Measuring impact and creating change: a comparison of the main methods for social enterprises

• DOI: https://doi.org/10.1108/CG-02-2020-0062
• Pages: 237-251
• Published date: 08 September 2020
• Date: 08 September 2020
• Subject Matter: Corporate governance,Strategy
• Author: Francesco Perrini,Laura A. Costanzo,Mine Karatas-Ozkan

Measuring impact and creating change: a

comparison of the main methods for social

enterprises

Francesco Perrini, Laura A. Costanzo and Mine Karatas-Ozkan

Abstract

Purpose –There is currently a wide range of methodsfor measuring social impact. Each method uses

specific indicators,mainly because of the diverse characteristicsof social enterprises (SEs) andthe type

of impact that is analysed, thushindering the definition of a single, shared measurement systemand, at

the same time,prompting the proliferation of countlessalternative methods. Many enterprisesexperience

difficulties in selectingthe best method to carry out the measurement process correctly. The purposeof

this paper is to contributeto filling in conceptual gaps inherent to measuringimpact and value creating in

the domain of social entrepreneurship (SE), as well as equipping the social entrepreneur with better

knowledge of the methodologies available for measuring impact and supporting their decision-making

process.

Design/methodology/approach –The aims of this paper are, therefore, threefold: to identify the

common conditions of how to measure social impact (literature); to analyse how measurement is

actually undertaken in practice (process); and to compare the four main methodologies, among

the numerous ones, that have been developed to measure the impact generated by SEs so far

(methods and comparison). The authors compared four of the most commonly used

methodologies in the field of social impact measurement, analysing advantages, disadvantages

and application fields. They evaluated whether a method can be considered preferable to others

in each case.

Findings –The paper demonstrated the high fragmentation that characterised the existing literature

concerningthe measurement of social impact and the wide range of methodologiesused, thus leading to

a great confusion in regardto the selection of the most appropriate methodology for thepursuit of one’s

own ends. Thisoften discourages the undertaking of the measurementprocess. The analysis used in this

paper leads us to conclude thatthe social return on investment method is more popularthan the other

three alternatives.

Research limitations/implications –There are significantdeficiencies in methodologies adopted, and

researchers must use innovative, situated approaches that fit with the SE literature. The authors

concludedthat for the future, there is a need to do a SLR in a disciplined way. Furtherresearch is strongly

recommended in this area, to provide more comparative studies of existing methods. It is hoped that

enterprises can be directed towards using a limited range of formal methods that can capture the

diversityof the various application cases, thus makingit possibleto compare different situations:a limited

range of formal methodsthat can capture the diversity of the SEs considered andthe impacts generated

will be promoted.

Practical implications –The authors also want to analyse how the SEs concretely realise the

measurementof their impact that often do not use the formalmethodologies presented in the literaturebut

rathertools created by the ad hoc companies on the basis of their specific needs.

Originality/value –This paper makes a theoretical contributionto the literature of the theory on social

value within the SE field by having regard to how to measuresocial impact. It partially responds to Choi

and Majumdar’s (2014) and Hlady-Rispaland Servantie’s (2016) calls for the development of a theory of

measuringsocial value.

Keywords Social entrepreneurship, SROI, Measurements, Social enterprise, Social value creation,

Social impact, Measuring

Paper type Research paper

Francesco Perrini is based

at SDA Bocconi School of

Management, Universita

`

Bocconi, Milan, Italy.

Laura A. Costanzo and

Mine Karatas-Ozkan are

both based at Faculty of

Social Sciences,

Southampton Business

School, University of

Southampton,

Southampton, UK.

Received 12 February 2020

Revised 4 May 2020

14 July 2020

20 July 2020

Accepted 22 July 2020

DOI 10.1108/CG-02-2020-0062 VOL. 21 NO. 2 2021, pp. 237-251, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 237