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Social entrepreneurship of the Buddhist Tzu Chi movement.


The development of the Buddhist Tzu Chi Movement (Tzu Chi henceforth) has moved in parallel with Taiwan's miraculous economic development. (1) Inasmuch as the nation's economy has advanced toward being more industrialized, the accompanying byproducts -such as the deterioration in social structure, the dereliction of family values as the traditional fabric of society, and the widening gap between the rich and the poor have posed dramatic challenges to Taiwan's social order. Following the lifting of Martial Law in 1987, a series of political changes, and the liberalization of people gathering freely, the organization of social associations became quite prevalent. The convergence of social, political, and economic factors contributed to creating an environment in Taiwan favorable to the growth of social enterprises (Pelchat, 2005). (2) None of these organizations could survive without charismatic individual leaders at their heart as predicated by Leadbeater (1996).

Without Master Cheng Yen as its leader, there in fact would be no Tzu Chi Movement. For over four decades, the Tzu Chi Movement under her leadership has been contributing to the betterment of social and community services, medical care, education, and humanism in Taiwan as well as around the world. What the Tzu Chi Movement has been doing is a typical case of social entrepreneurship, serving to fill gaps in social needs that are left unfilled or poorly addressed by both businesses and governments, as Dees (2001) contented. The feats of the Tzu Chi organization have won worldwide recognition. To name a recent one, Master Cheng Yen was selected as one of Time Magazine's 100 Influential Persons in April 2011 (Time, 2011). (3)

Tzu Chi has become a distinct icon representing the bright side of social change along with Taiwan's miraculous economic performance after WWII. How Master Cheng Yen and her Tzu Chi Foundation transformed pennies in a bamboo tube into six hospitals, an international bone marrow bank, and a quick-response global rescue organization that eclipses some governments' response to an emergency has drawn profound attention from various media (Chen, 2010; Montlake, 2010; Time, 2011) and academia (Ting, 1997; Laliberte, 2003; Huang, 2009; Brummans and Hwang, 2010). Most academic studies on Tzu Chi are from the perspectives of sociology, using an ethnographical approach to study how Tzu Chi is organized, or showing how Tzu Chi mobilizes volunteer groups to implement its charity and relief efforts. There is still a dearth of study on the Tzu Chi Movement from the perspective of economics, especially focusing on the role of entrepreneurship and issues of effectively managing entrepreneurial activities. This paper intends to fill this void.

Although the role of entrepreneurship in the market economy has been ignored by mainstream (neoclassical) economics, it recently has won a renaissance (Baumol, 1968; Bygrave and Zacharakis, 2008:1). Driven by profound technological change, a trio of investments (the personal computer, the mobile phone, and the Internet) is democratizing entrepreneurship at a cracking pace (Economist, 2009). Focusing on the analysis of market equilibrium, neoclassical economics fails to grasp the nature of the market economy, which is principally dynamic and rapidly changing. In order to properly incorporate the role of entrepreneurship in capitalism, economics has to pay attention to the process that is conducted towards to equilibrium, rather than to equilibrium situations themselves (Metcalfe, 2004; Minniti and Levesque, 2008).

Entrepreneurial behavior can be aptly defined by two types--adaptive entrepreneurship and revolutionary entrepreneurship (Yu, 2001)--or similarly by replicative entrepreneurship and innovative entrepreneurship as in Baumol et al. (2007). Revolutionary entrepreneurship is related to Schumpeter (1934), who stipulated that a successful entrepreneurship sets off a chain reaction through creating new combinations by destroying the existing equilibrium, rendering existing products and services obsolete. The process of "creative destruction" sparked by entrepreneurship drives economic progress. Another type of entrepreneurship proposed by Kirzner (1973) emphasizes that through the opportunity alertness and opportunity exploitation of entrepreneurial activities, a market economy is able to move from disequilibrium toward equilibrium, proving to be a more effective and efficient allocation of resources. Although there seems to be difference between these two types of entrepreneurship, researches have demonstrated that Schumpeter's and Kirzner's theories are not only compatible but complementary (Choi, 1995; Yu, 2001; Shockley and Frank, 2011). (4) The reconciliation of these two types of entrepreneurship in the market economic is aptly manifested in Holcombe (2003), in which he defines an entrepreneur as an equilibrator within the market and, simultaneously, a catalyst for economic activity and economic growth as a whole.

Focusing on the market process is useful for analyzing social entrepreneurship. As defined by Martin and Osberg (2007), social entrepreneurs are attracted to an unjust equilibrium, which causes the suffering of a segment of humanity. They thereby developed a social value proposition and then took direct action to forge a new equilibrium that releases any trapped potential or alleviates the suffering of the targeted groups. Since entrepreneurial activity is a long process connecting with variant elements, the study of entrepreneurship has shifted toward the entrepreneurial process, which consists mainly of three distinct activities: opportunity identification, organization creation, and resource mobilization (Shane and Venkataraman, 2000).

Based on the entrepreneurial process, I illustrate the burgeoning growth of the Tzu Chi Movement. I analyze three core factors contributing to the sustained competitive advantages of the Tzu Chi Movement: charismatic leadership, functional organization, and incessant support. With its shining success and a mass accumulation of enormous donations, more expectations have arisen from the public for Tzu Chi. There is no shortage of criticism for its future development. I highlight three challenges ahead for Tzu Chi: transforming to a global religion, adopting strategic management, and bracing for succession.

