Thanks, or no thanks? Scale development and validation of social value creation

Abstract

Despite growing literature on social entrepreneurship (SE) and its impact on local communities, very little research has attempted to measure the extent of the value it creates. Much of the literature merely describes the initiatives of SE, and some scholars have noted that social enterprises may be working on short term solutionism and thei r positive impacts are temporary and short lived (Chalmers, 2020). In order to address this gap, we design and propose a qualitative measure of social value creation (SVC) of social enterprises. We build on earlier research on SE that contextualised the various outcomes it purports, has evaluated other aspects of SE and using the theory of effectuation which reflects the resource-scarce background of social entrepreneurs and the resultant dynamism of their goals. We ensure the nomological validity of the construct and gather sufficient support from earlier studies on social entrepreneurship. After this we employed a two-tier design to interview senior staff at 15 Zimbabwean-based social organizations in order to understand their missions and goals, then survey 609 key beneficiaries of these same organizations to understand their impact on the communities they serve. From these we proposition a five-dimensional construct of SVC: Solution Innovativeness, Community Involvement, Social Mission Orientation, Sustainable Continuity and Effectual Rewards. While good levels of internal consistency were found, we discuss the limitations and implications of our measure to future research in SE and the SVC of social enterprises. The main contribution of our research is that the opportunity to measure how successful social enterprises are dealing with real-world problems in ways that are sustainable can be useful to attract funding to the most crucial organizations and improve those that do not create an overall positive impact. This information is useful not only to entrepreneurs and managers of social enterprises but also governments and philanthropic foundations that largely rely on financial information to evaluate performance of organizations which unfairly give a poor impression of SE.