What Drives Social Enterprises to Form Sustainable Values? The Effects of Normative Identity and Social Performance

Round 1

Reviewer 1 Report

Dear Author (s),

I've read the manuscript entitled "What drives social enterprise to make sustainable values? " with interest and I thank you for this opportunity. 

Then I present some recommendations and suggestions (see pdf file in annex):

Comments for author File: Comments.pdf

Author Response

Please see the attachment. 

Author Response File: Author Response.pdf

Reviewer 2 Report

Dear authors,

many thanks for the manuscript, it touches upon an interesting topic related to social enterprise.

here below some comments I hope can be useful for further revision:

- Introduction: I am not sure it is clear the difference between the conceptualisation of SE. Further information are required in terms of difference between European and America definition. Please also note that afterwards you consider only European definition. It could be useful to understand how social enterprise is defined in Korea (useful also to explore and understand the dataset).

- I have difficulties to follow the reasoning about the identity/values of social enterprise. Adding references would be good.

- More information on how the study fits with the current literature is needed (you write about several studies studying the connection - which are the several studies? how is the study is different?

- what do you mean with attention-based view and liability of newness? It is not explained neither in other part of the paper.

Theoretical background

- Definition of SE in Europe needs more reference in particular when authors state that they pay the minimum wage (is it true for every countries? in very different contexts?). It is not clear the sentence about market dependence or what you mean with weak economic mechanism. More explanation is needed

- HP 1B is not clear - what do the authors mean with postures? Can you provide references and details

- Lin 189-195: it needs references to sustain the argument

- Hypothesis 3 need more references and explanation of the arguments. Why do legitimacy mediate for all the three aspects explored in the first HPs?

Methods

- More information about systematic sampling can be useful (including references):

- 294-305 - could you please give more information on how the performance are measured in CSES? This is important to understand the data

- 309-310 - could you please provide more information on how you measure the pro-social value? Is it a question to managers about how much they connect social and economic value? 

-313-317 - it is not clear how you measure posture? could you provide more information? Is it a question to manager? Did you check websites? or others?

319-322 - what does it happen when the network is a mix of actors? How did you code that?

325- 333 more information are needed on how you measure moderators.

I will go through the discussion when the previous points are addressed because I will need further information to provide more details the discussion part. However, I can suggest few points below:

- I am not sure you detail enough about sensemaking to argument you contributed to the literature. More reference in the literature or you might want to explain you contribute to literature about identity

-You include social innovation but I am not sure what you mean about that (in terms of measurement or concept)

- Not clear how you contribute to measurement literature because there are not enough information on how you collect data

Author Response

Please see the attachment. 

Author Response File: Author Response.pdf

Reviewer 3 Report

This study examines how the SE’s normative identity and normative networks influence social performance. The authors assume that the only perspective to address hybrid organizations is to focus on tensions and misalignments. They ignore the perspective that studies the synergies and positive association between social and financial goals (Muñoz & Kimmitt, 2019; Spieth et al., 2019; Tobias et al., 2013). This perspective avoids the normative judgment of separating what is social and what is economic; there is no need to“assume that there is some metric or set of values that make certain types of value creation ‘social’ and others not” (Santos, 2012, p. 337), and finds it unnecessary (and potentially counterproductive) to distinguish between "social” and “economic” goals.  
This view is opposite to, as the authors express, the “threats to creating social performance” that stem from the “possibility of a mix of social and financial objectives in the process of growing business” (line 91). By not considering the literature that recognizes the above mentioned synergies, and just acknowledging conflicting logics, organizational performance is limited —unduly so— to social performance. It is a questionable starting point to state that “it is important to attach great importance to social values rather than increasing revenue” (line 53). And, then, to limit the measurement of ‘attention to pro-social values’ to the focus “on whether the SE’s social value activities are separated from economic values or not” (line 310). Is there any connection between these different perspectives and the fact that the biggest social sector in Table 1 is unidentified (i.e., 43.3 %). Could it be because commercial activities that engage underprivileged populations are common (and not visible under the social services listed)?  
Another problem of the article is not distinguishing between ‘pro-social values’ and ‘creating social value’. To mix values with value confounds two different concepts! The former, someone’s judgment of what is important in life, has a different connotation from the creation and capture of value that organizations do. Legitimacy is conformation to values, social norms and expectations (as the authors well mention), while organizations deal with resources and capabilities to create value and then to capture some part of it (issues that the authors do not address directly).  

