Description of the topic

The transition to a circular economy requires a fundamental redesign of business-to-business collaboration, moving beyond conventional business practices. In this search towards partnerships beyond traditional stakeholders, social enterprises may prove to contribute to improving long-term resilience of businesses and benefiting society as a whole (Ziegler et al., 2023). In this work, we focus on the collaboration between businesses and Work Integration Social Enterprises (WISEs). WISEs are hybrid organisations that provide job opportunities for people with a distance to the labour market. As social enterprises, WISEs pursue a social mission while sustaining their operations through commercial activities (Battilana et al., 2015). As WISEs include and empower workers that would have been unemployed or inactive otherwise, they contribute to a just transition (Purvis et al., 2023) and a circular society (Jaeger-Erben et al., 2021).

In policy documents WISEs are referred to as an interesting value chain partner to support the transition towards a circular economy and society, offering manual labour that is deemed crucial to organise circular value chains at a regional level (OECD and Commission, 2022). In many countries, WISEs are strongly embedded in business-to-business markets in global value-chains (Defourny and Nyssens, 2021a, 2021b). Recent research sustainable growth paths for WISEs in a circular transition shows that this strong embeddedness can act both as an enabler to redesign business-to-business collaboration towards circularity, as well as a threat for WISEs that are locked-in in linear economic activities (Van Opstal et al., 2024).

In 2022, the Flemish government (Belgium) funded the creation of 14 ‘social circular hubs’ that aim to support the collaboration between manufacturing companies and WISEs to enable a circular transition. While circular hubs have been established earlier in Europe as accelerators for startups or industrial networks to create symbiosis (Aarikka-Stenroos et al., 2021; Tsui et al., 2024), there is little or no empirical evidence on what these social circular hubs should do to support companies. Moreover, there is little to no empirical evidence that evaluates early experiences of this kind of hubs. This research is relevant for policymakers and entrepreneurial ecosystem designers from governments, sectoral federations, or industry networks, to identify synergies between companies and WISEs to foster a circular transition, and to construct initiatives that may foster and redesign the collaboration between both actors.

Research questions

In this paper, we address the following research questions:

• RQ1: How can a collaboration with WISEs support companies in their shift towards a CE?
• RQ2: What would be relevant value propositions of social circular hubs to enable companies and WISEs to redesign their businesses from linear to circular activities?
• RQ3: What are the main lessons from early experiences of social circular hubs?

The first research question addresses a research gap concerning a lack of critical studies on the potential contribution of WISEs to a circular transition and the boundary conditions to provide a sustainable contribution. The second and third research questions offer novel insights from social circular hubs as a unique format to foster the collaboration between businesses and WISEs. As this could be an inspiring example for other regions, it deserves a critical analysis for inform policymakers and civil society organisations that are willing to replicate this model.

Methods

In this research, we apply a mixed method approach. We use insights on the activities from social circular hubs by means of document analysis and semi-structured interviews with these hubs, policymakers, and stakeholders from the ecosystem they operate in, including WISEs and (federations of) companies. Furthermore, we conducted a survey among enterprises in Flanders (Belgium) engaging in the adoption of circular strategies (n=115), to learn about their barriers towards a circular transition, how they envision or experience collaborating with WISEs, and how social circular hubs could address their needs. This survey included questions on personal characteristics, company characteristics, roles of the respondent in their company, barriers, and enablers, allowing for multivariate statistical analysis and fsQCA. We complement this with insights from balance sheet data from WISEs and companies in the industries that are served by WISEs, stemming from the Belfirst database. From a theoretical perspective, we apply insights from market failure theory (Jaffe et al., 2005; Siderius and Zink, 2023), capability theory (Khan et al., 2020; Teece, 2007), and sustainable business model experimentation (Bocken et al., 2019, 2018).

