This paper explores the ethical assumptions underlying three common methods of social impact measurement: the blended value approach (Emerson 2003), the social return of investment (SROI) (Arvidson et al. 2013), and the social added value evaluation (SAVE) (Bassi 2012). The purpose of this investigation is to broaden the understanding of ethical implications of selecting one of these three approaches, and to assess their strengths and weaknesses in an ethically informed way. Including ethics in social impact measurement is seen here as an important tool for increasing credibility and accountability of social enterprises.
Social entrepreneurship, as the name suggests, combines elements of entrepreneurship with social focus or social mission (Peredo and McLean 2006; Huybrechts and Nicholls 2012). Although much of the existing social entrepreneurship literature assumes that the entrepreneurial and social part together lead to socially beneficial results, a consensus among scholars has been emerging recently that this does not have to be the case. The ethical ambiguity of social entrepreneurship stems from both of its elements: the entrepreneurial as well as the social. On the “entrepreneurship side” of the concept, some authors point out that entrepreneurship itself can be morally ambiguous since its essence lies in “rule-breaking” (Brenkert 2009). On the “social side,” a number of authors points to the fact that, despite the positive connotations of the “social,” it often remains empty or unexplained (Cho 2006; Bacq et al. 2016). The resulting complexity of the moral landscape of social entrepreneurship is increasingly becoming acknowledged by scholars (Dey and Steyaert 2016; Chell etal. 2016) which in turn brings further questioning of the“value-neutral” approach to social entrepreneurship which has been so far dominating the field.
One of the key areas in which the ethical assumptions surrounding social entrepreneurship come up to the surface of scholarly discussion is the sphere of its social impact or "social value creation."
This paper analyses the blended value approach, SROI and SAVE at two levels: First, it looks at the methodological foundations of these three approaches. It links their concern with subjective well-being as one of the most important indicators of created social value to broader discussions regarding the role of satisfaction in economics (Sen 1999; Bruni 2006). And second, it provides a literature review of existing case studies in which these measures have been applied to social enterprises and studied in an empirical manner. The results of this investigation are then discussed in the context of critical analysis of social entrepreneurship.
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5. Social impact, value creation and performance
