Over the last decades in Korea, the pursuit of creating social enterprises and transforming traditional nonprofit organizations into social enterprises has become increasingly popular, due to the strong economic and political... [ view full abstract ]
Over the last decades in Korea, the pursuit of creating social enterprises and transforming traditional nonprofit organizations into social enterprises has become increasingly popular, due to the strong economic and political forces encouraging the third-sector organizations to seek social and financial performance. In order to promote social enterprises, the central government of South Korea has provided financial supports, improved legal arrangements and created a supportive agency. In addition to the central government’s effort, the local governments have collaborated with social enterprises to provide a variety of public services at the community level. Due to these developments, social enterprises in Korea have shown incredible growth in both number and size.
In this context, entrepreneurship has become increasingly recognized as an important factor determining the performance of social enterprises and dynamics of a social economy in South Korea. From the social entrepreneurship perspective, an organization’s pursuit of entrepreneurship behavior has positive effects on community asset utilization and its performance (Dees, Emerson & Economy, 2002, Banoli & Megali, 2011). Recently, however, research on Korean social enterprises indicates that social entrepreneurship has a negative association with financial performance through the mediation of community asset utilization (Han, Choi & Chung, 2014). The research found that value-oriented leadership, innovative leadership, experience and knowledge on social innovation and new vision of Korean social enterprises increased the utilization of community assets but ultimately decreased financial performance.
Based on these existing studies, the purpose of this article is to extend the knowledge about the association between entrepreneurship and performance in Korean social enterprises. Using data collected from 102 social enterprises in Korea, the authors examined the mediating roles of community asset utilization in both the social and financial domains with regard to entrepreneurship effects on performance as well as how performance in one aspect of practice positively moderates the impact of entrepreneurship behavior in another. High-ranked directors including executive and financial directors of all sampled social enterprises were contacted and surveyed. The authors adapted the existing measurements and modified them to suit the purpose of this study, employing a subjective measurement (six-point Likert-type scale) for all of the variables. The reliability and validity of the constructs will be tested by confirmatory factor analysis using AMOS. The associations among independent, mediating and dependent variables will be tested using hierarchical regression analysis.
The results are expected to contribute to the development of a theory for understanding the concepts of entrepreneurship and asset utilization associated with social enterprise performance. Furthermore, the delicate balance between social enterprises’ mission and financial stability will be addressed.
KEYWORDS: Entrepreneurship, Social Performance, Financial Performance, Community Asset Utilization
References
Bagnoli, L & Megali, C. (2011). Measuring performance in social enterprises. Nonprofit and Voluntary Sector Quarterly, 40(1): 149-165.
Dees, J. G., Emerson, J. & Economy, P. (2002). Strategic Tools for Social Entrepreneurs: Enhancing the Performance of Your Enterprising Nonprofit, New York: John Wiley & Sons, Inc.
Han, S., Choi, M. & Chung, S. (2014). Empirical study on the sustainability of social enterprises in Korea: Focusing on organizational competences, local assets and performances. Paper presented at the 3rd International Conference on Social Enterprise in Asia.
