Social Enterprises Face Research Articles

Complex Systems and Sustainable Leadership: Enhancing Resilience and Sustainability of Community-Based Social Enterprises in Soweto, South Africa

In urban South Africa, community-based social enterprises (CBSEs) face challenges at the intersection of financial and environmental sustainability and social purpose. These enterprises address social exclusion and community development within complex institutional environments. Despite increasing governmental support, CBSEs struggle with historical inequalities, resource limitations, high poverty levels, inadequate infrastructure, and complex social dynamics. These challenges contribute to a high failure rate among SMMEs, including CBSEs, which represent approximately 71% of community-level businesses. This study examines how complex system dynamics in marginalized South African suburbs impact the sustainable leadership and resilience of CBSEs. Utilizing a qualitative approach, the study conducted 15 in-depth semi-structured interviews with CBSE leaders. The findings revealed that effective leadership in CBSEs requires extraordinary abilities to traverse complexity, adapt to changes, and engage in dynamic organizational change. The key themes identified included adaptive and flexible leadership, interdependencies and network collaboration, community engagement and co-creation, continuous learning and feedback loops, policy influence and response, and resource utilization and constraints. By applying complex systems leadership theory (CSLT) and sustainable leadership principles, the research offers insights into the mechanisms enabling CBSEs to thrive in challenging environments. These findings contribute to Social Enterprise Management and Leadership Studies, providing practical implications for policymakers and practitioners to support CBSE development and sustainability in marginalized urban communities.

Toward a moral approach to stakeholder management: insights from the inclusion of marginalized stakeholders in the operations of social enterprises

PurposePrevious literature on sustainable supply chain management has largely adopted an instrumental view of stakeholder management and has focused on understanding the effect of powerful stakeholders who have a more decisive influence on an organization's supply chain decisions. Social enterprises have emerged as organizations that often aim to create impact by integrating marginalized stakeholders into their operations and supply chains. This study examines the trade-offs that social enterprises experience due to their moral stance toward stakeholder engagement, evidenced in their commitment to serving marginalized stakeholders, as well as the responses adopted to these trade-offs.Design/methodology/approachThe study follows a theory elaboration approach through a multiple case study design. The authors draw on insights from stakeholder theory and use the empirical insights to expand current constructs and relationships in a novel empirical context. Based on an in-depth analysis of primary and secondary qualitative data on ten social enterprises, the authors examine how these organizations integrate marginalized stakeholders into various roles in their operations.FindingsWhen integrating marginalized customers, suppliers and employees, social enterprises face affordability, reliability and efficiency trade-offs. Each trade-off represents conflicts between the organization's needs and the needs of marginalized stakeholders. In response to these trade-offs, social enterprises choose to internalize the costs through slack creation or vertical integration or externalize the costs to stakeholders. The ability to externalize is contingent on the growth orientation of the organization and the presence of like-minded B2B (Business-to-Business) customers. These responses reflect whether organizations accept the trade-offs at the expense of one or more stakeholders or if they avoid the trade-offs and find mutually beneficial solutions.Originality/valueBuilding on the empirical insights, the authors elaborate on stakeholder theory with a focus on the integration of marginalized stakeholders by emphasizing a moral justification for stakeholder engagement, identifying the nature of the underlying trade-offs which can arise when various stakeholder needs are in conflict and examining the contingencies affecting organizational responses to these trade-offs.

Scaling strategies, organizational capabilities and scaling social impact: An investigation of social enterprises in China

AbstractMost social enterprises (SEs) face constant challenges to scale up their social impact, especially for those in transforming societies such as China, where the ecosystem of SEs is still immature. Previous literature has examined how and why SEs select specific scaling strategies; however, the scaling performance of different scaling strategies has rarely been empirically explored. Therefore, this study takes a hypothesis‐testing quantitative approach, for the first time, to investigate how different scaling strategies contribute divergently to scaling performance and how their contributions are subject to the moderating role of SEs’ organizational capabilities. The findings show that the three types of scaling strategies positively contribute to scaling performance, and the magnitude and significance of their influences descend from knowledge dissemination, through organizational growth, to contractual partnerships. Meanwhile, when SEs have a higher level of stakeholder engagement capabilities or strategic management capabilities, knowledge dissemination has a stronger effect on scaling performance. Conversely, when SEs have a lower level of marketing capabilities or strategic management capabilities, organizational growth has a stronger effect on scaling performance. These results offer practical implications, suggesting that SEs selecting knowledge dissemination as a scaling strategy should prioritize advancing their stakeholder engagement capabilities and strategic management capabilities.

