Relationship Of Organizational Identity and Organizational ...

Relationship Of Organizational Identity and Organizational ...

Relationship Of Organizational Identity to Organizational Performance in Social Entrepreneurial Organizations Angela French & G. Tyge Payne Agenda What is social entrepreneurship and why does social entrepreneurship matter Organizational identity Organizational performance

Performance in social entrepreneurship Implications Social entrepreneurship Why is it important? Social entrepreneurship impacts the global community by providing services that cannot be effectively offered by government or commercial entities (Sqauzzoni, 2009). In 2007, public charities reported over $1.4 trillion in total revenues and $2.6 trillion in total assets (NCCS Core Files 2007)

26.4% of Americans over 16 volunteered for an organization in Social entrepreneurship What is it? Nonprofit organizations that have characteristics business (Lasprota & Cotton, 2003) Organizations that exploit opportunities and pursue innovation to tackle social problems (Zahra et al., 2009) Individual or organizations that perform entrepreneurial action to reach a social goal (Certo & Miller, 2008) Organizations that focus on creating social

wealth over economic wealth (Mair & Marti, 2006) Organizational identity The characteristics of an organization that Define the organization Make it distinctive from other organizations Endure over time (Albert & Whetten, 1985) Organizational identity in social entrepreneurial organizations Has both normative and utilitarian

identities (Albert & Whetten, 1985; Moss et al., 2010) Each identity has its own set of conventions and beliefs (Foreman & Whetten, 2002) Multiple organizational identities may be problematic when the identities are in conflict or one identity is emphasized over (Foreman & Whetten, 2002; Glynn, 2000) The organizations identity influences the way the organization interprets issues, resolves conflict, establish competitive advantage, frames strategies, and sets goals (Dutton & Dukerich, 1991; Foreman & Whetten 2002) Organizational identity in

social entrepreneurial organizations Multiple identities impact performance and resources (Foreman & Whetten, 2002; Golden-Biddle & Rao, 1997; Whetten, 1981) Organizational goals, performance measures, and actions shape and are shaped by organizational identity (Fox,-Wolfgramm, Boal, & Hunt, 1998; Scott & Lane, 2000) Organizational performance Organizations need financial and nonfinancial performance measures that are aligned with the

organizations strategy or value drivers (Ittner, Larcker, & Randall, 2003; Kaplan & Norton, 1992, Venkatraman & Ramanujam, 1996) Organizational performance consists of three categories Financial performance Operational performance Organizational effectiveness (Venkatraman & Ramanujam, 1996) Organizational performance in social entrepreneurship Organizations with normative identities struggle to measure organizational

effectiveness because it is impossible to measure ideological goal fulfillment (Albert & Whetten, 1985) Social entrepreneurial organizations define their goals as they align to their organizational mission as opposed to defining operational or financial goals There is not a standardized way to calculate social value creation (Patton, 2003) Organizational performance in social entrepreneurship Organizations like the Better Business Bureau Wise Giving Alliance attempt to

quantify the relationship between donations and social impact by measuring the percentage of administrative costs to total expenses and other ratios The validity of these measures as indicators of organizational performance is questionable (Bhattacharya & Tinkelman, 2009). Performance is from the perspective of stakeholders and social entrepreneurial organizations have multiple stakeholders with dissimilar needs (Herman & Renz, 1998) Relationship between organizational identity and

organizational performance Relationship between organizational identity and organizational performance Proposition 1: Since organizational identity impacts organizational goals and strategies, the degree to which an organization identifies with its normative versus its utilization identity will impact the goals and organizational performance measures the organization sets. Proposition 1A: The stronger the normative identity of an organization, the more difficult it will be for the organization to measure organizational performance.

