Making sense of social enterprises' crisis preparedness and development of composite index for its assessment

Abstract

Social enterprises are organizations that make society more resilient, but at the same time they have their own vulnerabilities and are threatened by a number of factors that can throw them into a crisis. Nevertheless, a crisis in social enterprises and their crisis preparedness are not topics that the literature adequately deals with. The aim of this mixed method research is to identify how social entrepreneurs make sense of crisis preparedness, and how to measure it. The qualitative part of the research shows that there are five key themes that are perceived by social entrepreneurs when it comes to crisis preparedness in the context of social enterprises' specifics: Crisis preparedness as a prevention against mission drift, as a necessity when working with disadvantaged employees, as a path toward greater financial stability, as a “helper” in a changing legislative environment, and as a response to a fragile organizational structure. Combining these findings with the literature review, composite Perceived Threats Index (PTI) and Crisis Preparedness Index (CPI) are constructed. Using correlation and regression analysis and hypothesis testing, we validate them and confirm relationship between geographical scope of social enteprises and crisis preparedness as well as between latter and perceived threats.