Understanding social enterprise performance in Pakistan: role of bricolage behavior, social capital and social innovation

The dual pursuit of social and financial performance goals poses unique challenges for social enterprises to address the pressing societal problems. While resources and capabilities have been highlighted as important variables to perform in the existing studies, this issue has largely been under-researched in the field of social entrepreneurship. This study sets out to contribute to the understanding of social enterprise performance in an extremely resource-constrained context of the base of pyramid market. Drawing upon the radical view of resource-based theory, this study examines the role of social innovation in mediating the effects of bricolage behavior and social capital on social enterprise performance (scaling of social impact and financial performance). A total of 131 social ventures from different provinces of Pakistan participated in this study. Partial Least Square Structural Equation Modelling techniques were used to test the study hypotheses. The findings supported the hypothesized direct effects of bricolage behavior and social capital on social innovation. In addition, the findings also supported the direct effect of social innovation on social enterprise performance (scaling of social impact and financial performance). Furthermore, social innovation had mediated the relationship between bricolage behavior and social enterprise performance and social capital and social enterprise performance. In order to achieve the dual performance objectives (scaling of social impact and financial performance), the social enterprises should focus on building upon the resource mobilization strategies of bricolage behavior and social capital as relevant capabilities and resources through the introduction of socially innovative solutions to tackle the societal problems at large which is crucial for the overall wellbeing of the multiple stakeholders. Theoretical and practical implications, along with study limitations and future recommendations, are also discussed.