Governing Social-Business Hybrids. A Literature Review (WITHDRAWN)

There is consensus among scholars about the importance of governance in social enterprises. Yet, existing literature reviews have refrained from addressing social enterprise governance. This review inquires about the unique governance challenges that social enterprises face and how they address them. Based on a systematically collected and analyzed sample of 72 peer-reviewed journal articles across multiple disciplines, the review identifies accountabilities to multiple principal stakeholders, agents that combine altruism and self-interestedness, and the paradoxical relationship between social and commercial objectives as fundamental governance challenges in social businesses. ‘Hard’ governance, comprising formal structure and control addresses these challenges to some extent. However, impediments related to a mismatch between the assumptions of agency-based governance mechanisms and the context of social enterprises, the insufficiency of differentiated governance structures to balance social and commercial objectives over time, and technical and ideological difficulties of social measurement and reporting limit the applicability and effectivity of ‘hard’ governance. ‘Soft’ governance, comprising organizational culture, identity, socio-psychological mechanisms, and subtle mediation forces circumvent some of these impediments, making them a necessary supplement for social enterprise governance.

The effects of scaling strategies on the scaling of social impact: Evidence from Chinese social enterprises

AbstractConventional nonprofit organizations (NPOs) and social enterprises (SEs) face constant challenges when scaling their social impacts, especially in societies undergoing transformation, such as China, where NPO and SE ecosystems are still nascent. Whereas previous studies have identified various scaling approaches for SEs, empirical investigations of the linkages between scaling strategies and scaling performance are lacking. To address this gap, we conducted a quantitative study of 293 Chinese SEs to examine how the four types of scaling strategies brought about different scaling performances and how the results varied upon organizational form. Our results revealed that three of these scaling strategies, namely knowledge dissemination, organizational growth, and contractual partnerships, contributed positively and significantly to scaling performance, whereas capacity building had a positive but not statistically significant effect. Our results also indicated that the positive contributions of organizational growth and knowledge dissemination to scaling performance were reinforced in SEs organized as nonprofits. Moreover, the results indicated that SEs that deployed combined and diversified scaling strategies demonstrated better scaling performance than those that deployed just one strategy. Our findings have important managerial implications for practitioners within the SE community, and especially providing a scientific basis for the managers of nonprofit SEs to select appropriate scaling strategies.

The Effect of Cash Incentive Projects on the Social Value Performances of Social Enterprises: An Empirical Analysis of SK’s Social Progress Credit in Korea

Social enterprises seek to maximize benefits to society and the environment while obtaining profits. Social enterprises are increasing in number; however, their size and growth rates are very small. In addition, many social enterprises face difficulties in obtaining profits through social activities that generate social value, even though they are supported by government policy. Previous research has focused on the relationship between social performance and financial performance, compensation, and policy making, as well as the effect of incentives on social performance within organizations. To our knowledge, there is lack of empirical research on cash incentives for activities that generate social value. This paper analyzes the behavior of companies with regard to fostering a social enterprise ecosystem and a cash incentive system for social enterprises. In particular, we investigate the relationship between SK’s cash incentive system, which is called social progress credit (SPC), and the activities of social enterprises, and we examine which social value activities are affected by a cash incentive system. Furthermore, through empirical analysis, this paper analyzes how the amount of cash for incentives is determined by specific social activities, such as social service performance, employment performance, environmental performance, and social ecosystem performance, as well as by the size of the social enterprise and its financial performance (i.e., revenue and net profit). The results show that employment performance is the most important factor for incentive payments, reflecting the social atmosphere and government policy in Korea, and that it can be a simpler measurement of performance than other social performance measures. Moreover, the results show that there is a significant positive (+) relationship between incentive payments and financial performance, such as sales and net profit of social enterprises. In addition, it was found that more incentives were paid to small social enterprises with higher sales growth.