Results

In this extended abstract we present some preliminary results. Survey results show that 49% of our sample already collaborates with WISEs and another 26% is interested in doing so. There is also a strong positive relationship between already collaborating with WISEs and the willingness to hire vulnerable groups at the labour market themselves. We tend to coin the concept of a ‘contact hypothesis’ regarding the direct or indirect employment of target groups, of which the directionality will be further investigated.

As our sample consists of frontrunners regarding the social circular economy, we asked what WISEs can do for companies in their shift towards a circular economy. Geographical proximity is considered a major asset by a 62% of all respondents. Interestingly, a lack of ability to perform complex task is considered a (major) disqualifier by 31% of the respondents, while being considered an asset by 25% of the respondents. Bivariate Kruskal-Wallis tests do not show significant differences between companies that already collaborate, those who are interested to do so, and those who are not interested, showing no specific experience effects. In general, Poisson regression results (not included in this abstract) show a positive relationship between the number of CE strategies companies aspire to implement, and the prevalence of collaborating with WISEs. This result is in line with earlier research on the willingness of circular startups to collaborate with WISEs (Van Opstal and Borms, 2024).

Concerning the value propositions of social circular hubs, preliminary results show that companies mostly value platforms to share best practices and lessons learned, the referral to specific experts, assistance in preparing subsidy applications for innovation and collaboration subsidies, and matchmaking between companies. In the full paper we develop boundary conditions necessary to build compelling value propositions based on these needs. As many of these needs are very generic and go beyond the opportunity to collaborate with WISEs. Therefore, in the paper (and presentation) we will present a critical analysis on the effective added value of social circular hubs on top of what is already available to companies in their supporting ecosystem.

We also report Probit regression results on the profiles of respondents indicating a broad set of specific needs to succeed adopting circular strategies. Companies who already collaborate with WISEs report a lower need to matchmaking, while WISEs themselves feel a stronger need for matchmaking activities. Additionally, female respondents and respondents who own their company are more interested in matchmaking. Companies who are considering collaborating with WISEs are more interested in support on circular procurement and finance. Manufacturing companies feel a lower need to share best practices, but welcome circular procurement support more often. Moreover, companies who face difficulties in managing core processes, such as production and logistics, feel a lower need to engage in matchmaking, referral to experts, and finance. Companies facing difficulties in supporting processes, such as HR, marketing, and finance, show a higher need on product design support. Interestingly, the higher the number of barriers companies indicate for a circular transition, the higher the need for all kinds of support. Likewise, company owners indicate a higher interest in most activities of social circular hubs. Also interestingly, we found no difference between startups and incumbents in this respect. In the paper (and presentation), we will likewise present fsQCA results, helping to identify necessary and sufficient conditions, which will be complemented with insights from interview data.

Early lessons from the 30 months social circular hubs exist show critical design implementation gaps and a lack of alignment in governance and business models between social circular hubs. This stems from the wide variety of initiative takers that applied for an accreditation as a social circular hub, each representing an extensive array of regionally embedded stakeholders but resulting in suboptimal internal and dynamic economies of scale. Moreover, social circular hubs have been able to attract the relevant supporting ecosystem for WISEs but was not able yet to connect to major industrial players. Therefore, this research will contribute with a critical assessment of what is and what is not necessary to build compelling value propositions toward all relevant stakeholders to succeed in effectively supporting the redesign of business-to-business processes from a systemic perspective.

References

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1. Introduction

The growing role of social enterprises in addressing social issues and concerns in society is debated with increasing passion in the academic and practitioner communities (European Commission, 2020; Hietschold et al., 2023; World Economic Forum, 2024). A key component of this debate is the measurement of the social impacts generated by such organizations, defined as “those significant or lasting changes in people’s lives, brought about by a given actor or series of actions” (Roche, 1999, p.21). Measuring social impact is increasingly perceived as a fundamental step towards societal recognition of these organizations and of their tangible contribution to individual and collective wellbeing (Beer & Micheli, 2018). But the idea of the centrality of the measurement of social impact is still accompanied by uncertainties about what to measure and how to do it (Nicholls, 2009; 2018; Ormiston, 2019). More generally, there is insufficient clarity on the wider role and purpose of social impact measurement, as the debate tends to be limited to the technical aspects of the many existing formal methodologies and their traditional accountability dimension (Ebrahim, 2003; Ebrahim & Rangan, 2014; Lall, 2019; Maas & Liket, 2011; Nicholls, 2009). In such context, several influential academic voices have highlighted the contested nature of social impact measurement (Choi & Majumdar, 2014; Emerson, 2003; Mair & Marti, 2006) and the need for further academic enquiry (Battilana & Lee, 2014; Rawhouser et al., 2019; Saebi et al., 2019).

