INTRODUCTION:

The dimensions of organisational culture have been found to be associated with structure, resources and capabilities of the organisations. The cultures of organisations have been identified as mainly based on cognitive systems and thus provide valuable insights in learning how the people within organisations think and make decisions (Pettigrew, 1979). Thus, culture has been interpreted mainly as the collective thinking of minds (Hofstede, 1980); set of values and behaviors (Schein, 1990) which guide the organization’s success.

A strong organisational culture while helping in establishing an enterprising atmosphere, maximize the capabilities of the employees (Kim, et. al., 2010).

Through influencing the decisions and behaviors of employees, a strong organisational culture helps in better understanding of organisational events and objectives on the part of employees. Alternatively, it leads to increase in the effectiveness and efficiency of the employees. Further, cultural dimensions work as ‘social glues’ in integrating the shared values of corporate culture. Consequently, it enhances the self-confidence and commitment of the people thereby reduces the job stress and improves the ethical behavior of employees. Thus, strong cultural values would not only ensure unidirectional flow of organisational energy but will also ease the process of positive development within organisations.

Over the time, there has been substantial growth in the literature examining different facets of organisational culture within the private sector. However, the dimensions and elements of the organisational culture within social enterprises are yet to be explored. In consideration of distinctive features (discussed later) of social enterprise business models, crafting an effective culture within such enterprises is essential for creating contexts, circumstances, and opportunities to ensure that the social enterprise achieves its dual (social and economic) objectives. Therefore, the present study was undertaken with the primary objective of identifying the critical components of organisational culture within social entrepreneurship ventures. The central questions that underline the research are: what are the distinctive attributes of organisational culture within social enterprises? What shall be the key factors that will structure the thoughts of decision makers in strategy formulation for social entrepreneurship cultures? The outcomes of the research will accordingly enable the social entrepreneurship practitioners in aligning their useful energies towards the crucial elements of organisational culture, while saving their considerable amount of their precious time.

THEORETICAL BACKGROUND:

SOCIAL ENTREPRENEURSHIP:

Social entrepreneurship has become the topic of momentous attraction for the academicians, practitioners and the researchers worldwide (Dees, 2008; Korosec and Berman, 2006; Satar and John, 2016; in press; Satar et al., 2016; Satar, 2015; 2016). Nevertheless, social entrepreneurship as a typical emerging field of research has ill-defined boundaries and lacks conceptual clarity (Hill et al., 2010). The research approaches so far have mainly been case study and qualitative based with an explicit focus over defining the social entrepreneur individuals, the motivation behind their undertakings (Nga and Shamuganathan, 2010), its outcomes (McDonald, 2007), and forms of social enterprises (Townsend and Hart, 2008). Thus there is little empirical research on how social enterprises are developed (Haugh, 2007).

The multidimensional nature and diversity in the mission, strategies, structures, and processes of social enterprises have rendered them as challenging businesses to manage (Peattie and Morley, 2010). Although there is growing number of studies manifesting the interest of business and management scholars in social enterprise discourse, the focus till date have tended to be over defining the definitional controversies or the differences between the social enterprises and commercial ventures (Mair and Marti, 2006). Very scant studies have attempted to examine the strategic aspects of such ventures. Nonetheless, the strategic management of such social enterprises poses distinct and substantial challenges (Satar and John, 2016; in press).

Nevertheless, efforts are being continuously made to provide valuable foundation to move the field forward in this direction (Peredo and McLean, 2006; Satar, 2016; in press). The key issues that would affect the dynamic functioning of the social enterprises in achieving their social and economic objectives have been brought to light by many researchers from time to time (Satar and John, 2016; Wronka, 2013).

