliance on stakeholders, participation in networks and search for empowerment.

The focus on social value creation is the main characteristic of social entrepreneurship (Leal, Freitas & Santos, 2014; Nicolopoulou, 2014; Urbano et al., 2010). Value creation stems from “the combination of resources to pursue opportunities to catalyze social change and/or address social needs” (Mair & Martí, 2006, p. 37). Williams & Knife (2012) consider that value creation is not an attribute good enough to classify a venture as social; to do so, the venture needs to be compromised to social transformation. However, social value creation, search for social change and social transformation are inherent in social entrepreneurship (Toledano, 2011). Such statement does not entail disregarding the economic value, which needs to exist in the continuous activities of production and commercialization of goods and services; however, social value is perceived through the search for community benefits, decision-making power not based on capital ownership and limited profit distribution (Defourny & Nyssens, 2010).

Another characteristic of social enterprises is their reliance on many stakeholders, which are involved in their creation and governance (Urbano et al., 2010). With the support from stakeholders, social entrepreneurs deal with low legitimacy (Nicolopoulou, 2014) and raise resources, which enables them to explore new opportunities (Murphy & Coombes, 2009). At the same time, they must struggle to reduce their dependence on stakeholders (Bacq & Janssen, 2011).

In addition, social entrepreneurial action occurs through networks. Networks can be mechanisms used to mitigate the lack of legitimacy, visibility and resources (Nicolopoulou, 2014). They serve as sources of funding (Sassmannshausen & Volkman, 2013), discovery and exploration of opportunities (Hill, Kothari & Shea, 2010) and learning for entrepreneurs (Pessoa, Matos, Machado, Bulgarim & Sena, 2018).

Finally, social ventures distinguish from commercial ventures due to the logic behind value capture, which relates to empowerment and not to ownership and control (Urbano et al., 2010). The search for empowerment occurs due to the lack of resources faced by the entrepreneurs, as well as the need to develop competencies (Pinto, Brunstein, Martins & Desidério, 2016).

Briefly, these are the characteristics that distinguish social from commercial ventures. As social ventures are based on social logic and search for empowerment, they tend to face a few dilemmas between the search for social value and the generation of economic value (Austin et al. 2012; Barki, Comini, Cunliffe, Hart & Rai, 2015). Such pressure keeps track of these enterprises when struggling for survival or for growth. Solidarity economy is to be found within this field, which will be approached in the upcoming section.

2.2 Considerations on solidarity economy enterprises

In Brazil, in general, social enterprises are understood as solidarity economy, which represents an alternative for a part of society that is unable to generate their own income (Cassandre, Senger, Amaral & Falleiros, 2013). The term solidarity economy refers to economic practices developed by freely associated individuals, which present a few common characteristics, namely: a certain level of social ownership, mechanisms of workplace cooperation, democratic management style and involvement in broader actions around the venture (Gaiger, 2009).

In order to better understand these ventures, Gaiger (2015) affirms that they encompass the principles of entrepreneurship and solidarism. Entrepreneurship concerns the functioning of productive activities, which need to provide remuneration and other benefits to participants, as well as ensuring the preservation of the associate board and of the social and environmental spheres in which activities are conducted. Solidarism, in turn, refers to the equitable inclusion of all members, equal participation in the decision-making, social and productive cooperation in internal activities and involvement in internal issues of collective interest (Gaiger, 2015). This concept applies to cooperatives, associations and other collective ventures, with the presence of their members in management activities.

Thus, solidarity ventures correspond to collective organizations created and maintained by voluntary associations, consumers and users in order to meet users' needs and common economic, social and cultural goals. Such ventures should present the following characteristics:

1. Continuous economic activity, economic viability, common ownership, involvement of associates in management and collective work carried out predominantly by associates;

2. Social commitment to provide equitable distribution of gains and benefits among associates; equal and collaborative relationship with third parties, social activism, institutional strengthening and transformational actions and involvement in transformative social movements;

3. Democratic management of participative processes, equal decision power among associates, non-discrimination and social equality among associates, institutional autonomy and daily involvement of associates in the decision-making (Gaiger, Ferrarini, & Veronese, 2018).

It is relevant to observe that cooperation, self-management and solidarity are features inherent in solidarity ventures (Gaiger, 2014; Paula et al. 2011), which constitute working communities that arise from workers' associations based on social ties that go beyond the material sphere and immediate satisfactions; such ventures boost common aspirations and horizons, anchored in the history shared by associates (Gaiger, 2015).

We highlight herein the fact that solidarity ventures aim at the social and economic strengthening of the enterprise. Considering the collective and solidarity characteristics embedded in the work organization, Coelho & Godoy (2011) warn that these ventures cannot be observed from an economic rationale perspective.

Thus, this sort of venture presents a multidimensional nature; it transcends the economic sphere in order to meet immaterial, social, cultural, collective and individual needs and aspirations (Gaiger, 2014). Gaiger (2015) emphasizes that these ventures transcend the economic field and are inflexible regarding utilitarian conducts. Due to such characteristics, solidarity ventures present a logic that is not affected solely by economic purposes or by utilitarian and commercial dimensions (Gaiger, 2014). The search for conciliation between social and economic values is inherent in strategies of this sort of venture (Austin et al., 2006).

