SOCIAL ENTREPRENEURSHIP PRACTICES IN HOSPITALITY AND TOURISM INDUSTRY

INTRODUCTION

The concept of social entrepreneurship has been widely reported in the popular
media and is seen as an emerging discipline within many business schools. Social
entrepreneurship is often included in discussions of non-profit studies,
entrepreneurship, and corporate social responsibility.

As may be expected given the interest generated by the subject, social

entrepreneurship has been tackled extensively as a subject generically in the business
world. There are many annual conferences and symposia, with the resulting output of
articles (Desaa (2006); Smith, Barr, Barbosa and Kickul, (2008); Oncer and Yildiz
(2010). There have, however, been few studies that have dealt directly with the
subject of social entrepreneurship and the hospitality and tourism industries.

Concurrently, it would seem that many hospitality corporations are displaying greater
awareness of their role in the community and pursuing some aspects of social
entrepreneurship. Accor (a major European hotel chain) stresses its commitment to
people and the environment; Starwood hotels has recently appointed a vice president
for Corporate Social Responsibility; Kimpton hotels (a US national chain based in San
Francisco) for several years has stressed environmental and community contributions;
Wyndham developed in 2006 its core values and sees corporate social responsibilities
not as a program, but "as a way of living, working and playing" that embodies their
vision and values (Bohdanowicz and Zientra, 2008, a). Also at Scandic and Rezidor
Groups, vice presidents responsible for sustainable business are members of the
executive team

The origins of social entrepreneurship may be traced to two different sources: that of
income generation by a non-profit venture and, a more general interpretation that
defines social entrepreneurship as a process that involved identifying, addressing and
solving societal problems.

The point that social entrepreneurs are a species of the genus entrepreneur.
Classically, there are several characteristics of entrepreneurship that may be
attributed from leading writers and thinkers. Entrepreneurs may be seen to be
involved in:

Value creation (Say)

Innovation, change agents (Schumpeter)

Opportunities (Drucker)

Resourcefulness (Stevenson)
Turning to the social side of the equation, the major differentiator is in the value
proposition: to social entrepreneurs the pursuit of "mission-related impact" is
primordial. For the "classic" or non-social entrepreneur, the value proposition is in
anticipating and serving markets, thereby creating financial profit. For social
entrepreneurs, the value is found in the form of large-scale transformational benefit
that affects either sectors of society or society at large.

In terms of personal characteristics, social entrepreneurs may be described as

visionary change makers, implementing innovative ways of addressing pressing social
problems.

As may be anticipated from this brief discussion there are many different
interpretations relating to what a social entrepreneur is (or is not). A dozen different
definitions broken down into the themes of non-profit entrepreneur, non-profit
innovation, social entrepreneur and subset of business entrepreneurship.

"Adapting a mission to create and sustain social value not just private value;

Recognizing and relentlessly pursuing new operations to serve that mission; Engaging
in a process of continuous innovation, adaptation and learning;

Acting boldly without being limited by resources currently in hand; Exhibiting a

heightened sense of accountability to the constituencies served and for their
outcomes created"

In relation to studies examining the hospitality and tourism industries, as mentioned

in the introduction, the subject of social entrepreneurship may often be included
within that of corporate social responsibility (CSR) and environmental management.
There are several articles on corporate social responsibility. Holcomb, Upchurch and
Okumus (2007) presented information that 8 out of the top 10 hotel companies
reported socially responsible activities relating to some form of charitable donation.
The authors also noted that hotel corporations reported in five major areas:
community, environment, marketplace, vision and values, and workforce . Of the
major hotel companies, Hilton Hotels Corporation, Marriott and Accor had the highest
frequency of CSR reporting. (But only one company, Hilton had any external
verification of their data). Bohanowicz and Zientra (2008) examined the contribution
of hotel companies' impacts on employee well--being and also on local communities.
One of the conclusions of the study was that CSR-driven projects can enable hotel
companies to assist local communities as well as to cope with human resource
management-related problems. Direct ways that hospitality companies can benefit
local communities include donating unwanted linen, furniture and food to local
charity organizations, serving food to various youth and parent organizations,
coaching youths and offering entertainment facilities for the immediate communities.
Wider aspects of CSR include focusing on free trade products and adopting
environmental initiatives that may improve the quality of life of workers down the
supply chain, and reduce the hotel's impact on the environment.

