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Measuring impact and creating change: a comparison of the main methods for social enterprises

Measuring impact and creating change: a comparison of the main methods for social enterprises
Measuring impact and creating change: a comparison of the main methods for social enterprises

Purpose: There is currently a wide range of methods for measuring social impact. Each method uses specific indicators, mainly because of the diverse characteristics of social enterprises (SEs) and the type of impact that is analysed, thus hindering the definition of a single, shared measurement system and, at the same time, prompting the proliferation of countless alternative methods. Many enterprises experience difficulties in selecting the best method to carry out the measurement process correctly. The purpose of this paper is to contribute to filling in conceptual gaps inherent to measuring impact and value creating in the domain of social entrepreneurship (SE), as well as equipping the social entrepreneur with better knowledge of the methodologies available for measuring impact and supporting their decision-making process. Design/methodology/approach: The aims of this paper are, therefore, threefold: to identify the common conditions of how to measure social impact (literature); to analyse how measurement is actually undertaken in practice (process); and to compare the four main methodologies, among the numerous ones, that have been developed to measure the impact generated by SEs so far (methods and comparison). The authors compared four of the most commonly used methodologies in the field of social impact measurement, analysing advantages, disadvantages and application fields. They evaluated whether a method can be considered preferable to others in each case. Findings: The paper demonstrated the high fragmentation that characterised the existing literature concerning the measurement of social impact and the wide range of methodologies used, thus leading to a great confusion in regard to the selection of the most appropriate methodology for the pursuit of one's own ends. This often discourages the undertaking of the measurement process. The analysis used in this paper leads us to conclude that the social return on investment method is more popular than the other three alternatives. Research limitations/implications: There are significant deficiencies in methodologies adopted, and researchers must use innovative, situated approaches that fit with the SE literature. The authors concluded that for the future, there is a need to do a SLR in a disciplined way. Further research is strongly recommended in this area, to provide more comparative studies of existing methods. It is hoped that enterprises can be directed towards using a limited range of formal methods that can capture the diversity of the various application cases, thus making it possible to compare different situations: a limited range of formal methods that can capture the diversity of the SEs considered and the impacts generated will be promoted. Practical implications: The authors also want to analyse how the SEs concretely realise the measurement of their impact that often do not use the formal methodologies presented in the literature but rather tools created by the ad hoc companies on the basis of their specific needs. Originality/value: This paper makes a theoretical contribution to the literature of the theory on social value within the SE field by having regard to how to measure social impact. It partially responds to Choi and Majumdar’s (2014) and Hlady-Rispal and Servantie’s (2016) calls for the development of a theory of measuring social value.

Measurements, Measuring, SROI, Social enterprise, Social entrepreneurship, Social impact, Social value creation
1472-0701
Costanzo, Laura
bce28c22-8b70-4176-b523-4e2f59169baf
Perrini, Francesco
f87a36bb-8b9f-46dc-a5a4-56c866ad93c4
Karatas-Ozkan, Mine
f5b6c260-f6d4-429a-873a-53bea7ffa9a9
Costanzo, Laura
bce28c22-8b70-4176-b523-4e2f59169baf
Perrini, Francesco
f87a36bb-8b9f-46dc-a5a4-56c866ad93c4
Karatas-Ozkan, Mine
f5b6c260-f6d4-429a-873a-53bea7ffa9a9

Costanzo, Laura, Perrini, Francesco and Karatas-Ozkan, Mine (2020) Measuring impact and creating change: a comparison of the main methods for social enterprises. Corporate Governance. (doi:10.1108/CG-02-2020-0062).

Record type: Article

Abstract

Purpose: There is currently a wide range of methods for measuring social impact. Each method uses specific indicators, mainly because of the diverse characteristics of social enterprises (SEs) and the type of impact that is analysed, thus hindering the definition of a single, shared measurement system and, at the same time, prompting the proliferation of countless alternative methods. Many enterprises experience difficulties in selecting the best method to carry out the measurement process correctly. The purpose of this paper is to contribute to filling in conceptual gaps inherent to measuring impact and value creating in the domain of social entrepreneurship (SE), as well as equipping the social entrepreneur with better knowledge of the methodologies available for measuring impact and supporting their decision-making process. Design/methodology/approach: The aims of this paper are, therefore, threefold: to identify the common conditions of how to measure social impact (literature); to analyse how measurement is actually undertaken in practice (process); and to compare the four main methodologies, among the numerous ones, that have been developed to measure the impact generated by SEs so far (methods and comparison). The authors compared four of the most commonly used methodologies in the field of social impact measurement, analysing advantages, disadvantages and application fields. They evaluated whether a method can be considered preferable to others in each case. Findings: The paper demonstrated the high fragmentation that characterised the existing literature concerning the measurement of social impact and the wide range of methodologies used, thus leading to a great confusion in regard to the selection of the most appropriate methodology for the pursuit of one's own ends. This often discourages the undertaking of the measurement process. The analysis used in this paper leads us to conclude that the social return on investment method is more popular than the other three alternatives. Research limitations/implications: There are significant deficiencies in methodologies adopted, and researchers must use innovative, situated approaches that fit with the SE literature. The authors concluded that for the future, there is a need to do a SLR in a disciplined way. Further research is strongly recommended in this area, to provide more comparative studies of existing methods. It is hoped that enterprises can be directed towards using a limited range of formal methods that can capture the diversity of the various application cases, thus making it possible to compare different situations: a limited range of formal methods that can capture the diversity of the SEs considered and the impacts generated will be promoted. Practical implications: The authors also want to analyse how the SEs concretely realise the measurement of their impact that often do not use the formal methodologies presented in the literature but rather tools created by the ad hoc companies on the basis of their specific needs. Originality/value: This paper makes a theoretical contribution to the literature of the theory on social value within the SE field by having regard to how to measure social impact. It partially responds to Choi and Majumdar’s (2014) and Hlady-Rispal and Servantie’s (2016) calls for the development of a theory of measuring social value.

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Accepted/In Press date: 22 July 2020
e-pub ahead of print date: 9 September 2020
Published date: 9 September 2020
Keywords: Measurements, Measuring, SROI, Social enterprise, Social entrepreneurship, Social impact, Social value creation

Identifiers

Local EPrints ID: 451224
URI: http://eprints.soton.ac.uk/id/eprint/451224
ISSN: 1472-0701
PURE UUID: a016b415-6f70-4b76-9c4d-13971cf56012
ORCID for Laura Costanzo: ORCID iD orcid.org/0000-0002-7197-6778
ORCID for Mine Karatas-Ozkan: ORCID iD orcid.org/0000-0002-9199-4156

Catalogue record

Date deposited: 14 Sep 2021 18:47
Last modified: 23 Jul 2022 02:08

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Contributors

Author: Laura Costanzo ORCID iD
Author: Francesco Perrini

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