Despite several efforts, I could not understand the way in which the independent and dependent variables were operationalized. As for the social enterprises’s posture, can the part of the SE's "focus activities centered on generating profits and solving social problems” (line 316) be separated reliably? And for social performance, what problems arise from considering it equivalent to the monetary value that comes from pricing based on the SROI (line 301)? The authors express concern about “the absence of a standard for measurement” (line 66), but do very little to explain the shortcut they took.  
Besides operationalization issues, I encourage the authors to check their hypotheses because it seems to me that a couple of them can be tautological. For example, “activities that align with normative identity and are consistent with values can improve social performance” (line 173).  

Finally, not all quoted references are included in the final list. For example, no where to be found are the following: Bellostas, Lopez-Arceiz, & Mateos, 2016; Mair, Battilana, & Cardenas, 2012; Michaud & Tello-Rozas, 2019; and Zhao, 2014.  

References

Muñoz, P., & Kimmitt, J. (2019). Rural entrepreneurship in place: An integrated framework.Entrepreneurship & Regional Development,31(9–10), 842–873.  

Santos, F. (2012). A Positive Theory of Social Entrepreneurship.Journal of Business Ethics,111(3), 335–351.  

Spieth, P., Schneider, S., Clauß, T., & Eichenberg, D. (2019). Value drivers of social businesses: A business model perspective.Long Range Planning,52(3), 427–444.  

Tobias, J. M., Mair, J., & Barbosa-Leiker, C. (2013). Toward a theory of transformative entrepreneuring: Poverty reduction and conflict resolution in Rwanda’s entrepreneurial coffee sector.Journal of Business Venturing,28(6), 728–742.

Author Response

Please see the attachment. 

Author Response File: Author Response.pdf

Reviewer 4 Report

General overview:

·     The subject approached by the authors in the current research is one of increasing importance, the results obtained arousing the attention and interest of the audience.

·      In the current form, the title of the paper is quite clear, and arouses the curiosity of the readers, including important keywords.

·   In the beginning sections, respectively Abstract and Introduction, the authors clearly present the purpose of the research, which improves the audience's understanding and outlines its expectations.

·    From a methodological point of view, the authors combine theoretical research with empirical research, including direct, first-hand analysis.

·      Overall, the information obtained from the research is properly structured and presented in an appropriate manner.

·      Awareness of the limitations of research is a strong point of it, as it lays the foundations for any possible future work.

Recommendations:

·   With respect to the references, the authors used several appropriate studies summarizing the existing evidence in the approached research area. Nevertheless, if possible, the authors might consider the additional inclusion of more recent scientific sources as part of the theoretical substantiation.

·       Figure 1, as a numbering, appears twice (line 141 and line 317), although the first seems to be more of a table.

·        Figure 1. Research model (line 317) seems a bit distorted. It is possible that narrowing the figure height to lead a correct shape of it.

·       Line 346 cites Figure 3 (“Figure 3 shows the process how the CESE measure the social 346 performance”), but Figure 2 appears below. Is this the figure mentioned? If yes, please pay attention to the numbering and the name of the figure in question.

·     It is strongly recommended to mention all existing figures and tables in the text of the manuscript. In this way, the audience could follow the content much more easily.

·       Where appropriate, the extra lines between paragraphs may be removed.

·       Please check sections 6 and 7 because, in the current form of the paper, they have the same name, namely Discussion. This is probably an unintentional error by the authors, but its revision is recommended. At the same time, as a result of carefully reading the content of the paper, renaming the Discussion section into (something similar to) Discussion, conclusions and future research directions, could be considered appropriate. Another option could be to divide (by renaming) the existing sections into something similar to: 5. Results and discussions, respectively 6. Conclusions and future research directions.

·        Line 544 seems incomplete (Funding: This research is supported by).