Environment Conscious and Socially Driven Projects

Social entrepreneurship was tied with sustainability and better environmental

practices in three out of the four interview sessions. The establishment of a Green
Hotel chain and establishing a certification process for Green Restaurants were the
other two environmentally conscious topics disclosed by the interviewees. In terms of
socially driven projects, organizational contribution to "Save the Bay" (an environment
restoration program), donating to local charities such as Food banks and assisting
people in need through back to work projects were additional areas mentioned by
some of the interviewees. Motivational Aspects

In three out of the four interviews community involvement is linked as one of the
benefits of the social entrepreneurship projects. Intrinsic motivations of the social
entrepreneurs were pointed out as an important factor in transforming society's
viewpoint towards this topic. Furthermore, the attempts to pass on the motivation to
stakeholders were also discussed by some of the interviewees.

Return Benefits of Social Entrepreneurship

Interviewees pointed out the identification of financial and non-financial returns

derived from social entrepreneurship projects. In terms of financial returns, two out
of four interviewees pointed out the "repeat" business to their organizations. In
addition three out of the four interviewees pointed out the financial benefits of Social
Entrepreneurship to hospitality organizations. As for the non-financial returns,
creating a socially responsible image emerged as an important factor in making a
desirable company to work for. Improving the quality of internal and external
communications was also discussed as a return.

Real vs. Perceived Implementation Costs

Some of the real and perceived costs of implementing social entrepreneurship

projects were that the projects were seen to be an "expensive to do". This could
sometime prove difficult to implement during economic fluctuations and so were
highly reported by the interviewees. The cost of selecting and retaining the right
stakeholders, increased time and material costs (such as bio-degradable materials)
were also underlined. Difficulties in allocating budgets for social entrepreneurship
projects were also mentioned.
CONCLUSIONS

This was a preliminary study that was intended to give a glimpse of developments in
social entrepreneurship within the hospitality and tourism industries and provide
further insights for later, more comprehensive and detailed studies.

The results were encouraging, as the interviewees confirmed several of the themes
identified from the research were being practiced in the field. Two of the
respondents may also be seen to be involved in applying the principles of
sustainability entrepreneurship.

This is heartening given the fact that the hospitality and tourism industries often
labor under negative publicity relating to the image of the industries, including tough
working conditions, low pay and high labor turnover. It would seem that the
hospitality and tourism industries have many natural attributes for social
entrepreneurship that may be extended: these attributes of the industry include high
numbers of small and medium sized enterprise, core services of lodging, food and
beverage that are highly valued by society, along with increasing peripheral services
that may also be leveraged into social entrepreneurship projects.

Hospitality and tourism entrepreneurs may decide to take further steps of extending
their projects so that they may encompass all aspects of sustainability
entrepreneurship. This however is more challenging, as it may be relatively easy to
adopt certain aspects of sustainable development and social projects piecemeal into
the operation, but to embrace all aspects of sustainability entrepreneurship requires
a fundamental reevaluation of the vision, mission and operation of all aspects of the
business.

RECOMMENDATIONS AND FUTURE IMPLICATIONS

Interviewees addressed broad areas and contributed well to the body of the research.
Based on the comments from the interviews, the awareness of social entrepreneurship
examples in the hospitality and tourism industries should be increased. The action list
may include: (a) organizing conferences and workshops, (b) writing case studies, (c)
creating e-newsletters, (d) adding social entrepreneurship to current hospitality and
tourism management curriculums, (e) building partnerships between the industry and
the academia and (f) international investigation of social entrepreneurship including
partners in developing countries to conduct multifaceted research.

