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Impact of Social Entrepreneurship on Community Development

Libis et al. ( 2022) note that the Resource-Based View (RBV) theory offers a theoretical framework for understanding how social entrepreneurs deploy unique resources and capabilities to drive transformative changes in organizational and societal contexts. Jay Barney developed it. The theory contends that sustainable competitive advantage is derived from a firm’s distinct, rare, and not easily imitable resources(Libis, 2022). Social and cultural capital, on the other hand, social and cultural capital are some essential but non-economic resources that play an important role in the embedded asset that shapes the organizational culture.

According to Zahra (2021), the social embeddedness of resources in RBV theory helps to explain how social entrepreneurs can develop innovative solutions to social problems. Such resources range from tight community bonds to good inter-stakeholder rapport and a keen appreciation of cultural norms. Social enterprises often use these resources embedded within their organizations, creating a unique organizational culture based on the community they serve (Zahra, 2021). Employees develop a sense of social responsibility when their identities are interlinked with the organization and social fabric.

The RBV theory holds that physical assets play an enormous part in assisting a firm in sustaining competitive advantages (Miller, 2019). The intangibles related to this particular type of entrepreneurship include the social impact of a social enterprise, its public reputation, and the company’s ethics under scrutiny. These elements not only help to enhance the organization’s competitive positioning but also define the organization’s culture. Such organizations attract people with a social conscience, people who consider society, and socially oriented individuals. According to Miller( 2019), organizations build a culture that revolves around their mission, appreciating responsibility-based communities.

RBV theory brings out the dynamism of resources, while social entrepreneurship is about adapting to changing social needs. Socially and culturally, organizations should constantly enhance these resources in order to remain relevant in “this space.” This dynamism provides the organization’s culture with a commitment to innovation and flexibility that embraces improvement. Change is an inherent component of the typical approach in the social enterprise employees’ society, making it easier to acclimate to various social barriers. Based on RBV theory, people are considered strategic resources able to provide the firm with the sustainability of its competitive advantage. Social and environmental orientation in social entrepreneurship is more than skills and competencies. This commitment provides an atmosphere of purpose in the organization, permeating every body member. It manifests a collective belief in effecting societal change and determining daily behavior.

Miller(2019) notes that the theory recognizes that internal operations must be synchronized with opportunities outside the firm. Therefore, in social entrepreneurship, one should consider social and cultural aspects in determining the strategies. This creates a society for social accountability, morality, and sustainability of its practices. Indeed, it penetrates the whole organization and influences decision-making from a strategic point of view and the everyday implementation of the so-called “societal value-based” corporate culture. There is no doubt that organizational learning is essential in the maintenance of competitive advantage through RBV theory. Introspective reflections allow social innovators to gain more knowledge and revise their approach to influence society. An organization’s commitment to continuous learning ensures its culture remains synchronized with the changing social and cultural environment.

In conclusion, based on the above discussion, RBV gives a robust theoretical foundation for understanding how the social realm and sociocultural issues are related to social entrepreneurship. This theory explains the mechanisms that enable social enterprises to turn invisible inputs into visible outputs. The RBV theory focuses on the fact that social entrepreneurship is linked to human resources, strategic alignment, and organizational learning within a company.


Lubis, N. W. (2022). Resource-based view (RBV) in improving company strategic capacity. Research Horizon, 2(6), 587–596.

Miller, D. (2019). The resource-based view of the firm. In Oxford Research Encyclopedia of Business and Management.

Zahra, S. A. (2021). The resource-based view, resourcefulness, and resource management in startup firms: A proposed research agenda. Journal of Management, 47(7), 1841-1860.


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