ASSESSING SUCCESS FACTORS OF SOCIAL BUSINESS PERFORMANCE
DOI:
https://doi.org/10.35310/accruals.v9i02.1431Keywords:
Village-Owned Enterprises, social business, dynamic capability, case study, organizational capabilityAbstract
This study aims to analyze the factors influencing the success of Village-Owned Enterprises (BUMDes) as a form of social business practice in Indonesia. Drawing on the theoretical framework of dynamic capability, the study highlights the importance of an organization’s ability to sense opportunities, seize them strategically, and transform its institutional structure to remain resilient in a dynamic environment. A qualitative research method was employed, utilizing an exploratory case study approach on two leading BUMDes in the Special Region of Yogyakarta. Data were collected through in-depth interviews, limited observations, and document analysis, and were examined using an interactive analysis model. The findings reveal that BUMDes' success is driven by visionary leadership, adaptability to external dynamics, the enhancement of human resource capacity, transparent financial management, and ecosystem support through collaboration and digital technology. These findings reinforce the relevance of dynamic capability theory in explaining the performance of community-based social enterprises in developing countries and provide both theoretical and practical contributions to the development of policies and strategies for strengthening village economic institutions.
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References
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Lumpkin, G. T., & Dess, G. G. (1996). Academy of Management Heview. Academy of Management Review, 21(1), 135–172.
Miko?ajczak, P. (2020). Social Enterprises’ Hybridity in the Concept of Institutional Logics: Evidence from Polish NGOs. Voluntas, 31(3), 472–483. https://doi.org/10.1007/s11266-020-00195-9
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Moss, T. W., Short, J. C., Payne, G. T., & Lumpkin, G. T. (2010). Dual identities in social ventures: An exploratory study. Entrepreneurship: Theory and Practice, 35(4), 805–830. https://doi.org/10.1111/j.1540-6520.2010.00372.x
Nicholls, A. (2010). The Legitimacy of Social Entrepreneurship; Reflexive Isomorphism in a Pre–Paradigmatic Field. Entrepreneurship Theory and Practice, 34(4), 611–633.
Nuraeni, Y. (2020). Kinerja Seksi Usaha Ekonomi Masyarakat Dalam Pemberdayaan Pengelola Badan Usaha Milik Desa (BUMDES) Di Kabupaten Subang. The World of Business Administration Journal, 1(1), 93–111. https://doi.org/10.37950/wbaj.vi.748
Pache, A. C., & Santos, F. (2010). When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3), 455–476. https://doi.org/10.5465/AMR.2010.51142368
Quyen, N. T., & Cheah, J. S. S. (2023). Social enterprise performance: A Systematic Review. Albukhary Social Business Journal, 4(2), 3–22. https://doi.org/10.55862/asbjv4i2a001
Sarasvathy, S. D. (2001). Causation and Effectuation: Toward a Theoretical Shift from Economic Inevit...: Universiteitsbibliotheek Antwerpen. The Academy of Management Review, 4/1/2001, Vol. 26, Issue 2, 26(2), 243–263.
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Smith, B. R., & Stevens, C. E. (2010). Different types of social entrepreneurship: The role of geography and embeddedness on the measurement and scaling of social value. Entrepreneurship and Regional Development, 22(6), 575–598. https://doi.org/10.1080/08985626.2010.488405
Smith, W. K., Gonin, M., Besharov, M. L., Smith, W. K., & Besharov, M. L. (2013). Linked references are available on JSTOR for this article?: Managing Social-Business Tensions?: A Review and Research Agenda for Social Enterprise. Business Ethics Quarterly, 23(3), 407–442. https://doi.org/10.5840/beq201
Sofyani, H., Atmaja, R., & Rezki, S. B. (2019). Success Factors of Village-Owned Enterprises (BUMDes) Performance in Indonesia: An Exploratory Study. Journal of Accounting and Investment, 20(2). https://doi.org/10.18196/jai.2002116
Stake, R. E. (1995). The Art of Case Study Research.
Sumiyana, S., Susanto, E. A. A., Rahajeng, D. K. K., & Winardi, R. D. (2024). Indonesia’s local government internal auditors (LGIAs): reflecting on low motivation in enhancing their dynamic capabilities while being the spearhead of responsible auditing. Journal of Accounting and Organizational Change. https://doi.org/10.1108/JAOC-10-2022-0159
Teece, D. J. (2007). The Effect of Firm Compensation Structures on the Mobility and Entrepreneurship of Extreme Performers. Business, 920(October), 1–43. https://doi.org/10.1002/smj
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Knowledge and Strategy, 18(March), 77–116. https://doi.org/10.4337/9781035334995.00014
Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic Capabilities and Organizational Agility. California Management Review, 58(4), 13–35.