The findings of this study could serve as a framework in developing a more detailed
research instrument. Such an instrument may provide more detailed results in social
entrepreneurship research. This may help for the concept to be more widely
recognized internationally. It would be of interest to canvas and quantify the major
international hospitality and tourism corporations and categorize their social
entrepreneurship initiatives.
LIMITATIONS

As this was an exploratory study the study was limited in size and scope by the
number of the interviewee responses, the representation from the different segments
of the hospitality and tourism industries and the generalizability of the results.

Figure 1. Convergences of generic social entrepreneurship and TSE typologies.

Adapted from Avord

et al (2004) and Day and Mody (2017)

The second category in the typology, the providers of the tourism experience, have
their role in local capacity building social innovation strategies. Providers develop and
manage the specific types of niche tourism experience (e.g. ecotourism) offered by a
destination, with a degree of community organisation and involvement. Here, tourism
social enterprises are required to identify community needs and develop local
capacity to address these needs through training and some form of community-based
tourism (Alvord et al, 2004, Day & Mody, 2017). This strategy has been adopted by
Smokey Tours, a social enterprise in the Philippines that operates slum tours in Manila
In this case, residents from the slums are employed and trained to conduct tours and
facilitate the day-to-day operations of the enterprise (Smokey Tours, 2017).

Thirdly, the movement building social innovation approach complements the work of
the intermediaries of the tourism experience (eg, tour operators). Movement building
social enterprises share some purposes that are similar to those of non-profit
advocacy organisations, influencing public views on social issues through their
commercial activities.

respective destinations they sell". This is practiced by PEPY Tours, a tour operator
that designs and offers responsible tourism packages to Cambodia and Nepal, and
supports various community development projects in these areas (Ferrari & Lund-
Durlacher, 2015).

These models show the multiplicity of ways in which TSE can be adopted. It is
important to note that tourism social enterprises are not limited to adopting
exclusively one of these models. Nevertheless, tourism social enterprises are observed
to be primarily small to medium-scale businesses (Dredge, 2017). Similarly, they are
seen to target a specific community or individuals within these localities, specifically
those who are economically disadvantaged or subject to social exclusion. In terms of
geographic and socio-economic contexts, TSE appears to operate within small and
low-income communities, and aims to improve community and individual well-being.
Hence, it is vital to conceptualise TSE as a strategy for sustainable community
development.

TSE for Sustainable Community Development

For community development work to be realised, having an explicit definition of the

concept

of community is essential (Popple & Quinney, 2002). Theodori (2005) conceptualises

community as a "a place-oriented process of interrelated actions through which
members of a local population express a shared sense of identity while engaging in
the common concerns of life” (pp. 662-663). This is relevant in tourism, specifically
within the notion of destination community which should not be limited to a
geographical area, or the actors and resources in that area, but rather be extended to
how its members interact throughout the tourism process (Jamal & Getz, 1995;
Okazaki, 2008). Since, in general, social entrepreneurship is concerned with improving
society, the above definition fits within the goals of TSE.

Community development is not a new agenda in tourism. Given that the development
of the industry is observed to occur within community settings, alternative and
community-centric approaches to tourism development have long been advocated
with the objective of having a sustainable industry in various locations worldwide
(Murphy, 1983; Okazaki, 2008). These initiatives underscore the potential of TSE to
induce social change and transformation at a community level. This paper suggests
TSE as implementing mechanisms for sustainable community.development.