It is about a peculiar type of rationale, simultaneously economic and social, integration between what one understands by entrepreneurial spirit and by solidarity spirit (Gaiger et al., 2018). Cooperation is a factor related to economic streamlining, which contributes to the pursuit of tangible effects and advantages by providing income to the reach of any associate. In addition to cooperation, Silva, Calazans, González & Souza (2011) highlight the principle of reciprocity in organizations and the principle of fair redistribution of income and wealth, which benefits the entire community through the use of shared resources. Within this scope, we mention the common ownership of the means of production and non-hierarchical work relationships (Pinheiro, 2016).

Based on a collective and relational protagonism (Gaiger, 2015), the dynamics of solidarity ventures are characterized by the presence of families and social circles (Gaiger, 2013); these ventures often receive support from universities and business incubators (Gaiger, 2009). There are also other cooperation networks that aim at providing collective gains and knowledge for solidarity entrepreneurs. Pirotti, Bitencourt & Wegner (2017), for instance, identified some gains associated with learning in collaborative practices, namely: acquisition of information, consulting and access to problem solution tools, knowledge improvements, improved skills to perform activities, process improvement and viability of strategic objectives. The authors noted that some collaborative practices resulted in legitimation and status: social empowering, improved bargaining power and safer negotiations. They also confirmed economic and financial benefits, such as contracts with privately-owned and public companies, acquisition of equipment and machinery and better bargaining power with intermediaries of sales processes.

However, not every solidarity venture presents a full self-management that fosters social emancipation (Faria, 2017). Despite classified as solidarity economic enterprises, some ventures do not represent initiatives constituted by workers'' autonomous associations; these ventures are created by third party initiatives, as pointed out by Gaiger et al. (2018) and are listed below.

1. Social economy ventures, in which work is collective, but without open accession membership. These ventures do not follow the criteria of democratic management;

2. Entrepreneurial cooperatives, whose members often own private businesses and hire employees;

3. Voluntary sector entities that develop social operations, but do not always develop economic activities and are not democratically managed. Voluntary sector entities are governed by private law and do not seek for the generation of financial benefits for their members; their purpose is to meet the demands of public interest.

As a social entrepreneur, the individual analyzed in our research is represented by the vulnerable worker aiming at economic organization and successful conduction of a venture based on a singular rationale (Gaiger, 2015). In order to boost the growth of this sort of venture, the individual must face – for example – the challenges of expanding the operational capacity, diversification of resources and access to networks (Austin et al., 2006). The evaluation of these ventures is associated – in addition to economic aspects (e.g. market share, customer satisfaction, number of contracts and agreements and among others) – to the social impact evaluation and improvements in the associates' quality of life (Austin et al., 2006). As pointed out by Gaiger (2015), the success of solidarity economy ventures depends on the opportunities they offer to individuals – affected by inequalities – to trace their own path toward dignity and provision of better life conditions; the individuals must also be provided with the opportunity to recreate their own reality while attributing new meanings to their existence (Paula et al. 2011).

2.3 Considerations on business growth

Growth differs among companies; not every company grows the same way and they rarely grow in a continuous manner (Davidsson et al. 2010; Delmar, Davidsson, & Gartner, 2003; Mckelvie & Wiklund, 2010). According to Penrose (2006), growth stems from the managerial ability of entrepreneurs, from the market behavior and from risks and uncertainties. Thus, internal and external factors exert an influence on the growth of enterprises (Julien, 2010). Growth is not limited to structural changes, but it encompasses the internal evolutions of every individual involved in the process (Delmar et al. 2003; Pasanen, 2007; Penrose, 2006).

Growth can be defined as “a change in size over any given time period” (Dobbs & Hamilton, 2007, p. 313). Such alteration can be associated with factors at the individual, company or environment level (Wiklund, Patzelt & Shepherd, 2009). At the individual level, the time dedicated by the entrepreneur to the business management and participation in social and business networks influences growth (Dalborg, Von Friederichs & Wincent, 2012). The insertion in social networks, as well as personal contacts and contacts with other entrepreneurs, increases business vision, develops collective learning and consequently promotes growth (Bogren, Friederichs, Rennemo & Widding, 2013).

Another important aspect refers to the meaning attributed by the entrepreneur to growth, which can be different from one person to another. Achtenhagen, Naldi & Melin (2010), for instance, identified as meanings of growth according to entrepreneurs the following: increased sales volume, increased number of employees, increased profitability, asset increase, increased value of the company and internal development. According to the authors, internal development is associated with the development of competencies, establishment of efficient organizational practices and establishment of a professional sales process; the latter was considered the most important indicator according to the entrepreneurs analyzed. However, such meanings can vary according to the idiosyncrasies of the venture.

