IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i21p11660-d661914.html
   My bibliography  Save this article

Scaling Social Enterprises through Product Diversification

Author

Listed:
  • Srivardhini K. Jha

    (Indian Institute of Management Bangalore, Entrepreneurship Area, F202, Bannerghatta Road, Bangalore 560076, India)

  • Nachiket Bhawe

    (Thomas School of Business, University of North Carolina–Pembroke, Pembroke, NC 28372, USA)

  • P. Satish

    (Sa-Dhan–Association of Community Development Finance Institutions, A 1/248, Safdarjung Enclave, New Delhi 110029, India)

Abstract

Scaling has remained a challenge for social enterprises, which strive to balance social impact with financial performance to facilitate sustainable development. Product diversification, a common scaling strategy in commercial enterprises, has been recently proposed as a strategy to scale social enterprises while keeping their dual goals in balance. We empirically investigate this using a combination of qualitative and quantitative analyses of microfinance institutions in India. Our inductive analysis reveals that product diversification in social enterprises varies along two dimensions—relatedness and locus of impact—to give four distinct diversification strategies. Each of these strategies impacts the social and financial goals of the organization differently. To scale successfully, social enterprises need to deploy a deliberate and dynamic mix of product diversification strategies. The paper makes an important contribution to the field of social entrepreneurship by exploring how diversification strategy can help social enterprises scale. It also provides important insights to social entrepreneurs on how they should deploy a mix of diversification strategies to maintain a balance between their social and financial goals.

