Doing social good on a sustainable basis: competitive advantage of social businesses

Abstract

Purpose – The purpose of this paper is to investigate the capabilities of social entrepreneurship (SE) firms and how they achieve competitive advantage while engaging in social value creation. The authors employ a business model perspective to understand the (self-) sustaining mechanism for social good. Design/methodology/approach – The authors carry out an in-depth investigation of three SE ventures. The authors analyse the history of these ventures to determine how they achieved competitive advantage. The cases are analysed based on the internal development in the context of environmental support. Findings – The authors find that SE ventures, like all other organisations, achieve competitive advantage based on available resources such as reputation and network of the founder, managerial experience and other corporate resources within the firm. The authors also find that the competitive advantage often comes from innovate usage – a practice that is reinforced by the support from institutional environment. Research limitations/implications – Due to the case study approach, the research is aimed at theoretical development within the social business literature. The approach makes it difficult for the findings to be universally generalisable. The authors therefore envisage future researchers to test the theoretical propositions. Practical implications – Based on the analysis, the authors conclude that distinct capabilities of social businesses help them achieve competitive advantage, and that policy makers should institutionally support these ventures. The findings stress the importance of resources in sustainability and effectiveness of emerging market SE. Originality/value – The application of a business model perspective in SE is unique, and advances the understanding of social businesses from a strategic management perspective.