Core2H – Social Entrepreneurship
Oct 22nd, 2021
Strategic management for social
enterprise
Tony Bradley
Lecturer in Social Economy & Business Sustainability
Strategic Management for
Social Enterprise
Issues of Strategic Management
“In the day-to-day running of an organization it is easy
to lose focus on the bigger picture. Strategy is about the
bigger picture: the context you work in, the needs of
your users, the passion of your staff and volunteers and
your desire to do things differently” (Sharp et al, 2007)
“The aim of strategic management is to articulate a
desired future state for the organization and be proactive
in implementing actions to bring it about” (Doherty et
al, 2009, p55)
The Strategic Management functions
We can identify 6 overarching functions for socents in their
strategic management:
1. Strategic Development
2. Developing Vision & Mission
3. Determining the current Strategic Position
4. Developing Objectives & Strategic Plans
5. Implementing Strategies
6. Measuring Performance
Some of these functions will be examined in greater detail later in the
Module. Here we focus on some specific issues facing socents.
Strategic Development
 Defining, elaborating and connecting values to business sustainability





is a particular challenge for socents – values-led, market-driven
(Westall, 2001)
Managing the profile and nature of the workforce, especially in relation
to engagement of volunteers and interested stakeholders
Strategic development is often constrained by contracts, requirements
of grant providers/ donors, so need to move towards market selfdetermination (see SEUK)
Democratisation of structures can lead to confusion of leadership,
conflicts over strategic direction and indecision e.g. Co-op Bank, 2013
Social missions can change according to circumstances and the actions
of state authorities
Balancing social, environmental and commercial objectives inevitably
creates challenges for strategic development.
Developing vision & mission
 This relates to how identity is translated into operational processes (Young,




2001)
Defining organisational identity: “who we are as a business amd
organisation” is vital – this can be particularly challenging in periods of
“succession management” from charismatic founders to more normal
operational times e.g. Body Shop, after Anita Roddick’s handover and
subsequent death.
Utopian ideas about ‘fairness’, ‘justice’ and ‘social need’ have to be
operationalised and converted into sustainable business practices.
‘Mainstreaming’ cf Fair Trade USA can create serious divisions in
organisations and movements, where some believe that core values have
been diluted or compromised.
Maintaining a clear mission focus can become difficult in times of marketbased change, growth in size or arrival of new senior managers/ owners.
Determining the current strategy
 This requires evaluation of the external operating environment and





internal resource capabilities – to determine ‘strategic fit’.
Again, focus can be on satisfying sources of funds more than
orientation to the (social) market-place – which is an inherent tension.
According to Jackson & Irwin (2007) the 12 most common evaluative
tools are most often directed towards assessing the needs of funders
and donors.
Simple techniques, such as SWOT analysis are usually based on highly
subjective analyses and require considerable refinement, if they are to
be fit in a commercial environment.
A reformed SWOT analysis can provide a more rigorous tool. But it will
rarely meet the requirements of refined accounting procedures.
Translating key issues into precisely prioritized objectives can be very
hard for many socents.
Developing objectives
 Overly rationalised processes for objective-setting are, frequently, avoided




by socents because they are perceived as conflicting with ‘social
embededness’.
Multi-stakeholder co-ordination is required to develop processes whereby
objectives are iteratively developed in pursuit of common vision and
mission.
The drive from dependence on funders to financial autonomy, based on
market ‘sales’ shifts from stakeholder power to performance profiling.
One strategy is to seek co-operative business development with other
similar companies e.g. Fair Trade Foundation, so that there is an increasing
activity to transform the marketplace. (cartel formation?)
Use of for-profit management approaches, such as Ansoff and TOWS
matrices emphasises a trade-off between efficiency and differentiation,
with internal growth in learning and development, rather than size and
profit.
Implementing Strategy
 Whilst there is a theoretical distinction between ‘planned’ and




‘emergent’ approaches to implementing change, most strategic change
involves a mix of both.
But socents are more likely to be strongly influenced by ‘bottom-up’
pressures and ‘viral change’, because of the relatively greater
democratic nature of their organisations.
Further, external stakeholder pressures can be far greater in socents,
despite the lack of influence by changes in fluctuating markets.
Often socents (consider they) lack specialist change management skills
and, hence, bring-in external specialists to help implement strategic
change.
Consequently, change managements is usually a dialogic, processual
conversation about change, unfolding over a series of steps. This can
give the impression that socents are slow to change and/ or risk averse.
Measuring Performance
 Performance measurement and appraisal is made difficult by the




multiplicity and, potentially, conflictual nature of alternative objectives –
between profit, people and planet.
Since strategic evaluation is often related to adherence to values it is often
difficult to assess the degree to which conformity is beuing maximised.
Measurement tools – as we’ll see in later sessions on social value/ impact
estimation – vary widely, from highly quantitative CBA frameworks to
more ‘anthropological’ models that view measurement as a function of
culture and what an organisation chooses to measure itself against.
This makes objective comparisons of the relative efficiency and
effectiveness of socents difficult to estimate.
Mike Bull (2007) has, for example, developed a modified ‘balanced
scorecard’ approach that takes much greater account of ‘organisational
learning’, ‘internal activities’, the ‘stakeholder environment’ and triple
bottom-line returns.
Conclusions
 The specific contexts, dynamics and objectives of
socents mean that many of the standard strategic
management approaches and tools used in the
corporate world seem unsatisfactory to helping third
sector organisations to assess their performance.
 In particular, the co-operative, democratic and valuesbased nature of socents mean that they are averse to
occupying the same type of competitive space that
characterises so many traditional businesses.
 The question, which we’ll pick-up further next session
is whether or not this represents a failure or an
example of new businesses for a new century.
Select References
Alter, K. (2007) Social enterprise typology. www.virtueventures.com/typology, version 1.5, published 27
November
Berglund, K. and Wigren, C. (2011) Societal entrepreneurship – the shaping of a different story of
entrepreneurship, Tamara Journal of Critical Organization, 10, 1, 9-22
Bull, M. (2007), “Balance”: the development of a social enterprise business performance analysis tool,
Social Enterprise Journal, 3, 1, 49-66
Defourny, J. (2001) ‘Introduction: from third sector to social enterprise’, in C Borzaga & J Defourny
(eds.), The emergence of social enterprise, London: Routledge
Doherty, B. et al., (2009), Chapter 3, Strategic management for social enterprises, in Management for
Social Enterprise, London: Sage
DTI (2002) Social enterprise: a strategy for success, London: HM Treasury
Jackson, A. and Irwin, D. (2007), Tools for strategic planning: what works best, Performance Hub,
available at: www.performancehub.org.uk
Ridley-Duff, R. & Bull, M. (2011) Understanding social enterprise – theory and practice, London: Sage
Sharp, C. et al., (2007), Successful strategies: real learning from real experiences, Performance Hub,
available at: www.performancehub.org.uk
Spreckley, F. (2008) Social audit toolkit, 4th Edn., Hereforshire: Local Livelihoods