University of Twente Student Theses

Characteristics of companies' decision-making to support social organizations: Does the provisioning of an innovative impact assessment method potentially increase selection likelihood?

Seidel, Claudius Emanuel (2012) Characteristics of companies' decision-making to support social organizations: Does the provisioning of an innovative impact assessment method potentially increase selection likelihood?

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Abstract:	Due to tense public budgets and other societal developments like ageing populations, alternative providers of social services like social entrepreneurs are increasingly dependent on new external sources of (financial) support. Simultaneously, corporate social responsibility and “Corporate Social Action” (CSA) are becoming important issues for differentiation and therewith, competitive advantage of companies nowadays. This thesis analyzes characteristics of motivation factors and selection criteria of companies to support social organizations. Further, the innovative impact assessment method “Social Return on Investment” (SROI) is enlightened on its potential to serve as a selection criterion. The literature findings are refined and extended through qualitative research with an elite sample consisting of five managers from medium to large German enterprises. In addition, two expert interviews enrich the discussion on SROI. The characteristics of the decision-making process are interpreted applying “Rational Choice Theory” (RCT) and “Social Exchange Theory” (SET). Eventually, the concept of “emotional rationality” is introduced which neatly captures the interplay of rational considerations and interpersonal aspects in decision-making. Whereas the reported motivation factors are mostly confirming literature findings, a discrepancy could be observed in selection criteria of companies. Here, transparency is desired by companies from social organizations but not provided comparatively by themselves. Also, SROI - based on the RCT and SET analysis – obviously contains the potential to be a selection criterion in the future. Essentially, CSA decision-making characteristics – influenced by manifold variables ranging from customer pressure over managerial preferences and shareholder considerations to altruistic intentions – is a mixture of rationally assessing the added value a social investment can deliver to the company while at the same time emotionally processing the personal, individual satisfaction a project or social organization support might give to the person in charge. Practical recommendations can be derived from the analysis’ findings. First, the SROI community should increase awareness within companies on this particular assessment tool, enforce standardization and promote its application. Second, companies are encouraged to disclose generic selection criteria for social support, therewith increasing internal and external efficiency. Third, social organizations should more strongly emphasize in their fundraising campaigns the economic advantages of CSA and allow more widely the practical approach of corporate volunteering. In addition, social organizations can increase the likelihood to be supported if they focus on a high company-organization thematic fit in advance when addressing potential donors. Finally, they can increase transparency and professional behavior – which are important selection criteria, too – through the application of e.g. a SROI analysis. II Theoretically, this thesis provides a request for a more integrated and complementary approach to RCT and SET to analyze human decision-making. Rationality and emotionality should not any longer be conceived of as different strands for diverse decision-making researches. Even findings from neuroscience support this thesis’ conclusions that human decision-making continuously represents a straightforward interplay of RCT and SET aspects.
Item Type:	Essay (Master)
Faculty:	BMS: Behavioural, Management and Social Sciences
Subject:	85 business administration, organizational science
Programme:	Business Administration MSc (60644)
Link to this item:	https://purl.utwente.nl/essays/61912
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