The rest of the paper is organized as follows: Section 2 explicates the social entrepreneurship of the Tzu Chi Foundation and its founder, Master Cheng Yen, and the entrepreneurial process of Tzu Chi's social change-making venture. Section 3 analyzes the competitive advantages of Tzu Chi, and section 4 concludes and discusses Tzu Chi's imminent future challenges.


Social entrepreneurship consists of two elements: one is the social element and the other is the entrepreneurial element (Peredo and Mclean, 2006). From the social element, social entrepreneurs differ from commercial entrepreneurs in terms of their mission (Mort et al., 2003; Austin et al., 2006). While commercial entrepreneurship is associated with the profit motive, social entrepreneurship is an expression of altruism. For social entrepreneurs, the social mission is explicit and central. The mission-related impact becomes the central criterion, not wealth creation (Dees, 2001). (5) As for the entrepreneurship element, it is the essential part of social entrepreneurship and the word "social" simply modifies entrepreneurship (Martin and Osberg, 2007).

The role of entrepreneurship is critical in a market economy and it is through entrepreneurial activities that the market economy moves from disequilibrium toward equilibrium, where efficient and effective resource utilization can be warranted (Kirzner, 1973; 1997). Entrepreneurship is a value creation process. During the process, entrepreneurs need to be informed enough in order to discover opportunity, to have sufficient knowledge to evaluate opportunities, and to mobilize resources for exploiting any opportunity (Perrini et al., 2010). Specifically, the entrepreneurial process consists mainly of three distinctive activities: opportunity identification, organization creation, and resource mobilization (Shane and Venkataraman, 2000; Corner and Ho, 2010).

Entrepreneurial process of the Tzu Chi Movement

Social entrepreneurship is emerging as an innovative approach for dealing with complex social needs, especially in the face of diminishing public funding (Johnson, 2000). Social issues are "wicked" problems, as opposed to "tame" problems, that require a creative, problem-solving approach. Social entrepreneurship usually has the following three components, as suggested by Martin and Osberg (2007). First, it identifies a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own. Second, it discovers an opportunity in this unjust equilibrium, developing a social value proposition and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state's hegemony. Third, it forges a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group. Moreover, through imitation and the creation of a stable ecosystem around the new equilibrium, it ensures a better future for the targeted group and even society at large. The components suggested by Martin and Osberg (2007) are associated with three fundamental entrepreneurial processes: opportunity discovery, institution creation, and resource mobilization. I will delineate the burgeoning growth of Tzu Chi and how it initiated itself to resolve unmet social needs based on the three stages of the entrepreneurial process.

A. Opportunity discovery-initiating the Tzu Chi Movement

All entrepreneurial activities begin from opportunity discovery. With an impulse for the pursuit of profits, Kirzner (1973) postulated that entrepreneurship is "alertness to hitherto undiscovered opportunity." Entrepreneurial opportunities are situations in which innovative opportunities can be introduced through the formation of new means, ends, or means-ends relationship to solve social disequilibrium (Dorado, 2006; Peredo and McLean, 2006). The ability to discover the opportunity is closely related to human attributes, such as a willingness to bear uncertainty, a tolerance for ambiguity, or a need for achievement, which can be affected by the environment or the institution where entrepreneurs reside (Shane, 2003).

Opportunity identification is the first step to solve social issues. The inchoation of the Tzu Chi Movement dates back to 1937 when Master Cheng Yen was born to an ordinary family in a small town called Qingshui (located in central Taiwan's Taichung County). Master Cheng Yen was adopted by her uncle at an early age and moved to Fengyuan City, Taichung County with the new family. Begun under the auspices of filial piety, Master Cheng Yen worshipped Buddha in exchange for her adoptive mother's good health and later on pursued Buddhist enlightenment on the path of her rebirth from the grievance of her adoptive father's death (Huang, 2009). In 1963, an encounter with Venerable Yin Shun, one of the most important figures in contemporary Mahayana Buddhism and a major advocate of reformist humanitarian tradition in Chinese Buddhism, was the tipping point for Master Cheng Yen's journey in the Buddha world and the seed for the Tzu Chi Movement. Later on, Master Cheng Yen took refuge under Venerable Yin Shun (1906-2005) and became his 5th disciple (Huang, 2009: 22). Venerable Yin Shun told Master Cheng Yen "to serve Buddhism and all living beings," which became her life's mission (O'Neil, 2010: 179).

Triggered by the following two events in the 1960s, Master Cheng Yen conceived of "doing something for the society" and plunged into initiating the Tzu Chi Movement (Huang, 2009: 186). First, after witnessing a "cruel blood," left by a pregnant woman untended at a hospital in Hualien in eastern Taiwan, Master Cheng Yen discovered a void of social needs that needed to be filled and vowed to form a charity organization to help the poor and the sick. In the second event, Master Cheng Yen was inspired by three nuns from Stella Mars Ursuline High School in Hualien who iterated the Catholic Church's teachings of helping people around the world by building churches, hospitals, and nursing homes. Although the concept of "engaged Buddhism" or "action Dharma" of the Buddhism World as advocated by Venerable Yin Shun is in line with that of the Catholic Church, it has rarely been done by Buddhists.