Mitigating challenges of small social enterprises to improve performance

PurposeSmall social enterprises (SEs) face many challenges as they seek to secure their survival, sustainability and performance, but little is known about the interrelations among these challenges and how these SEs might mitigate their challenges by using online platforms.Design/methodology/approachDrawing on the results of 19 in-depth semi-structured interviews with founders of small SEs in Australia, the authors present two integrative frameworks: one demonstrates how different challenges directly or indirectly influence SE performance, and the other represents the linkage between online platforms use and SE performance.FindingsThe authors’ findings indicate that SEs face social, economic and organizational challenges, and that SEs use online platforms to mitigate these challenges and improve their performance. Online platforms enable these enterprises to identify funding opportunities, recruit staff and volunteers, connect with other SEs, form partnerships, promote their organization, market their products and services, and avoid competition and duplication in their ecosystem.Research limitations/implicationsThe authors provide a guiding model for further research on using online platforms to mitigate challenges for small enterprises to improve performance. This study advances current understanding of why some SEs fail to thrive, while others survive, flourish and grow.Originality/valueThe authors’ study advances the resource-based view by identifying how online platforms offer a valuable resource to improve SE performance, and assist managers to maintain the strategic direction of their enterprise.

Competitiveness of Social Entrepreneurship in Latvia

Social entrepreneurship is an important component of the European social market economy that is based on the principles of solidarity and responsibility and the priorities regarding the individual and social goals; it promotes social responsibility and social inclusion. However, in practice, social enterprises face various problems that negatively affect their competitiveness. The present research has set an aim to examine the competitiveness of social entrepreneurship in Latvia. To achieve the aim, a case study was carried out to identify the factors affecting the competitiveness of social entrepreneurship and its competitive advantages and disadvantages in comparison with conventional enterprises. The research found that the key competitive advantages of social entrepreneurship were the story told by social enterprises and their employee motivation, while the negative effects regarding competitiveness were as follows: the lack of government support for social entrepreneurship, insufficient information in society about social entrepreneurship and the social value created by it, as well as various other factors in the internal environment of an enterprise.

Вынужденные расходы как фактор, препятствующий развитию социального предпринимательства

Characteristics of social entrepreneurship as a special type of entrepreneurial activity are considered and the hindrances that influence the functioning of such enterprises are identified. Classifications of compulsory payments that social enterprises face in their activities, are analyzed. Possible alternatives to reduce the payment burden and optimize costs are proposed.

“You have to make some money before you can do some good”: Balancing the commercial, social and public health objectives in a “community enterprise” regulatory model for alcohol and cannabis

IntroductionNew Zealand's alcohol licensing trusts are social enterprises that operate retail alcohol outlets in their districts and distribute profits back to the community. There have been calls for a similar “social enterprise” approach to legal cannabis sales. However, social enterprises face unique challenges in balancing commercial and social objectives. AimTo explore mechanisms that support the balancing of commercial, social and public health objectives in alcohol trusts and identify learnings for cannabis reform. MethodThematic analysis of interviews with 16 internal and external key informants (trust board members, trust retail managers, community activists, law enforcement) from two alcohol trust districts. ResultsKey informants overwhelmingly conceptualised alcohol trusts as business entities, but commercial success was also seen as a means to help the community. Interviewees’ perceptions of trusts’ social mission ranged from simple “corporate social responsibility” to a “genuine” community orientation. Despite a near-monopolistic market position, forces within and outside the trusts create pressures to conform to standard commercial behaviour, including strategic placement of alcohol outlets. Participants attributed the potential public health benefits of the trusts to reduced density of alcohol retail outlets and ease of enforcement. The pragmatic political goal of maintaining a favourable public image (to secure survival of the trust and re-election of individual trustees) was the key mechanism balancing commercial and social objectives. Ethical dilemmas related to the sale of alcohol and conflicts of interest in allocating community funds were evident. Discord was “negotiated” with the community via the public discussion and voting, providing opportunity to correct mission drift. ConclusionsThe need to maintain a positive public image (to ensure favourable electoral results) was a key mechanism helping to balance the commercial and social goals of alcohol trusts. A community trust model for retail cannabis sales could similarly provide constraints on commercial behaviour while funding community services.

