Social Innovation and Ethical Considerations

Theme: Promoting of social entrepreneurship 


Title: Social Innovation and Ethical Considerations


Developed by: CARDET, Cyprus


Based on:  Curtis, T., 2014. Chapter 8 - The Challenges and Risks of Innovation in Social Entereprenurship. In: Gunn, R. and Durkin, C., Social Entrepreneurship - A Skills Approach. Bristol, UK: Policy Press, pp. 83-98.


Hartley, J., 2005. Innovation in governance and public services: Past and present. Public money and management, 25(1), pp.27-34.


Leadbeater, C., 2007. Social enterprise and social innovation: Strategies for the next ten years. A social enterprise think piece for the Cabinet Office of the Third Sector.


Martins, E. C. & Terblanche, F., 2003. Building organisational culture that stimulates creativity and innovation. European Journal of Innovation Management, 2003, (6) 1 p. 64.


Mulgan, G., Tucker, S., Ali, R. and Sanders, B., 2007. Social Innovation: What it is, why it matters and how it can be accelerated, The Young Foundation. Skoll Centre for Social Entrepreneurship, University Of Oxford.


Zahra, S.A., Gedajlovic, E., Neubaum, D.O. and Shulman, J.M., 2009. A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of business venturing, 24(5), pp.519-532.



  • Understand the different types of innovation.
  • Understand what social innovation is.
  • Understand the ethics of social entrepreneurship.


The level of language knowledge: Level B2.


Description: 1. Innovation and Social Entrepreneurship


“All innovation involves the application of new ideas – or the reapplication of old ideas in new ways – to devise better solutions to our needs. Innovation is invariably a cumulative, collaborative activity in which ideas are shared, tested, developed and applied. Social innovation applies this thinking to social issues: education and health, issues of inequality and inclusion.” (Leadbeater, 2007).


Social enterprises are considered to be the enablers of social and economic development as well as the primary creators of social innovation (Mulgan et al., 2007). A social innovation differs from a business innovation as it is motivated by meeting a social need rather than profit maximisation. At this point it is important to mention that a lot of social innovations developed by social organisations are often adopted by for-profit enterprises (Mulgan et al., 2007). Such examples are distance learning technologies, various innovative approaches to helping disabled people into work and FairTrade.


As a lot of social enterprises are concerned with public service provision it is important to have in mind the following typology of public service innovation (Hartley, 2005):

  • Product innovation (A new product).
  • Service Innovation (New ways in which services are provided to users).
  • Process Innovation (New ways in which organisational processes are designed).
  • Position Innovation (New contexts and users).
  • Strategic Innovation (New goals or purposes of the organisation).
  • Governance Innovation (New forms of engagement).
  • Rhetorical Innovation (New language and new concepts).


Although innovation is a personal skill (Curtis, 2014), it is often exercised within an organisational context. For that reason it is important for social entrepreneurs to manage their enterprise in such a way as to allow for social innovation. The following Table presents the characteristics of the “Innovative Organisation” (Martins & Terblanche, 2003).


Strategy Structure Support Mechanisms Behaviour that Encourages Innovation Communication

Shared Vision and Mission

Future Focus

Customer and Market Orientation

Goals Reflect Values / Mission

Emphasis on Quality



Freedom / Flexibility (job roles)

Empowering - Not Controlling

Speed of Decision Making

Cooperative / Interdisciplinary Teams

Trust, Respect and Understanding

Rewards and Recognition:

  • Idea Generation
  • Experimentation and Risk Taking
  • Individuals and Teams


Resource Availability:

  • Time
  • Technology
  • Diverse Workforce


Tolerate Mistakes

Fairly Evaluate ideas

Continuous Learning

Encourage Competition

Support Change

Tolerante Conflict and Questionning

Open and Transparent

Open Door Policy



Innovation is one of the main features that distinguishes social enterprises from charities (Curtis, 2014). However, innovation is not ethically neutral and can sometimes lead to bad decisions or cause real harm to people and communities.


2. The Ethics of Social Entrepreneurship


“Despite the widely acknowledged importance of social entrepreneurship, concerns persist over the ethics of its practice. Some believe social entrepreneurship represents a harmful marriage between opposing values. The increased emphasis on efficient and profitable market models dramatically clashes with many of the founding ideals of the public sector and NGOs dedicated to fostering the public good. While social entrepreneurs are driven by an ethical obligation and desire to improve their communities and societies, egoism can drive them to follow unethical practices. Egoism is especially relevant because the identity and passions of social entrepreneurs usually compel them to create and lead social ventures...This egoistic streak...may lead some social entrepreneurs to believe that ANY actions taken to fulfil their ambitions are ethically justified” (Zahra et. al, 2009).


The ethical challenges social entrepreneurs might face depend on their motives, resources needed to pursue, their ambitions, as well as the governance and control mechanisms employed to regulate their behaviours. The unethical actions of a social entrepreneur will likely lead the social enterprise into a mission drift and probably closure. For that reason, it is especially important for social entrepreneurs to behave in an ethical manner towards their stakeholders and the community they operate in.


Learning outcomes: Completing this activity, participants will be able to:

  • Understand what social innovation is and how it can be achieved.
  • Understand the ethical challenges faced by social entrepreneurs.


Expected duration: About 15-20 minutes.


Task(s): Read the following statements and mark the True or False.



Go to the task >>


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