09.09 PD Social Enterprises and Social Value Creation: From Vicious to Virtuous Cycles

Aim of the project

The project aims to explain how differences in intra- and inter-organizational governance structures and stakeholder relations affect Social Enterprises’ long-term success or failure to elicit and sustain positive social change in Iran.

Theoretical background

Social innovations (SI) and the organizations implementing them are often hailed as the Golden Key to realize social change and transitions towards more sustainable societies. SI is defined as the development and implementation of new ideas (products, services and models) to solve pressing social demands, like social exclusion, poverty, lack of well-being, unemployment, and underdevelopment. Often, this is achieved through fostering alternative and more participative forms of organizing and collaborating across multiple stakeholders, usually through a process that relies heavily on actions developed by collaborative networks from bottom up actions. Put differently: SIs are innovations that are social in both their ends and their organizational means. 

Many observers believe that SI’s outperform existing approaches and organizational forms aiming to realize sustainability transitions in society. That is, SI’s are considered to be more effective, more efficient, more sustainable and just, and that the value they create accrues to society as a whole rather than benefitting only select coalitions of individuals SI’s are a global phenomenon. But evidence on SI’s ability to effectively realize sustained societal transitions is mixed at best. Impact evaluations are scarce and hampered by the fact that SI practices are very heterogeneous and have multiple and sometimes conflicting goals which also often shift through time. Moreover, related theorizing is patchy when it comes to explain why and how SI’s “alternative”, participative forms of organizing should achieve better outcomes. 

We therefore face a twofold research gap. Not only do we need to assess under which conditions which kinds of SI’s have more or less impact (i.e. the “ends”, defined as the degree to which they actually realize their objectives). We also need a better understanding of the behavioral processes through which different forms of organizing foster or hamper the realization of impact (i.e. the “means”, defined as the types of organizational arrangements through which an initiative aims to sustain multistakeholder collaborations).

The present project advocates a comparative system dynamics perspective on the study of social enterprises and their societal impact. Shifting the focus to the (unintended) self-reinforcing processes triggered by the activities of social enterprises, this perspective involves tracing cascading effects of specific social interventions as they are implemented by different organizations. Variations in social enterprises’ approaches to govern collaborative relations inside the organization and with external societal stakeholders are explored as potential antecedents of vicious or virtuous cycles of social value creation.

Research design

Existing empirical evidence from mixed method longitudinal action research on five Iranian social enterprises will be analyzed. Qualitative data consists of information from semi-structured interviews with selected representatives of the organizations and their stakeholders, as well as of focus group meetings and internal documents from each social enterprise. Action research data was generated during a four-stage change management process geared towards improving organizational effectiveness in solving specific societal problems. The interviewees were selected through snowball sampling. Text analysis will be used (1) to identify self-reinforcing processes triggered by inter- and intra-organizational cooperation patterns and their (unintended) consequences; (2) to assess and compare the effectiveness of the different interventions - co-designed between researchers and social enterprise stakeholders as part of the action research approach - to break the vicious cycles.