Exploring How Organizational Capabilities Contribute to the Performance of Social Enterprises: Insights from China

Abstract

The impact of organizational capabilities on the performance of social enterprises (SEs) has not been examined in the context of China. This study addresses the research gap by conducting a hypothesis-testing quantitative study. The questionnaire survey data of 206 Chinese SEs were analyzed by performing Pearson correlation and hierarchical linear regression analyses. The research findings show that four types of organizational capabilities have divergent effects on the social and economic performance of Chinese SEs. Specifically, stakeholder engagement capabilities and business planning capabilities make positive contributions to SE performance in economic and social domains, while human resource management capabilities have positive effects on social performance but not economic performance, and there is no statistically positive relationship between marketing capabilities and SE performance in economic and social domains. Our study provides important practical implications to managers of SEs in China or in another similar context, who should give priority to enhancing stakeholder engagement capabilities and business planning capabilities rather than human resource management capabilities and marketing capabilities as a booster of economic and social performance of SEs.