Academic journal article Academy of Entrepreneurship Journal

Measuring Sustainability and Effectiveness of Social Value Creation by Social Sector Actors/social Enterprises, within Developing Countries

Academic journal article Academy of Entrepreneurship Journal

Measuring Sustainability and Effectiveness of Social Value Creation by Social Sector Actors/social Enterprises, within Developing Countries

Article excerpt

INTRODUCTION

Resulting from a number of factors including poor governance and ineffective strategic planning, numerous developing countries have found themselves on a downward spiraling development trajectory. A resulting effect has been the disempowerment of their population manifesting itself in the breakdown of social cohesion, increasing crime and violence. Ultimately this results in decreasing social, political and economic capital amongst the population. In response to this, numerous institutions, which can be classified as social sector actors (SSA) (including foundations, endowments, NGOs and faith-based institutions (1)), have established social intervention programmes with the aim of improving the quality of lives of the targeted beneficiaries. This is to essentially create sustained social value among their constituents.

Millions of dollars has been spent on these endeavors, yet the evidence of meaningful change is not forthcoming (The UNDP Caribbean HDR (2012) and The UNODC (2010)). The question, which arises, is why. One recurring explanation given is that many of these institutions, while receiving funds to develop intervention strategies, have no clear understanding and methodology of measuring their effectiveness in social value creation. Worse yet there are questions about how sustainable these organisations are in generating and maintaining the value creation strategy. It is this concern, which has motivated this research.

Many of these organisations in developing countries have not examined and identified what are the significant elements that drive social value creation within their organization; and how to effectively develop their intervention strategies. They are locked into an output and outcome mode; failing to focus on impact. The Ashoka Institute, emerged in the 1980s as a response to some of these societal needs that were not addressed by the government and business sector (Brooks 2008), has led the process in measuring social value creation. Over the years they have developed tools to measure the effectiveness of their partners in doing so (Leviner 2006). Kushner has also developed models to measure organizational effectiveness for over 15 years, from the 1990s 'An Open Systems Model of Organisational Effectiveness'. Brooks (2008) further highlights that measuring organizational effectiveness and vulnerability is imperative in determining sustainability of the interventions and the organisatons as well. The paper draws on the model of Kushner (1996, 2002) and ideas of Brooks (2008) in conducting the research (2). It employs an empirical approach in the methodology to assess vulnerability and how effective these organisations are in generating social value; and applies an econometric approach in unearthing the significant factors that drive social value creation among these organisations. The findings thus present relevant data that can be used to inform intervention strategies for these organisations, as well a performance measurement framework through which they can more effectively measure their impact through social value creation.

Jamaica, like many developing countries, has many social sector actors, including public and private endowments and foundations, as well as NGOs. They all share a similar mandate of improving the quality of lives of beneficiaries. UN (2009) has revealed that there are significant questions regarding these major interventions in particular their sustainability and effectiveness. Despite the money being spent, there continues to be breakdown in social, political and economic capital among the targeted beneficiaries (UNDP 2011). Crime and violence continues to increase, while social sector actors continue to request additional funding. Jamaica is thus used as a case to examine how vulnerable/sustainable these social sector actors/organisations are; perceptions about their effectiveness; how they measure social value and what are the significant elements which determine the organisations' effectiveness in generating social value. …

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