Previously posted at © IE Insights
Female entrepreneurs are playing an essential role in a society prioritizing social and environmental objectives. By Rachida Justo, Associate Professor of Social Entrepreneurship and Entrepreneurial Management at IE Business School.
In addition to their standard economic objectives, entrepreneurs in the world’s most advanced societies have also begun to pursue social and environmental value. Achieving professional goals is no longer enough: some business owners are seeking mutual benefit and trying to solve problems in their communities. Female entrepreneurs play a central role in this culture.
Beyond the fundamental aim of turning a profit, some entrepreneurs have discovered the importance of pursuing values-based objectives. With economic considerations now being considered in tandem with social and environmental aims, many entrepreneurs have begun to make multifaceted contributions. Surprisingly—given that this combined value is the key to developing a reliable strategic plan—these contributions often go beyond the initial scope of the business project. It is worth considering whether the prevailing cultural values of a particular country are in tune with the goal of building an entrepreneurial movement that creates economic and social value and promotes environmental friendliness—in other words, a sustainable entrepreneurship movement. In one way or another, these intangible indicators configure the business context.
In a society that prioritizes social and environmental objectives over purely economic ones, businesses spearheaded by this sort of person have better chances of success. Beyond merely making money, these entrepreneurs aspire to drive change and generate profound, long-lasting transformations. They differ from NGOs in that they approach problems in novel ways, always seeking something different and applying innovative strategies.
The importance of gender
In this three-pronged approach to value creation, the who can be a more decisive intangible factor than the what. The founder’s gender has a significant impact on the definition of a company’s objectives and the projects that arise in its milieu. Women are more likely to pursue social value, whereas men are more focused on the economic side. The differences between men and women in this regard underscore women’s role in efforts to create social value. Women are also more active in environmental initiatives. In simpler terms, some people believe that women are more motivated by issues of ethics and justice, although there is no empirical evidence to support this assertion.
Besides the who, the when is also important. At the time of its founding, a company is imprinted with the character and philosophy that will distinguish its goals. In these early stages, women are more likely than men to plant the seed of multifaceted value creation.
The differences between men and women underscore women’s role in efforts to create social value.
Postmaterialism in modern societies
Let us return to the topic of cultural values. Societies with a more postmaterialistic culture are likelier to generate projects that put social and environmental factors before the bottom line. The transition towards postmaterialism has pushed modernized societies into a new stage. With industrialization now behind them, postmaterialistic societies place great importance on concepts such as intellectual abilities, human rights, quality of life, esteem, and self-realization. The genes of such a society will define its future entrepreneurs, who will be more interested in protecting the environment and ensuring the welfare of others. Culture, more than any other variable, is the essential vehicle for channeling transformations in business.
We must therefore renounce the preconceived notion that women’s character is incompatible with launching and running a business. In fact, one consequence of this cultural shift is a reinvigorated defense of the principle of equality. With the advent of postmaterialism, a more intense relationship has developed between female leadership and the creation of social and environmental value. The gap between men and women in creating social and economic value has grown wider in postmaterialistic societies than in others. Social entrepreneurship rates are significantly higher in these societies than in regions that remain anchored in materialism.
Of course, the phenomenon of social entrepreneurship is not limited to advanced and emerging countries. Paradoxically, social enterprises tend to flourish in less developed countries, where governments are unable to cope with societal problems and environmental challenges. Indeed, the challenge for these administrations is to allow the entry of foreign figures who can help solve these conflicts. Not surprisingly, in some regions foreigners play a crucial role in complementing the work of NGOs and helping to renew economic systems.
Culture, more than any other variable, is the essential vehicle for channeling transformations in business.
Beyond the GEM
In addition to the data provided by the Global Entrepreneurship Monitor (GEM)—the worldwide network that measures entrepreneurial activity, attitudes, and aspirations—the intangible indicators mentioned above provide valuable complementary information. This information makes it possible to link value creation to a particular environment and identify the advantages of sustainable entrepreneurship. Postmaterialism and the female perspective will be enormously useful in ensuring that future research provides a more comprehensive vision of the entrepreneurial ecosystem. Whatever the case, we mustn’t lose sight of the qualities that may well be innate to these entrepreneurs: perseverance, adaptability and teamwork. The economic component also remains significant, since profits obtained in one project can be reinvested in others.
Rachida Justo, Associate Professor of Social Entrepreneurship and Entrepreneurial Management at IE Business School; Diana M. Hechavarría, Assistant Professor of Entrepreneurship at the University of South Florida; Siri A. Terjesen, Associate Professor of Entrepreneurship at American University; Amy Ingram, Assistant Professor of Entrepreneurship at Clemson University; Maija Renko, Associate Professor of Entrepreneurship at the University of Illinois; and Amanda Elam, Research Director at the Center for Women’s Entrepreneurial Leadership at Babson College.