THE DISCOURSE ON SOCIAL ENTERPRISES:

The social entrepreneurs are seen to lead some ‘unique endeavors’ through the establishment of some social purpose organizations. Although, entrepreneurs in general do launch or operate an organisation but it is not assumed to be a necessity (Peredo, 2003). Likewise, all business enterprises and start-ups are entrepreneurial in nature (Carland, et al., 1984), but there are good numbers of reasons to say that all entrepreneurs don’t launch new organizations (Shane and Venkataraman, 2000).A breadth of literature explicitly cites the success stories of social entrepreneurs having established some for-profit or not-for profit ventures. Furthermore, it is a universal observation that after perceiving the opportunities of social value creation, the social entrepreneurs restlessly look for some sustainable formal structures to carry forward and actualize their mission of social transformation. This goes in line with Sullivan et al., (2003) who believe that social entrepreneurship leads to the establishment of new social enterprises and the continued innovation in existing ones. The literature mostly demonstrates the use of innovative approaches by the individuals to solve the social needs (Grenier, 2003), often through non-profit organizations, but also through the for-profit sector as well (Alex, 2006). In order to realize their social goals associated with either public or non-profit sectors, social enterprises have been identified as applying the business strategies from the private sector. Thus, they emerge as blended or hybrid forms (Defourny and Nyssens, 2006; Satar and John, 2016). Alternatively, social enterprises have been recognized as organisations existing between public and private organisational forms. In a way, they possess the characteristics of both the types in a blended form. Meanwhile, the concept of social enterprise is being referred to as the innovative side of certain social enterprises as well as the financial risks they are taking (Young, 2001). Here in this case, the concept of social enterprise enclaves a broad spectrum of organizations, ranging from pure non-profit organizations engaged in a social mission supporting commercial activity to for-profit ones operating some socially beneficial activities (Kerlin, 2006). Thus, such socially inclined organizations can take the form of either non-profit or for-profit social enterprises depending upon the perceived benefits of each form and the legal environment of the country in which the social entrepreneur operates.

While, social enterprises represent a relatively under-developed field of thought and knowledge, their role is experiencing an ‘explosion’ both in theory and practice. Social enterprises have been acknowledged as possessing vast potential in addressing a wide variety of social welfare issues (Alter, 2006) and this potential seems to be enticingly growing worldwide. There is significant convergence over the thought of social enterprises as adopting some financially sustainable strategies to realize unique social aims and combat a range of societal problems. The social aims they pursue and the social problems they solve can range from substantial alleviation of poverty, unemployment, deprivation, social exclusion, inequalities in health care services, corruption, high incidences of crime, inequalities in wealth distribution, drug abuse, constellation of education, economic, political, cultural problems, environment regeneration and any undesirable outcome which can ‘stuck’ a society becomes the target of social enterprise’s activities. The world asserts that social enterprises can prove to be a power to drag the society to new heights of developments. They can permeate social sector overwhelmingly and can play a critical role in mobilizing the resources and directing them towards a desirable change. Societies can be redeveloped with these well planned and established centers and especially their role in the developing economies (e-g India) can go beyond accounting. Leadbeater, (1997) for example, argues that while it is possible to be a successful entrepreneur without being innovative, social entrepreneurs almost always use innovative methods: Social entrepreneurs will be one of the most important sources of innovation. Social entrepreneurs identify underutilized resources, people, buildings, equipment and find ways of putting them to use to satisfy unmet social needs. Although, the commercial non-profits ventures have pioneered the concept of social enterprise, the for-profit ventures have rightly carried over some of those insights. This modified and redesigned role of social enterprises is now attracting significant attention at the policy levels, primarily due to their assumed potential to contribute to social, economic and environmental regeneration. However, this heightened interest has been mainly policy driven than research-led, and consequently many claims have been proposed regarding the potential of social enterprises towards contributing to social capacity building, responding to unmet needs, creating new forms of work (Amin et al., 2003), promoting local development, defining new goods and services, fostering integration, creating jobs, improving attractiveness of an industry and locality, empowerment, and consolidating local assets (ECOTEC, 2001). Again, the problem is chiefly the result of the ambiguity lying with the definition of social enterprise. It is not, however, the general definition of social enterprise that appears to be problematic, but rather the specific ways that can be used to identify and measure social ventures on a broad scale. Thus, it is tough to metricize the contribution made by social enterprises due to the reason that the benefits fetched by social enterprises are predominantly of non-monetary nature and thus difficult to value.

