In pursuit of diversification opportunities, efficiency, and revenue diversification: A generalization and extension for social entrepreneurship
Jiaju Yan, Nick Mmbaga, David Gras
Strategic Entrepreneurship Journal · 2023 · Volume 17 · Issue 1
Abstract
Our study generalizes and extends a cumulative body of research on diversification into the contexts of social entrepreneurship. We examine the extent to which internationalization and program diversification affect a coveted, yet understudied, outcome for social organizations—revenue diversification—and investigate efficiency as a boundary condition of those relationships. Our longitudinal analyses, based on roughly 53,000 observations of Canadian nonprofits that engage in social entrepreneurship, indicate that program diversification is positively related to nonprofits' revenue diversification, but internationalization is not. Further, we found that efficiency compliments these relationships. Our findings are partially in line with research from the for-profit literature, but also extend this line of research by suggesting that different types of diversification are associated with revenue diversification in the context of social entrepreneurship. Founders, executives, and managers of social organizations often strategically design and implement programs and internationalization strategies to achieve better organizational outcomes. Our results reveal that pursuing program diversification opportunities are related to revenue diversification and that highly efficient nonprofits are more likely to increase their revenue diversification as they pursue more program diversification and internationalization opportunities. Social entrepreneurs and their organizations may therefore learn from, build upon, and to some degree tailor theories and strategies of for-profit organizations to better serve their social and environmental mission and ensure long-term financial stability.
Keywords
internationalization, nonprofits, organizational efficiency, social organization, strategic social entrepreneurship
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