B. Institution organization-developing the Tzu Chi Foundation

Entrepreneurs need to organize institutions or new venture creations to implement their judgments in order to create value. As noted by Knight (1921), the presence of uncertainty transforms society into an "enterprise organization" and reducing uncertainty by transforming it into a measurable risk through grouping constitutes a strong incentive to extend the scale of a firm's operation. Gartner (1988) contented that the phenomenon of entrepreneurship is the process by which new organizations are created. Working through a group or a team from an organization, the opportunity can be exploited more easily.

In 1966 the Buddhist Compassion Relief Tzu Chi Foundation (or the Tzu Chi Foundation) was formally founded. The charity work of Tzu Chi was started by six disciples following Master Cheng Yen's order to save US$0.5 a day. The gospel of "Save people with 50 cents" went out quickly, while at the same time Tzu Chi started to help lonely elderly people. While news of Tzu Chi helping an old lady from mainland China by providing meals every day and cleaning her house till she passed away spread out, many followers wanted to take refuge vows under Master Cheng Yen. Master Cheng Yen demanded two prerequisites for those who wanted to be followers: to be a Foundation member and to participate in charity work. Tzu Chi started expanding as its charity missions grew.

In the early days, Master Cheng Yen and her disciples lived in an area of less than 120 square feet in Puming Temple. They generated their own financial resources for their living by producing biscuits, candles, handcrafts, etc. After moving to the simple Abode of Still Thoughts located in Hualien in 1969, this living quarter became the eternal symbol of the Tzu Chi Foundation, as well as a spiritual home for Tzu Chi members all over the world. Nowadays, Tzu Chi has six hospitals, various properties all over Taiwan and overseas branches, and owns a TV channel, Da Ai. With the expansion of the Tzu Chi Movement, different task forces and subgroups were formed in due course.

C. Resource mobilization-fulfilling the social needs

With entrepreneurs who coordinate limited resources, an economy can move toward superior equilibrium (Kirzner, 1973). (6) The critical task of entrepreneurs lies in effectively managing uncertainty (Sull, 2004). As noted by Miner (2000), in order to exploit opportunities, enterprise management is indispensible, and it involves goal setting, planning, and information gathering. Capital accessibility is generally believed to be the main constraint for a startup or the viability of an established enterprise (Holtz-Eakin et al., 1994; Hurst and Lusardi, 2004). Capital restriction is particularly acute for social entrepreneurship due to its shyness from pursuing profits as the main goals.

Along with the strong growth of Taiwan's economy, social problems, unfortunately, have kept abreast. The poor seems to be locked into their abject situation, while the rich are not any happier. Master Cheng Yen believes that suffering in this world is caused not only by material deprivation, but, more importantly, also by spiritual poverty (Huang, 2009). Thus, Tzu Chi's guiding principle on charity is to "help the poor and educate the rich." Tzu Chi's missions focus on giving material aid to the needy and inspiring love and humanity to both givers and receivers. The Tzu Chi Movement asserts what Master Cheng Yen has coherently advocated, in that "Buddhism is principle, Tzu Chi is implementation and only through implementation, principle can be revealed and understood." Under the leadership of Master Cheng Yen and the principle of Tzu Chi's simplicity and frugality, the organization has won the trust and confidence from donors and volunteers, helping to facilitate the implementation of "engaged Buddhism" and the ability to mobilize vast social resources and to grow swiftly.

Responding to the increasing social needs, Tzu Chi's missions are currently oriented into eight categories: charity, medicine, education, culture, international disaster relief, bone marrow donations, environmental protection, and community volunteerism. The Tzu Chi Foundation has been notable as the largest recipient of Taiwan' s philanthropic donations. With its endowments reaching NT$26.3 billion (US$800 million) in 2005 (Himalaya Foundation, 2005) and from incessant donations, the Tzu Chi Foundation has owned enviable funds dwarfing all other Taiwanese social organizations.

Scaling up the missions

Entrepreneurship is inspired to alter an unpleasant or unjust equilibrium. Any successful social entrepreneurial ventures need to demonstrate that they are capable to expand and promote a value creation model. Given the objective of maximizing social change, social entrepreneurship differs from its business counterpart in its ability to grow and to be replicated, or to be scaled up (Dees et al., 2004; Perrini et al., 2010). Martin and Osberg (2007) argued that unless the extent of the impact from social entrepreneurial behavior achieves a large scale or is so compelling as to launch legions of imitators and replicators, it is not likely to lead to a new superior equilibrium. Formed as a missionary for charity, the Tzu Chi Movement has expanded on every front of its Four Major Missions, i.e. charity, medicine, education, and culture. (7)

Mission of charity: A new paradigm of fundraising was established in 1973 after Typhoon Nora hit Taiwan. Master Cheng Yen explicitly instructs that the mission comes first and funding will follow. Although she estimated disaster relief needed following Nora would be NT$600,000, the organization at that time only had NT$100,000. Master Cheng Yen then urged all the members to ask for donations and they succeeded in achieving. In 1991, Tzu Chi started its international relief efforts by supporting orphans who suffered from the Persian Gulf War and the flooding in Bangladesh. In the same year, with floods devastating the central and eastern parts of China, Master Cheng Yen initiated new relief programs and asserted 3-no's (no commercial, no politics, and no proselytization) in order to avoid any obstruction of charity missions from the prejudice of commercial, politics, and religion. International relief by Tzu Chi not only provides emergency materials like food, clothing, grain seeds, and medical materials, it also goes a step further by rebuilding houses and schools, setting up water supply systems, and offering free clinics. One of Tzu Chi's core principles is that relief supplies (blankets and food parcels) should be handed over personally, with a bow, by volunteers so as to express sincerity and gratitude (Montlake, 2010).

