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Measuring the social impact of a business

Research presented at the Scientific Colloquium on Social Enterprise 2019 provides the basic criteria for evaluating the relationship between a company and the local area.

 

Business and the local area can work in harmony, giving rise to organisations that, until recently, simply did not exist. These are economic but also social entities. They are communities of production, with profit as their ultimate goal, but also systems of social relations in which profit is accompanied by something else (of equal importance). We often look to hybrid organisations to achieve this development. And these are the organisations it’s worth getting to know.

Paolo Biancone, Silvana Secinaro, Valerio Brescia, and Daniel Iannaci (from the department of management at the University of Turin) have thought about this goal, in their research ‘La misurazione dell’impatto sociale nelle organizzazioni ibride’ (‘measuring the social impact of hybrid organisations’), presented at the XIII Scientific Colloquium on Social Enterprise last May in Rome.

The investigation starts from an assumption that comes from observing the real world; coping with the challenges posed today on a social and economic level implies, according to the four writers, ‘an inclusive entrepreneurial system, in other words one in which companies are the drivers of economic and social inclusion in the areas in which they work.’ But there’s more. Indeed, according to the authors, whereas ‘before the advent of globalisation the competition consisted of individual companies or individual business groups, which could come out as winners or losers, what is happening today is that the fate of companies is linked to that of their local area.’

So new conditions need to be addressed by new organisations. It is here that the working group coordinated by Paolo Biancone categorises hybrid organisations, understood as ‘business models dedicated to melding a social mission with activities that are commercial in nature.’ In other words, these are ‘models that turn the social dimension into a strategic asset that can regenerate resources of a different kind, human resources, by developing new knowledge and new skills: financial, by combining a wide range of sources precisely because of the hybrid nature of the organisation; physical, that is, linked to the process of transforming spaces into places, where relations become the fundamental ingredient for the success of the process.’

Something, that has to be done, however, is to measure and evaluate the economic effects of all of this. But to achieve a goal of this kind, new tools for both investigation and communication have to be developed.

After outlining the theoretical and practical scope of the subject, Biancone and the other researchers, go into popular financial reporting (POP), which is seen today as one of the most effective tools for measuring the impact of a hybrid organisation in terms of economy, finances, shares and society, meeting interested parties’ demand for information and transparency.

The research carried out by Biancone, Secinaro, Brescia and Iannaci deals with a complex theme of today’s economic environment, but it presents the salient aspects to readers clearly, albeit in decidedly technical language.

Misurare l’impatto sociale di un’impresa

Paolo Biancone, Silvana Secinaro, Valerio Brescia, Daniel Iannaci (department of management, University of Turin)

Paper, XIII Scientific Colloquium on Social Enterprise, Rome, May 2019.