The empirical study of factors affecting the success of social enterprise on marketing and social performances

Abstract

This study is the first empirical research conducted in Thailand to examine the performance of social enterprise (SE) through the involving internal and external factors. The objectives of this study are twofold: (1) to discover how the internal and the external factors affecting the success of SE performance and (2) to investigate how marketing and social performances associated with SE performance. The internal factors were social mission, value-based leadership, shared vision, and customer orientation. The external factors were perceived environmental uncertainty and relationship with external organizations. These six variables were based on integrating four theories, i.e. institutional theory, resource-based view theory, social capital theory and contingency theory. Six SE executives were interviewed to explore the key success factors related to SE performance. Questionnaire were developed and pretested, then mailed to 1,475 SEs that were listed in Thai Social Enterprise Office (TSEO).The 300 completed questionnaire returned were from agricultural industry (50.3%), retails (23.7%), food and beverages (14.3%) and the rest were from finance, health care, tourists, education and others. The data was analyzed using SEM-PLS path modeling. The reliability and construct validity were assessed through measurement model. The results of structural model showed that all variables had significant and positive impacts on SE performance i.e. social mission (β = 0.09, p < 0.05), value-based leadership (β = 0.10, p < 0.01), shared vision (β = 0.17, p < 0.01), customer orientation (β = 0.23, p < 0.01), relationship with external organizations (β = 0.19, p < 0.01), and perceived environmental uncertainty (β = 0.11, p < 0.05). These variables explained 45% of SE performance. The results of second order construct also revealed that SE performance was strongly associated with marketing performance (β = 0.92, p < 0.01), and social performance (β = 0.92, p < 0.01), R2 = 0.85. The study provided theoretical and managerial contributions to academicians and executives to better understand the factors affecting SE performances in order to formulate effective marketing strategies for SEs.