Still regarding the individual level, growth – which is also a subjective phenomenon (Mckelvie & Wiklund, 2010) – depends on entrepreneurs' growth intention and must be desired (Doern, 2011). Growth intentions reflect entrepreneurs' objectives and aspirations (Dutta & Thornhill, 2008) and present a guiding effect on growth (Sadler-Smith, 2003). They represent the intended growth (Hermans et al., 2012). Intentions can be influenced by some factors, such as age, experience and culture (Douglas, 2013). Conforming to Davis & Shaver (2012), they can also vary according to gender; men tend to present more business growth intentions than women.

At the company level, growth can be influenced by product quality (Bulanova, Iksaden & Kolvereid, 2016), by the adoption of new technologies, product and service diversification (Costin, 2012) and by creative and innovative capacities (Freel & Robson, 2004; Roomi, Harrison & Beaumont-Kerridge, 2009). It is also possible to add to these factors the emphasis on the qualification of the team and on the use of advertising and product promotion (Costin, 2012; Mitchelmore & Rowley, 2013). There are also some strategies that influence growth, namely market positioning strategies, technological sophistication strategies, product launch strategies (Davidsson et al., 2010) and internationalization (Coad & Tamvada, 2012; Davidsson et al., 2010).

Despite being influenced by enabling elements, as the ones mentioned above, growth can also be affected by some difficulties, which restrain its fulfillment. Previous studies showed that obstacles to growth may be related to lower personal qualification and managerial training, as well as little entrepreneurial experience (Dolinsky & Caputo, 2003; Roomi et al., 2009). Psychological factors, e.g. low self-confidence and fear of taking risks, can affect growth in a negative way (Hermans et al., 2012; Roomi et al., 2009; Winn, 2005). In addition, the concern stemming from family and work conciliation may limit the growth of small ventures (Shelton, 2006). The scarcity of financial resources represents another obstacle to growth (Martins, Crnkovic, Pizzinatto, & Maccari, 2010).

In short, these were the dimensions of analysis used in our study, whose aim is to understand business growth from a social entrepreneur perspective. We elaborated a synthesis of such dimensions in Table 1, in which authors were also identified.

These were the elements that guided the data collection procedure based on the analyzed literature. Only the dimension “internationalization”, mentioned by Coad & Tamvada (2012) and Davidsson et al. (2010) was not considered in Table 1 because it does not fit the social ventures approached herein.

3. Method

Our qualitative research, whose aim is to understand what business growth means to social entrepreneurs, considers that the way through which the world is perceived by individuals is a socially constructed image and what feels important to someone will inevitably appear in the discourse (Nicolaci-da-Costa, 2007).

The first phase of our research was the selection of participants. In order to ensure the diversity of discourses, we selected male and female social entrepreneurs in cooperatives and associations. The selection of subjects was based on homogeneity (selection of social entrepreneurs) and heterogeneity criteria – our focus was on cooperates and associates, both male and female (Nicolaci-da-Costa, 2007). We selected eight social entrepreneurs; four of them belonging to two waste picker cooperatives, the other four artisans belonging to two associations. The number of observations enabled the understanding of a shared vision of venture growth.

The participants were selected based on the indication of two social incubators located within the campus of two universities (one public university and one confessional university) and through two artisan associations. The research participants are involved in the execution of activities, in management and in the decision-making processes of the social ventures to which they are associated. Their participation in our research was voluntary and all of them signed the term of consent.

The data collection was carried out through semi structured interviews with open-ended questions, such as: What are your plans to grow? What does venture growth mean to you? After your business started growing, what helped you to achieve such growth? In your opinion, what hinders growth? How and which individuals and institutions were part of your growth experience? The interviews were recorded with the consent of all participants; the longest interview lasted a maximum of 1 hour and 38 minutes; the shortest 40 minutes. We accomplished a full transcription of the interviews. In order to keep the anonymity of all participants, they will be referred to herein as C1, C2, C3, C4 and A1, A2, A3, A4. The content of all interviews was submitted to participants for increased data reliability (Flick, 2009; Schwandt, 2000).

The data analysis was guided by the interpretivist paradigm. We aimed at understanding the behavior of entrepreneurs engaged in social ventures in order to find out the sense they attribute to the process of growth in such ventures (Packard, 2017; Schwandt, 2000). First, we carried out an interparticipant analysis (answers of the group as a whole), which led to the emergence of representative categories of growth. The codification of data was accomplished during a first interrogative reading with the support of the software program NVivo 9 in order to find explanatory categories related to the process of growth. We used open coding based on data (Gibbs, 2009), observing the regularity and variability of data. The classification led to five different categories, namely: (1) business growth intentions; (2) meanings of business growth; (3) support from other institutions and networks; (4) business growth strategies and (5) obstacles to growth.

Subsequently to categorization, we carried out a first-order analysis, based on the categories and a second-order analysis, based on concepts and repercussions presented in literature (Gioia, Corley & Hamilton, 2012). Thus, we made use of a mix of inductive and deductive processes (Graebner, Martin & Roundy, 2012).