Proposition 2: An organizations social impact is influenced by the organizations financial and operational performance. Proposition 3: An organizations financial performance will be influenced by the Implications If social entrepreneurship is about building social wealth over economic wealth, then social ventures need both a strong normative and strong utilitarian identity that impacts their goals and strategies in order to thrive Social entrepreneurs need to have

business savvy to fulfill their social goals (Vega & Kidwell, 2007) Implications Social entrepreneurial organizations need to have both identities manifest in their organizational goals and strategies which are then translated into measureable performance goals Scholars and practitioners have introduced multi-dimensional performance indicators to social entrepreneurship like the balanced score card and social return on investment (Kaplan, 2001; Nicholls, 2009).

Implications Operational performance and financial performance are antecedents for social impact, so financial and operational measures could be effective, though only partial, methods to measure organizational performance in social entrepreneurship Implications Further research is necessary to understand the unique organizational structures of social entrepreneurial

organizations Understanding and possibly generalizing key performance characteristics of social entrepreneurial organizations could lead to determining key performance referents, which could lead to ways to improving way social ventures operate This type of model could be adapted to other organizations that exhibit multiple identities Questions & Comments References

REFERENCES *Albert, S., & Whetten, D. 1985. Organizational identity. In B.M. Staw & L. L. Cummings (Eds.), Research in Organizational Behavior: 263-295. Greenwich: JAI Press. Austin, J., Stevenson, H., & Wei-Skillern, J. 2006. Social and commercial entrepreneurship: Same, different, or both? Entrepreneurship Theory and Practice, 30: 1-22. Barney, J.B., Bundrson, J.S., Foreman, P., Gustafson, L.T., Huff, A.S., Martins, L.L., Reger, R.K., Sarason, Y., & Stimpert, J.L., 1998. A strategy conversation on the topic of organizational identity. In D.A. Whetten & P.C. Godfrey (Eds.), Identity in organizations: Building theory through conversations: 99-168. Thousand Oaks, CA: SAGE Publications. Bhattacharya, R. & Tinkleman, D. How tough are Better Business Bureau/Wise Giving Alliance financial standards? Nonprofit and Voluntary Sector Quarterly, 38: 467489. Carmen, J.G. The accountability movement: Whats wrong with this theory of change? Nonprofit and Voluntary Sector Quarterly, 39:256-274. Corley, K.G., Harquail, C.V., Pratt, M.G., Glynn, M.A., Fiol, C.M, & Hatch, M.J. 2006.

Guiding organizational identity through aged adolescence. Journal of Management Inquiry, 15: 85-99. Cooney, K. 2006. The institutional and technical structuring of nonprofit ventures: Case study of a U.S. hybrid organization caught between two fields. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 17(2): 137-155. Deephouse, D.L & Suchman, M. 2008. Legitimacy in Organizational Institutionalism. In R. Greenwood, C. Oliver, K. Sahlin, and R. Suddaby (Eds.), The Sage Handbook of Organizational Institutionalism: 49-77. Los Angeles: Sage Publications. References Dees, J.G., & Elias, J. 1998. The challenges of combining social and commercial enterprise. Business Ethics Quarterly, 8(1): 165-178. Dutton, J.E., & Dukerich, J.M. 1991. Keeping an eye in the mirror: Image and identity in Organizational adaptation. Academy of Management Journal, 34:517-554. Foreman, P., & Whetten, D.A. 2002. Members' identification with multiple-identity

organizations. Organization Science, 13(6): 618-635. Fox-Wolfgramm, S.J., Boal, K.B., Hunt, J.G. 1998, Adaption to institutional change: A comparative study of first-order change in prospector and defender banks. Administrative Science Quarterly, 43: 87-126. Glynn, M.A. 2000. When cymbals become symbols: Conflict over organizational identity within a symphony orchestra. Organization Science, 11(3): 285-298. Golden-Biddle & Rao, 1997. Breaches in the boardroom: Organizational identity and conflicts of commitment in a nonprofit organization.. Organization Science, 8:593611. Herman, R.D. & Renz, D.O. 1998. Nonprofit organizational effectiveness: contrasts between especially effective and less effective organizations. Nonprofit Management & Leadership, 9: 23-38. *Internal Revenue Service, Exempt Organizations Business Master File (2003, Nov) . The Urban Institute, National Center for Charitable Statistics, 2010 Ittner, C.D., Larcker, D.F., & Randall, T. 2003. Performance implications of strategic performance measures in financial services firms. Accounting, Organizations, and

