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Open AccessOpen Access JUSTC Management 18 April 2023

Research on the influence of social relations on social enterprise performance: The mediating role of business model innovation

  • School of Management, University of Science and Technology of China, Hefei 230026, China

Cite this:
https://doi.org/10.52396/JUSTC-2022-0109
More Information
  • Author Bio:

    Jianlin Wu is currently an Associate Professor at the University of Science and Technology of China (USTC). She received her Ph.D. degree in Management from USTC. Her main research areas include strategic management and social enterprise

    Wenhao Cai is currently a master student at School of Management, University of Science and Technology of China, under the supervision of Associate Professor Jianlin Wu. Her research focuses on social enterprise

  • Corresponding author: E-mail: caiwh1998@mail.ustc.edu.cn
  • Received Date: 31 July 2022
  • Accepted Date: 26 January 2023
    • Available Online: 18 April 2023
    Abstract

  • Abstract

    With the development of the social economy, social problems are becoming increasingly prominent. Solving social problems only by the government and public welfare organizations is difficult. Social enterprises offer opportunities for sustainable solutions to social problems; however, social enterprises generally face the problem of poor performance. Although previous studies provide some clues on the impact of social relations on social enterprise performance, whether social relations impact performance remains unknown, and the mechanism remains unclear. Based on resource-based theory, our study proposes the role of business model innovation as the intervening mechanism. Market information management capability enhances the positive effect of social relations on business model innovation. The findings from a survey of 198 Chinese social enterprises show that social relations have a significant positive impact on economic performance and social performance and that business model innovation plays a mediating role between social relations and performance. Market information management capability plays a positive moderating role between social relations and business model innovation. The research results enrich the research on the influencing factors of social enterprise performance, reveal the influencing mechanism and boundary conditions of social relations on social enterprise performance, and propose effective practical measures for improving social enterprise performance.

    Graphical abstract

    Theoretical framework of social relations on social enterprise performance.

    Abstract

    With the development of the social economy, social problems are becoming increasingly prominent. Solving social problems only by the government and public welfare organizations is difficult. Social enterprises offer opportunities for sustainable solutions to social problems; however, social enterprises generally face the problem of poor performance. Although previous studies provide some clues on the impact of social relations on social enterprise performance, whether social relations impact performance remains unknown, and the mechanism remains unclear. Based on resource-based theory, our study proposes the role of business model innovation as the intervening mechanism. Market information management capability enhances the positive effect of social relations on business model innovation. The findings from a survey of 198 Chinese social enterprises show that social relations have a significant positive impact on economic performance and social performance and that business model innovation plays a mediating role between social relations and performance. Market information management capability plays a positive moderating role between social relations and business model innovation. The research results enrich the research on the influencing factors of social enterprise performance, reveal the influencing mechanism and boundary conditions of social relations on social enterprise performance, and propose effective practical measures for improving social enterprise performance.

    • Public Summary

    • Social relations have a significant positive impact on economic performance and social performance.
    • Business model innovation plays a mediating role between social relations and economic performance. Business model innovation plays a mediating role between social relations and social performance.
    • Market information management capability positively moderates the relationship between social relations and business model innovation.

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    • References(62)
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    Figure  1.  Theoretical framework.

    Figure  2.  Moderating effect of market management capability between social relations and business model innovation.