Tracey, P., Phillips, N., & Jarvis, O. (2011). Bridging institutional entrepreneurship and the creation of new organizational forms: A multilevel model. Organization Science, 22(1), 60–80. https://doi.org/10.1287/orsc.1090.0522
Vézina, M., Ben Selma, M., & Malo, M. C. (2019). Exploring the social innovation process in a large market based social enterprise: A dynamic capabilities approach. Management Decision, 57(6), 1399–1414. https://doi.org/10.1108/MD-01-2017-0090
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the grameen experience. Long Range Planning, 43(2–3), 308–325. https://doi.org/10.1016/j.lrp.2009.12.005
Miles, M., & Huberman, A. M. (1994). An analytic approach for discovery. In CEUR Workshop Proceedings (Vol. 1304, pp. 89–92).
Battilana, J., & Dorado, S. (2010).
Battilana, J., & Dorado, S. (2010). AMJ. Building sustainable hybrid org. The case of commercial microfiance. Academy of Management Journal, 53(6), 1419–1440.
Battilana, J., & Lee, M. (2014). Advancing Research on Hybrid Organizing - Insights from the Study of Social Enterprises. Academy of Management Annals, 8(1), 397–441. https://doi.org/10.1080/19416520.2014.893615
Beisland, L. A., Djan, K. O., Mersland, R., & Randøy, T. (2020). Measuring Social Performance in Social Enterprises: A Global Study of Microfinance Institutions. Journal of Business Ethics, 171(1), 51–71. https://doi.org/10.1007/s10551-019-04417-z
Breznik, L., & Robert, D. H. (2014). Dynamic capabilities vs. innovation capability: are they related? Journal of Small Business and Enterprise Development, 21(3), 368–384. https://doi.org/10.1108/JSBED-02-2014-0018
British Council. (2018). Developing an Inclusive and Creative Economy The State of Social Enterprise in Indonesia.
Brooks, A. C. (2008). Social entrepreneurship. Upper Saddle River, NJ: Pearson/Prentice Hall
Cheah, J. S. S., Yeoh, Q., & Chandra, Y. (2023). The influence of causation, entrepreneurial and social orientations on social enterprise performance in the nascent ecology of social enterprise. Social Enterprise Journal, 19(3), 308–327. https://doi.org/10.1108/SEJ-11-2022-0102
Cooney, K. (2012). Mission control: Examining the institutionalization of new legal forms of social enterprise in different strategic action fields. Social Enterprises: An Organizational Perspective, 198–221. https://doi.org/10.1057/9781137035301_10
Dacin, M. T., Dacin, P. A., & Tracey, P. (2011). Social entrepreneurship: A critique and future directions. Organization Science, 22(5), 1203–1213. https://doi.org/10.1287/orsc.1100.0620
Ebrahim, A., Battilana, J., & Mair, J. (2014). The governance of social enterprises: Mission drift and accountability challenges in hybrid organizations. Research in Organizational Behavior, 34, 81–100. https://doi.org/10.1016/j.riob.2014.09.001
Estrin, S., Mickiewicz, T., & Stephan, U. (2013). Entrepreneurship, Social Capital, and Institutions: Social and Commercial Entrepreneurship Across Nations. Entrepreneurship: Theory and Practice, 37(3), 479–504. https://doi.org/10.1111/etap.12019
Farmer, J., De Cotta, T., McKinnon, K., Barraket, J., Munoz, S.-A., Douglas, H., & Roy, M. J. (2016). Social enterprise and wellbeing in community life. Social Enterprise Journal, 12(2), 235–254. https://doi.org/10.1108/sej-05-2016-0017
Haigh, N., & Hoffman, A. J. (2012). Hybrid organizations. The next chapter of sustainable business. Organizational Dynamics, 41(2), 126–134. https://doi.org/10.1016/j.orgdyn.2012.01.006
Ince, I., & Hahn, R. (2020). How dynamic capabilities facilitate the survivability of social enterprises: A qualitative analysis of sensing and seizing capacities. Journal of Small Business Management, 58(6), 1256–1290. https://doi.org/10.1111/jsbm.12487
Jay, J. (2013). Navigating paradox as a mechanism of change and innovation in hybrid organizations. Academy of Management Journal, 56(1), 137–159. https://doi.org/10.5465/amj.2010.0772
Kania, J., & Kramer, M. (2011). Chair Written Report 1-23-2018. Stanford Social Innovation Review, 35.
Kim, A., Moon, C. W., Kim, S. K., Koh, Y. S., & Shin, J. (2019). An Empirical Investigation on the Psychological Antecedents of Social Entrepreneurship. Entrepreneurship Research Journal, 10(3), 1–18. https://doi.org/10.1515/erj-2017-0129
Lee, E. K. M., & Chandra, Y. (2019). Dynamic and Marketing Capabilities as Predictors of Social Enterprises’ Performance. Voluntas, 31(3), 587–600. https://doi.org/10.1007/s11266-019-00155-y
Liu, G., Takeda, S., & Ko, W. W. (2012). Strategic Orientation and Social Enterprise Performance. Nonprofit and Voluntary Sector Quarterly, 43(3), 480–501. https://doi.org/10.1177/0899764012468629
Lumpkin, G. T., & Dess, G. G. (1996). Academy of Management Heview. Academy of Management Review, 21(1), 135–172.
