Integrating normative values and/in value creation: A strategic management decision aid tool for social enterprises' values practices

• DOI: http://doi.org/10.1002/nml.21392
• Date: 01 March 2020
• Published date: 01 March 2020

RESEARCH ARTICLE

Integrating normative values and/in value creation:

A strategic management decision aid tool for social

enterprises' values practices

Valérie Michaud | Sonia Tello-Rozas

École des sciences de la gestion, Université

du Québec à Montréal, Montreal, Quebec,

Canada

Correspondence

Valérie Michaud, Université du Québec à

Montréal, École des sciences de la gestion,

Montreal, Quebec, Canada.

Email: michaud.valerie@uqam.ca

Abstract

Normative values are one of the most central motives for

the creation of nonprofits and social enterprises. Neverthe-

less, their actual role in the management of these organiza-

tions has been little explored. Furthermore, the social

enterprise literature has typically approached the concept

of value from a value creation perspective. This paper

looks at the role played by normative values in the strate-

gic management decisions of a nonprofit social enterprise

and unpacks the dynamics between the enactment of these

values and the creation of social and economic value. In

terms of practical implications, this research allows for

proposal of a value-based, strategic management decision

aid tool that emerged from the in-depth, longitudinal study

of a work integration social enterprise. Our findings sug-

gest that the enactment of normative values can actually

feed in economic value creation, which, in turn, allows for

strengthened respect of the normative values, thus generat-

ing virtuous cycles that ultimately help the organization to

find a coherence between its social mission and market.

Values matter: They drive, shape, and constrain behavior (Dees, 2012, p. 321)

Values have long been argued to be central for nonprofits and social enterprises (SEs) (Aiken,

2006; Chen, Lune, & Queen, 2013; Dees, 2012; Rothschild & Milofsky, 2006). Often referred to as

value-based organizations, nonprofits “come into being and exist primarily to give expression to the

social, philosophical, moral, or religious values of their founders and supporters”(Jeavons, 1992,

p. 404). Similarly, social entrepreneurs hold “unique values”(Zahra, Gedajlovic, Neubaum, &

Shulman, 2009). Nonprofits' actual commitment to and “recapturing”of their values has been

Received: 6 July 2018 Revised: 14 August 2019 Accepted: 22 August 2019

DOI: 10.1002/nml.21392

Nonprofit Management and Leadership. 2020;30:377–398. wileyonlinelibrary.com/journal/nml © 2019 Wiley Periodicals, Inc. 377

described as a significant differentiation attribute, and even a “crucial part of developing a sustain-

able, competitive strategy.”(Frumkin & Andre-Clark, 2000, p. 142).

In the midst of increased financial and market pressures (Ebrahim, Battilana, & Mair, 2014;

Ramus & Vaccaro, 2014), the reaffirmation and integration of values into strategic actions could poten-

tially help SEs combat mission drift (Cornforth, 2014) and, more generally speaking, manage their

social-economic tensions (Doherty, Haugh, & Lyon, 2014; Smith, Gonin, & Besharov, 2013).

According to Mair, Battilana and Cardenas (2012, p. 364), “we need to understand the factors that

enable social entrepreneurial organizations to remain committed to their social mission while sustaining

effective operations.”However, to address these challenges, the SE literature has focused more on the

balance between social and economic value creation (Bellostas, López-Arceiz, & Mateos, 2016) than

on how normative values affect social enterprises per se. What role do normative values play in strate-

gic management decisions of SEs? Given the importance such values hold in the creation of SEs, this

relative neglect of their role in decisions is quite surprising. Calls have also been articulated, outside

the nonprofits and SE literature (that is, in the mainstream organizational and management studies), to

move from organizational values “theory to practice”(Malbaši

c, Rey, & Poto

can, 2015), for a focus on

“values work”and “values practices”(Gehman, Trevino, & Garud, 2013).

In this paper, we analyze the dynamics between normative values and value creation and present

a value-based strategic management decision aid tool that emerged from the in-depth study of a non-

profit work integration social enterprise. Based on the integration of the social and economic value

concepts with the normative values, this allows for an understanding of the concrete role values

played in the strategic management of SEs, more specifically for “nonprofit with a mission-related

enterprises”(based on Fruchterman's (2011) typology).

In what follows, we briefly review the literature, observing the little number of studies on the role

of values in the managerial practices of nonprofits and SEs. We then present the case and methods

and the results and finally discuss implications for the theory and practice of social enterprises' strate-

gic management.

1|LITERATURE REVIEW

1.1 |Normative values and/in the (mainstream) management literature

According to an oft-cited definition, a value can be conceived of as “an enduring belief that a specific

mode of conduct or end-state of existence is personally or socially preferable to an opposite or con-

verse mode of conduct or end-state of existence”(Malbaši

c et al., 2015, p. 438; Rokeach, 1973,

p. 5). We adopt Collins and Porras' (1994, p. 73) encompassing definition of organizational values as

“the organization's essential and enduring tenets—a small set of general guiding principles.”Norma-

tive values “tell us how we should behave”(Argandoña, 2003, p. 16). Pant and Lachman (1998)

showed that values “may legitimize or sanction strategic alternatives as desirable, acceptable, or pro-

scribed depending on their organizational contexts,”with “core”values (which generate more con-

sensus and greater resistance to change) exerting more control and influence on strategic choices

than “peripheral”values.

The values literature is marked by different models and taxonomies such as Cameron and Quinn's

(Cameron, 2005) competing values framework. Bourne and Jenkins (2013) distinguished espoused,

attributed, shared, and aspirational values, and theorized on how overlaps and gaps can emerge

between those forms, together with the consequences of such situations. Another stream focused on

the analysis of (financially) successful companies' sets of organizational values (Malbaši

c et al.,

378 MICHAUD AND TELLO-ROZAS