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Business model innovation in social enterprises: An activity system perspective

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  • Tykkyläinen, Saila
  • Ritala, Paavo

Abstract

Social enterprises aim to create both social and financial value, requiring the creation of business models that allow both objectives to be pursued simultaneously. However, the tensions between these objectives can make this a challenging task in terms of issues such as mission drift and commercial failure. Our multiple case study of seven social enterprises operating in Finland examines business model innovation in social enterprises from an activity system perspective to identify different patterns of activity through which social and financial goals are developed, discarded, and reconfigured. We find that the process involves variety of hybrid logics, with both sequential and parallel combinations of social and financial value, as well as gradual and discontinuous progressions. The findings also provide evidence of how social and financial goals guide the strategic framing of the business model in social enterprises by setting mutually constraining boundary conditions, restricting or guiding opportunities for business model innovation.

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  • Tykkyläinen, Saila & Ritala, Paavo, 2021. "Business model innovation in social enterprises: An activity system perspective," Journal of Business Research, Elsevier, vol. 125(C), pages 684-697.
    • Handle: RePEc:eee:jbrese:v:125:y:2021:i:c:p:684-697
    DOI: 10.1016/j.jbusres.2020.01.045
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    2. Paolo Esposito & Emanuele Doronzo & Spiridione Lucio Dicorato, 2023. "The financial and green effects of cultural values on mission drifts in European social enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 1-29, January.
    3. De Beule, Filip & Bruneel, Johan & Dobson, Kieran, 2023. "The internationalization of social enterprises: The impact of business model characteristics," International Business Review, Elsevier, vol. 32(6).
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    6. Huff, Aimee Dinnin & Barnhart, Michelle, 2022. "UNRAVEL-ing gnarly knots: A path for researching market-entangled wicked social problems," Journal of Business Research, Elsevier, vol. 144(C), pages 717-727.
    7. Godfroid, Cécile & Otiti, Naome & Mersland, Roy, 2022. "Employee tenure and staff performance: The case of a social enterprise," Journal of Business Research, Elsevier, vol. 139(C), pages 457-467.
    8. Maria José Sanzo-Pérez & Marta Rey-García & Luis Ignacio Álvarez-González, 2022. "Downward accountability to beneficiaries in social enterprises: do partnerships with nonprofits boost it without undermining accountability to other stakeholders?," Review of Managerial Science, Springer, vol. 16(5), pages 1533-1560, July.
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