Social impact measurement: why do stakeholders matter?

Abstract

Purpose – This paper aims to discuss the notion of social impact of social impact measurement in social enterprises by supporting the multiple-constituency theory as a contribution to this under-theorised issue. Moreover, the paper proposes the stakeholder-based approach as the most appropriate solution for selection among metrics related to the growing number of social impact measurements. Design/methodology/approach – The paper proposes a review of social impact measurement studies by considering contributions from both academia and practitioners, while providing a reassessment and conceptualisation of this issue in terms of the multiple-constituency theory. Findings – The paper criticises the “golden standard approach” to social impact measurement according to which social enterprises have to find one standardised metric capable of determining an organisation’s real impact. The golden standard approach promotes a more “political view” of social enterprises, according to which multiple stakeholders set performance standards based on their viewpoints regarding the measurement’s purposes. Research limitations/implications – The paper responds to the urgent call to define a theoretical framework that might guide social impact measurement, seeking to avoid the current lack of order and transparency in existing practices that could serve as a vehicle for camouflaging corporate social un-sustainability. Originality/value – The multiple-constituency approach should discourage organisations from opportunistically selecting a social impact measurement with the sole purpose of proving a higher impact, as, within the proposed new perspective, social impact metrics are no longer managed independently by the social enterprises themselves. Instead, these metrics are defined and constructed with the stakeholders. As a result, social enterprises’ manipulative intentions should diminish.

Advancing Performance Measurement Theory by Focusing on Subjects: Lessons from the Measurement of Social Value

“…Measurement standards should refer not only to attributes of measured objects, but also to guidelines concerning individual dispositions during the measurement process (i.e. Given the multifaceted nature of social value and the necessity to engage multiple stakeholders in the SVM process, authors have concluded that successful implementations require a host of approaches (Costa and Pesci 2016;Hall et al 2015;Polonsky and Grau 2011). Potential theoretical lens: institutional theory.…”

“…Yet, while there are many approaches available to stakeholders interested in SVM (Maas and Liket 2011), few have been considered beneficial and appropriate for both internal and external stakeholders. This is despite consensus over the positive effects of internal stakeholder empowermentthrough SVM -on individual and organizational performance (Costa and Pesci 2016;Nguyen et al 2015;O'Dwyer 2005). This is despite consensus over the positive effects of internal stakeholder empowermentthrough SVM -on individual and organizational performance (Costa and Pesci 2016;Nguyen et al 2015;O'Dwyer 2005).…”

Managing Sustainable Hybrid Organisations: A Case Study in the Agricultural Sector

“…If managers decide to establish sustainability as an essential value of the organisation, their relationship with stakeholders should be established on that principle. If the stakeholder-firm relationship is grounded on trust, emotion, conscience and mutuality, complexity is reduced, making the relationship closer and stronger [39].…”

Nonprofit accountability: The viewpoint of the primary stakeholders

“…Despite the growing importance of the nonprofit sector in providing public services in many developed countries, much remains to be understood in terms of its accounting and accountability mechanisms (Benjamin, ; Valentinov, ). What has to date been discussed is that nonprofit organizations (NPOs) have to respond to multiple stakeholders (Costa & Pesci, ) and therefore have to broaden their accountability mechanism in order to include mission achievement (Ryan, Mack, Tooley, & Irvine, ; Valentinov, ). In discussing broader accountability requirements for the nonprofit sector, many scholars have de‐emphasized the role of financial reporting information in favor of more nonfinancial information with a strong focus on mission and mission achievement (Ryan et al., ).…”

“…Researchers have investigated social accountability in NPOs as a complex, multidirectional, and multistakeholder accountability process through which an organization measures and reports on its performance to multiple stakeholders (Brown & Moore, 2001;Costa & Pesci, 2016;Ebrahim, 2005;Knutsen & Brower, 2010;Najam, 1996). By investigating to whom NPOs should be/are accountable, many scholars have analyzed which stakeholders are affected by NPO activities-namely donors, funders, beneficiaries, workers, volunteers, and the members themselves (Ebrahim, 2003b;Najam, 1996;Ospina, Diaz, & O'Sullivan, 2002).…”