Mission of medicine: From the experience of caring for the poor, Master Cheng Yen realized that the root of poverty is due to illness. She believes that offering medical help for the poor is very important in helping to change their condition. In 1986 the Hualien Tzu Chi General Hospital, the first Buddhist one ever to be opened, was realized under the guiding principles of "respecting life" and "patient-centred. " No deposit funds are necessary for patients to live and stay at the hospital. Tzu Chi's medical network in Taiwan was completed after a series of additional hospital openings in Yuli, Guanshan, Dalin, Taipei, and the most recent branch in Taichung in 2007. In 1996 the Tzu Chi International Medical Association was established and now has 58 branches in 11 countries with more than 7,000 professional medical volunteers. It has provided free medical services in 39 countries around the world (Tzu Chi Foundation, 2010). Notwithstanding all this medical service, the Tzu Chi Nursing Care Professional School, the first one established by the private sector in Taiwan, was launched in 1989. In 1994, when Tzu Chi Medical School commenced, Master Cheng Yen promoted the donation of one's body after passing away for medical uses. Her stipulation of "life is a person's usage, not a right to own" has since helped promote Taiwan's body donations. Master Cheng Yen further initiated bone marrow donations in 1993, knowing that this would save lives without harming the donor's health. Today, Tzu Chi runs Asia's largest bone marrow registry (Tzu Chi Foundation, 2010).

Mission of education: After the foreign press started criticizing Taiwan as an island of greed during a stock market bubble in the 1980s, Master Cheng Yen considered that aside from pursuing individual merits and profit-making, basic education needs to focus on promoting social harmony and compassion as well. Tzu Chi's philosophy is published by Tzu Chi's in-house publishing company in the form of books, DVDs, and audio CDs, which create Tzu Chi's own canons. One of the best examples of this canonization is the book, Still Thoughts, or Jing Si Aphorisms (in Chinese, like the abode's name). It was first published in 1989 and is a collection of inspirational quotes taken from the Master's daily speeches that many Tzu Chi members carry around and regard as the "bible" by which they abide in speech and conduct (Tzu Chi Foundation, 2011). Tzu Chi completed the establishment of its education program in 2000, offering a well-rounded curriculum and running a full curriculum from kindergarten, elementary school, and middle school to high school, college, and graduate studies. Tzu Chi also owns a media group that includes a 24-hour global satellite TV station carrying in-house productions of news, dramas, talk shows, and documentaries, as well as Master Cheng Yen's speeches and notices of charity activities that can be easily spread instantly to every corner of the world.

Mission of culture: As Taiwan's economic development escalated to a higher stage, society changed dramatically also, with forms of rebellion rising such as people dying their hair a dramatic colour, nose piercing, tongue piercing, and weird dressing. Master Cheng Yen feels that it is necessary to establish a culture model. She promulgated ten precepts for the discipline of Tzu Chi men, particularly for the male Compassion Faith Corps (to be discussed in section 3.2), in order to stem them from the common bad habits of Taiwanese, such as indulging in smoking, chewing betel nuts, etc. The ten precepts have been assimilated into Tzu Chi volunteers and set up as examples for society. Respecting the environment has also gained a broad recognition and a humanistic culture is merging with the stream of global concern for the earth. The Tzu Chi Movement's respect for the earth began in 1990 when Master Cheng Yen gave a speech at Shin-Min Professional School (in Taichung). In response to the welcome applause from the audience, Master Cheng Yen encouraged them to use clapping hands as a form of environmental protection. One lady, Young Shun-ling, afterwards started to collect recycled cans and bottles and donated the proceeds from them in the name of Tzu Chi. The environmental protection mission of the organization was duly launched. In recent years, Tzu Chi has spearheaded the project of recycling millions of plastic bottles from the city of Taipei's waste stream into hundreds of thousands of polyester blankets to distribute to people in regions inflicted by disasters. (8) These blankets have reached the victims of Hurricane Katrina, the Sichuan earthquake in China, and the recent devastating earthquakes in Haiti and Japans.


Although social entrepreneurship shuns away from the profit-pursuing purpose, it cannot eschew intensive competition like commercial enterprises, and its success relies upon whether it can create capabilities to maintain its competitive advantages (Porter and Kramer, 2002). To maintain competitiveness in social enterprises, three factors, if not more, need to be considered. First, social enterprises are highly related to compassion, and therefore it is essential that social entrepreneurs possess several leadership characteristics-namely, significant personal credibility and the ability to generate followers' commitment to the project by framing it in terms of important social values rather than purely economic terms (Mort et al., 2003). Second, sustainability of a social enterprise is the foremost concern since social missions are an enduring work. As noted by Weerawardena and Mort (2006), a social mission goes hand in hand with the sustainability of the organization. Mort et al. (2003) suggested that social entrepreneurship should be put within the framework of the strategic management model (such as the capability model) of an organization. Third, the foremost challenge for social enterprises is public support, which can be best manifested in the ability at fundraising. When the calamity of human beings occurs unexpectedly, compassion is always ahead of capability. However, once positive cash flows run out, social enterprises literally cease to exist. With the motto of "reaching first, then considering how to grasp", social entrepreneurs risk facing more uncertainty. This makes the sustainability of a social enterprise more challenging (Henton et al., 1997). The rapid expansion of the Tzu Chi Movement tellingly demonstrates its success, and it is worth further discussing its competitive advantages.