    [1]
    China Social Enterprise and Impact Investing Forum. China Social Enterprise and Social Investment Industry Research Report (2019). [2022-06-10]. http://www.cseiif.cn/Uploads/file/20190415//5cb42a12becf4.pdf . (in Chinese)
    [2]
    Reficco E, Layrisse F, Barrios A. From donation-based NPO to social enterprise: A journey of transformation through business-model innovation. Journal of Business Research, 2021, 125: 720–732. doi: 10.1016/j.jbusres.2020.01.031
    [3]
    Thorgren S, Omorede A. Passionate leaders in social entrepreneurship: Exploring an African context. Business & Society, 2018, 57 (3): 481–524. doi: 10.1177/0007650315612070
    [4]
    Wang Z, Yan Y, L J. Relationship between entrepreneurial experience, opportunity identification and social enterprise performance. Journal of China University of Geosciences (Social Sciences Edition), 2019, 19 (2): 138–146. (in Chinese) doi: 10.16493/j.cnki.42-1627/c.2019.02.012
    [5]
    Cho S, Kim A. Relationships between entrepreneurship, community networking, and economic and social performance in social enterprises: Evidence from South Korea. Human Service Organizations Management, Leadership & Governance, 2017, 41 (4): 376–388. doi: 10.1080/23303131.2017.1279094
    [6]
    Liu G, Eng T Y, Takeda S. An investigation of marketing capabilities and social enterprise performance in the UK and Japan. Entrepreneurship Theory and Practice, 2015, 39 (2): 267–298. doi: 10.1111/etap.12041
    [7]
    Liu G, Takeda S, Ko W W. Strategic orientation and social enterprise performance. Nonprofit and Voluntary Sector Quarterly, 2014, 43 (3): 480–501. doi: 10.1177/0899764012468629
    [8]
    Liu Z, Cui L G, Yang J, et al. The institutional logics, legitimacy mechanisms and the growth of social enterprises. Chinese Journal of Management, 2015, 12 (4): 565–575. (in Chinese) doi: 10.3969/j.issn.1672-884x.2015.04.012
    [9]
    Bhattarai C R, Kwong C C Y, Tasavori M, et al. Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom. Journal of Business Research, 2019, 96: 47–60. doi: 10.1016/j.jbusres.2018.10.042
    [10]
    Wang Z, Zhou Y. Business model innovation, legitimacy and performance: Social enterprises in China. Management Decision, 2021, 59 (11): 2693–2712. doi: 10.1108/MD-05-2019-0678
    [11]
    Li S S, Huang Q H. Social entrepreneurship orientation, boundary-spanning search, and social enterprise performance: The moderating role of market environment. Science & Technology Progress and Policy, 2022, 39 (2): 60–69. (in Chinese) doi: 10.6049/kjjbydc.2021010376
    [12]
    Vanevenhoven J, Winkel D, Malewicki D, et al. Varieties of bricolage and the process of entrepreneurship. New England Journal of Entrepreneurship, 2011, 14 (2): 53–66. doi: 10.1108/NEJE-14-02-2011-B005
    [13]
    Sheng S, Zhou K Z, Li J J. The effects of business and political ties on firm performance: Evidence from China. Journal of Marketing, 2011, 75 (1): 1–15. doi: 10.1509/jm.75.1.1
    [14]
    Siebold N. Reference points for business model innovation in social purpose organizations: A stakeholder perspective. Journal of Business Research, 2021, 125: 710–719. doi: 10.1016/j.jbusres.2020.01.032
    [15]
    Liu Z Y, Zhuang X H. Quantitative research on social entrepreneurship: Literature review and research framework. R&D Management, 2018, 30 (2): 123–135. (in Chinese) doi: 10.13581/j.cnki.rdm.20180425.004
    [16]
    Wang J J, Zan D P, Chen S Y. The influence of dynamic capabilities and social ties on firm performances: An investigation of the moderated mediation effects. Journal of Industrial Engineering and Engineering Management, 2017, 31 (1): 39–49. (in Chinese) doi: 10.13587/j.cnki.jieem.2017.01.006
    [17]
    Xiong L, Xiong Q Y. The theoretical limitation and expansion path of resource-based view from the dynamic perspective. Enterprise Economy, 2014 (9): 45–48. (in Chinese) doi: 10.13529/j.cnki.enterprise.economy.2014.09.050
    [18]
    Leonard J, Higson H. A strategic activity model of Enterprise System implementation and use: Scaffolding fluidity. The Journal of Strategic Information Systems, 2014, 23 (1): 62–86. doi: 10.1016/j.jsis.2013.11.003
    [19]
    Burt R S. Structural holes and good ideas. American Journal of Sociology, 2004, 110 (2): 349–399. doi: 10.1086/421787
    [20]
    Hillman A J, Hitt M A. Corporate political strategy formulation: A model of approach, participation, and strategy decisions. Academy of Management Review, 1999, 24 (4): 825–842. doi: 10.2307/259357
    [21]
    Diao Y Z, Bai J K. Mechanism of business model innovation: A theoretical framework of systems thinking. Chinese Journal of Management, 2012, 9 (1): 71–81. (in Chinese) doi: 10.3969/j.issn.1672-884X.2012.01.013
