The development of a measurement instrument for the organizational performance of social enterprises

There is a growing consensus that the adoption of performance measurement tools are of particular interest for social enterprises in order to support internal decision‐making and to answer the demands of accountability toward their stakeholders. As a result, different methodologies to assess the non‐financial performance of social enterprises are developed by academics and practitioners. Many of these methodologies are on the one hand discussions of general guidelines or, on the other hand, very case specific. As such, these methodologies do not offer a functional tool for a broad range of social enterprises. The goal of this article is to fill this gap by developing an instrument suitable for the internal assessment and the external reporting of the non‐financial performance of a diverse group of social enterprises. To reach this goal, we used qualitative (focus groups and a Delphi panel) and quantitative research methods (exploratory and confirmatory factor analysis), involving multiple actors in the field of social entrepreneurship. Focusing on five dimensions of organizational performance (economic, environmental, community, human and governance performance), we offer a set of indicators and an assessment tool for social enterprises

When internal representation leads to faultlines : a study of board performance in social enterprises

Following the growing interest in sustainability and ethics, organizations are increasingly attentive to accountability toward stakeholders. Stakeholder representation, obtained by appointing board members representing different stakeholder groups, is suggested to be a good ethical practice. However, such representation may also have nefarious implications for board functioning. Particularly, it may result in strong faultline emergence, subsequently mitigating board performance. Our study aims at understanding the process through which faultlines affect board performance, and particularly the board service role through which the board is involved in providing counsel and strategic decision-making. We study the relationship between faultlines and board service performance in the particularly relevant context of social enterprises. We find that faultline strength is negatively related to board service performance and that this relationship is mediated by board task conflict. Furthermore, our study reveals the importance of clear and shared organizational goals in attenuating the negative effects of faultlines

Stakeholder knowledge and behavioral integration in boards of social enterprises : a team production approach

The social entrepreneurship literature increasingly acknowledges that the board of directors is of major importance in dealing with the specific tensions that social enterprises face. Using a team production perspective, we argue that the extent to which board members possess relevant knowledge about stakeholder groups, enhances the engagement of the board in counseling and decision-making (i.e. board service performance). Furthermore, we expect that such engagement is positively related to organizational performance, which is multifaceted, in line with the hybrid nature of social enterprises. Finally, we investigate the contingency factors under which board stakeholder knowledge relates to board service performance and subsequent organizational performance. Particularly, we claim that such knowledge is especially relevant in cases of strong behavioral integration among board members. Using a sample of Flemish social enterprises, we find that board stakeholder knowledge is positively related to board service performance. This relationship is further moderated by strong board behavioral integration, which is strengthening the relationship in cases of high stakeholder knowledge, but has a mitigating effect in cases of low stakeholder knowledge. Finally, while board service performance is positively related to the social goal of hiring disadvantaged people, it is not significantly related to financial performance

A longitudinal comparison of capital structure between young for-profit social and commercial enterprises

We develop a new perspective on capital structure differences between for-profit social and commercial enterprises by combining imprinting and social entrepreneurship theory. Using a longitudinal matched sample, we find that for-profit social enterprises have 40% to 13% lower leverage and up to four times greater leverage stability over time than commercial enterprises. Our results suggest that these differences in capital structure derive from the process of prosocial organizing, which goes beyond the primary focus on financial preferences. Thus, for-profit social enterprises—and similar hybrid organizations, such as B corporations—may require theories adjusted to their context

The Development of a Measurement Instrument for the Organizational Performance of Social Enterprises

There is a growing consensus that the adoption of performance measurement tools are of particular interest for social enterprises in order to support internal decision‐making and to answer the demands of accountability toward their stakeholders. As a result, different methodologies to assess the non‐financial performance of social enterprises are developed by academics and practitioners. Many of these methodologies are on the one hand discussions of general guidelines or, on the other hand, very case specific. As such, these methodologies do not offer a functional tool for a broad range of social enterprises. The goal of this article is to fill this gap by developing an instrument suitable for the internal assessment and the external reporting of the non‐financial performance of a diverse group of social enterprises. To reach this goal, we used qualitative (focus groups and a Delphi panel) and quantitative research methods (exploratory and confirmatory factor analysis), involving multiple actors in the field of social entrepreneurship. Focusing on five dimensions of organizational performance (economic, environmental, community, human and governance performance), we offer a set of indicators and an assessment tool for social enterprises