Charismatic leader

Leadership is one of the key drivers of performance in an organization. Two of the most often studied leadership behaviors are transactions and transformation (Burns, 1978; Bass, 1985). Transactional leadership fosters rule-based ways of doing things, implementing routines that take advantage of past experiences, while transformational leadership encourages individuals to think "out of box" and champions innovation. Conceptually, charismatic leadership as proposed by Weber (1948) is similar to what transformational leadership describes. (9) Weber argued that leadership itself is situational in nature and that true leaders need to move dynamically from one type of leadership style to another in order to remain successful. In the similar vein, Bass (1985, 1988), Howell and Avolio (1993), and Judge and Piccolo (2004) stipulated that successful leaders display both types of behaviors and effective leaders often supplement transactional leadership with transformational leadership.

Huang (2009) ascribed Master Cheng Yen's behavior as a typical example of charismatic leadership. A charismatic leader has the flavor of being divine in nature and often compared to heroes. Charismatic leaders use personal charm to bring about change. However, to be an effective leader, it is essential to build trust and confidence among followers and to communicate effectively with them. Trust can be built in many ways, such as by working hard, maintaining a constant message, and/or being available to solve followers' problems, among others. By showing that they are fully committed to achieving their vision, leaders can build trust and confidence in their followers. This in turn yields high follower satisfaction and commitment. Master Cheng Yen is a dedicated hard worker, routinely communicating through the TV channel of Da Ai every day and regularly visiting various branches all over Taiwan. (10) Her style of "walking about" management keeps her in fresh touch with the organization of Tzu Chi and ongoing issues (Soung, 2006). While making decisions covering issues of methods and strategies, Master Cheng Yen accepts divergent views, but on issues of principle she makes the final decision (O'Neil, 2010: 198).

Master Cheng Yen's charismatic magnetism manifests in different aspects. Effective communication is critical for the successful leadership of a social entrepreneur (Leadbeater, 1996). With physical frailty and a weeping voice with a crying tune as described by Huang (2009:33), Master Cheng Yen can be powerful and immediate enough to make followers cry when first hearing her preach for compassion mission (Huang, 2009). Apart from her frailty and soft voice, by mixing idealism with perseverance, Master Cheng Yen often commits herself to a project before raising the money. One example was that she built Tzu Chi's first hospital in 1986 by collecting small donations and bypassing big donors after eight years of trying. Her determination and perseverance awed many of her followers (Soung, 2006). Another stunning example was when she overruled skeptics and agreed to the requests of every school headmaster who knocked at Tzu Chi's door asking for money to rebuild after the 1999 Chi-Chi earthquake that flattened a large slice of central Taiwan. Tzu Chi raised NT$800 million to build 51 schools, all of which are now shock-resistant structures (Chen, 2008).

Functional organization

Tzu Chi has demonstrated itself as a functional organization unparallel to commercial organizations. Its staff numbers just 800, bolstered by its network of 2 million volunteers. (11) Huang (2009) contended that Tzu Chi is an organization with an undefined structure, and its departments and the titles among its followers continue to proliferate in number with an obscure hierarchy and authority. With a fluid organization, it allows more subgroups to be initiated and set up. The actual core of the organization consists of six title groups: commissioners, (male) Compassion Faith corps members, honorary trustees, and members of Tzu Chi's friends' club, teachers' club, and college youth corps (Huang, 2009: 65). Among them, commissioners and male members of the Compassion Faith Corps are the most essential and devoted. If commissioners are the missionaries of Tzu Chi, the Compassion Faith Corps is the guard of the missions, as aptly commented by Huang (2009).

Commissioners--the missionaries of Tzu Chi: Commissioners form the core of the Tzu Chi volunteer association. The title was established at the time Tzu Chi was initiated. To be a commissioner, the basic eligibility and primary duty is to proselytize a minimum number of households. (12) There were only 10 commissioners in 1966, increasing in 1988 to 1,024, and by 2009 reaching 35,961 (31,433 in Taiwan and 4,528 overseas; Tzu Chi Foundation, 2010). Commissioners are not only the backbone to Tzu Chi' s proselytization system, but are also the core of its effective mobilization, which often impresses the public and even outshines a government's response during any emergency.

Two coordinating modules operate among commissioners to maintain effective Tzu Chi mobilization. The first module is the commissioners' calling chart, frequently updated and distributed among commissioners of local subgroups, which outlines regular tasks and prepared-for emergencies. (13) The second coordinating model is the detailed division of labor at the group level, updated frequently and distributed along with the calling chart. This well-crafted division of labor streamlines the coordination of commissioners' regular activities and special events (Huang, 2009).

