Social enterprises need to start measuring their performances in a systemic way, in order to support decision making and ensure accountability towards their stakeholders. In order to be as effective and successful than profit-making organizations, social purpose organizations need to be highly innovative in creating reporting practices and measurement systems because they are not as developed and extensive than the measurement systems for financial reporting. But because of hybridity nature of social enterprises, performance measurement and reporting processes are very complex and challenging for them.
This conceptual paper aims to contribute to the existing literature by exploring and clarifying the ideas and ways to measure and report social value creation, and try to prose framework for social SMEs to choose proper performance measurement tool for different purposes. A range of performance measurement tools have been introduced and utilized by social enterprises. In this paper the proposed approach consists of a balanced scorecard and SROI.
Balanced scorecard is one of the widespread management tools that enable organizations to consider both hard and soft sides of businesses. SROI is accepted as an internationally recognized measurement tool for social enterprises. Our proposed framework is based on previous impact measurement literature and on four case examples.
The information of three presented cases is collected from the secondary sources (The SROI Network 2014) and the information from one single case is gathered by interviewing the CEO of the social enterprise. The results of this paper indicates that evaluating the performance effectively and reporting the results transparently are the key activities. At present to this list can be attached social value creation and its efficient measurement.