Unintended Consequences of Scaling Social Impact Through Organizational Growth Strategy in Social Enterprises

Abstract

Social enterprises are hybrid organizations aiming to achieve both financial sustainability and social impact. Because of their active role in creating social impact by addressing pressing social problems, they are recognized as important agents to help attain the United Nations Sustainable Development Goals. In the social enterprise context, organizational growth is considered a major strategy to scale social impact since it helps them offer more products/services to a larger number of beneficiaries. However, little is known about when and how this strategy may not work as intended. By synthesizing prior research and using real-life examples, this article presents ten conditions under which scaling social impact through an organizational growth strategy can create unintended consequences in social enterprises. The article also develops a holistic framework articulating how these ten conditions can emerge via seven growth-related activities in social enterprises. The developed framework facilitates a comprehensive understanding for managers and social entrepreneurs about the pitfalls to avoid while pursuing organizational growth as a social impact scaling strategy in social enterprises. Finally, this article introduces a diagnostic tool — ImpactProtect: A Growth Risk Assessment Tool for Social Enterprises — designed to help social enterprises evaluate their vulnerability to unintended consequences associated with organizational growth.