Compassion Faith Corps--the guard of the missions: The major role of the Compassion Faith Corps is to collaborate with commissioners by fulfilling the distinct functions mostly identified with male disciplines. Tzu Chi was first chiefly a women's group. In the late 1980s, in response to the rapidly increasing number of male participants who did not pursue the commissioner track, Master Cheng Yen created the male Compassion Faith Corps. The first cohort of Compassion Faith Corps members received their titles in 1992 and the total number was 545, selected from 2,000 applicants (Huang, 2009). By January 1998, there were 3,340 certified Compassion Faith Corps members worldwide and in 2009 the number reached 22,211 worldwide (20,628 in Taiwan and 1,583 overseas; Tzu Chi Foundation, 2010).

To become a certified Compassion Faith Corps member, apart from experiencing a long training process, the imperative criteria is discipline, chiefly observing ten precepts (Huang, 2009). The ten precepts consist of two parts: The first five are the basic lay Buddhist precepts--do not kill, do not steal, do not fornicate, do not lie, and do not drink alcohol. The other five precepts protect the ideal Tzu Chi man from the common bad habits attributed to Taiwanese masculinity, including smoking, chewing betel nut, participating in politics, etc. (14) The precept-based Tzu Chi culture assimilates to diversified volunteer associations, which are organized in three levels. (15) The bodily disciplines and morality of the precepts make each Tzu Chi individual a manageable module of collectivity. Master Cheng Yen believes that the ten precepts are the "secret" strategy of managing an enormous organization.

Incessant support

Humanism Buddhism emphasizes "practice instead of meditation only," or "you don't do it, you don't feel it," and the emphasis on practicing helps pervade the idea of Buddhism into the secular world (Soung, 2006). Tzu Chi wins broad support due to its integrity and trustworthiness, which are founded in three merits disparate from other Buddhism organizations in Taiwan: self-reliance without accepting any offering; neutral position in politics; detailed archiving of its missions.

Self-reliance and separation of institution and foundation: Still Thought Abode is the headquarters of the worldwide missions of the Tzu Chi Movement. Master Cheng Yen and her disciples still abide by the founding rule of self-reliance and reject any offerings. (16) For any use of the Still Though Abode, growing vegetable, producing handicrafts, making candles, etc. are still the main financial sources for self-subsistence. Although the Tzu Chi Foundation has collected a large amount of donations, all the funds are used only for the four major missions. Separating the financial sources of donations from the subsistent needs of the Still Thought Adobe demonstrates a good gesture to the public. With 150 nuns living with Master Cheng Yen in Abode, they strictly adopt a Spartan lifestyle that has not changed--a 17-hour work day, sleeping no more than five hours at night, a strict vegetarian diet, and no holidays (O'Neil, 2010: 187). The rigor of the community and the small size and simplicity of its temple impress members and show a stark contrast with other temples in Taiwan, whose size and magnificence show that they spend their money in other ways.

A neutral role in politics: Master Cheng Yen has asserted over the years that politics are "too complex" and involvement in sensitive political debate may prove too threatening for Tzu Chi's cohesion (Laliberte, 2001). To be quite concrete about this issue, Tzu Chi's aversion to political participation has been written in its ten precepts. Aside from an aversion towards domestic politics, in order to avoid any general doubt, during international relief missions, 3-nos (no politics, no religion, and no propaganda) are also asserted. Given the sensitive relationship between the two sides of the Taiwan Strait, the policy of 3-nos offers a non-confrontational, non-antagonistic, and apolitical approach, which helps to deal with the social problem (Laliberte, 2003). Tzu Chi insists on keeping an arm's length from mundane organizations. In stark contrast with another faith-based Buddhist social enterprise, Buddha's Light Mountain founder Master Hsing Yun is constantly involved in the political sphere, particularly during elections, and has stirred controversial criticisms (Laliberte, 2001). (17) Leadbeater (1996) argued that social entrepreneurs are better at being ideological chameleons. Being tied down to a political position would cut them off from potential supporters.

Detailed archiving of its missions: Tzu Chi carefully counts and documents its accomplishments, such as the number of goods distributed, participating volunteers, or donating families, although this is disparate from the conventional practice of doing good anonymously. (18) At the same time, through the Da Ai Channel, donors can see volunteers give relief goods directly to victims and they appreciate what their money has been used for--blankets for victims of fire, earthquakes, or floods. Donors can monitor how the money is spent through commissioners' reports and the Da Ai station, radio, and print media. The transparency of Tzu Chi and the frugality of Master Cheng Yen and her disciples ensure that the organization's money is used for its stated purpose and not spent on expensive cars and lavish banquets--as is the case in some other Buddhist charities. This transparency and system of dedicated accounts have greatly helped the foundation's credibility (O'Neil, 2010: 48).

