Exploring micro-foundations of dynamic capabilities for social enterprises

Abstract

Purpose Social enterprises (SEs) operate with a primary goal of meeting a social purpose while creating economic wealth for the fulfillment of their primary mission. These organizations need to develop a certain set of capabilities that facilitates the successful pursuit of their dual mission goals. This paper aims at exploring the micro-foundations of dynamic capabilities (DCs) that enable SEs to recognize and exploit opportunities and reconfigure their resources to pursue their dual-mission goals and adjust with the environmental dynamics. Design/methodology/approach This study uses a multiple case design and an abductive research approach to conduct an in-depth and in-due course investigation of the development of DCs in two distinct SEs selected on the basis of theoretical-purposive sampling and availability of the richness of the information about them. Findings This study finds certain generic and exclusive micro-foundations of DCs that contribute to sensing opportunities, seizing opportunities and reconfiguring resources in SEs. The exclusive micro-foundations of DCs of SEs noted in this study are sustainability of beneficiaries, involving beneficiaries in decision-making, defining unique business models and selective suppliers for critical resources. Research limitations/implications The limitation of this study lies in its dependence on retrospective data, which may perhaps influence the comprehensiveness and accuracy of the acquired data. This study, although, implemented the measures to minimize the bias, by supplementing the interview data with archival sources. Practical implications To the researchers, this study proffers an in-depth and in-due course explanation of the micro-foundations of DCs that facilitate SEs to sense opportunities, seize opportunities and reconfigure their resources with time. To practitioners working in the area of social entrepreneurship, this process study is an outline of reference that answers the how and why concerning the importance of micro-foundations of DCs for SEs. Originality/value To the best of the authors’ knowledge, no prior study has explored the micro-foundations of DCs in the context of SEs from emerging economies. The exclusive micro-foundations of DCs for SEs found in this study are the unique and original contribution that outlines the path for future academic inquiry in this evolving research area.