Social Enterprise Performance: The Role of Market and Social Entrepreneurship Orientations
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RESEARCH PAPERS
Social Enterprise Performance: The Role of Market and Social Entrepreneurship Orientations Paula Pinheiro1
•
Ana Daniel1 • Anto´nio Moreira1
International Society for Third-Sector Research 2020
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 profitoriented 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. Keywords Social entrepreneurship orientation Entrepreneurial orientation Market orientation Social enterprise performance Structural equation model Mediation Portugal
& Paula Pinheiro [email protected]; [email protected] 1
DEGEIT, Universidade de Aveiro, Aveiro, Portugal
Introduction Social entrepreneurship, social enterprises or social economy are expressions that in recent decades have been gaining more and more attention from the media, politicians and the public in general, as well as from the academic and scientific community. This is mainly due to social enterprises’ relevance in promoting social change by providing new, transformative solutions to eradicate poverty, solve environmental problems, enhance social inclusion and increase political participation or the well-being of society in general (Defourny and Nyssens 2008; Yunus et al. 2010; Popoviciu and Popoviciu 2011). Although there is no universal definition, the concept of social enterprise is increasingly used to identify a different way of doing business, through the creation of enterprises with a clear double mission: achieving both a social purpose and financial sustainability (European Commission 2013; Doherty et al. 2014). They are known as hybrid organizations as they attempt to balance their objectives between social value creation and pursuing commercial objectives (Doherty et al. 2014). Moreover, they might be characterized as private, public or non-profit organizations (Defourny and Nyssens 2008; Doherty et al. 2014; Kraus et al. 2017). Those enterprises rely on collective dynamics and involve various types of stakeholders in their governing bodies. However, at the same time, they
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