External oriented resources and social enterprises’ performance: The dominant mediating role of formal business planning

Abstract

Abstract Social entrepreneurship has been recognized as an innovative and effective approach to poverty reduction and employment generation. However, the roles undertaken by social enterprises in Malaysia and Singapore are still limited and many are grappling to survive. Determine the external resources that could increase social enterprises' efficiencies and performance, are the key management issues for the external supportive bodies. Guiding by the resource dependence theory, this cross-nation quantitative study established a framework to examine the most prominent external resources (i.e., financial and training supports), which were mediated by formal business planning, towards the financial and social performance of social enterprises in the emerging contexts (i.e., Malaysia and Singapore). The empirical data on 181 Malaysian and Singaporean social enterprises were analysed by using a structural equation modelling approach. The research findings reveal that financial and training supports should be correlated closely with formal business planning in order to generate a significant impact on their organisational performance. The results showed business planning plays a dominant role between the external supports and social enterprises' performance. This challenges the conventional knowledge that common business practices of profit-driven companies are not suitable for mission-driven organisations. The moderation effects of the socio-economic context were found to be insignificant. The research model's predictive power and predictive capability for all the endogenous constructs were satisfied and assured. Furthermore, the Importance-Performance Map Analysis corresponded with the path coefficient results, the main factor to enhance social enterprises' performance is through the improvement in business planning practices, and financial support is another area to enhance their social performance.