In order to contribute to the debate on the conditions of a wider and more conscious application of social impact measurement towards the societal recognition of social enterprises this paper originally explores the links between its potential multiple roles and the expected outcomes of such organizations.

Social entrepreneurship and institutionalist scholars have widely investigated how social entrepreneurs generate social change, where this last is defined as “the impact on values, institutions and patterns of behavior brought by the constant activity of individuals and groups attempting to organize their lives around systematic sets of contending ideals” (Ney et al., 2014, p.53). Social entrepreneurs can bring “catalytic change” by challenging complex social problems, making use of their credibility as a resource and generating followers’ commitment inspired by their social values (Waddock & Post, 1991): while there appears to be an established literature on the links between social entrepreneurs as institutional entrepreneurs and social change, it can be argued that the systematic relationships between social impact measurement in the social entrepreneurship context and social change remain currently unexplored.

Social impact measurement is in this paper investigated in the wider context of social enterprises, one of the most original and promising forms of social innovation (Phills et al., 2008): characterized by “the pursuit of sustainable solutions to neglected problems with positive externalities” (Santos, 2012, p.343), they originally match the commercial and social dimensions (Battilana & Lee, 2014; Doherty et al., 2014; Mair & Marti, 2006; Smith & Besharov, 2019) and represent an ideal type of hybrid organizations, given their exposure to external and internal tensions (Battilana & Lee, 2014). The hybridity concept is rooted within the institutional literature and in particular within the idea of multiple institutional logics (Besharov & Smith, 2014), defined as those “socially constructed, historical patterns of material practices, assumptions, values, beliefs and rules by which individuals produce and reproduce their material subsistence, organize time and space and provide meanings to their social reality” (Thornton & Ocasio, 1999, p.804).

Within the general frame of the institutional theory, social impact measurement and its relationship with social change can be effectively studied as an example of institutional work, an important construct of the institutional theory, defined as “the purposive actions of individuals and organizations aimed at creating, maintaining and disrupting institutions” (Lawrence & Suddaby, 2006, p.215). The adoption of such theoretical lens allows to introduce the perspective of the individuals in their agency towards institutions and to concentrate the attention on the mechanisms suitable to bring social changes.

Within such theoretical framework and the identified gaps, this paper intends therefore to explore how the multiple roles and functions of social impact measurement in the context of social enterprises might contribute to social change at different levels, by offering an answer to the following research question: “How do social entrepreneurs use social impact measurement as institutional work to generate social change?”.

The importance of such research resides in the attempt of shifting the academic and practitioner debate around social impact measurement from the technicalities of its implementation to the theoretical and practical reasons that at societal and organizational level help justifying its more extensive and convinced adoption.

The practice and phenomenon of social impact measurement is observed and analysed via a qualitative inductive study in the context of Italian social cooperatives, a widespread type of social enterprises, and on its potential of being a catalyst for social change. Initially relevant in the not-for-profit domain, mainly as a result of pressure from funders (Arvidson & Lyon, 2014; Ebrahim & Rangan, 2014) and from not-for-profit leaders and social entrepreneurs (Ebrahim & Rangan, 2010), it is now also affecting the entire for-profit sector, where it connects with the debates on corporate social performance (Wood, 2010) and its impacts on organizations’ financial performance (Margolis et al., 2009). Scientific investigations which help to advance conceptualisations and practices of social impact measurement can therefore provide valuable insights into modern enterprises’ quest for social legitimation.

