Why social enterprises pursue growth? Analysis of threats and opportunities

Abstract

Purpose: The purpose of this study is to extend theoretical understanding on social enterprises’ growth orientation. Inspiration is drawn from the fundamentals of prospect theory and threat-rigidity theory, as the role of external threats as a source of growth orientation is largely absent from the social enterprise growth literature. According to previous studies, social enterprises grow mainly because of their social mission and social opportunities. Design/methodology/approach: The qualitative research is conducted by analysing thematic interviews from seven, growth-oriented social enterprises operating in Finland. Findings: The study provides novel insights on social enterprises’ growth orientation by drawing attention to the plurality of growth motivations and showing the importance of perceived threats as the origin of their growth pursuits. Goals of growth are defined mainly in terms of organisational and financial performance of the firm. Practical implications: Social enterprise managers and boards are encouraged to cooperate in analysing the significance of external threats and opportunities for their business and to concentrate on defining measurable social goals to ensure balanced growth. Originality/value: The study demonstrates that the behavioural theories offer a beneficial departure point for studying social venture growth. By clarifying the role of the perceptions of the firm’s internal actors and showing that growth is sometimes seen as a response to external threats, the study increases theoretical understanding on social enterprises’ growth orientation.