Sink, swim, or drift: How social enterprises use supply chain social capital to balance tensions between impact and viability

Abstract

Social enterprises seek solutions for some of society's most pressing problems through the development of commercially viable businesses. However, pursuing social impact is often at odds with financial viability, and social enterprises need to engage with a wide range of stakeholders to access tangible and intangible resources to overcome this tension. Although the current literature emphasizes the need for social capital within social enterprises' supply chain relationships, it does not consider the costs associated with the development of such capital. This article examines how social enterprises develop social capital in their supply chain relationships and how this social capital affects their ability to pursue impact and viability. Using data from in-depth interviews with nine social enterprises, the findings indicate that the roles and positions of beneficiaries in supply chains determine the appropriate forms of social capital needed to sustain simultaneous impact and viability. The empirical insights highlight that structural and relational capital are most valuable within core supply chain relationships, whereas cognitive capital is most beneficial within peripheral relationships aimed at enhancing competitiveness. Further, social enterprises sometimes relinquish power in their supply chain relationships to prioritize impact but develop relational capital to mitigate threats of opportunism. This study advances a contingent view of social capital in cross-sectoral supply chain relationships and provides valuable implications for managers pursuing impact.

Unleashing the power of organizational social capital: exploring the mediating role of social entrepreneurship orientation in social enterprises' performances

“…Lastly, the cognitive dimension of OSC emerges as the glue binding SEs, crucial in maintaining their hybrid essence (Taylor and Rosca, 2022). This dimension fosters a unified cognitive and communicative structure, which, in turn, lays the groundwork for economic expansion (Evans and Syrett, 2007).…”

Radical innovations as supply chain disruptions? A paradox between change and stability

“…Paradox theory suggests that understanding the nature of a paradox and its complex relationships with other paradoxes is an important prerequisite for resolving it in order to support a firm's competitiveness (Taylor & Rosca, 2022). Four different paradox types have been identified (Lewis, 2000; Smith & Lewis, 2011).…”

Delivering societal impact through supply chain design: insights from B Corps

“…Companies may engage with nontraditional partners with a strong social orientation who can push organizations toward their mission (Rosca and Bendul, 2019) or help to create additional social and environmental impact (Rodr ıguez et al, 2016). Finally, a holistic approach to sustainability requires investments in social capital (Longoni et al, 2019;Taylor and Rosca, 2022) and capabilities for managing social innovation and supply chain monitoring (Tate and Bals, 2018;Klassen and Vereecke, 2012). Financial slack may be required to develop supply chains to support underserved beneficiaries (Taylor and Rosca, 2022) and to enable investments in new technologies to facilitate environmental impact across the supply chain (Choudhary et al, 2020).…”

“…Examples from social impact supply chain literature Inter-firm processes Information sharing and monitoring capabilities reduce severity of supply chain disruptions (Craighead et al, 2007) Involvement of non-business actors can help facilitate collaborations between businesses to address large scale societal issues (Benstead et al, 2018) Intra-firm processes Lean adoption without appropriate HR and prevention practices can harm worker safety (Longoni et al, 2013) Social enterprises adopt forgiving absence policies to reduce barriers to beneficiary participation (Taylor and Rosca, 2022) Financial resources Financial slack mitigates harms of reducing operational slack (Wiengarten et al, 2017) Social enterprises employ payment terms that benefit beneficiary suppliers to enable their participation in the supply chain (Taylor and Rosca, 2022) Technology…”

“…Extant literature in this research area indicates that these supply chains operate differently from conventional organizations (e.g. Bals and Tate, 2018;Longoni et al, 2019;Taylor and Rosca, 2022). However, little is known on how these organizations can tailor their SCD to create different impacts.…”