4. Presentation of results

Regarding the profile of participants, the youngest was 32 years old; the oldest 61. Most of respondents were women; the highest level of education was high school. Regarding their previous occupations, C1 used to work as a domestic employee and later became a waste picker. C2 had already worked as a waste picker. C3 has always been involved with waste recycling. C4 had previously worked at a jeans dyeing company. A1 and A3 are retirees; A2 and A4 worked as salesman (see Table 2).

Next, we will present the categories involved in the entrepreneurs' understanding on growth; first, we initiate the discussion by presenting aspects related to growth intention and meaning of growth.

4.1 Business growth intention

In order to promote the growth of companies, entrepreneurs need to present growth intentions, which can be defined as “the individual's intention to start a new venture that will be substantially larger in subsequent time periods” (Douglas, 2013, p. 636). In our study, only three entrepreneurs expressed growth intentions, as it can be observed in some excerpts of the discourses: “We think about improving, always growing” (C3). Another participant that presented growth intentions was A4, who aims at creating an online shop. According to C1, growth intention depends on the availability of inputs, accordingly: “We do have a chance to grow, yes […] If we have enough inputs and machinery, we can still be major entrepreneurs in this city in the future” (C1). The other interviewees presented no growth intention and claim that the main reason for such behavior is the lack of available time, considering they cannot rely on the help of others, as pointed out by A3: “I only have this amount of time… I have no conditions to double it”.

Douglas (2013) classifies growth intentions as growth and independence oriented. The latter try to avoid risk by searching for work satisfaction. In our research, A1 was more independence oriented, since she did not pursue growth because it would entail losing time with her family; we emphasize that A1 became an entrepreneur after her retirement. The valorization of family rather than growth represents a logic that differs from economic aspirations; such fact evidences that growth is a multidimensional phenomenon, as pointed out by Seifert & Vizeu (2015).

Davis & Shaver (2012) consider that growth intentions are related to the human life cycle. Conforming to these actors, the older entrepreneurs get, the lower the business growth intentions. In our research, such findings are in accordance with cases A3 (55-year-old entrepreneur) and A1 (58-year-old entrepreneur).

4.2 Meanings of business growth

In the data analysis, we identified that the meaning of growth was related to three different aspects according to entrepreneurs, namely: (1) economic; (2) empowerment and (3) collective phenomenon. Table 3 gives further detail on each type of meaning.

These meanings are different from the ones presented by Achtenhagen et al. (2010), who claimed that entrepreneurs emphasize growth as an internal development of competencies, efficient organizational practices and a professional sales process. Social entrepreneurs, according to the data of our research, presented a different logic concerning the attribution of meanings to growth.

Regarding the economic meaning according to social entrepreneurs, growth is equal to the creation of economic value, which encompasses increased sales volume, production, or revenue (Janssen, 2009), such as the case of commercial ventures. This way, according to some entrepreneurs, growth is synonymous with increased income and production (cases C1, C2, C3, C4). However, such meaning is associated to a collective effort and to the socialization of the means of production, which characterize solidarity ventures.

Growth as a collective phenomenon presents a meaning that distinguish social from commercial entrepreneurs. As pointed out by Toledano (2011), the concept of community is a key point in social entrepreneurship and was prominent in the discourses of the interviewees. Growth, as a collective phenomenon, shares characteristics from solidarity ventures, such as the socialization of the means of production and solidarism, highlighted by Gaiger (2009, 2015).

On the one hand, the meaning of growth as a synonymous with empowerment represents a specificity for social entrepreneurs, who must deal with the lack of visibility and self-confidence (Nicolopoulou, 2014; Urbano et al., 2010). On the other hand, as observed in the excerpts of some discourses, the entrepreneurs analyzed by us consider that growth “empowers”, “capacitates”, “moves competitors away”; in this sense, it represents an opportunity of empowerment and inclusion, as mentioned by Estivalete, Andrade & Costa (2018).

In short, through the meanings demonstrated herein, we understand that growth for social entrepreneurs presents a multidimensional characteristic, which transcends the economic sphere, as defended by Gaiger (2014; 2015).

4.3 Support from other organizations and participation in networks

Amongst the institutions that supported activities to promote growth, the interviewees mentioned a few large companies, municipalities and church. One type of support mentioned is either associated with the maintenance of vehicles or with improvements in the facilities and furniture, as showed in the following excerpts.

