Social enterprise is a term to denote a variety of organizations ranging from cooperatives, innovative non-profits, entrepreneurial ventures with a social mission, to profit oriented social businesses (Dacin et al. 2010) For the purpose of this article, social enterprises are defined as organizations pursuing an explicit social mission through business-inspired earned-income strategies. The field of social entrepreneurship research has been dominated by conceptual discussions, practitioner based accounts and research studies adopting qualitative approaches. However, a quantitative scale for measuring the components of the construct of social enterprise has not been developed. Through this paper, we aim to extend the typology discussion (Zahra et al. 2009; Young & Lecy 2013; Borzaga & Defourny 2001; Defourny & Nyssens 2008; Kerlin 2009) by exploring the various components of social enterprise concept. Hence our research question deals with how to develop a measurement scale for social enterprises?
We present three components of social enterprise namely income generation & distribution, social innovation, and governance derived from existing literature. The first component has three sub elements which include earned income strategies to create revenue, minimum amount of paid work (Defourny & Nyssens 2010) and restriction related to profit distribution (Yunus et al., 2010).Social innovation component make the enterprises take a Schumpeterian view(1934) resulting in the generation of disequilibria in market and non-market environments through the discovery of opportunities to create social benefits (Hockerts 2010). The governance component focuses on the importance of stakeholders in a social enterprise (Yunus et al. 2010) who are beneficiaries , employees and investors in the organization (Low, 2006). This component has been emphasized in the EMES social enterprise approach.
An online survey was sent to the email addresses of management teams of 348 Danish, 337 Swedish and 241 Finnish social enterprises. The exploratory data analysis was conducted using the Finnish and Swedish samples to reveal the latent variables of the social enterprise construct and the confirmatory factor analysis was conducted for validation of the model using the Danish sample.
Through this paper, we presented a psychometric measurement for the social enterprise construct. We identified the 19 items scale with latent variables of creation of market disequilibria, open sharing of knowledge, earned income generation, limited profit distribution, employee compensation and autonomy in operation. In addition to allowing scholars to study variations in social enterprise configurations, we also want to encourage more quantitative work regarding the antecedents of the different organizational types, and the question how they differ in terms of economic, social and environmental effectiveness.
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