THE INTRICACY OF SOCIAL ENTERPRISE MANAGEMENT:

Unlike their commercial counterparts, social enterprises represent a paradigm shift by leading a renewed bottom-up approach of development. The simultaneous pursuing of both the financial and social goals often creates tension while taking the strategic operational decisions of the enterprise (Boschee, 2006). Social enterprises have to managing double bottom line which necessitates a careful balance when striving to build and maintain competitive advantages. Failure to maintain balance between the social and economic objectives often threatens the organisational sustainability (Rubin and Stankiewicz, 2001). Thus, maintaining an appropriate balance between social impact and financial viability maintaining an appropriate balance between social impact and financial viability is critical aspect of social enterprise management. Nevertheless, while there is growing number of studies manifesting the interest of business and management scholars in social enterprise, the focus till date have tended to be over defining the definitional controversies or the differences between the social enterprises and commercial ventures (e.g. Mair and Marti, 2006). Very scant studies have attempted to examine the strategic aspects of such ventures. Nonetheless, the strategic management of such enterprisesposesdistinct and substantial challenges.

The variegated nature of social issues themselves poses challenges to their solvers and thus to effectively serve such pressing social issues often demands fundamental alterations in the economic, political and social systems that underpin current stable states (Sarah et al., 2002). In the pursuit of measuring the ‘social entrepreneurship’, one of the greatest challenges identified so far is to find a means of measuring both the levels of social entrepreneurial activity and the impact that social entrepreneurship fetches in terms of macro variables of job-creation, poverty reduction etc. (Harding, 2004). In order to critically apply and thoughtfully practice the model of social enterprise towards fulfilling their social mission, the social entrepreneurs or the social workers in general have to understand its relevance in individual and community empowerments.

For the purpose of measuring the activities of social enterprises, one has to be necessarily capable of first identifying ventures generating revenues which are principally reinvested in their social purpose business or invested in meeting their community betterment goals. Thus, a central challenge lies with identifying and analyzing data from appropriate samples (McKenny et al., 2011). The preceding delinquency arises primarily due to the multidimensional nature of social enterprises, as well as the significant diversity prevailing in their mission, structures, strategies and processes (Satar and John, 2016).

Indian markets have been and are continuously witnessing an ample number of entrepreneurial activities with some social purpose. Such activities carrying seeds of social development are being established and managed in diverse geographical contexts and organizational forms. However, they have marginally been receiving the attention of researchers and policy makers. Surprisingly, majority of the Indian social entrepreneurial efforts stay with meager results. They go unorganized and unnoticed by dint of poor support and recognition they are getting from multiple agents. They stay with financial difficulty on a self-employed scale. Here we argue that while there is mounting number of social issues prevailing in Indian markets, they simultaneously offer some powerful opportunities for social enterprise efforts to spur up.

ORGANISATIONAL CULTURE AND FIRM PERFORMANCE:

Over the time, there has been substantial growth in the literature showing the positive correlation of organisational culture with organisational performance (Moshe and Lerner, 2006; Wheeler and Thomson, 2003). The organization’s cultural content has been deemed important for achieving the higher levels of organisational performance. Denison (1984) analyzed 34 American firms and correlated the five years organisational data with the firm performances. In his study, he found that organisational culture significantly affected the performance of these firms. Further, there have been claims of organisational culture influencing the competitive advantage of firms (Reichers and Schneider, 1990; Kotter and Heskett, 1992).

SOCIAL ENTERPRISES AND THE ORGANISATIONAL CULTURE:

The renewed interest in social enterprises arose particularly because they combine the social missions with the business acumen thereby unlocking new entrepreneurial opportunity with a high customer focus. However, they remain driven by a strong commitment to public benefit unlike the business profit maximization of private sector. Nevertheless, the pursuit of social good may sometimes directly conflict with the pursuit of profit (Foster and Bradach, 2005). Even the literature has cited many incidences where the social enterprises had to settle for decreased social/environmental impact for the sake of acquiring revenue targets (ibid). Thus, maintaining the trade-off between social impact and financial viability often represents a complex interplay and poses the managerial challenge of balancing between mission and income (Foster and Bradach, 2005). Related to this tension between the social and financial goals, the literature suggests that ‘the difficulties of balancing for-profit and non-profit principles and cultures’’ serves as the biggest threat the survival of the social enterprises (Rubin and Stankiewicz, 2001).

