Stakeholders Matter: How Social Enterprises Address Mission Drift

Abstract

This study explores social enterprises' strategies for addressing mission drift. Relying on an inductive comparative case study of two Italian social enterprises, we show how stakeholder engagement combined with social accounting can successfully support a social venture to rebalance its positioning between wealth generation and social value creation. Indeed, stakeholder engagement helps the internal actors of a social enterprise to rationalize and embody pro-social values previously abandoned, while social accounting reinforces this embodiment process by showing the reintroduced social commitment of the social enterprise to external audiences. Conversely, strategies focused only on social accounting and without significant engagement of external stakeholders prove to be unsuccessful in counterbalancing mission drift because they fail to activate the necessary process of internal re-introduction and operationalization of pro-social values and objectives.

A Fair Trade-off? Paradoxes in the Governance of Fair-trade Social Enterprises

“…However, the articulation of this as a paradox is largely absent, with only a few studies to date focusing on the stories of individuals and teams within social enterprises, and what this reveals about social/enterprise tensions (Dey and Teasdale 2013;Pache and Santos 2010;Nicholls 2010;Smith and Lewis 2011). The paradox is constituted by barriers to achieving a balance between social and economic benefit, including: under-developed organizational identities, poor stakeholder management, mission drift, corruption, legal form issues, resistance to professionalization, and governance failure (Bull 2008;Diochon 2010;Ebrahim et al 2014;Jones and Keogh 2006;Mason 2010;Ramus and Vaccaro 2014;Seanor and Meaton 2008;Smith et al 2013).…”

“…One such stream is social enterprise governance research, which has been able to obtain insights where tensions arise and manifest in organizations, connecting managerial experiences with the interface between governance actors and core stakeholders. Prior studies have already provided empirical insights, and we know that board members are likely to have conflicting interests that governance processes aim to manage and resolve (Pache and Santos 2010;Ramus and Vaccaro 2014).…”

An Examination of Tensions in a Hybrid Collaboration: A Longitudinal Study of an Empty Homes Project

“…Our longitudinal study demonstrates that tensions from opposing social and commercial logics can be compatible if they are part of the organizational goals. We, therefore, contribute to an emerging area of literature which examines what happens when hybrids collaborate (Nicholls and Huybrechts 2016;Ramus and Vaccaro 2017). Hybrids are defined as "organizations that exist in the intersections of two distinct spheres i.e.…”

“…Governments globally, as they adopt so-called 'austerity' policies, are increasingly looking towards social enterprises and other hybrid organizations to deliver social welfare services (Lyon 2012;Cornelius and Wallace 2010), which may raise various ethical issues, e.g. mission drift if such conduct is considered to be against their social objectives (Ramus and Vaccaro 2017;Teasdale 2010a). Therefore, SEs are required to face the conflicting institutional logics of social welfare and commercial objectives (Doherty et al 2014).…”

The Development of a Measurement Instrument for the Organizational Performance of Social Enterprises

“…This challenging environment has made the assessment and the reporting of the organizational performance within social enterprises of particular importance. Firstly, different authors warn of internal tensions because of the difficulty of balancing the financial and social goals in decision-making, and refer to mission drift, which is the erosion of the social goals in favor of financial goals, as a threat [9,14,15]. In addition to the annual account-which is useful to evaluate the financial performance-a tool that supports social enterprises to assess and discuss internally their non-financial performance might be helpful in balancing the social and the financial goals in decision-making and in avoiding mission drift [2,8].…”