The Emotionality of Social Enterprises: Mechanisms and Challenges for Generating Emotional Energy

Despite the clear importance of emotions for social enterprises, theory on social entrepreneurship still lacks a framework for understanding why emotions are so important for these organizations. Further, theory on social entrepreneurship lacks a framework for understanding the challenges faced by social entrepreneurs in attempting to mobilize their internal and external audiences from an emotion-based perspective. Building on the sociological work that has been carried out on emotions, I provide a framework for understanding how a collective emotionality is manifested in and by social enterprises. I suggest that social enterprises leverage three mechanisms for generating emotional energy: (1) pursuing meaningful ideals, (2) nourishing a vibrant emotional culture, and (3) granting power and status to individuals with less power and lower status. By analyzing these factors, I reveal the challenges that social enterprises face in scaling up, challenges that are relatively unknown compared with the well-explored challenges of balancing social and financial objectives. As social enterprises attempt to scale up their objectives, organizational growth exerts pressures on these efforts, putting these organizations at risk of emotional dispersion.

Identifying Key Success Factors for Social Enterprises Serving Base‐of‐Pyramid Markets through Analysis of Value Chain Complexities

There are people in this world who have little or no access to basic needs and they struggle financially, living on less than a handful of dollars a day. A better understanding of how to supply/serve the world's poor is needed. In this paper, through the lens of Porter's value chain framework we investigate the challenges and opportunities social enterprises face in base‐of‐pyramid (BoP) markets based on secondary data on 23 organizations. Our contribution is twofold: First, we analyze value chain complexities for the social enterprise based on the value creation role (consumer, coproducer) and income level (poverty, extreme poverty) of the local population. We find that nature of customers’ requirements varies across customer segments in the BoP markets and social enterprises face unique challenges in fulfilling such differentiated demand patterns. Second, we develop an affordability–accessibility framework that helps to identify the situations that may be favorable/unfavorable for social enterprises to meet the challenges in BoP markets. We make four propositions that social enterprises may use to cope with difficulties in affordability and accessibility. Our findings will be useful for such organizations to understand and design better supply chains for the base of pyramid.

Emergent models and strategies of social enterprises in China

Many nonprofits are turning to commercial strategies to enhance their income. While previous research identified challenges social enterprises face in balancing commercial and social missions, little is known about how Chinese social enterprises respond to similar challenges in meeting the double bottom line. Using 16 cases studies, this study identified different types of social enterprises extant in the Chinese context, and examined the strategies they adopt. We found that the fee-for-service is the most common operational model, and that despite attempts of heavy state influence, Chinese SEs were able to demonstrate their resilience by diversifying their operational models. Implications for China’s social work development are discussed.

Managing tensions in a social enterprise: The complex balancing act to deliver a multi-faceted but coherent social mission

Until recently, it was commonly assumed that social enterprises – by virtue of the ingenuity of their founders – were extra-ordinarily capable to simultaneously pursue social and financial goals. However, an emerging body of literature considers that social enterprises face tensions and trade-offs as they pursue their divergent goals. While extant research has offered insights into tensions that social enterprises face between social and financial goals, it is not clear whether this is the only trade-off social enterprises face or whether they also have to balance other, related tensions that stem from their social mission. In case tensions and trade-offs manifest themselves in other ways too, how do social enterprises manage the various different tensions and trade-offs while keeping a coherent social mission? The aim of this study is to examine a social enterprise's balancing act of addressing the various different tensions and trade-offs that arise when trying to deliver a multifaceted but coherent social mission. A qualitative research design was employed to examine tensions and trade-offs by focusing on the case of a German social enterprise from the organic food sector. The case study findings suggest that, initially, social enterprises face social-financial tensions. Yet, as they grow in size and scope, they also begin to experience tensions among their various social goals that we refer to as social mission design tensions. Regarding the management of tensions, we find that in contrast to the current tenor in the social enterprise literature, which espouses that redressing tensions is essentially an act of separation or integration of social and financial goals, we find that, at times, social enterprises accept and live with tensions instead of addressing them.