2. Method

Data collection. In an effort to provide a comprehensive answer to the above research question, this study adopts a qualitative inductive approach based on the idea that social impact measurement is a socially constructed phenomenon (Nicholls, 2009; Paton, 2003). The overall methodology is designed with the aim of better understanding and explaining the experiences of those who, at different levels, measure and are being measured within social cooperatives: 54 semi-structured interviews with internal and external stakeholders of selected Italian social cooperatives, and nine days of participant observations of five selected organizations that generated 43 pages of field notes, complemented by the analysis of 15 social reports, have offered abundant material to build a qualitative inductive analysis and support the proposed contributions.

Sampling. This paper focuses on Italian social cooperatives, the most represented type of social enterprises, as they are descendants of the rich Catholic and socialist traditions in a country where over the last 40 years they have been playing a key role in remedying the weaknesses of a troubled welfare system. Italy has been chosen as the research context for the large number of organizations registered as SC (14,984 in 2020) (ISTAT, 2022) and the rich history of social cooperation, capable of filling the gaps between the demand and supply for social services (Borzaga et al., 2017). Even more importantly, Italy displays an advanced legislative framework (Carnini Pulino et al., 2019), culminating with the so-called Reform of the Third Sector (Law 106/2016).

The choice of the subjects of study has been initially performed at different levels (individual, organizational and collective) and, consistently with the research design selected, has been driven by the idea of theoretical rather than random sampling (Eisenhardt, 1989; Glaser & Strauss, 1967). The original sampling idea, considering the nature of the research question, was to target those social cooperatives that ensured a minimum size, a defined organizational structure, and a visible approach to impact measurement. It was also important to try to identify organizations that could ensure a varied composition of the sample, in terms of the typology of the organization (type A, type B and type A+B social cooperatives and consortia), of the geographical position (North, Centre and South of Italy) and in terms of size. This was meant to create a sufficiently diverse composition of the sample allowing further considerations about the influence of such variables on the impact measurement progress and strategy. The respondents, initially limited to the leadership level of the selected organizations, have been later extended to the middle management level and to external stakeholders.

Data analysis. Data analysis followed an inductive approach designed to contribute towards theory building. Given the nature of the data, in most of the cases this entailed the reading and interpretation of the subjects’ measurement experiences for comparisons and progressive associations in more complex constructs. An inductive approach to qualitative data allows “research findings to emerge from the frequent, dominant or significant themes inherent in raw data, without the restraints imposed by structured methodologies” (Thomas, 2003, p.2).

In practical terms the collected data were analysed by applying the Gioia methodology (Gioia et al., 2013) to move from first order concepts to second order themes and then defining aggregate dimensions, which are the basis of theorization. Having in mind the questions “what is the respondents’ understanding about their organizations’ path to social change” and “what are their personal experiences about the role of social impact measurement?” the interview transcripts, the field notes and the selected social reports were initially analysed by identifying first order concepts, highlighting both recurring and unusual statements and attributing them an initial label, rigidly preserving the respondents’ language and expressions.

The following phase, moving to second order themes, which respond to the question “why is this happening?” and to aggregate dimensions, has seen the author’s intervention in progressing to further regrouping, paying attention to the meaning of what is proposed by the respondents and attributing novel labels. At this stage, adopting an abductive approach, it has been useful and necessary to go back to the academic literature to compare the emerging findings and the use of certain categories.

3. Findings

Findings derived from the qualitative data, participant observations and reports have been organized around three key themes: the institutional work of social impact measurement can be understood via the exploration of its different roles, the intended social changes that may be enacted by it and the different mechanisms that connect them.

Roles of social impact measurement. The considerations of the cooperatives’ respondents regarding their understanding of social impact measurement unveiled its multiple roles, touching different aspects of their reality: looking at their nature and the target audiences and going beyond the technicalities of the implementation of the relevant systems, it has been possible to regroup social impact measurement into four roles: as strategic compass (when used to explain and replicate success or to guide strategic decision making), dynamic enabler (when used as an opportunity for self-reflection or contribute to social planning), external ambassador (via the communication of social data or social reports), and internal connector (as it might foster a sense of belonging or respond to internal measurement needs).