With their insistence on simplicity and frugality, Tzu Chi wins extraordinary trust and confidence from large supporters. As a result, raising funds does not seem to be an issue for Tzu Chi. One of the sources for funding is from the Honorary Trustees, which are awarded to those individual donations that equal NT$1 million or above. The most common case is that a female commissioner "makes" her husband an honorary trustee, despite his non-participation in Tzu Chi. A host of the core honorary trustees is also actively involved in the authority of the Tzu Chi mission. In addition to providing their professional knowledge and mobilizing their social connections, active honorary trustees generate further associations based upon their shared entrepreneurship. For example, those prominent entrepreneurs in civil engineering or the construction industry have formed a construction committee to regularly help Master Cheng Yen in supervising construction projects for Tzu Chi's establishments (Huang, 2009: 79). Another example of support from business entrepreneurs is Wei Yin-Chun, an early disciple of Tzu Chi and one of the four founding brothers of Tingyi Holdings (Master Kang, which is the largest beverage and instant noodle brand in mainland China). (19) Wei, deeply touched by stories in a Tzu Chi publication, started to make a donation in 1988. In 1995 he started working with Tzu Chi in China, doling out relief and building schools in remote villages. When disaster strikes, he puts aside work at the family business to focus on relief efforts, as he did for Haiti while on business in China (Chen, 2008).


Social entrepreneurship has leapt to prominence since the 1990s in response to the growth of technology and the rise of globalization, as they not only provide more opportunities to create wealth for businesses, but also expose more global social injustices and economic misery to the light. Social entrepreneurs are a unique kind of person, because they see opportunities in every difficulty rather than difficulties in every opportunity. Taiwan's social enterprises started booming after 1987 when Martial Law was dismantled and the civil rights of free press and free association were warranted. Within those booming social enterprises, Tzu Chi has created a phenomenal impact. Although there have been many case studies about the Tzu Chi Movement, they rarely look at it from the perspective of economics, particular the role of entrepreneurship. Through entrepreneurship, a chain of actions in response to opportunity discovery has aspired to changes in any unjust and unpleasant equilibrium. I use the entrepreneurial process, which mainly consists of opportunity discovery, institution organization, and resource mobilization, to analyze the burgeoning growth and scaling up of the Tzu Chi Movement on its four Major Missions.

Although a faith-based organization normally shuns itself from adopting mundane management skills, Tzu Chi has managed its organization very successfully. I highlight three factors that contribute the most to creating the competitive advantages of the Tzu Chi Movement: a dedicated charismatic leader, a functional organization, and incessant support. Along with the movement's success, criticisms follow as well. Three questions are worth noting for Tzu Chi's future development.

Transforming to a global religion: Under close scrutiny, the Tzu Chi Movement is mostly confined to Chinese society, although it is a growing transnational organization among overseas Chinese. Western believers remain in small numbers. How to adapt to a global environment with versatile cultures is crucial for the Tzu Chi Movement to attract more westerners as argued by Clarke (2009). For instance, Huang (2009: 273) raised questions of the ritual prostration when meeting Master Cheng Yen and handing over donations, and the hysterical cult emotions of its believers' love for Master Cheng Yen poise doubt to outsiders, particular to Westerners. Another criticism falls on the loss of self-independence of Tzu Chi members, and thereby their behaviors seem to be mesmerized collectively. As Brummans and Hwang (2010) argued, many people working within and with the Tzu Chi organization seem to have a taking-for-granted sense of confidence in the core beliefs or doctrine of the institution. Tzu Chi members' collectivistic spirit and persistent commitment to "getting their hands dirty" leave little room for individual expression, agency, or voice. Tzu Chi may appear like a concertive control "regime" or "machine" in which people pressure each other to "do good" and whose enactment is so well oiled and finely monitored that it hides the fact that it is an "iron cage" (Burmmans and Hwang, 2010).

Adopting strategic management: Whether foundations fulfill their potentials to fully utilize their funds has become a moot issue (Economist, 2006). Tzu Chi has grabbed a tremendous and envious proportion of Taiwan's annual donations, particularly acute during Taiwan's 921 Earthquake (September 21, 1999). Seldom is there an argument about whether the foundation funds can be used in a more efficient way. Social entrepreneurs often fail to think in terms of business (Porter and Kramer, 2002; Bloom; 2009), and social enterprises are involved in pursuing strategies aimed at outperforming their closest competitors. Similar to commercial enterprises, they are compelled to adopt innovative ways of perceiving and delivering superior value to their clients.

Bracing for succession: Social enterprises will only be long lasting if they have an orderly way of ensuring management succession (Leadbeater, 1996). The evidence suggests that most successful movements are those that have handled this question well and adequately. No apparent successor has emerged among Tzu Chi's four deputies, who are all professional managers, or from the nuns. Although Master Cheng Yen has always said there is no retirement plan for her (Chen, 2010), this inevitable issue will only become more pressing and evoke more trepidation as time goes by. Sonnenfeld (2011) offered that the best measure of a founder's success is not how bright the star shines while they are there, but what happens after they are long gone from this earth.


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Ho-don Yan

Feng Chia University

(1) Taiwan's economic success has been ascribed to its "entrepreneurial society." Of its enterprises, 97% are small and medium size enterprises (SMEs), which have helped manifest Taiwan's active and pervasive entrepreneurial spirits. For a discussion of the role of entrepreneurship in the making of Taiwan's economic miracle, see Yu et al. (2006) and Chen et al. (2011).

(2) According to the 2002 survey of Foundations in Taiwan, there are a total of 3,014 foundations, with the majority of these foundations involved in the fields of education and social welfare. Of these foundations, 53% are registered at the local government (county or city government) level, while 47% are registered at the national level government. It bears noting that 65% of foundations in Taiwan were established after 1987 (Pelchat, 2005).

