The Effect of Adoption of Commercial Business Practices on Social Enterprise Performance: An Empirical Study from the UK

Drawing on the resource-based view, dynamic capability perspective, and resource dependency theory, and utilizing a sample of 164 UK social enterprises, this dissertation investigates the effects of adoption of commercial business practices on social enterprise performance. The adoption of commercial business practices refers to the adoption of market orientation, learning orientation, market disruptiveness capability, new product development capability, and ‘trade vs. grant dependency’. The dissertation comprises three independent but interrelated empirical essays. The first essay (Chapter 2) analyzed individual and combined (interaction) effects of market orientation and market disruptiveness capability on social enterprise performance. The study shows that market orientation improves both the economic and social performance whereas market disruptiveness capability improves only the economic performance of social enterprises. However, interestingly, the study demonstrates that the interaction effect of market orientation and market disruptiveness capability is negative on economic performance but positive on social performance. Similarly, the second essay (Chapter 3) analyzed how learning orientation and new product development capability influences the economic and social performance of social enterprise. The essay shows that learning orientation improves new product development capability and, thereby, the economic and social performance of social enterprises. Likewise, the third essay (Chapter 4) investigated how ‘trade vs. grant dependency’ influences social enterprise performance. It was found that trade dependency is better than grant dependency for social enterprises to improve their social performance. However, contrastingly, it was found that the adoption of trade dependency over grant dependency has no significant effect on their economic performance. Nevertheless, the study shows that the adoption of trade dependency over grant dependency is better for social enterprises to improve their learning orientation and thereby both economic and social performance. In sum, this dissertation has made a strong case for why social enterprises should adopt commercial business practices.