Intended social changes. The data extracted from the interviews, field notes and social reports offered the opportunity to go further and explore the consequences in terms of social changes that the identified social impact measurement roles are capable to elicit. Such intended changes, defined as those modifications intentionally produced to improve the wellbeing of communities of different levels and sizes, are investigated in their relationship with social impact measurement and regrouped, considering their nature and reach as, individual changes addressed to employees and shareholders, cultural changes addressed to local communities, organizational changes addressed to private companies and foundations and institutional changes addressed to public authorities and policymakers. The social changes under consideration are “intended” as the analysis of the actual effects of such expanded roles of social impact measurement falls beyond the scope of this paper and requires a different set of supporting evidence.

Mechanisms of institutional work. The proposed expansion of potential roles for social impact measurement helps identifying social entrepreneurs as change agents: by introducing social impact measurement systems in their organizations, they are both “initiating divergent changes and actively participating to their implementation” (Battilana et al., 2009, p.68), identifying a specific social impact measurement role as a function of the group of beneficiaries that they intend to target (for example, adopting internal connection strategies when targeting individuals within their organizations or external ambassador ones when targeting authorities or local communities).

In performing such activity of identifying the appropriate role of social impact measurement instrumental to defined social changes, social entrepreneurs embark in institutional work. The relevant emphasis on the role of individuals and on their agency towards institutions (Lawrence et al., 2011) is fully reflected in the biographies of the social entrepreneurs and of the members of their senior management teams that have offered valuable inputs for this research and have shared with the author the impressive mark of their passion and dedication: looking at the institutional work constitutive elements (Hampel et al., 2017), it is the agency of those individuals that has historically favoured the conditions for the creation and the development of social enterprises and social cooperatives and it is by their constant practice that the relationship with institutions (in the case at hand in particular the public healthcare institutions) gets challenged and revisited over time.

The reference to institutional work in relation to the multiple roles of social impact measurement is also instrumental to a clearer theoretical framing of the mechanisms that produce the above identified social changes. Building on those studies that have illustrated how social entrepreneurs use visuals and words to elicit emotions that might ultimately translate in social changes (Barberá-Tomás et al., 2019), how middle managers’ activities of sensemaking and sensegiving can be instrumental to the generation of social change (Sharma & Good, 2013) and more generally how actors change institutions via processes of vision creation and resources mobilization (Battilana et al., 2009), it is possible to extract from the above data on roles of social impact measurement and intended social changes the mechanisms that connect innovative uses of social impact measurement with desired change effects on multiple publics, enriching the theory of institutional work. Social changes within different audiences can therefore be elicited first by sharing with the target audiences the vision and values inspired by a more aware and intentional use of social impact measurement (the social role of the organization and values of inclusion and solidarity) together with the tangible benefits deriving from it (processes efficiency and internal cohesion). Second, social entrepreneurs and middle managers have to focus on the activities to effectively convey such vision and benefits, making use of discourse, past examples, achievements and emotions and building networks of alliances to strengthen their communication. Building on Hampel et al.’s (2017) typology of means used within institutional work to achieve institutional objectives (symbolic, material and relational), the observed mechanisms associated with the use of social impact measurement and enacted by social entrepreneurs configure a surprisingly rich variety of contexts (acting towards internal and external stakeholders) and levels (engaging individuals, organizations and higher level institutions) in a constantly changing mix between different means.

Framing such innovative uses of social impact measurement within the institutional work realm allows the impact measurement research to benefit of the past studies in relation to the targets, the actors and the means that such activity involves, while at the same time enlarging its perspective from a pure technical implementation exercise to a broader debate on the multilevel uses of it. Social impact measurement acts within the social cooperative organizations at their highest level, by informing their key strategic decisions (on their products/services offer or on their overall vision), but also at lower levels by stimulating critical process improvements or practices of active participation: the matching of such different perspectives, creates the ideal conditions for a smooth implementation of social impact measurement, not obscurely imposed from the top but shared and supported at all levels.

