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Strategy for Sustainability of Social Enterprise in Indonesia: A Structural Equation Modeling Approach

Author

Listed:
  • Putri Mega Desiana

    (School of Business, IPB University, Bogor 16151, Indonesia
    Department of Management, Universitas Indonesia, Depok 16424, Indonesia)

  • Mohamad Syamsul Ma’arif

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Herien Puspitawati

    (Department of Family and Consumer Sciences, IPB University, Bogor 16680, Indonesia)

  • Riani Rachmawati

    (Department of Management, Universitas Indonesia, Depok 16424, Indonesia)

  • Ruslan Prijadi

    (Department of Management, Universitas Indonesia, Depok 16424, Indonesia)

  • Mukhamad Najib

    (Department of Management, IPB University, Bogor 16680, Indonesia)

Abstract

Social enterprise (SE) is a significant global phenomenon that occurs when an organization with social concerns can grow concurrently with its commercial activities. However, the factors that influence the sustainability of SE remain relatively understudied. This study argues that innovation is a prerequisite for SE’s sustainability. Therefore, this study aims to find alternatives to SE’s sustainability strategy, considering the need for SE to have dynamic capabilities, to anticipate changes in the ecosystem, and to manage the company’s internal resources to build on SE’s innovation and sustainability. The dataset was obtained from a survey of 187 SEs in Indonesia, which was then processed using SEM. Results indicate that internal factors have no direct significant effect on sustainability, but the ecosystem and innovation have been shown to have a direct and significant positive effect on sustainability. Dynamic capabilities have a significant but negative direct relationship to sustainability. Internal and ecosystem factors cannot be mediated by dynamic capabilities when it comes to sustainability, whereas innovation can only mediate internal factors towards sustainability. Finally, serial mediation of dynamic capabilities and innovation are key elements that contribute to sustainability. It is proven that if dynamic capabilities are directed to foster innovation, it will increase sustainability.

Suggested Citation

  • Putri Mega Desiana & Mohamad Syamsul Ma’arif & Herien Puspitawati & Riani Rachmawati & Ruslan Prijadi & Mukhamad Najib, 2022. "Strategy for Sustainability of Social Enterprise in Indonesia: A Structural Equation Modeling Approach," Sustainability, MDPI, vol. 14(3), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1383-:d:734268
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    Citations

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    Cited by:

    1. Kumudu Jayawardhana & Imali Fernando & Janaka Siyambalapitiya, 2022. "Sustainability in Social Enterprise Research: A Systematic Literature Review," SAGE Open, , vol. 12(3), pages 21582440221, September.
    2. Muhamad Faisal & Mohammad Syamsul Maarif & Idqan Fahmi & Budi Yulianto, 2022. "Business Environment Turbulence and Industrial Connections Instruments as Determinants of Firm Performance Mediated by an Industrial Connections Climate," Sustainability, MDPI, vol. 14(19), pages 1-13, September.
    3. García-Monleón, Fernando & González-Rodrigo, Elena & Bordonado-Bermejo, María-Julia, 2024. "Coexistence of sustainability and growth in different economies," Journal of Business Research, Elsevier, vol. 170(C).
    4. Marian Oliński & Jarosław Mioduszewski, 2022. "Determinants of Development of Social Enterprises according to the Theory of Sustainable Development," Sustainability, MDPI, vol. 14(23), pages 1-21, November.
    5. Michael Odei Erdiaw‐Kwasie & Matthew Abunyewah, 2024. "Determinants of social innovation in hybrid organisations: The moderating role of technology readiness," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1099-1112, February.
    6. Annuridya Rosyidta Pratiwi Octasylva & Lilik Noor Yuliati & Hartoyo Hartoyo & Agus W. Soehadi, 2022. "Innovativeness as the Key to MSMEs’ Performances," Sustainability, MDPI, vol. 14(11), pages 1-14, May.

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