Suggested Citation

  • Srivardhini K. Jha & Nachiket Bhawe & P. Satish, 2021. "Scaling Social Enterprises through Product Diversification," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11660-:d:661914
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/21/11660/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/21/11660/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marek Hudon, 2009. "Should Access to Credit be a Right?," Journal of Business Ethics, Springer, vol. 84(1), pages 17-28, January.
    2. Jill Kickul & Mark Griffiths & Sophie Bacq & Niharika Garud, 2018. "Catalyzing social innovation: is entrepreneurial bricolage always good?," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 30(3-4), pages 407-420, March.
    3. Kevin André & Anne-Claire Pache, 2016. "From Caring Entrepreneur to Caring Enterprise: Addressing the Ethical Challenges of Scaling up Social Enterprises," Journal of Business Ethics, Springer, vol. 133(4), pages 659-675, February.
    4. Brett R. Smith & Christopher E. Stevens, 2010. "Different types of social entrepreneurship: The role of geography and embeddedness on the measurement and scaling of social value," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 22(6), pages 575-598, October.
    5. Mair, Johanna & Marti, Ignasi, 2009. "Entrepreneurship in and around institutional voids: A case study from Bangladesh," Journal of Business Venturing, Elsevier, vol. 24(5), pages 419-435, September.
    6. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    7. Desmond W. Ng, 2007. "A Modern Resource Based Approach to Unrelated Diversification," Journal of Management Studies, Wiley Blackwell, vol. 44(8), pages 1481-1502, December.
    8. Kerstin Lopatta & Magdalena Tchikov & Reemda Jaeschke & Sumit Lodhia, 2017. "Sustainable Development and Microfinance: The Effect of Outreach and Profitability on Microfinance Institutions' Development Mission," Sustainable Development, John Wiley & Sons, Ltd., vol. 25(5), pages 386-399, September.
    9. Andrea Fosfuri & Marco S. Giarratana & Esther Roca, 2016. "Social Business Hybrids: Demand Externalities, Competitive Advantage, and Growth Through Diversification," Organization Science, INFORMS, vol. 27(5), pages 1275-1289, October.
    10. Krishna Palepu, 1985. "Diversification strategy, profit performance and the entropy measure," Strategic Management Journal, Wiley Blackwell, vol. 6(3), pages 239-255, July.
    11. Islam, Syrus M., 2020. "Towards an integrative definition of scaling social impact in social enterprises," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    12. Sheila M. Puffer & Daniel J. McCarthy & Max Boisot, 2010. "Entrepreneurship in Russia and China: The Impact of Formal Institutional Voids," Entrepreneurship Theory and Practice, , vol. 34(3), pages 441-467, May.
    13. Johanna Mair & Ignasi Marti & Marc Ventresca, 2012. "Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids," Post-Print hal-02276707, HAL.
    14. Johanna Mair & Ignasi Marti & Marc Ventresca, 2012. "Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids," Post-Print hal-02312706, HAL.
    15. Smith, Wendy K. & Gonin, Michael & Besharov, Marya L., 2013. "Managing Social-Business Tensions: A Review and Research Agenda for Social Enterprise," Business Ethics Quarterly, Cambridge University Press, vol. 23(3), pages 407-442, July.
    16. Constance E. Helfat & Margaret A. Peteraf, 2003. "The dynamic resource‐based view: capability lifecycles," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 997-1010, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jessica Breaugh & Keegan McBride & Moritz Kleinaltenkamp & Gerhard Hammerschmid, 2021. "Beyond Diffusion: A Systematic Literature Review of Innovation Scaling," Sustainability, MDPI, vol. 13(24), pages 1-21, December.
    2. Kendisha Soekardjo Hintz & Jürgen Pretzsch, 2023. "Co‐creation of business models for smallholder forest farmers’ organizations: Lessons learned from rural Ethiopia and Tanzania," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 921-949, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paola Bernardi & Alberto Bertello & Canio Forliano & Ludovico Bullini Orlandi, 2022. "Beyond the “ivory tower”. Comparing academic and non-academic knowledge on social entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 999-1032, September.
    2. Silvestre, Bruno S., 2015. "Sustainable supply chain management in emerging economies: Environmental turbulence, institutional voids and sustainability trajectories," International Journal of Production Economics, Elsevier, vol. 167(C), pages 156-169.
    3. Marta Widz & Nadine Kammerlander, 2023. "Entrepreneurial exit intentions in emerging economies: a neoinstitutional perspective," Small Business Economics, Springer, vol. 60(2), pages 615-638, February.
    4. Pradeep Kumar Hota, 2023. "Tracing the Intellectual Evolution of Social Entrepreneurship Research: Past Advances, Current Trends, and Future Directions," Journal of Business Ethics, Springer, vol. 182(3), pages 637-659, January.
    5. Franczak, Jennifer & Lanivich, Stephen E. & Adomako, Samuel, 2023. "Filling institutional voids: Combinative effects of institutional shortcomings and gender on the alertness – Opportunity recognition relationship," Journal of Business Research, Elsevier, vol. 155(PB).
    6. Junzhe Ji & Pavlos Dimitratos & Qingan Huang & Taoyong Su, 2019. "Everyday-Life Business Deviance Among Chinese SME Owners," Journal of Business Ethics, Springer, vol. 155(4), pages 1179-1194, April.
    7. Sahasranamam, Sreevas & Nandakumar, M.K., 2020. "Individual capital and social entrepreneurship: Role of formal institutions," Journal of Business Research, Elsevier, vol. 107(C), pages 104-117.
    8. Christophe Boone & Serden Özcan, 2020. "Oppositional Logics and the Antecedents of Hybridization: A Country-Level Study of the Diffusion of Islamic Banking Windows, 1975–2017," Organization Science, INFORMS, vol. 31(4), pages 990-1011, July.
    9. Gupta, Parul & Chauhan, Sumedha & Paul, Justin & Jaiswal, M.P., 2020. "Social entrepreneurship research: A review and future research agenda," Journal of Business Research, Elsevier, vol. 113(C), pages 209-229.
    10. Onuklu, Atilla & Hill, Theodore (TL) & Darendeli, Izzet S. & Genc, Omer F., 2021. "Poison or antidote: How subnational informal institutions exacerbate and ameliorate institutional voids," Journal of International Management, Elsevier, vol. 27(1).
    11. Wry, Tyler & Haugh, Helen, 2018. "Brace for impact: Uniting our diverse voices through a social impact frame," Journal of Business Venturing, Elsevier, vol. 33(5), pages 566-574.
    12. Jie Wu & Steven Si & Haifeng Yan, 2022. "Reducing poverty through the shared economy: creating inclusive entrepreneurship around institutional voids in China," Asian Business & Management, Palgrave Macmillan, vol. 21(2), pages 155-183, April.
    13. Alisa Sydow & Benedetto Lorenzo Cannatelli & Alessandro Giudici & Mario Molteni, 2022. "Entrepreneurial Workaround Practices in Severe Institutional Voids: Evidence From Kenya," Entrepreneurship Theory and Practice, , vol. 46(2), pages 331-367, March.
    14. Meyer, Camille, 2020. "The commons: A model for understanding collective action and entrepreneurship in communities," Journal of Business Venturing, Elsevier, vol. 35(5).
    15. Adomako, Samuel & Amankwah-Amoah, Joseph & Donbesuur, Francis & Ahsan, Mujtaba & Danso, Albert & Uddin, Moshfique, 2022. "Strategic agility of SMEs in emerging economies: Antecedents, consequences and boundary conditions," International Business Review, Elsevier, vol. 31(6).
    16. Sven Horak & Yuliani Suseno, 2023. "Informal Networks, Informal Institutions, and Social Exclusion in the Workplace: Insights from Subsidiaries of Multinational Corporations in Korea," Journal of Business Ethics, Springer, vol. 186(3), pages 633-655, September.
    17. Dorado, Silvia & Ventresca, Marc J., 2013. "Crescive entrepreneurship in complex social problems: Institutional conditions for entrepreneurial engagement," Journal of Business Venturing, Elsevier, vol. 28(1), pages 69-82.
    18. Syrus M Islam, 2022. "Social impact scaling strategies in social enterprises: A systematic review and research agenda," Australian Journal of Management, Australian School of Business, vol. 47(2), pages 298-321, May.
    19. Bhattarai, Charan Raj & Kwong, Caleb C.Y. & Tasavori, Misagh, 2019. "Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom," Journal of Business Research, Elsevier, vol. 96(C), pages 47-60.
    20. Juan M. Gil-Barragan & María José López-Sánchez, 2021. "The Fast Lane of Internationalization of Latin American SMEs: A Location-Based Approach," Sustainability, MDPI, vol. 13(6), pages 1-20, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11660-:d:661914. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.