Strategic Orientations, Situational Characteristics, and Social Value Creation in Social Enterprises

While the internal challenges between business and social missions in social enterprises have attracted increased scholarly attention, less is known about how social enterprises exploit the dual missions in their strategies in response to external environment in the pursuit of social goals. Drawing upon the strategic orientation literature, we propose that competitor and social orientations are two types of strategic actions social enterprises employ to address market competition and create social value, and that the effects of both orientations are contingent on situational characteristics. Results based on a dual-informant survey of 230 social enterprises in China show that both competitor and social orientations can enhance social performance. However, their actual social outcomes depend on contingency factors characterized by local resource endowment, network competence, and founder expertise, which moderate the above relationships. We discuss the reasons behind social enterprises’ choice of different approaches in pursuing their social goals and highlight a contingent approach to capturing the complexity of social enterprise actions and performance.