Question 2 (b)
Entrepreneurship: commercial and social entrepreneurship compared
9 marks
- Time to write
- About 18 minutes
- Notes
- Crux notes
Question
Question 2 (b) · 9 marksWhat is 'entrepreneurship'? Compare commercial entrepreneurship and social entrepreneurship, and contrast them?
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- What…?Compare…?Two asks in one question: answer both.
- CompareCompare in a table, basis by basis.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Meaning of entrepreneurship 1½ marks 1 min
- 2 Commercial and social entrepreneurship explained 2 marks 4 min
- 3 Similarities 1½ marks 3 min
- 4 Differences 3½ marks 7 min
- 5 Conclusion ½ mark 1 min
- Check: every ask answered, key terms underlined 1 min
Easy marks
- Meaning of entrepreneurship (step 1, 1½ marks): a clear definition and a line on what it covers. It opens the answer, so it takes a minute or two.
Short on time? Keep step 1 short. Trim steps 2–4 evenly rather than skip one: each is capped at its own marks. End with step 5 in a line or two.
Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Entrepreneurship is the process of identifying an opportunity, mobilising and organising resources, innovating and bearing the risk of uncertainty to create a new venture or a new way of doing things. The person who undertakes it is the entrepreneur. Its essential elements are opportunity recognition, innovation (new products, new markets, new sources of supply), risk-bearing, organising resources and creating value; it is a systematic and purposeful activity, not a matter of chance.
Commercial (business) entrepreneurship creates ventures whose primary aim is economic value: profit and wealth for the owners: by meeting market demand. Success is measured by sales, profit, market share and the value of the firm. Example: a founder who starts a chain of cafés to earn profit.
Social entrepreneurship applies entrepreneurial methods to solve social or environmental problems: poverty, health, education, sanitation, pollution: creating social value as the primary aim. The venture may be a non-profit, a for-profit social enterprise or a hybrid; any surplus is mostly reinvested in the mission. Success is measured by social impact. Example: an enterprise that trains rural women to produce and sell low-cost sanitary pads, improving health and incomes.
Both rest on recognising an opportunity (or an unmet need) as a process; both require innovation, risk-taking, resource mobilisation, leadership and a sustainable business model; and both create value and employment. Both follow the same broad process, spotting the opportunity, testing the idea, assembling resources, launching and scaling, and both need customers or beneficiaries who accept the product or service.
| Basis | Commercial entrepreneurship | Social entrepreneurship |
|---|---|---|
| Primary aim | Profit and private wealth | Social or environmental value |
| Opportunity | Market demand that customers can pay for | Social problem or market failure |
| Measure of success | Profit, growth, return on investment | Social impact (lives improved, problems reduced) |
| Use of surplus | Distributed to owners | Mainly reinvested in the mission |
| Customers / beneficiaries | Paying customers | Often the poor or under-served, who may pay little |
| Sources of funds | Equity, loans, retained profits | Grants, donations, impact investment, earned income |
| Stakeholders | Owners and customers mainly | Communities, donors, government, volunteers |
| Ownership forms | Proprietorship, firm, company | Trust, society, section 8 company, cooperative or company |
| Risk | Financial loss to owners | Failure to achieve impact as well as financial risk |
Both commercial and social entrepreneurs see opportunity where others see problems and organise resources to act. They differ chiefly in purpose and in how success is measured. A commercial entrepreneur asks whether customers will pay enough to yield a profit; a social entrepreneur asks whether the problem will be reduced at a cost that can be sustained. The line between them is narrowing, as many businesses pursue social goals and many social enterprises earn their own revenue.
Where the 9 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Meaning of entrepreneurship | 1.5 |
| 2 | Commercial and social entrepreneurship explained | 2 |
| 3 | Similarities | 1.5 |
| 4 | Differences | 3.5 |
| 5 | Conclusion | 0.5 |
| Total | 9 |
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