Then we managed to buy this Volskwagen Transporter. We had no money to fix it. Then Coca Cola helped us to fix it… The municipality rents the old shed… This one time we needed new tires for the Transporter and the mayor helped us, we needed an automotive battery, he helped me. The municipality now helps, we needed this furniture for the office, they gave us a desk. (C1)

… this guy from Tetra Pak comes here and gives us some guidance, he helps with some problems like the press he gave us, now he just gave us some roof tiles, he wanted to see what we wanted to do with them, so we move forward based on what we receive. (C3)

Regarding the participation in networks, only one participant mentioned the insertion in the national network of waste pickers. Her participation in one of the events promoted by the network provided her with contact with other cooperate members, as shown in the excerpt below:

It's been three years since I've been to Porto Alegre. I flied all the way there. We've also been to São Paulo, every year there is this event (Pró catador, in Portuguese), I don't know if you've heard of it, it's located in Anhembi. Every year there's this event, there are waste pickers from all over the country, it is the conference of waste pickers in Anhembi, every year there's a new one. There will be another meeting in the end of the year, I'm going. We know a lot of people there. We met people from Argentina, Paraguay, and from every part of Brazil. (C1)

The Program for Waste Pickers (Pró Catador, in Portuguese) was created by the Brazilian federal government through a Decree of 2010 (n. 7405) as part of the national policy for solid waste, instituted by a Law of 2010 (n. 12305) in order to promote an integration among waste pickers. After the creation of this law, several Brazilian cities joined the program. From the interviewees, only C1 took part and is still participating in the program. The participation in this network, according to the interviewee, is relevant to obtain more information and contact with the reality of other cooperatives; it is a way to commiserate with other social entrepreneurs, as emphasized by her:

We get more information, we learn. We also know the reality of other cities, there are people and cooperatives that are doing worse than we are. I met a cooperative with 105 people, and it is managed by a woman, the president, most of them are women. We end up knowing different realities, some cooperatives are going through more difficulties. (C1)

These affirmations are in line with Toledano (2011) regarding the important role of social connections, social interactions and networks in social entrepreneurship. Bronzo & Rocha (2012) refer to collaborative articulations, which involve government, civil society and market. In our research, the connections observed involve the government, represented by municipalities, the civil society and the market, represented by large companies. Besides, one of the interviewees mentioned that she intends to make use of social media in order to promote her products.

Unlike the findings presented by Corrêa & Teixeira (2015) and Gaiger (2013), the entrepreneurs participating in our research did not mention strong ties with family, friends and neither work colleagues. Still, research data show the relevance of relational protagonism in order to enable the accomplishment of activities, as mentioned by Gaiger (2015).

4.4 Business growth strategies

According to the participants in the research, seven types of strategies contributed to the promotion of growth. The first one is the collective commercialization, which provides entrepreneurs with a higher level of empowerment in the market. The second is the pursuit of expansion of the physical space; for such, the entrepreneurs need the support from stakeholders. The third is the attempt to increase in the number of cooperates. Even though the apportionment of construction works is carried out based on the number of employees, they are the ones performing the activity of waste separation and, in order to grow, they need a larger number of people. The increase in the number of machines is another strategy considered jointly with the increase in the number of members.

Some other strategies were mentioned, such as the search for inputs in different locations and the adjustment to the dynamics of the market. The volume of activities developed by the cooperative is determined by the number of garbage trucks that the municipality allocates to each cooperative. To promote growth, some entrepreneurs have been negotiating with municipalities in order to increase the volume of activities; for such, it is necessary to extend the area devoted to receiving materials to include the recycling of other materials – this is another strategy used by the cooperative members. Thus, these increased activities are linked to the increase in the number of members. Finally, self-learning was mentioned by one participant as a growth strategy. Table 4 indicates the discursive fragments according to each type of strategy.

While commercial ventures focus on market positioning, technological satisfaction and internationalization to achieve growth (Coad & Tamvada, 2012; Davidsson et al., 2010), social ventures look for collective markets and collective forms of commercialization in order to ensure a stronger bargaining power. Organizations need a set of strategies in order to meet their goals; for such, they need human and financial resources (Austin et al., 2012). According to Table 4, social entrepreneurs pursue physical and human resources, as well as inputs necessary to accomplish activities – such finding highlights that growth strategies in social ventures are embedded in the context of survival, as shown by Nissant, Castaño & Carrasco (2012).

Austin et al. (2012) mention that social entrepreneurs need a long-term growth strategy and must resist strong demands. According to the authors, social entrepreneurs must identify relevant risks while evaluating all growth opportunities with a strategic thinking. The authors also point out that social entrepreneurs rely on a strict access to resources and capital and present a low capacity to attract capital. These emotional and psychological dimensions create “strategic rigidities” (Austin et al., 2012, p. 377).

4.5 Obstacles to growth

As obstacles to growth, the social entrepreneurs mentioned a few relevant issues: the lack of machinery and recycling material. Regarding the lack of machinery, the inexistence of conveyers and paper shredders were mentioned by some interviewees.

