Growth for the Common Good? Social enterprises’ growth process

Abstract

Social enterprises are expected to contribute to solving some of the most vicious problems of our time, including poverty, inequality and environmental threats. Thus, social enterprises need to tailor scalable operational models and solutions to match the scope of those problems. So far, not much help has come from academia, as the 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. Firm growth research is utilised as a reference point as it is a theoretically more mature research field. Prior studies on social enterprise growth have emphasised the distinctiveness of social enterprise growth, but separating these two domains of research may be unnecessary.

The study employs qualitative and quantitative research designs and longitudinal data from Finnish social enterprises. It addresses the following questions: Why do social enterprises pursue growth, what actually grows while they pursue growth and how is growth pursued? The findings call into question the dominance of social missions and social impact within the growth of social enterprises, showing that the financial aspects of growth play a role from formulation of growth-related goals to implementation of growth modes. Interestingly, this study found that social enterprises grow faster than commercial enterprises in a recession.

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. In addition, it provides insights for policy-makers and practitioners by increasing the understanding of how the pursuit of growth can facilitate the common good. 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.