In a context of increasing globalization and neoliberal economic policies, to what extent can local communities respond to the social, cultural, economic and environmental impacts posed by those processes? This chapter provides a conceptual foundation for understanding one particular community response that emerges from local cultural and collective action. ‘Community-based enterprise’ (CBE) is the vehicle in which the community creates an entity that constitutes the community as both an entrepreneur and an enterprise addressing economic, social and environmental challenges holistically. We define ‘CBE’, as a community acting corporately as both entrepreneur and enterprise in pursuit of community common good. This form of enterprise departs from traditional models of entrepreneur in which the agent is an individual or a group of individuals. The basis for this chapter begins in communities in the global south, but extends to communities in the global north. It examines the social, environmental, economic and/or political conditions associated with the emergence of CBEs. It also points out the role that collective action, forms of social capital and size play in its creation. We consider also their typical characteristics such as rootedness in available community skills, multiplicity of goals as well as prevailing community participation and governance structures. The effects of CBEs on fostering entrepreneurship within communities as well as similar developments in neighbouring communities are outlined as well. We discuss challenges to CBE in the form of balancing individual and collective outcomes, of reconciling social, economic and environmental goals and withstanding the pressures of globalization and generational change. We conclude by outlining a future research agenda.
Ana María Peredo and James J. Chrisman
Elton L. Scifres, James J. Chrisman and Esra Memili
Scifres, Chrisman and Memili examine the role of environmental change in fueling corporate entrepreneurship (CE) activities in the US banking industry, which has been the subject of considerable upheaval because of technological and regulatory changes. These environmental shifts have added much dynamism, but have also introduced considerable hostility into the industry. As a result, the pursuit of CE has become essential for achieving strategic renewal and effective adaptation. Using data from 797 US banks which experienced an environmental revolution, Scifres et al. advance three hypotheses: a) more organizations will engage in strategic change; b) most of these strategic changes will be incremental in nature; c) incremental rather than radical changes will be more strongly correlated with organizational performance. Scifres et al. use five strategic groups to test their hypotheses. They find that more of the banks pursued strategic change than showed no such change, supporting their prediction. Analyses also revealed that the majority of firms engaged in incremental changes. Analysis of covariance showed a curvilinear relationship between the degree of change in strategic renewal and bank performance. Banks that undertook incremental changes experienced lower declines in their financial performance compared to other strategic groups. In a way, these are counterintuitive findings but they make the point that companies that aggressively pursue strategic renewal through CE may pay a price—that is, too much change further disrupts internal operations and depresses performance. Managers need to be careful as they embark upon strategic renewal efforts amid rapid and unpredictable environmental changes.