Finally, interpreting social impact measurement as institutional work discloses its potential as a way to address the competing institutional logics (Reay & Hinings, 2009; Smith et al., 2013) that are typical of the social enterprise context.

4. Conclusion and expected contributions

This paper shows that social impact measurement can be considered as a form institutional work when its catalytic role towards social change is emphasized. Such conclusion highlights the individual agency of those that in socially oriented organizations measure and are measured.

This paper offers therefore one theoretical and one practical contribution. Theoretically, it brings empirical evidence of the multiple roles of social impact measurement, contributing to the academic discussion about how social changes brought by novel forms of institutional work happen (Hietschold et al., 2023; Mair & Marti, 2006; Ney et al., 2014; Stephan et al., 2016). Practically, in line with the idea that businesses have to go beyond compliance and regulations in the pursuit of societal wellbeing, it identifies the organizational pre-conditions and the paths available to social enterprises, and potentially to for-profit organizations, to creatively adopt social impact measurement practices towards the improvement of society as a whole.

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Sustainability scholars have traditionally focussed on global and national governance spheres, but the increase of “localism” means that subnational governments and local governance—including local businesses—are also becoming an integral part of these systems. Drawing on an ethnographic case study of a rural county in the South-West of England, we examine how the concept of place impacts local sustainability governance. We contribute by: (1) demonstrating how local sustainability governance is part of broader multilevel governance systems, in which governance divisions happens along place-based lines rather than public-private spheres; (2) theorising how local sustainability governance is different because of its “local pragmatist” approach, emphasizing problem-solving, deliberation, creative action, and experimentation between local businesses, governments and civil society; and (3) explaining how local sustainability governance can alters the initial ‘sense of place’ through collective place-forming, bridging insights from geography studies. Our contributions help to complete the picture of sustainability governance and sketches an alternative, place-based governance system to enhance the resilience of societies and economies in the face of sustainability challenges.

Our understanding of how businesses deal with sustainability tensions has largely been derived from the perspective of large firms, neglecting SMEs and sustainability-driven enterprises. To narrow this gap, we examined how sustainability-driven entrepreneurs cognitively deal with the sustainability tensions that their firms face. Undertaking a qualitative study of ten sustainability-driven ventures in the UK, we identified two distinct strategies for managing tensions. First, entrepreneurs employ linear sensemaking when dealing with straightforward sustainability tensions, utilizing clear and focussed strategies. Secondly, entrepreneurs engage in elaborate, open-ended sensemaking for more ambiguous tensions, which requires more time and an adaptive approach. These strategies involve different processes of scanning, interpreting and learning, highlighting the varied approaches entrepreneurs take to navigate sustainability challenges.

This study examines the role of Corporate Social Responsibility (CSR) in advancing financial inclusion for Bottom of the Pyramid (BOP) entrepreneurs in Bolivia, essential for the economic development of emerging markets. BOP entrepreneurs encounter significant barriers to accessing financial resources, often due to limited networks and support. The research investigates how CSR initiatives can enhance financial inclusion by providing tailored financial services and fostering supportive ecosystems.

Recognized as a strategic framework for financial institutions, CSR enables businesses to fulfill ethical obligations while enhancing access to economic resources for marginalized groups (Carroll, 2016; Chikweche & Stanfield, 2018). This study employs Shared Value Theory (Porter & Kramer, 2019) to argue that businesses can generate economic value by addressing social challenges, resulting in mutual benefits.

Utilizing qualitative methods, the research will involve interviews with financial institutions and BOP entrepreneurs to explore key themes including CSR definitions, initiatives, impact measurement, and challenges. This research aims to clarify the effective role of CSR in fostering economic empowerment and address systemic challenges in financial inclusion.