Thus, in light of above the culture of the social enterprise has to take care of specific dilemmas and thus may differ on many dimensions from that of traditional businesses. Many such cultural differences between not-for-profit and commercial organisations have been highlighted by different authors from time to time (Boschee, 2006; Weerawardena and Mort, 2006; Dees, 2007, 1998; Emerson and Twersky, 1996). The differences highlighted by these authors mainly consist of ‘‘community participation versus industry competition, ‘‘mission related bottom line versus profit focused bottom line, ‘‘grants orientation versus market orientation, ‘‘philanthropic versus commercial values’’ and varying degrees of risk tolerance.

Thus, social enterprises have to take care of some challenging cultural environment which may have ramifications over the type of the people the social enterprise is going to engage with. Hiring people with business skills and market focus may not suffice (Dees, 1998). The above differences in culture have been regarded as noteworthy because failing to balance them can be a source of great threat to the survival of SE (Rubin and Stankiewicz, 2001). The organisation must be capable of cherishing a social entrepreneurial culture which can integrate the skills and values of people in line with its social goals.

While as the interest in measurement of non-financial outcome has grown tremendously and the organisational culture has simultaneously been recognized as playing an important role in holding together that non-financial orientation within organisations. Although, the complexity of cultural dimensions is tremendous for a SE, their role in determining the success of social enterprise is equally high. For example; in a recent study of determining the critical success factors of 185 social enterprises in South Korea, Yong Tae Kim, et. at., 2010) found that the organisational culture is significantly affecting the social and economic outcome of social enterprises under consideration. Further, in a qualitative analysis of factors affecting the launch of social enterprises by not-for-profit organisations in Alberta; social enterprise culture has been found to be positively affecting the social enterprise success (Andres, 2013).

METHODOLOGY:

The present paper is a part of larger research project on social entrepreneurship in India (Satar and John, in press).The 2016 social entrepreneurship survey was conducted in India with the objective of identifying the social entrepreneurship critical success factors in Indian social enterprises. The study primarily strived to identify and analyze the factors that contribute to social entrepreneurship success in social enterprises. Besides reviewing extant literature, the researchers examined privileged documents of the selected social enterprises, held in-depth interviews as well as carried out several validation exercises (seminars) in Delhi, India. Accordingly, we asked a broad spectrum of social entrepreneurs and organizations working on social issues across India to tell us which factors are critical in determining the success of their ventures. Our final sample included 146 SE’s which are engaged in diverse social entrepreneurship activities across different social settings within India. The researcher carried out field-based research by disseminating and collecting data on a structured questionnaire from November 2015 to December 2016. The statistical analysis of the questionnaire was conducted through ranking and factor analysis. Further, several post survey interviews were also conducted with the select SE’s. The overall research process was guided by a general framework which was subsequently adjusted and refined to provide a structured map for investigating the individual critical success factors and their different levels of contribution to social entrepreneurship success (Satar and John, 2016, in press).

The survey endorsed the notion that organisational culture with its various associated elements provides the requisite key managerial support towards social value creation mission of social enterprises. Nonetheless, the existence of the double or triple bottom line approaches makes the cultural decisions distinctively difficult for a social enterprise than it is for either commercial profit or traditional not-for-profit ones. Interestingly, the survey while identifying many organisational cultural challenges in social enterprises, discovered two unique dimensions namely; strong social business values and social mission, as implicitly regulating the cultural functions within such firms. While the two dimensions originally stem from the hybrid nature of social entrepreneurship business models, they plausibly have profound implications in navigating many cultural challenges of small businesses in general.

ORGANISATIONAL CULTURE IN SOCIAL ENTERPRISES -CONCLUSIVE OVERVIEW IN LIGHT OF THE SURVEY FINDINGS:

The management of culture within social enterprises, while characteristically differs from management within large or established organizations also doesn’t clearly map to the cultural management within their commercial counterparts. Nonetheless, the practitioners in social entrepreneurship ventures confront many dilemmas similar to the ones faced by the HR managers of small and emerging firms in general. For example; like the case with small enterprises, the prime source of HR capital in social enterprises is the entrepreneur himself. As such there is disorientation towards creating formal cultures within such organisations. As identified by the survey, such disorientation is partially attributable to the liabilities emerging from their newness and dominantly to the lack of awareness about managing people strategically. Arguably, the latter reason obscures the entrepreneurs from realizing the potential of organisational culture in driving the bigger goals of social value creation mission. Besides, it was found that since job descriptions are not laid down properly, this gives rise to role ambiguity within their employees which hampers build-up of effective cultures.

