For those readers interested in research, there’s a new juicy read from Finland. Saila Tykkyläinen’s doctoral theses about social enterprise growth has just been published. The researcher has been following up and analyzing the growth of 7 Finnish social enterprises of different business fields over the period of 5 years.
Here’s a short overview on the findings – the theses report as whole can be found from Lappeenranta University research gate: https://lutpub.lut.fi/handle/10024/160328
Rare social enterprise research
According to the report, research on social enterprise growth is still in its infancy. The purpose of this thesis is to pave the way towards a more holistic understanding of social enterprises’ growth process. As firm growth research is a theoretically more mature research field, it is utilised as a reference point in this research; even if prior studies on social enterprise growth have emphasised the distinctiveness of social enterprise growth, the researcher thinks that separating these two domains of research may be unnecessary.
This study addresses the following questions:
- Why do social enterprises pursue growth?
- What actually grows while they pursue growth?
- How is growth pursued?
Answers to the research questions can be summarized as follows:
- Growth orientation is conceptualised as managers’/owners’ growth motivations, which are influenced by their perceptions of the firm’s external environment and goals for growth. Also, social enterprise leaders’ are more growth-oriented than their colleagues running commercial enterprises and they are driven to grow by concerns related to their firms’ financial survival.
- The overall value of social enterprise growth cannot be reduced to changes in sales, employees and assets. For many social enterprises, organisational growth is a way to achieve social outcomes.
- Creating a virtuous circle between financial and social missions of the firm is possible if the firm remains committed to its social mission and successfully finds partners that enable balanced growth.
The findings of this research are quite interesting as they call into question the dominance of social missions and social impact within the growth of social enterprises. The research showed that:
- Finnish social enterprises are very market-oriented (as compared to social enterprises in many other countries)
- the financial aspects of growth play a role from formulation of growth-related goals to implementation of growth modes, and
- social enterprises grow faster than commercial enterprises in a recession. In the long run, the pace of growth of social and commercial enterprises was equal as social enterprises grew slower during an economic boom.
Towards fostering the balance of financial and social missions
As a suggestion, the researcher points out, that as the expected outcomes of growth are produced throughout the growth process, attention should be placed on ensuring that goals of growth and daily business activities foster the balance of financial and social missions.
Value to social enterprise development
According to the researcher, the thesis contributes to the theoretical development of research on social enterprise growth by drawing attention to the operationalisation of growth and influence of the operational environment on the growth process. Likewise, it provides insights for policy-makers and practitioners by increasing the understanding of how the pursuit of growth can facilitate the common good.