Impact of the Use of Blended value accounting Methods on Social Enterprise Success

Abstract

Purpose: Social enterprises (SEs) are businesses managed by entrepreneurs who seek to improve society. Blended value accounting is a conceptual framework for measuring combined social and financial outcomes in SE. The purpose of this study is to determine the impact of the use of BVA methods on the success of the social enterprise. Age of business and no. of employees were used as control variables along BVA. Success is determined through a social and financial basis. Design/Methodology/Approach: Data was collected using a close-ended questionnaire from 150 respondents working in different social enterprises, and analyzed using factor analysis, structured equation modeling, and ANOVA for comparison. Findings: The result showed that No. of employees has a significant impact on success based on financial performance, but not on social success. The results also showed that there is no significant impact of the use of BVA method on Success based on both financial and social performance and it is concluded that the choice of the BVA method and sector of business does not have a significant impact to the financial and social success of the firm. The result from a Comparison of means showed that different BVA methods do not seems to be significantly different in terms of social success, whereas in the case of financial success, their impact varies significantly. Social impact tracker is the best BVA method to be used by social enterprise and B-impact is the least important to be used for social success and PCV Social impact is the best BVA method to be used by social enterprise and B-impact is the least important to be used for financial success. Results also showed that social performances of Social enterprises are significantly different in social sectors but not significantly different in the financial sector. SEs working in the Agriculture sector is creating the highest social impact and the education sector is the second-highest to achieve social success whereas Livelihoods sector is creating the least social impact. The education sector is creating the highest financial impact and the clean water sector is the second-highest to achieve financial success whereas Health sector is creating the least financial impact. Practical implications: The findings suggest that the managers of social enterprises should select a BVA method that is budget-friendly to implement and is in line with industry standards. Supportive agencies are advised to create an institution that reports the social change impact SEs create through their businesses and encourage all businesses to adopt the social-change orientation of SEs. Originality/Value: This is the first study that measured the effect of BVA methods on performance for Pakistani Social enterprise.