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Measuring to Improve vs. Measuring to Prove: Understanding Evaluation and Performance Measurement in Social Enterprise Open Access

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Social enterprises develop innovative and financially viable approaches to addressing social problems, and exist between the public sector and private markets. In recent years, there has been increasing attention on measuring the social value created by these organizations However, despite its prominence, there has been relatively little scholarly study of the topic, and we know relatively little about the actual practices that these enterprises adopt to measure the social value that they create. This dissertation examines the practice of evaluation and performance measurement in social enterprise through the lens of organizational theory, using mixed methods. Drawing from the literature on evaluation and performance measurement in the nonprofit and for-profit sectors, this study proposed a framework based on five organizational theories: imprinting, agency theory, stewardship theory, resource dependence, and institutional theory. The first part of the analysis uses this framework to examine the antecedents of evaluation and performance measurement in social enterprise, using a logistic regression model. The findings suggest that external antecedents such as receiving grant funding or interacting with peer networks are more strongly associated with the adoption of mission-related measurement approaches, which is consistent with reasons of accountability and legitimacy. The second part of the analysis uses a qualitative approach, based on interviews with a small sample of eight social enterprises operating in the rural electrification sector, as well as interviews with their funders, and with staff from organizations that have developed measurement tools and approaches. The qualitative analysis focuses on understanding how the evaluation and performance measurement findings are used by these organizations. The social enterprises in this sample report using various output and short-term outcome level performance metrics on an ongoing basis to inform their day-to-day operations, as well as to inform longer-term strategic decisions. Additionally they appear to be regularly reporting these metrics to their funders, which presents a potential (and as yet, unfulfilled) opportunity for synthesizing knowledge at a larger, more systemic scale.This research aims to contribute to a theoretically grounded understanding of the factors that influence these enterprises to measure their social performance, the specific practices they adopt, and how they use the findings. Additionally, this research can also help practitioners and policy makers develop more effective and appropriate measurement tools for the sector.

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