(3) In recognition of its global aid programs across five continents, Tzu Chi became the first Non-Government-Organized charity group in Taiwan to attain association status with the United Nations Department of Information in 2003. In July 2010, the Buddhist Tzu Chi Foundation was awarded to be an NGO in Special Consultative Status with ECOSOC, as an acknowledgement of its outstanding charity and medical works around the world. In August 2010 Tzu Chi was officially authorized by China's government, a dogged regime hostile to religious activities, to establish that country's first and only nationwide charity foundation.

(4) For instance, Choi (1995) argued that Schumpeter's entrepreneur focuses on disturbing the equilibrium through innovations, but is not explicit how to reach the new equilibrium. Kirzner's entrepreneurs thrive in disequilibrium, and drive the market to the new equilibrium through opportunity exploitation.

(5) Dominant social enterprise activities include: launching culture-related organizations; providing services for disabled people; focusing on waste recycling and nature protection or offering open-source activities such as online social networking; and community safety schemes (Di Domenico et al., 2010).

(6) New innovations trigger disequilibrium by closing the existing opportunities and opening up new ones (Schumpeter, 1934). It is this creative destruction which pushes an economy to move forward. Entrepreneurship is important to the functioning of a market economy. Through an entrepreneur who coordinates supply and demand when discovering a value-added opportunity and through the value-seeking process, an economy can move toward equilibrium, which proves to be a more efficient and effective resource allocation (Kirzner, 1973).

(7) See the related information of Tzu Chi Missions at the website of the Tzu Chi Foundation:

(8) The foundation operates over 4,500 recycling stations throughout Taiwan. One of the foundation' s projects is the recycling of polyethylene terephthalate (PET) plastic bottles for textiles. The project, which was started in 2006, collects PET plastic bottles, shreds and rinses them, and then converts the shredding into polyester resin which is spun into yarn and woven into cloth (Tzu Chi Quarterly, 2007). By September 2008, about 11,856,000 bottles were used to make more than 152,000 polyester blankets, many of which were handed out as part of their disaster relief programs in over 20 countries. Currently Tzu Chi is the biggest recycling organization in Taiwan.

(9) Weber (1948) suggested three types of leaders - bureaucratic, charismatic, and traditional. The power of traditional leadership is usually passed down, often through heredity. It is typically embodied in feudalism or patrimonialism and less useful in modern times. Bureaucratic leadership behaviors are similar to those of transactional leadership.

(10) A daily 15-minute address, Ren Jian Pu Ti (Practicing Buddhism), which Da Ai broadcasts five times during the day and is required viewing for her disciples, is the main link between her and her followers around the world (O'Neil, 2010: 187).

(11) As noted by Chen (2010), in comparison to the Red Cross with fewer than 1 million volunteers and 34,000 paid employees, Bangladesh's BRAC, the world's largest NGO by number of staff, employs over 120,000.

(12) The mission of commissioners is to: (1) proselytize contributions, exemplifying the spirit of compassionate contribution and the spirit of relieving suffering while bestowing joyfulness, in order to educate the well-to-do; (2) investigate and follow-up on low-income households; (3) care for disaster victims and patients, and (4) participate in local branch activities and commissioners' club and attend small group meetings. See Huang (2009) for a detailed discussion of the process for pursuing a commissioner track.

(13) All commissioners are divided into three regions (north, central, and south) across Taiwan. Each region is divided into districts, each district is divided into groups, and each group is divided into subgroups. Each subgroup is comprised of about 10 commissioners and headed by three coordinators. This coordinating net lists all the numbers (home, work, cellular phone, and fax) of each commissioner. It is little wonder that Tzu Chi can mobilize thousands within one hour. See Huang (2009).

(14) These five other precepts include: do not smoke, use drugs, or chew betel nuts; do not gamble or speculate; respect your parents and be moderate in speech and attitude; follow traffic regulations, and do not participate in politics and demonstrations.

(15) With regard to organization, parallel to the commissioner system, the Compassion Faith Corps system consists of three levels: regional corps, middle-range corps, and small corps. With this closely-knitted network, Tzu Chi can mobilize resources promptly whenever necessary (Huang, 2009).

(16) The community follows the rule of Pai Chang, a famous Chinese monk in the 9th century A.D. who declared that a day without work was a day without food. This decision aroused strong opposition from other Buddhist communities, who used to rely upon donations from the faithful (O'Neil, 2010: 192).

(17) Buddha's Light Mountain (Fo Guang Shan) was founded by Master Hsing Yun in Dashu Township, Kaohsiung County in 1967.

(18) In their argument of the paradoxical nature of Tzu Chi's organizing, Brummans and Hwang (2010) offered an interesting observation that behind the detailed archive lies the struggle of a Mahayana Buddhist between impermanence of the real life and permanence of spiritual seeking. The struggle of seeking for permanence urges one to treasure every moment. Tzu Chi's impressive "archivization" of all deeds partly reflect this mindfulness.

(19) Master Kang, a brand name of the beverage and food corporation, is the flagship brand of Tingyi Holdings. Master Kang, founded in Taiwan in 1958, is the leading brand in mainland China currently, with its brand ranking 5th and having a market value worth US$916 million, according to Interbrand, a brand appraisal consultancy.
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Author:Yan, Ho-don
Publication:American Journal of Entrepreneurship
Geographic Code:1USA
Date:Jan 1, 2012
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