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Social Enterprise Performance: The Role of Market and Social Entrepreneurship Orientations

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Abstract

Market orientation has been presented as an important predictor of business performance, and it is presumed to contribute to long-term success in both profit-oriented and non-profit enterprises. Similarly, entrepreneurial orientation is a concept that has been widely applied to business firms but has not been empirically tested in social enterprises. Moreover, the literature does not present a widely accepted and tested conceptual model relating entrepreneurial orientation, market orientation and performance, in the realm of social enterprises. In order to fill this gap, this research assesses how these strategic orientations affect social and economic performance in the setting of social enterprises. Structural equation modeling was used as a means to analyze the hypothesized relationships. After testing the model on a sample of 805 Portuguese social enterprises, the findings show that both social entrepreneurship and market orientations significantly impact social performance. The results also indicate that market orientation mediates the effect of social entrepreneurship orientation on the performance of social enterprises.

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Source: Zhao et al. (2010)

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Notes

  1. IPSS are non-profit private institutions, set up on the initiative of private individuals, which aim to solve social problems in Portugal.

    Their purpose is giving individuals an organized expression to the moral duty of solidarity and justice. IPSS, which are not administered by the State or by any regional or local government institution, pursue the following objectives, among others:

    • Provide support for children and adolescents;

    • Provide support to families;

    • Provide protection to the elderly and disabled citizens and in all situations of lack or reduction of means of subsistence or work capacity;

    • Provide health promotion and protection, namely through the provision of preventive, curative and rehabilitation medical support;

    • Provide citizens with education and professional training;

    • Provide solutions to the population’s housing problems.

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Authors and Affiliations

  1. DEGEIT, Universidade de Aveiro, Aveiro, Portugal

    Paula Pinheiro, Ana Daniel & António Moreira

Authors
  1. Paula Pinheiro
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  2. Ana Daniel
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  3. António Moreira
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Correspondence to Paula Pinheiro.

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Appendices

Appendix 1: Measurement scales\

Intelligence generation

 We meet with our beneficiaries at least once a year to better understand their needs

 We meet with our stakeholders at least once a year to better understand their needs

 We understand the role of social enterprises in the current economic and political context

 We make satisfaction surveys (beneficiaries, stakeholders or others) at least once a year

 We have various ways of collecting information about our environment (with beneficiaries, stakeholders, etc.)

 We monitor changes in the economy, society, technology and political-legal system, in order to understand how they can affect us

 We regularly compare the performance we think we have with the performance perceived by our stakeholders

 We regularly analyze the factors that influence the beneficiaries’ decision to choose us instead of companies with similar missions

 We collect the opinion of our beneficiaries through social networks

Intelligence Dissemination

 We share information and cooperate with organizations with a similar mission

 We disseminate the information collected (with beneficiaries, stakeholders, etc.) throughout the organization

 We have regular team meetings to discuss important operational and strategic changes

 We have a business model/business plan that is clearly perceived by employees and stakeholders

 We use social networks to communicate regularly among employees

Responsiveness

 We have enough information available to develop appropriate products/services for our beneficiaries

 We use all available information to adjust or develop products/services for our beneficiaries

 We try to respond to the emerging needs of beneficiaries or stakeholders

 We adapt our strategies according to the needs of our beneficiaries

 We adapt our strategies according to the expectations of our stakeholders

 We try to differentiate our services from other alternatives

 We invest significantly in marketing and communication

  1. Dimensions and items of Market orientation scale
  2. Source: Kohli et al. (1993)

Appendix 2

Innovativeness

 Social innovation is important for our company

 We invest heavily in developing new ways to increase our social impact or to serve our beneficiaries

 In our company, new ideas to solve social problems come up very frequently

Risk-taking

 We are not afraid to take substantial risks when serving our social purpose

 Bold action is necessary to achieve our company’s social mission

 We avoid the cautious line of action if social opportunities might be lost that way

Proactiveness

 We are not afraid to take substantial risks when serving our social purpose

 Bold action is necessary to achieve our company’s social mission

 We avoid the cautious line of action if social opportunities might be lost that way

Socialness

 The objective to accomplish our social mission precedes the objective to generate a profit

 Our organization places a strong focus on partnerships with other organizations and/or governments in order to ensure a greater and accelerated accomplishment of the social mission

 We set ourselves ambitious goals in regard to sustainability and incorporate them in all strategic decisions

  1. Dimensions and items of Social Entrepreneurship orientation scale
  2. Source: ad. from Kraus et al. (2017)

Appendix 3

Social performance

 We operate our organization in an environmentally sustainable manner

 Our donors are very satisfied with us

 Our organization operates in a socially sustainable manner

 We help inform the community about the plight of our beneficiaries

 We help mobilize interest for additional social welfare initiatives

 We are often perceived and valued by our beneficiaries as a provider of last resort

 In the past few years we have met our objectives in terms of beneficiaries served. Beneficiaries are satisfied with our services

 Beneficiaries and stakeholders recommend our services to others

Economic performance

 We are more effective in serving our beneficiaries than others

 In the past few years we have increased our effectiveness.

 We are more efficient in serving our beneficiaries than others.

 In the past few years we have increase our efficiency.

 In the past few years our financial situation has improved

 Our organization is financially sustainable

  1. Dimensions and items of social enterprise performance scale
  2. Source: adapted from Miles et al. (2014)

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Pinheiro, P., Daniel, A. & Moreira, A. Social Enterprise Performance: The Role of Market and Social Entrepreneurship Orientations. Voluntas 32, 45–60 (2021). https://doi.org/10.1007/s11266-020-00266-x

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