Miko?ajczak, P. (2020). Social Enterprises’ Hybridity in the Concept of Institutional Logics: Evidence from Polish NGOs. Voluntas, 31(3), 472–483. https://doi.org/10.1007/s11266-020-00195-9
Miller, T. L., Wesley, C. L., & Williams, D. E. (2012). We thank our Associate Editor, Nelson Phillips, and two anon- ymous reviewers for their insightful and constructive comments. 349. Academy of Management Learning & Education, 11(3), 349–370. http://dx.doi.org/10.5465/amle.2011.0017
Moss, T. W., Short, J. C., Payne, G. T., & Lumpkin, G. T. (2010). Dual identities in social ventures: An exploratory study. Entrepreneurship: Theory and Practice, 35(4), 805–830. https://doi.org/10.1111/j.1540-6520.2010.00372.x
Nicholls, A. (2010). The Legitimacy of Social Entrepreneurship; Reflexive Isomorphism in a Pre–Paradigmatic Field. Entrepreneurship Theory and Practice, 34(4), 611–633.
Nuraeni, Y. (2020). Kinerja Seksi Usaha Ekonomi Masyarakat Dalam Pemberdayaan Pengelola Badan Usaha Milik Desa (BUMDES) Di Kabupaten Subang. The World of Business Administration Journal, 1(1), 93–111. https://doi.org/10.37950/wbaj.vi.748
Pache, A. C., & Santos, F. (2010). When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3), 455–476. https://doi.org/10.5465/AMR.2010.51142368
Quyen, N. T., & Cheah, J. S. S. (2023). Social enterprise performance: A Systematic Review. Albukhary Social Business Journal, 4(2), 3–22. https://doi.org/10.55862/asbjv4i2a001
Sarasvathy, S. D. (2001). Causation and Effectuation: Toward a Theoretical Shift from Economic Inevit...: Universiteitsbibliotheek Antwerpen. The Academy of Management Review, 4/1/2001, Vol. 26, Issue 2, 26(2), 243–263.
Shakeel, M., Yaokuang, L., & Gohar, A. (2020). Identifying the Entrepreneurial Success Factors and the Performance of Women-Owned Businesses in Pakistan: The Moderating Role of National Culture. SAGE Open, 10(2). https://doi.org/10.1177/2158244020919520
Smith, B. R., & Stevens, C. E. (2010). Different types of social entrepreneurship: The role of geography and embeddedness on the measurement and scaling of social value. Entrepreneurship and Regional Development, 22(6), 575–598. https://doi.org/10.1080/08985626.2010.488405
Smith, W. K., Gonin, M., Besharov, M. L., Smith, W. K., & Besharov, M. L. (2013). Linked references are available on JSTOR for this article?: Managing Social-Business Tensions?: A Review and Research Agenda for Social Enterprise. Business Ethics Quarterly, 23(3), 407–442. https://doi.org/10.5840/beq201
Sofyani, H., Atmaja, R., & Rezki, S. B. (2019). Success Factors of Village-Owned Enterprises (BUMDes) Performance in Indonesia: An Exploratory Study. Journal of Accounting and Investment, 20(2). https://doi.org/10.18196/jai.2002116
Stake, R. E. (1995). The Art of Case Study Research.
Sumiyana, S., Susanto, E. A. A., Rahajeng, D. K. K., & Winardi, R. D. (2024). Indonesia’s local government internal auditors (LGIAs): reflecting on low motivation in enhancing their dynamic capabilities while being the spearhead of responsible auditing. Journal of Accounting and Organizational Change. https://doi.org/10.1108/JAOC-10-2022-0159
Teece, D. J. (2007). The Effect of Firm Compensation Structures on the Mobility and Entrepreneurship of Extreme Performers. Business, 920(October), 1–43. https://doi.org/10.1002/smj
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Knowledge and Strategy, 18(March), 77–116. https://doi.org/10.4337/9781035334995.00014
Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic Capabilities and Organizational Agility. California Management Review, 58(4), 13–35.
Tracey, P., Phillips, N., & Jarvis, O. (2011). Bridging institutional entrepreneurship and the creation of new organizational forms: A multilevel model. Organization Science, 22(1), 60–80. https://doi.org/10.1287/orsc.1090.0522
Vézina, M., Ben Selma, M., & Malo, M. C. (2019). Exploring the social innovation process in a large market based social enterprise: A dynamic capabilities approach. Management Decision, 57(6), 1399–1414. https://doi.org/10.1108/MD-01-2017-0090
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the grameen experience. Long Range Planning, 43(2–3), 308–325. https://doi.org/10.1016/j.lrp.2009.12.005
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2025-09-30
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Rusdianto, R. (2025). ASSESSING SUCCESS FACTORS OF SOCIAL BUSINESS PERFORMANCE. ACCRUALS (Accounting Research Journal of Sutaatmadja), 9(02). https://doi.org/10.35310/accruals.v9i02.1431
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