The difficulty used to be the shed, now we have the shed. Now we need machinery… I went to this city were the local cooperative has conveyers. It is much faster to work with conveyers. (C1)

There are even some companies that don't send any material to us because of the lack of machinery. Some laboratories don't send us any discarded materials because we have no paper shredder. And the paper must be shredded, so they send it somewhere else, where there is a shredder. So, if we had the machinery, companies would trust sending us more material, a material that must be destroyed. We don't receive this donation because we don't have the machinery… (C3)

Another difficulty mentioned was the lack of recycling material. Four years ago, the municipality – through a regulation – specified that the delivery of the material collected would occur in the sheds where the municipality allocated the cooperatives. With this alteration, the entrepreneurs conquered a physical space (sheds), but were prohibited to collect any waste of the streets. This way, the municipality found a way to regulate the collection of recyclable waste; however, when depriving cooperative members of any contact with waste on the streets, the municipality reduced their job control. Examples of waste pickers that work independently show a different dynamic, as declared by Andery (2016, p. 1): “I created a schedule to collect the waste, and I started treating waste producers like clients. I explain to them the path that the waste will be running along, I tell them it won't be landfilled and, in the end of the month, I send them a spreadsheet showing how much waste they removed from the waste productive chain thanks to my service” [1].

The way through which waste is organized between government, cooperatives or associations was instituted in the country in 2007 by means of a national regulation that allowed the hiring of cooperatives by the municipality without raising bids and was adopted by several Brazilian cities. Teixeira, Chettino, Rodrigues & Mendes (2010) observed that waste pickers in the city of Sergipe also encountered a few difficulties related to the lack of material to recycle.

Another reason that explains the lack of recyclable materials is the valorization of this input over the past few years. Considering that company growth can be influenced by the individual or by the environment where the individual works (Antoncic & Antoncic, 2011; Penrose, 2006), the valorization of waste is one of the factors that have restrained the possibility of venture growth, as revealed by the interviewees: “Recyclable materials are capital, so a lot of people invest in it now” (C1); “The price of the material rose, the demand for it increased” (C3). Problems related to the scarcity of inputs, the social entrepreneurs mentioned: the need to expand the number of garbage trucks made available by the municipality, competition with individual waste pickers and the existence of large companies that started operating in the recycling business.

Austin et al. (2012), regarding the obstacles faced by social entrepreneurs, mention the following situations: limited access to best talents, little funding, limited tools and resources and strategic rigidity, which hinder the ability to mobilize resources. With poor working and housing conditions – which is the case of the waste pickers analyzed in our research and in other studies (Freitag et al., 2015) – social entrepreneurs present growth intentions, but they are aware that, in order to grow, it is necessary to obtain higher volumes of inputs, more machinery and more resources to expand activities. According, to Freitag et al. (2015), the difficulties observed by the authors interfered in the search for empowerment because many pickers believed that the individual collection of waste presented more advantages.

5. Analysis of results

The focus of our research was the growth of social ventures from a subjective phenomenon perspective, i.e. from the viewpoint of eight social entrepreneurs. The growth phenomenon was analyzed based on five dimensions: intentions, meanings, strategies, support from other organizations and participation in networks and obstacles to growth.

Regarding growth intentions, only three entrepreneurs manifested such aims. One of the reasons given for the lack of intentions was the scarcity of resources, as also pointed out by previous studies and lack of available time (Nicolopoulou, 2014; Urbano et al., 2010). The behavior of these social entrepreneurs differs from ambitious entrepreneurs' because a more ambitious entrepreneur “identifies and exploits opportunities to create new products, services, processes and organizations with high aspirations to achieve entrepreneurial success – i.e. to maximize value creation” (Hermans et al., 2012, p. 2). In the specific case of cooperatives, participants expressed a clear desire to recycle other types of materials, but they cannot do it because the waste collection is limited and carried out by the municipality. This information indicates a lack of autonomy of social entrepreneurs who want to develop growth intentions. Another limitation to growth intention mentioned in our survey was the lack of available time because, in addition to planning and managing their ventures, entrepreneurs need to keep on providing the service they stand for.

In relation to the meanings of growth, we found three main perspectives: creation of economic value, form of empowerment and collective effort. The creation of economic value was addressed to the increase in production levels and sales, which is similar to the definition presented by commercial entrepreneurs (Davidsson et al., 2010). However, concerning commercial entrepreneurs, the results stem from individual effort and reward; for social entrepreneurs, the increase in production and in sales is a result of a collective dynamics. Conforming to Apetrei et al. (2013), social entrepreneurship has a collective origin because opportunity results from social problems, not from individual needs; it is a group phenomenon that commits to the group.

With respect to empowerment, it depends on the jointly sharing of four elements, namely: access to information, inclusion and participation, responsible activities and local organization capacity (Word Bank, 2002) and means “increasing one's authority and control over the resources and decisions that affect one's life” (World Bank, 2002, p. 14). The findings of our research showed that, considering entrepreneurs' self-management, growth – according to the participants of the survey – contributes to empowerment. Regarding social entrepreneurs, growth must create social and economic value (Mair & Martí, 2006) in order to promote empowerment (Urbano et al., 2010).

While growth in economic ventures is determined by actions, such as product quality, adoption of new technologies, product and service diversification, innovative and creative capacity (Freel & Robson, 2004; Roomi & Harrison, 2009), use of advertising and product promotion (Bulanova et al., 2016; Costin, 2012; Mitchelmore & Rowley, 2013), social entrepreneurs need to overcome another bottleneck, i.e. the scarcity of resources, which was also emphasized by Montgomery et al. (2012).

