2 Theoretical foundations The following section outlines the academic literature relevant to the concept of social business, but

also identifies the gaps in this literature. Broadly, there are two main streams of literature which relate conceptually to this phenomenon: Stakeholder Theory and Corporate Social Responsibility (CSR), and Social Entrepreneurship (SE). Below we outline the key focus of each and their intersection. A small, emerging literature relates to the hybrid form of social business (Campbell 1998; Schaltegger 2002; Volery 2002; Mair and Noboa 2003; Clifford and Dixon 2006; Hockerts 2006a, b) which exists where an emerging social innovation is also seen as a viable business opportunity and turned into a commercial for-profit business creating, in the process, new market space while also simultaneously attaining a social objective (Hockerts 2006a, b, p. 145). These organizations have been variously referred to as hybrids (Dees 1998; Alter 2007), social purpose business ventures (SPBVs) (Hockerts 2006a, b), for-benefit companies (Sabeti 2008), social businesses (Yunus 2007), for-profit social ventures (Clark and Ucak 2006), and low-profit organizations (Wolk 2008). The social business is seen as inherently and explicitly social in its mission and purpose (Thompson et al. 2000; Dees 2001; Alter 2006; Austin et al. 2006; Austin 2006; Haugh 2006; Mair and Marti 2006; Nicholls 2006; Peredo and McLean 2006; Mair and Schoen 2007; Meyskens et al. 2008). Unlike a classic non-profit however, social businesses fundamentally repurpose business methods and approaches to solve the worlds social problems in an efficient and sustainable manner (Haugh 2006; Rauch 2007). Although some previous literature has focused on defining hybrid forms of organization, less work has focused on specifying exactly how hybrid activity occurs. While previous research (mostly conceptual) has tantalizingly suggested that economic sustainability is possible for social and environmentally focused organizations (Clifford and Dixon 2006), and that rather than hindering the process, idealistic values can be translated into valuable economic assets (Clifford and Dixon 2006),

Indeed, the idea of merging social and economic value creationwithin the same organizational structure

goes beyond trade-offs or balancing acts. Rather, this merging involves fundamentally innovative and entrepreneurial approaches which can explicitly create both social and economic value in ways that are mutually reinforcing (Mair and Schoen 2007). Issues associated with developing an organization are amplified in hybrid organizations because of the double (social and economic) nature of the organizations objectives (Imperatori and Ruta 2006).