How Do Social Enterprises Create Public Value through Resource-focused Action? A Dual Case Comparative Study

In recent years, social enterprises have been striving to create public value, emerging frequently in the provision of public goods and services, and attracting significant theoretical attention. However, existing research lacks an in-depth analysis of the mechanisms and outcomes behind this new phenomenon.

The integration of commercial and social logics by social enterprises represents a typical attempt by non-public entities to create public value, leveraging the sustainability of business models to generate outcomes such as efficiency, equity, and civic rights. To explore the dynamic process of public value creation by social enterprises, this study adopts resource-focused action theory to conduct a comparative analysis of two work-integrated social enterprises in the field of intellectual disabilities. It seeks to reveal how social enterprises create public value under resource-scarce conditions.

The study reveals several key findings. First, under dual resource and capability constraints, the process of public value creation by social enterprises comprises two main stages: an initial stage and a diffusion stage. These stages correspond to two distinct action strategies, namely, resource bricolage and resource orchestration. Second, the process of public value creation by different social enterprises exhibits both consistencies and differences. The consistencies are evident during the initial stage, whereby both social enterprises adopt similar internal resource input strategies and network resource integration strategies to overcome the resource constraints. The differences are reflected at the diffusion stage. Although both social enterprises adopt three resource orchestration actions—corporate structure integration, external linkage enhancement, and value connection leveraging—their resource orchestration follows distinct action logics due to their differing entrepreneurial contexts and goals. Specifically, one social enterprise adheres to a “public welfare priority” logic, while the other follows a “commercial strengthening” logic. In the combined process of consistency and differentiation, both social enterprises ultimately align to achieve the shared goal of creating public value. Third, the outcomes of public value creation by social enterprises include instrumental value and purposive value. During the initial stage of public value creation, both instrumental and purposive value emerge, with the instrumental value supporting the purposive value. During the diffusion stage, the instrumental value are stablized, while the purposive value expand significantly. As the instrumental value continue to support the purposive value, the purposive value, in turn, reinforce the instrumental value. The two kinds of value adjust dynamically and co-evolve over time.

The theoretical significance of this study is reflected in several areas.First of all, this study analyzes how social enterprises, non-public administrative entities, creat public value, there by exceeding the limitations of prior research that generally focused on public sector contributions to public value creation. Additionally, this study innovatively applies resource-focused action theory to the context of public value creation among social enterprises, contributing new insights to the development of this theoretical framework. Furthermore, it identifies a public value creation pathway for social enterprises that integrates both consistency and differentiation, providing valuable guidance for diversified practices of public value creation by social enterprises.