In addition to economic value and empowerment, growth – according to the interviewees – results from a collective effort. Since all activities are jointly carried out among cooperative members, growth is also perceived by them as something that stems from a collective effort, indicating a sense of community, supporting the study of Toledano (2011).

Regarding growth strategies, while economic ventures adopt strategies like market positioning, technological sophistication, product launch and internationalization (Coad & Tamvada, 2012; Davidsson et al., 2010), in our research the participants mentioned some other strategies, namely: collective commercialization, expansion of the physical space and machinery, increasing the number of cooperative members, identification of inputs in other locations, adjustment to the market dynamics and self-learning. This way, social entrepreneurs aim at increasing agency power – collectively – instead of becoming great entrepreneurs, as pointed out by Costa et al. (2012).

The collective action extends to the external environment of the venture and counts on the support from other organizations in actions like vehicle maintenance, improvement of facilities and furniture, as mentioned by the interviewees; such finding indicates that growth is only accomplished with the help of stakeholders. In consonance with Santos (2012), the empowerment of social entrepreneurs is achieved thanks to the support from stakeholders. On the one hand, the participation in networks was considered an important elements for the survey participants; on the other, these networks are used to establish more contact with other cooperative members and not to promote growth, which is in accordance with the findings of other studies (Bogren et al., 2013; Corrêa & Teixeira, 2015; Dalborg et al., 2012).

The obstacles to growth mentioned by the interviewees were: lack of machinery and materials to recycle. The experience in this market segment, mentioned by Roomi et al. (2009), was not considered an obstacle because most of the pickers had already previously worked as waste pickers and the artisans also have had prior experiences in the segment. The obstacles presented by them were more associated with the scarcity of resources (Martins et al., 2010). Other difficulties, like the low self-confidence and fear to take risks (Dolinsky & Caputo, 2003; Roomi et al. 2009) were not identified in our research. Within this context, Paula et al. (2011) highlight the need to focus on limiting factors and obstacles because they can prevent entrepreneurs from becoming agents capable of transforming their own existences.

Figure 1 shows a synthesis of the findings regarding growth dimensions for the social entrepreneurs approached in our research.

Social entrepreneurs aim at the creation of value for them, especially social values; however, they must also create economic value (Mair & Martí, 2006; Urbano et al., 2010). For such, they need empowerment in order to ensure the survival of the ventures. Austin et al. (2012, p. 375) affirm that social entrepreneurs have less power than commercial entrepreneurs, “social entrepreneurs may choose to pursue opportunities to address social change not despite of, but because of, an inhospitable context”.

In fact, growth – according to the social entrepreneurs that participated in our research – is preceded more by overcoming obstacles than by the pursuit of profit maximization. The difficulties presented by the inhospitable environment are overcome thanks to the support from stakeholders and a collective effort. Growth, according to the narratives, represents an empowerment possibility. The need of empowerment for social entrepreneurs is particularly important, especially considering their low self-confidence (Austin et al. 2012; Barki et al., 2015).

Austin et al. (2012) underline that social entrepreneurs must evaluate their growth strategies because, in some cases, growing may not be the best way to achieve the aims of the organization and promote higher social impacts. According to the authors, if social entrepreneurs start acting proactively, paying attention to the context while actively monitoring the environment in order to protect themselves from threats and identify opportunities, it may help them develop an adaptive strategy that considers several contingencies. However, structural, economic and social barriers hinder the proactivity of social entrepreneurs. In our study, we realized that social entrepreneurs design strategies that not only focus on the survival of the venture, but also contribute to empowerment. Thus, if they manage to overcome structural barriers, such as the ones pointed out by them in this research, the entrepreneurs will enhance their possibilities to act more proactively and transform their realities.

6. Final considerations

Our study on the growth of social entrepreneurs demonstrated that growth, from a social entrepreneur perspective, does not only imply venture expansion, but also other dimensions, such as increased autonomy over production and the exercise of collective actions. In this sense, conforming to Seifert & Vizeu (2015), there are different logics related to venture growth that go beyond the economic aspect.

Considering social entrepreneurship, the findings indicate that growth according to social entrepreneurs represent a challenge for social and economic value creation and for the pursuit of empowerment. The logic that lies behind value capture is the empowerment of actors, which is a central element of social entrepreneurship (Santos, 2012; Urbano et al., 2010). Therefore, the growth of social ventures does without public policies that ensure the ability of entrepreneurs to create value for themselves and for the market. Additionally, the findings of the research showed, from a social entrepreneur perspective, the complexity and the dynamics involved in the pursuit of growth.

The qualitative research method was important to identify subjective understandings related to business growth for social entrepreneurs and to provide a multidimensional understanding of growth in a social context. These dimensions, however, encompassed only a few management variables, which constitutes a research limitation. Another important limitation identified by us refers to the analysis of only one type of cooperative (waste pickers) and one type of association (artisan); further work should be done to expand the analysis to other types of cooperatives and associations. Even though Gaiger et al. (2018) consider that associations and cooperatives are the most common types of solidarity economy, it is important that future studies focus on other types of solidarity economy ventures.

