What makes great social organizations great: four variables for social entrepreneurial success

Posted on March 20, 2011

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Over the last decade, a mounting public concern regarding sustainable development has surfaced. The need for institutional change towards a more sustainable construct appears more pressing than ever and social entrepreneurs, among others, have accepted that challenge. Yet, much still remains unknown about the processes of social entrepreneurship and how it brings about institutional change.

What makes great social organizations great?

Motivated, and intrigued, by this growing public debate and concern about sustainable development, and the obvious need for sustainable solutions, I decided to study the phenomenon of social entrepreneurship for my master thesis – and set out to do so in India; a country facing endless of challenges and home to a rapidly growing number of social entrepreneurs. Social entrepreneurs alleviate localized social problems because they perceive the current ‘way things are done’ as insufficient. Intrigued to comprehend ‘what separates the wheat from the chaff’ in connection to social entrepreneurial organizations, my thesis questioned; why are some social entrepreneurial organizations more successful than others in achieving organizational legitimacy and growth? I found this question essential to ask and pursue, because in knowing what ‘makes the great social organization so great,’ we can emphasize more of that, and support the new, aspiring entrepreneurs even better.

4 variables essential for success

Hence, I approached this curiosity through conducting an explanatory qualitative field study of multiple-cases of social entrepreneurship in New Delhi, which portrayed varying levels of ‘success/impact.’ In abductively investigating the ‘success’ cases against the others the study suggested four variables which pertained to the processes that ‘makes the great organizations great’: (1) the external environment’s response to the organizational idea (i.e. acceptance of the social issue in public discourse), (2) the approach to financial resources, (3) the organizational set-up, and (4) the strategic initiatives enhancing growth and diffusion. Those four variables, among many studied, where the points at which it could be explained why some organizations were even more successful than others. The ‘best practice’ had a different behavior in relation to just those four topics. The model below summarizes those points.

External variable: the ‘nature’ of the social cause matters for ‘success’

The research found that in achieving organizational legitimacy, the external environment’s response to the organizational idea was the focal variable decisive for the level of success. As it turned out the Best Practice cases (very high impact) were more successful because their organizational idea was easier to accept by the general public, and they were generally not perceived as a threat by any stakeholders. The organizations working for a non-contentious social cause expressed fewer difficulties in creating awareness and were exposed to fewer threats and resistance. Interestingly, these were the three Best Practice cases (defined by a large, international support organization). On the contrary, the organizations working for highly tabooed social causes experienced vast resistance and were for this reason cautious about creating awareness for their organization. Consequently, they had difficulties with gaining acceptance in public discourse, making their quest for organizational legitimacy increasingly complex. Evidently, in the ‘lower impact’ cases the organizational activities were not perceived as ‘desirable, proper, or appropriate’ within the socially constructed systems of ‘norms, values, beliefs, and definitions’ (i.e. cognitive and normative institutions) in New Delhi. This distinction is important, because it illustrates a condition underlying the ‘lower impact’ cases apparent ‘lower levels of success.’ From the theoretical perspective on legitimacy, it seems logical that entrepreneurial organizations addressing highly tabooed issues will find it increasingly difficult to acquire legitimacy since they do not conform to social expectations. This point is very essential to the way we even understand ‘success,’ but seems highly overlooked in academia as well as more practice-oriented discourse around social entrepreneurship. I shall return to discuss this point more in-depth in a coming blog post, as I find it essential for the debate.

Internal key variables:  financing, structure, and scalability

In relation to organizational growth the study suggested three additional reasons pertinent to the level of ‘success.’ Mainly internal to the organizations, the three variables of approach to financial resources, organizational set-up, and strategic initiatives enhancing growth and diffusion set the Best Practice cases apart from the rest. With a strategic focus on mobilizing financial resources, these organizations were in a financially superior situation relative to the lower impact-cases. Also in this regard to mobilizing human resources the Best Practice cases were in a better position. In line with institutional- and social entrepreneurship literature, this study supports the notion that mobilizing resources, financial as well as human, is precondition for successful social entrepreneurial activities.

The organization can be structured such that it enables or impedes growth; and often, this seemed to be related to the role of the founder. The data showed that an organizational set-up prone to scaling-up is a parameter for organizational success. Decentralization of responsibilities, delegation of tasks, and emphasizing knowledge sharing, for instance, stimulated a structure supportive of growth, by down-playing the organizational dependency on the founder, i.e. reducing the risk of the ‘entrepreneur dilemma’(a concept I have been noticing, will address that in a later blog post). Finally, the research suggested that diffusion of an organizational idea can be enhanced by proactively establishing initiatives to invite other organizations to copy the idea. This was seen in the most successful case of the study. This organization saw diffusion as a precondition for catalyzing social transformation, and therefore linked other organizational strategies to the overall mission of diffusion. This was for example done by deliberately formulating their communication such that it is easy to replicate, or by distributing manuals as to how the idea can be copied. In return, the organization experienced rapid grow and increasing impact; they experienced vast success.

This was a brief presentation of the main findings of my master thesis, however, each point contains much more detailed information. This shall just be seen as an overview – and an indication for which elements related to social entrepreneurship and creating change, that are particular important to keep in mind; whether you are a social organization, a curious researcher, or something third.

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