Prof. Srivardhini K. Jha makes valuable contributions to product-diversification literature; published in Business & Society
‘Context-driven Diversification in Social Enterprises’ co-authored by Prof. Jha investigates role of context in diversification strategies of Social Enterprises (SEs)
10 September, 2024, Bengaluru: The research paper, ‘Context-driven Diversification in Social Enterprises’ co-authored by IIMB faculty Prof. Srivardhini K. Jha, Entrepreneurship area and Prof. Nachiket Bhawe, UNC Pembrook has been accepted for publication in Business & Society.
The study investigates the often-overlooked role of context in product diversification—particularly in Social Enterprises (SE). It offers nuanced insights into how different types of diversification can help SEs balance their dual goals of financial sustainability and social impact, offering fresh perspectives on a vital, yet under-researched area of enterprise strategy.
Abstract: Recent work has emphasized the role of context in shaping the diversification strategies of social enterprises (SEs), but our understanding remains superficial. We identify two types of context-driven diversification strategies - market development diversification (MDD) and market functioning diversification (MFD) - depending on the type of voids being addressed. We then empirically test how these diversification strategies impact the performance of SEs on the twin dimensions of financial growth and social impact. Using a mixed-method approach of qualitative interviews and a longitudinal database of Indian microfinance firms (MFIs), we find that while MFD positively impacts financial growth, MDD has a positive effect on social impact. Further, we find that the strategic fit (or lack of it) between the SE’s legal form and the type of diversification enhances (undermines) financial growth. However, strategic fit between the legal form and diversification choice does not amplify social impact. The study contributes to product diversification literature, which has paid limited attention to the role of context.