Society, 28: 715-741. Kaplan, R.S., 2001. Strategic performance measurement and management in nonprofit organizations. Nonprofit Management & Leadership, 11: 353-370. References Kaplan, R.S., & Norton, D.P., 1992. The balanced scorecard Measures that drive performance. Harvard Business Review, January February. Kendall, J. & Knapp, M. 2000. Measuring the performance of voluntary organizations. Public Management, 2: 105-132. Mair, J., & Marti, I. 2006. Social entrepreneurship research: a source of explanation, prediction, and delight. Journal of World Business, 41:36-44. Mitchell, R.K., Agle, B.R., & Wood, D.J. 1997. Toward a theory of stakeholder identification and salience: Defining the principle of wh o or what really counts . Academy of Management Review, 22: 853-886.

Moss, T., Short, J.C., Payne G.T., & Lumpkin, G.T. 2010. Dual identities in social ventures: An Exploratory Study. Entrepreneurship Theory and Practice, Nicholls, A. 2009. We do good things dont we?: Blended value accounting in social entrepreneurship. Accounting, Organizations, and Society, 34: 755-769. Peredo, A.M., & McLean, M. 2006. Social entrepreneurship: A critical review of the concept. Journal of World Business, 41: 56-65. Pratt, M.G., & Foreman, P.O. 2000. Classifying managerial responses to multiple organizational identities. Academy of Management Review, 25: 18-42. Rose-Ackerman, S. 1996. Altruism, nonprofits, and economic theory. Journal of Economic Literature, 34: 701-728. Sawhill, J.C. & Williamson, D. 2001. Mission Impossible? Measuring success in nonprofit organizations. Nonprofit Management & Leadership, 11: 371-386. Scott, S.G., & Lane, V.R., 2000. A stakeholder approach to organizational identity, References

Scott, C.R., Corman, S., & Cheney, G. 1998. Development if a structural model of identification in the organization. Communication Theory, 8: 298-336. Short J.C., Moss, T.W., & Lumpkin, G.T. 2009. Research in social entrepreneurship: Recent challenges and future opportunities. Strategic Entrepreneurship Journal, 3: 161194. Short, J.C., & Palmer, T.B. 2008. The application of DICTION to content analysis research in strategic management. Organizational Research Methods, 11: 727-752. Short, J.C., & Palmer, T.B. 2003. Organizational performance referents: An empirical examiniation of their content and influences. Organizational Behavior and Human Decision Processes. 90: 209-224. Speckbacher, G. 2003. The economics of performance management in nonprofit organizations. Nonprofit Management & Leadership, 13: 267-281. Squazzoni, F. 2009. Social entrepreneurship and economic development in Silicon Valley A case study on The Joint Venture: Silicon Valley Network. Nonprofit and Voluntary Sector Quarterly, 38: 869-883. Tan, W.L., Williams, J., & Tan, T.M. 2005. Defining the social in social entrepreneurship:

Altruism and entrepreneurship. International Entrepreneurship and Management Journal, 1: 353-365. Tracey, P., & Jarvis, O. 2007. Toward a theory of social venture franchising. Entrepreneurship Theory and Practice, 31(5): 667-685. Venkatraman, N., & Ramanujam, V., 1986. Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review, 11: 801-814. Weerawardena, J., Mort, G.S. 2006. Investigating social entrepreneurship: A References Whetten, D.A. 2006. Albert and Whetten Revisited: Strengthening the concept of organizational identity. Journal of Management Inquiry, 15: 219-234. Zahra, S., Gedajlovic, E., Neubaum, D., & Shulman, J. 2009. A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of Business Venturing, 24(5): 519-532.

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