The delve deep interviews have revealed that the leaders of surveyed social enterprises are passionate about the cause and most are good at the maximum of the tasks they undertake. They are rightly helping their enterprise navigate more esoteric and humanistic topics to drive tangible and real results through people. Interestingly, we found them apt at generating improved levels of trust among all enterprise beneficiaries’.

Consequently, the factors associated with organisational culture namely; strong social business values and strong social mission are essential in order to take care of some challenging cultural environment which may have ramifications over the type of the people the social enterprise is going to engage with. Hiring people with business skills and market focus may not suffice (Dees, 1998). Thus a sense of strong social business values is necessary in order to glue together people to maintain their commitment and dedication to venture success. Overall, the finding of the survey is moderately in parallel with the study outcomes of authors like Moshe and Lerner, (2006); Saa-Pe’re and Garcia-Falcon, (2002); Rubin and Stankiewicz, (2001); Kim, et al., (2010) who have argued for the positive influence of organisational culture on organisational performance and competitive advantage of firms.

CONCLUSION:

Social entrepreneurship as a social problem solving endeavor, is emerging as a socially innovative business model for the required social transformation vis-à-vis socio-economic development. Nonetheless, social entrepreneurship is having fragmented literature and there is lack of consensus regarding the framework and theory of social entrepreneurship on a global level. Besides, while social enterprises are carrying out the daunting tasks of social entrepreneurship, nothing much has been researched towards their management.

Unlike the traditional top-down approach of development, social enterprises represent a paradigm shift by leading a renewed bottom-up approach of development. While as the distinctiveness of their business models can emerge as strength, they concurrently pose some unique challenges in their strategic management. For example, unlike commercial social enterprises have to managing double bottom line which necessitates a careful balance when striving to build and maintain competitive advantages. The difficulties of balancing for-profit and non-profit principles and cultures serve as the biggest threat to the survival of social enterprises. Therefore, such enterprises must be capable of cherishing a social entrepreneurial culture which can integrate the skills and values of people in line with its social goals. While there are abundant studies examining the organisational culture of for-profit firms, social entrepreneurship culture and knowledge of its related facets is fragmented and absolutely imprecise and incomplete.

Considering the immense role organisational culture plays in regulating the commitment, performance and, ethical behavior of employees, the present study attempted to explore the dimension of organisational culture in social enterprises. In the background of a survey, the study identified ‘social business values’ with a ‘strong dedication to social mission’ as unique dimensions of managing culture within social enterprises.

Accordingly, the study suggested that social enterprises must cherish an organizational culture manifesting the strong social business values. The espoused cultural values will expectedly serve as ‘social glues’ in integrating the skills and values of people in line with the social enterprise’s bottom of pyramid goals. The finding moderately corresponds with the study outcomes of authors like Authority (2007); Kim, at el., (2010); Moshe and Lerner, (2006). Further, the factor of strong dedication to social mission finds its legitimacy on account of the fact that the people joining social enterprises must be having a total dedication to the venture success with a passion for solving social issues. Further, a strong dedication to social mission prevents ‘mission drift’ in social entrepreneurs (Satar and John, 2016).While social enterprises mainly drive results through people, it rightly behooves the practitioners to work towards establishing formal organisational cultural practices. However, in situations filled with the liabilities of enterprise smallness and newness, the social enterprise leaders can stand greatly benefited by optimizing the above two unique functions. Upholding an organisational culture with strong social values will ensure the required level of employee motivation and dedication required to work both in non-profit and for-profit context simultaneously.

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Received on 11.02.2018 Modified on 28.02.2018

Int. J. Ad. Social Sciences. 2018; 6(1):35-41.

DOI: 10.5958/2454-2679.2018.00001.4