Strategy for Sustainability of Social Enterprise in Indonesia: A Structural Equation Modeling Approach

Putri Mega Desiana,Mohamad Syamsul Ma’arif,Mukhamad Najib,Herien Puspitawati,Riani Rachmawati,Ruslan Prijadi

doi:10.3390/su14031383

Putri Mega Desiana, Mohamad Syamsul Ma’arif + Show 4 more

Open Access

https://doi.org/10.3390/su14031383

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Abstract

Social enterprise (SE) is a significant global phenomenon that occurs when an organization with social concerns can grow concurrently with its commercial activities. However, the factors that influence the sustainability of SE remain relatively understudied. This study argues that innovation is a prerequisite for SE’s sustainability. Therefore, this study aims to find alternatives to SE’s sustainability strategy, considering the need for SE to have dynamic capabilities, to anticipate changes in the ecosystem, and to manage the company’s internal resources to build on SE’s innovation and sustainability. The dataset was obtained from a survey of 187 SEs in Indonesia, which was then processed using SEM. Results indicate that internal factors have no direct significant effect on sustainability, but the ecosystem and innovation have been shown to have a direct and significant positive effect on sustainability. Dynamic capabilities have a significant but negative direct relationship to sustainability. Internal and ecosystem factors cannot be mediated by dynamic capabilities when it comes to sustainability, whereas innovation can only mediate internal factors towards sustainability. Finally, serial mediation of dynamic capabilities and innovation are key elements that contribute to sustainability. It is proven that if dynamic capabilities are directed to foster innovation, it will increase sustainability.

Highlights

Social Enterprise (SE) is a worldwide phenomenon that has had a major impact on communities and society [1,2,3]
In contrast with the findings of Ince and Hahn [62], who found that SE sustainability will be aided by dynamic capabilities, this study shows a negative relationship which can be explained as follows: first and foremost, it must be acknowledged that developing organizational capabilities that are constantly adaptable to changes in the environment is extremely difficult [118]
Ecosystems, dynamic capabilities and innovation are proven to have a direct effect on sustainability, while internal factors must be managed properly before they can affect the sustainability of SE

Summary

Introduction

Social Enterprise (SE) is a worldwide phenomenon that has had a major impact on communities and society [1,2,3]. SE is capable of resolving economic disparities as well as social or environmental issues, and it is regarded as successful in empowering marginalized communities by providing access to education, low-cost health care, and assisting those who have been neglected to become useful members of society [3,5]. In contrast to commercial businesses, which are driven solely by profit, SE is driven by a social mission in that the majority of earnings are reinvested in the beneficiaries or the community. Complexity, even the conflict between efforts to achieve social missions (benefits for the community) and the need to maintain the availability of funds, often causes SE to experience difficulties, even not be able to survive [7]. The success of combining these two things is a prerequisite for SE’s sustainability [6,8]

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