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Types[edit]
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Social enterprises can generally be classified by the following categories listed below,
although new sectors and areas arise as the field continues to evolve. Their shared
common thread is that they all operate to achieve a balanced financial, social and
environmental set of objectives.
Trading enterprises[edit]
Worker/employee owned trading enterprises, co-operatives and collectives. These
vary from very large enterprises such as John Lewis Partnership in the UK and
the Mondragon Corporation in Spain, to medium-sized enterprises owned by their staff
with traditional management hierarchies and pay differentials, to quite small worker
co-operatives with only a few director/employees who work in less hierarchical ways
and practice wage parity. Within the trading enterprises there are employee owned
enterprises and membership owned enterprises.
Financial institutions[edit]
Saving and loans organisations such as credit
unions, microcredit organisations, cooperative banks and revolving loan funds are
membership-owned social enterprises. Credit unions were first established in the
1850s in Germany and spread internationally. Cooperative banks have likewise been
around since the 1870s, owned as a subsidiary of a membership co-operative. In
recent times microcredit organisations have sprung up in many developing countries
to great effect. Local currency exchanges and social value exchanges are also being
established.
Community organisations[edit]
Many community organisations are registered social enterprises: community
enterprises, housing co-operatives and community interest companies with asset
locks, community centers, pubs and shops, associations, housing associations and
football clubs. These are membership organisations that usually exist for a specific
purpose and trade commercially. All operate to re-invest profits into the community.
They have large memberships who are customers or supporters of the organisation's
key purpose. There are village co-operatives in India and Pakistan that were
established as far back as 1904.
Non-governmental organisations (NGOs) and charities[edit]
There are many NGOs and charities that operate a commercial consultancy and
training enterprise, or subsidiary trading enterprises, such as Oxfam. The profits are
used to provide salaries for people who provide free services to specific groups of
people or to further the social or environmental aims of the organisation.
SOCIAL ENTREPRENURSHIP TYPES/MODEL
All those entrepreneurial models are being analysed within three different
entrepreneurial structure models. At this phase, we would attempt to provide the
reader with a brief description for each one:

(1) Leveraged non-profit ventures: In this case, social entrepreneurs establish a non-
profit organization in order to apply an innovative model that is deemed capable to
address a previous market failure, or even a governmental failure. This target is being
achieved through the engagement of a cross section of society, composed of both
private and public organizations, to accelerate the applicability of this innovative
model, thus generating a multiplier effect. In terms of funding, at the initial phase
this type of entrepreneurial structures rely on external philanthropic sources,
although if the partner wish to constantly work on this venture, the longer term
sustainability could be reinforced in various ways;

(2) Hybrid non-profit ventures: In this case the entrepreneur establishes a non-profit
organization, whilst at the same time the model contains an extent of cost-recovery,
primarily maintained by the sale of goods and the provision of services towards a cross
section of both private and public organizations and many other pre-determined
target groups. Frequently, the entrepreneur establishes or supports the creation of
various legal entities in order to maintain the accommodation of the earning derived
by the incomes, as well as the charitable expenditures, thus attempting to detect the
optimal entrepreneurial structure. Subsequently, to be able to support all the
transformation activities to satisfy the needs of clients, social entrepreneur should
detect other funding sources in the form of loans or grants, deriving from both the
public and philanthropic sectors;

(3) Social business ventures

In the last case, social entrepreneurs establish a for-profit institution or business with
the aim to provide products and services related with the social or ecological interest.
Due to the status of organization (for-profit), the ultimate goal is not to reach a
maximum of financial earnings that return to shareholders, but to make the social
venture itself more sustainable, thus serving many more underserved social groups.
Simultaneously, profits could be re-invested in the expansion of the funds.
Accordingly, the investors in this case should be individuals who are willing to receive
both financial and social returns on their investments.
Self-assessment Test:
1. The social economy:
a) places the individual in the center of society well-being
b) places the community in the center of society well-being
c) both individual and community are in the center of well-being
d) in the center of well-being is the interests of the business
2. The Nongovernmental organization can be a social enterprise if:
a) it is in public utility
b) it is in private utility
c) it receives social aid
d) it receives funding from Government
3. Social entrepreneurship is:
a) person with social mission
b) a business activity with social mission
c) a project with community mission
d) an organization with social mission
4. Cooperation is:
a) nongovernmental organization
b) trade company in private utility
c) property of workers and specific business subject
d) joint activity between two organizations in trade sector
5. Social entrepreneurship has to:
a) self-sustain with own resources
b) use only public resources
c) use only private resources
d) use only donation