·     Several discrepancies were observed between the present paper and required template of the journal. Therefore, it would be advisable for the author/s to review the structure and the design of the specific parts within the manuscript (e.g. the format of figure titles, the format of figure footnotes etc.).

Author Response

Thank you for your detailed comments to improve our paper. 

 

1. With respect to the references, the authors used several appropriate studies summarizing the existing evidence in the approached research area. Nevertheless, if possible, the authors might consider the additional inclusion of more recent scientific sources as part of the theoretical substantiation.

 

Thank you for your considerate comments. I added recent scientific sources like as following:

Sieger, M., Pinkse, J., & Panwar, R. (2018). Managing tensions in a social enterprise: The complex balancing act to deliver a multi-faceted but coherent social mission. Journal of Cleaner Production, 174(10), 1314-1324.

Yin, J., & Chen, H. (2018). Dual-goal management in social enterprises: evidence from China. Management Decision, 57(6), 1362-1381.

Wang, Z., & Zhou, Y. (2020). Business model innovation, legitimacy and performance: Social enterprises in China. Management Decision, 59(11), 2693-2712.

 

 

2. Figure 1, as a numbering, appears twice (line 141 and line 317), although the first seems to be more of a table.

I revised figure 1(original version) to table 1. I apologize for our mistakes.

 

3. Figure 1. The research model (line 317) seems a bit distorted. It is possible that narrow the figure height to lead to a correct shape of it.

I revised this error. The new picture has no distorting.  

 

4. Line 346 cites Figure 3 (“Figure 3 shows the process how the CESE measure the social 346 performance”), but Figure 2 appears below.Is this the figure mentioned? If yes, please pay attention to the numbering and the name of the figure in question.

 

I apologize for these mistakes. I double-checked the numbering tables and pictures.

 

5. It is strongly recommended to mention all existing figures and tables in the text of the manuscript. In this way, the audience could follow the content much more easily.

 

I added explanations regarding all figures and tables.

Lin, 129. In this context, Campbell & Sacchetti (2014) largely divided the public domain and the private domain (e.g. Table 1

Lin, 292. We illustrate our proposed research model in Figure 1.

Lin. 318. Table 2 shows the social enterprise’s geographical distribution and the social service sector.

 

6. Please check sections 6 and 7 because, in the current form of the paper, they have the same name, namely Discussion. This is probably an unintentional error by the authors, but its revision is recommended. At the same time, as a result of carefully reading the content of the paper, renaming the Discussionsection into (something similar to) Discussion, conclusions and future research directions, could be considered appropriate. Another option could be to divide (by renaming) the existing sections into something similar to: 5. Results and discussions, respectively 6. Conclusions and future research directions.

I apologize for the unintentional error. I revised this section as the second option you suggested.

 

 

6. Results and discussions

This study is a response to recent calls for increased focus on SE’s identity to understand how SE is involved in devoting all effort to creating social value. We explore how the normative identity affects social performance and how legitimacy moderates the link between the SE’s normative identity and social value creation. To test the hypotheses, we have attempted to introduce some variables that can best explain the normative identity of SE.

We contribute to the literature on SE in three ways. First, this study seeks to deep-en the understanding of the relationship between SE’s normative identity and performance based on the attention-based view. Whereas previous literature on SE has argued that tension between social and economic identity affected the SE’s activity and performance, few studies have specified the normative variables of SE’s identity (Moss et al., 2010; Stevens et al., 2015; Wry & York, 2017). To examine the role of SE’s normative identity, we introduce three concepts: attention to creating social values, maintaining strategic posture focusing on solving social problems, and establishing social normative networks. Our research reveals that SE’s normative identity has partial influence on social performance. In particular, SE’s strategic postures toward solving social problems and the normative network affect SE’s performance. Contrary to our hypothesis, social enterprise’s attention to pro-social values is not positively related to social performance. These results are interesting and important because prior research has assumed that SE’s ‘social mission’, ‘social goal’, or ‘attention for social value’ can be directly associated with social performance (Austin et al., 2006; Dorado, 2006; Ketprapakorn & Kantabutra, 2019; Stevens, Moray & Bruneel, 2015). However, our empirical analyses show that attention on social value alone is not sufficient. By concentrating on the ‘strategic posture’ for creating social value, SEs’ decision-making and continuous activities are involved more in social engagement (i.e. social mission, social goals, and social value creation) rather than economic engagement (i.e. commercial activity), and in turn, these promote the creation of social value. In addition, we identify that SE’s normative network is necessary not only in securing external resources and support but also in enhancing the motivation of internal members. As Milbourne (2010) emphasized, SE’s networking relations with a specific sector (i.e. public or private) and interaction play a critical role for building and reinforcing goals. Accordingly, SE can improve social performance by building networks with organizations that pursue normative orientation and same goals.