A Resource-Based View of Social Entrepreneurship: How Stewardship Culture Benefits Scale of Social Impact

Despite efforts to address societal ills, social enterprises face challenges in increasing their impact. Drawing from the RBV, we argue that a social enterprise’s scale of social impact depends on its capabilities to engage stakeholders, attract government support, and generate earned-income. We test our hypotheses on a sample of 171 US-based social enterprises and find support for the hypothesized relationships between these organizational capabilities and scale of social impact. Further, we find that these relationships are contingent upon stewardship culture. Specifically, we show that an entrepreneur-centered stewardship culture increases the effects of the capabilities to attract government support and to generate earned-income, while an employee-centered stewardship culture compensates for low abilities to attract government support and to generate earned-income.

Organizational identification in hybrid-identity social enterprises:An ASS model of identification

As a typical type of hybrid-identity organization, social enterprises face identification tensions among members arising from the divergent identities. Prior research has focused on how hybrid iden...

Making social enterprises meaningful: Legitimation of social enterprise as hybrid organization

A social enterprise is regarded as a representative form of hybrid organization among researchers. Yet, social enterprises face internal and external challenges of pursuing their goals because they...

Marketing and social enterprises: implications for social marketing

Purpose– The purpose of this paper is to build understanding of the concept of social enterprise in the social marketing community and to report on empirical research designed to develop an understanding the perceptions and practices of marketing within social enterprises. This addresses a significant gap in the current literature base and also provides insights for social marketers seeking to pursue social change initiatives through social enterprise.Design/methodology/approach– This empirical investigation uses a qualitative investigation of 15 social enterprises informed by a grounded theory approach. Researchers conducted interviews with senior decision-makers responsible for marketing activities and strategic policy, and gathered additional data regarding the organizations in the form of archival materials, including strategic planning documents, promotional materials and firm-generated online content.Findings– Strategic marketing practices used by social enterprises are shaped by moral, pragmatic and cognitive legitimacy influences stemming from imperatives to achieve congruence with institutional norms. This study exposes the challenges social enterprises face in developing strategic marketing activities that address business needs, while balancing stakeholder interests linked to the social missions of such organizations.Research limitations/implications– This qualitative study pursues depth of understanding through focused investigation of a small, regional sample of Canadian social enterprises. The findings demonstrate that social enterprises are similar to both not-for-profit and small- and medium-sized firms in terms of their marketing approaches, but face particular institutional legitimacy challenges when developing and implementing strategic marketing activities.Practical implications– This paper highlights the influences of institutional legitimacy on marketing practices and approaches in social enterprises. Understanding these influences is crucial for social marketing practitioners, as they develop strategic activities. The findings from the research provide a baseline upon which to begin to build both our theoretical and practical understanding of the potential utilization of social marketing through social enterprises.Social implications– Understanding the challenges social enterprises face in developing their strategic marketing activities provides deeper insights into social enterprises for social marketers, who might consider using social marketing in such organizations to achieve social change.Originality/value– This paper offers empirical evidence grounded in depth investigations of 15 social enterprises operating in a Canadian context. The findings help to extend our understanding of the complex institutional influences impacting marketing practices within social enterprise organizations. These institutional influences help to attune social marketers to the potential opportunities and challenges of using social enterprise as an organizational form for launching social marketing programs.

Dialogue in the Dark: Shedding Light on the Development of Social Enterprises in China

The application of for‐profit business practices to nonprofit organizations, social enterprises are a way for nonprofit organizations to find funding in a time of rising costs, falling donations, and increased competition from for‐profit businesses in the social sector. Although well established in the mature economies of the West, these enterprises are a novelty in the emerging economies of Asia and in the transitional economies of the former communist world. The experiences of Dialogue in the Dark, a social enterprise concerned with the problems associated with blindness, highlight the unique challenges that social enterprises face in China and offer lessons for entrepreneurs who may wish to embark on a similar venture. ©2015 Wiley Periodicals, Inc.

Questioning the Legitimacy of Social Enterprises through Gramscian and Bourdieusian Perspectives: The Case of British Social Enterprises

Drawing on data from six social enterprises in the UK, this paper demonstrates that social enterprises negotiate their legitimacy borrowing from the state, the corporation and the service logics. The paper illustrates the existential crises of legitimacy as experienced in the social enterprise sector. The utility of a principled ethical approach is discussed as a way forward. The paper also outlines challenges that social enterprises face when adopting an ethical approach. Theoretical tools of Gramsci and Bourdieu are mobilized in the paper in order to render visible the often implicit and questioned structures of hegemonic power that shape the habitus of legitimacy in social enterprises.