The significance of our study lies in the theoretical contribution on growth in a specific context (social ventures), which has not been approached in previous works. Our findings provide practitioners (managers of solidarity business incubators and stakeholders of social entrepreneurs) with important insights related to the efforts and difficulties faced by social entrepreneurs in order to survive and pursuit growth. In addition, our findings may contribute to the formulation of public policies oriented to social and solidarity entrepreneurs and offer subsidies for the elaboration of teaching material on social entrepreneurship.

Future studies should investigate the actions of social entrepreneurs from a stakeholder perspective, i.e. analyzing the phenomenon from a different angle.

Figures

Figure 1

Representation of growth according to social entrepreneurs

Table 1

Elements for business growth analysis

Growth determinants
Individual level	Growth intentions	Doern (2011), Dutta & Thornhill (2008), Sadler-Smith (2003), Hermans et al. (2012), Douglas (2013), Davis & Shaver (2012)
	Meanings of growth	Achtenhagen et al. (2010)
	Insertion in networks	Bogren et al. (2013), Dalborg et al. (2012)
Company level	Quality of products and services	Bulanova et al. (2016), Costin (2012), Freel & Robson (2004), Roomi et al., 2009), Mitchelmore & Rowley (2013)
	Adoption of new technologies
	Diversification of products and services
	Creative and innovative capacity
	Qualification of the team
	Use of advertising and product promotion
	Strategies	Davidsson et al. (2010)
Barriers to growth	Low self-confidence	Dolinsky & Caputo (2003), Roomi et al. (2009), Hermans et al. (2012), Rommi et al. (2009), Shelton (2006), Winn (2005), Martins et al. (2010)
	Fear of taking risks
	Conciliation between work and family
	Scarcity of financial resources

Table 2

Profile of research participants

Participants	Age	Gender	Previous occupation	Type of venture
C1	32	Feminine	Domestic worker/waste picker	Waste picker cooperative
C2	61	Feminine	Waste picker	Waste picker cooperative
C3	52	Feminine	Worked with recycling	Waste picker cooperative
C4	48	Masculine	Employee at a jeans dyeing company	Waste picker cooperative
A1	58	Feminine	Retired as a domestic worker	Artisan association
A2	39	Feminine	Unemployed	Artisan association
A3	55	Feminine	Retiree	Artisan association
A4	35	Feminine	Unemployed	Artisan association

Table 3

Meanings of business growth according to participants (social entrepreneurs)

Meanings	Discursive fragments
Economic	“Produce more” (C1)
	“Make money” (C2)
	“Growth is… the more the cooperative grows, the higher the profits, for sure” (C3)
	“I believe that it means revenue because there is no growth without an increase in sales” (A4)
Collective phenomenon	“There must be a unity, everybody thinking about this one thing, we will grow, we will walk hand in hand” (C1)
	“First (to grow) it is necessary to have a good management, because the cooperative members know everything we do, because they all participate. We need to discuss things during meetings, to say how much we sold…” (C1)
	“Today we work, we produce things individually, but we sell them collectively” (A1)
	“The cooperative is like this, because you are part of the game, if you lose, everybody loses” (C4)
	“The more the cooperative grows… but the whole cooperative, in general” (C3)
Empowerment	“It means to show we are capable” (C1)
	“Because if we grow, we won't need a facilitator, we can sell directly to industries” (C3)
	“We empower ourselves” (A1)
	“It's like a little ladder, I started doing this one thing, then they found me and now here I am” (A2)
	“I already have clients that buy my products to give as a gift to someone, sometimes the neighbor likes my work and then the business expanded” (A3)

Table 4

Strategies of social entrepreneurs focused on venture growth

Strategy	Discursive fragments
Collective commercialization	“We still sell to the facilitator, now we will sell it to the central management and the central management makes the sales to companies. We owe this central management. We administrate it, we are the board of directors. I Am the secretary of Cooperative X, she is the treasurer of Cooperative Y, he is the president. In Cooperative Z, the vice president is also the commercial manager, he is always looking for better prices” (C1)
Expansion of the physical space	“We… they are planning on creating an extra shed here” (C3)
	“Then in the future we will get more cooperative members because there are many people interested…” (C3)
Increase in the amount of machinery	“So, considering our plans, the main one would be to get more machinery, increase production” (C3)
Search for inputs elsewhere	“Maybe we can even bring materials from other places, all that….” (C3)
Adjustment to the market dynamics	“Each market has one… we used this criterion. In some flea markets we start Saturday early in the morning… from eight until five. In another one, we stay until 6pm. This other flea market, the largest one, we have to be there Fridays, Saturdays and Sundays while the market is open, but the profits from this market are higher. Now we are established, each Saturday we go to one determined flea market” (A1)
Self-learning	“I do some research online, I'm always looking for tips to improve my product and grow” (A2)
	“I've been trying to study and to professionalize in handicraft” (A4)

Note

1. Free translation.