Second, we fill the gap in the prior literature that has examined the core norma-tive values, SEs’ activities, and strategic direction by using the sensemaking perspec-tive and the attention-based view as a theoretical frame. Sensemaking is beneficial for Ses to persuade members, organizations, networks, and society to interact for creating social values. Sensemaking activities are key variables that are significantly associated with organizational decisions and strategic direction (Maitlis, 2005). For various stakeholders, sensemaking effectively influences how they construct and maintain the Ses’ identity (Weick et al., 2005; Chen et al., 2013). In addition, the attention-based view can explain the SE’s strategic posture. Ocasio et al. (2015) explained that organi-zation’s attentional engagement is critical for managerial cognition, in turn it affects communication and interactions. Thus, this research contributes to understanding the positive effect of SE’s normative identity on internal members, external members, and community (Ocasio et al., 2015), and SE’s legitimacy (Stride & Higgs, 2014) by combin-ing the sensemaking perspective and attention-based view.

Third, we measured the social enterprise’s social performance into four categories: 1) social service performance, 2) employment performance, 3) social ecosystem per-formance, and 4) environmental performance. Whereas previous studies focused on “job creation for the underprivileged” to measure the social performance, the CSES examined social enterprise’s social value creation to understand how well social en-terprise met the original purpose. The final social performance measured the outcome of social performance based on the four categories. Although Ses are established for purposes of a social mission, rather than profit (Bagnoli & Megali, 2011; Liu et al., 2015), prior research focused more on the economic performance as Ses’ performance. Thus, our research advanced SE literature by investigating the social value creation effect as social performance.

7. Conclusions and future research directions

The findings suggest that while the SE’s normative identity orientation does not affect the social performance, normative activity influences on the social performance. In addition, the legitimacy of SE moderates the relationship between the normative network and social performance. Despite the contributions mentioned above, several limitations remain that point out future research directions. First, since the samples are all limited to South Korea, the results do not reflect the reality of other countries or contexts. Although this study addressed the South Korean context, there could be some room for further research opportunities using cross country samples to include cultur-al or normative value-wide differences of SE. Given the social enterprise ecosystem could be different across countries, future research can consider institutional variables and cross-national dimensions by collecting cross-country data. Second, additional analyses using various dependent variables may enrich the findings about the role of the SE’s normative identity. While we employ dependent variables based on the CSES survey, future research is necessary to discover more variables for measuring social performance

 

7. Line 544 seems incomplete (Funding: This research is supported by).

We didn’t get funding or support. So I removed this part.

Round 2

Reviewer 1 Report

Dear Authors,

I received a revision of the manuscript (version 2) to verify if it has been sufficiently improved to warrant publication in Sustainability.

The authors will follow the recommendations presented in an adequate way. In this way, it is considered that the manuscript is currently being published. I wish you good luck with your future research.

Author Response

Thank you for your detailed comments to improve our paper! 

Reviewer 2 Report

Thank you, I think you addressed most of my comments and I am happy with the new version of the paper.

Author Response

Thank you for your detailed comments to improve the quality of our paper. 

Reviewer 3 Report

I appreciate the efforts that the authors put into revising the manuscript.  However, their explanations were not convincing.  In my opinion, the research model is still fraught with problems (e.g., variable identification, tautologies, relevance).

Author Response

We apologize for not meeting your expectations.
The comments received in the 1st and 2nd rounds were also faithfully answered, and most of the pointed out points were supplemented and corrected. Through this opportunity, we will study harder and proceed with better research activities.