Published in: Technological Forecasting and Social Change, Volume 160, 2020, https://doi.org/10.1016/j.techfore.2020.120230.
Cited as: Gali, N. et al. (2020) Social entrepreneurship orientation and company success: The mediating role of social performance. Technological forecasting & social change. [Online] 160120230–.
This study contributes to closing these research gaps by investigating how SEO influences social entrepreneurial performance taking into account the performance consequences of heterogeneity in firms’ characteristics demonstrated by start-ups and established firms. Moreover, the evidence presented in this study regarding SEO influences will be of interest to the enterprise support community in tailoring funding and training support for social enterprises for both start-ups and established firms.
We examine the impact of social entrepreneurship orientation (SEO), a behavioral measure of the social entrepreneurship of the organization, on the social and financial performance of a sample of Austrian firms. Despite growing research interests in social entrepreneurship, the field remains fragmented and this has led to calls for a careful examination of the implications of social entrepreneurship for firms. We draw on stakeholder theory and hybrid organizing to hypothesize that social performance mediates the SEO-financial performance relationship. By analyzing a sample of 1,156 companies, we find that the SEO-financial performance relationship is partially positively mediated by social performance even though the direct effect is negative. Our results show that social performance compensates for the otherwise negative effect SEO has directly with financial performance. We contribute to an understanding of the mechanisms by which an SEO affects firm performance and provide richer insights into the various aspects of performance. We discuss the future implications of our study and suggest promising avenues for further research on the SEO construct.
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Recommendations from this resource
“1. First, this study focused only on a sample small companies from Austria. Future research can test the model with samples in different. contexts such as emerging or developing markets and larger firms.
2. This research employed perceptual indicators of performance, future research can extend on the findings by including objective measures of performance.
3. An other interesting field of research would be the apparently differences in why and how social enterprises are started and managed, e.g. by women as also suggested by Rosca et al., 2020. “
“These findings have important practical implications for managers.
1. Results reveal that being socially entrepreneurially oriented is beneficial for the firm’s social performance, and if the firm is successful in its social performance, then it shall benefit economically (the mediating effect). In other words, success drives success. So, if a manager is passionate about the firm’s social impact or social performance, this will also mean higher financial success for the firm.
2. However, additional tests show that SEO does not have a direct positive effect on financial performance, but rather a negative one. This is compensated for by the positive financial performance effects of social performance. Managers should not squander an investment in SEO simply by focusing only on financial performance.”
1. Managers should not squander an investment in SEO simply by focusing only on financial performance.