    [22]
    Zott C, Amit R. The fit between product market strategy and business model: Implications for firm performance. Strategic Management Journal, 2008, 29 (1): 1–26. doi: 10.1002/smj.642
    [23]
    Yu X M, Zhang Q, Lai Z F. Chinese social enterprises in an international comparative perspective. Comparative Economic & Social Systems, 2011 (1): 157–165. (in Chinese)
    [24]
    Zeng P, Song T B. Exploring driving forces for business model innovation: The integrative perspective of internal and external factors. Chinese Journal of Management, 2014, 11 (7): 989–996. (in Chinese) doi: 10.3969/j.issn.1672-884x.2014.07.007
    [25]
    Mongelli L, Rullani F, Versari P. Hybridisation of diverging institutional logics through common-note practices − an analogy with music and the case of social enterprises. Industry and Innovation, 2017, 24 (5): 492–514. doi: 10.1080/13662716.2017.1302793
    [26]
    Jenner P, Oprescu F. The sectorial trust of social enterprise: Friend or foe? Journal of Social Entrepreneurship, 2016, 7 (2): 236–261. doi: 10.1080/19420676.2016.1158732
    [27]
    Wernerfelt B. A resource-based view of the firm. Strategic Management Journal, 1984, 5 (2): 171–180. doi: 10.1002/smj.4250050207
    [28]
    Grant R M. The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 1991, 33 (3): 114–135. doi: 10.2307/41166664
    [29]
    Barney J B. Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 2001, 27 (6): 643–650. doi: 10.1177/014920630102700602
    [30]
    Liu Y. Resource capability school in firm theory: From resource-base to dynamic capability. Marketing Management Review, 2020 (3): 174–175. (in Chinese) doi: 10.19932/j.cnki.22-1256/f.2020.03.103
    [31]
    Gu F F, Hung K, Tse D K. When does guanxi matter? Issues of capitalization and its dark sides. Journal of Marketing, 2008, 72 (4): 12–28. doi: 10.1509/jmkg.72.4.012
    [32]
    Liu D, Sun J, Wang P. Influence of social capital on the performance of agricultural e-commerce enterprises under the dynamic environment: The mediating role of dynamic capability. Science and Technology Management Research, 2021, 41 (20): 106–113. (in Chinese) doi: 10.3969/j.issn.1000-7695.2021.20.014
    [33]
    Huang Y, Tao Q Y, Meng M M. Social networks, resource bricolage and innovation performance of new venture. Technology Economics, 2017, 36 (10): 31–37, 106. (in Chinese) doi: 10.3969/j.issn.1002-980X.2017.10.005
    [34]
    Zhang X E, Zhang K. The impact of entrepreneurial orientation on new social enterprises performance: The mediating role of resource bricolage and moderating role of regulation. Science & Technology Progress and Policy, 2018, 35 (9): 91–99. (in Chinese) doi: 10.6049/kjjbydc.2017110653
    [35]
    Mair J, Martí I. Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 2006, 41 (1): 36–44. doi: 10.1016/j.jwb.2005.09.002
    [36]
    Easter S, Dato-On M C. Bridging ties across contexts to scale social value: The case of a Vietnamese social enterprise. Journal of Social Entrepreneurship, 2015, 6 (3): 320–351. doi: 10.1080/19420676.2015.1049284
    [37]
    Morrison C, Ramsey E, Bond D. The role of social entrepreneurs in developing community resilience in remote areas. Journal of Enterprising Communities People and Places in the Global Economy, 2017, 11 (1): 95–112. doi: 10.1108/JEC-02-2015-0020
    [38]
    Iqbal J, Kousar S, Ul Hameed W. Antecedents of sustainable social entrepreneurship initiatives in Pakistan and outcomes: Collaboration between quadruple helix sectors. Sustainability, 2018, 10 (12): 4539. doi: 10.3390/su10124539
    [39]
    Liu Z, Le G L, Li Z G. Double driving factors and the growth performance of social enterprises’ performance: The intermediary role of market legalization. Science of Science and Management of S.& T., 2016, 37 (9): 114–128. (in Chinese)
    [40]
    Tykkyläinen S, Ritala P. Business model innovation in social enterprises: An activity system perspective. Journal of Business Research, 2021, 125: 684–697. doi: 10.1016/j.jbusres.2020.01.045
    [41]
    Pattinson S. The Hextol Foundation: Building a sustainable social enterprise business model. The International Journal of Entrepreneurship and Innovation, 2020, 21 (1): 72–80. doi: 10.1177/1465750319879023
    [42]
    Leenders R T A J, Dolfsma W A. Social networks for innovation and new product development. Journal of Product Innovation Management, 2016, 33 (2): 123–131. doi: 10.1111/jpim.12292
    [43]
    Khwaja A I, Mian A. Do lenders favor politically connected firms? Rent provision in an emerging financial market. The Quarterly Journal of Economics, 2005, 120 (4): 1371–1411.
    [44]
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