Study points out impact paths for social enterprises

There are many movements that influence the development and strengthening of social entrepreneurship in Brazil.
31 May 2023
Study points out impact paths for social enterprises

The management of impact assessment initiatives is pertinent when dealing with social enterprises. Accordingly, a paper by Juliana Rodrigues, a doctoral student at Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP), and Aurélia Adriana de Melo, a professor at Dom Bosco University, published in FGV EAESP’s journal, GV-Executive, discusses social impact assessments as a way to improve the management of social enterprises.

In this context, there are many movements that influence the development and strengthening of social entrepreneurship in Brazil. In order to deal with this complex subject, the researchers chose to focus on impacts when analyzing leading and lagging indicators, whether involving the evaluation or management of actions, based on a theory of change.

“You can’t manage what you don’t evaluate, you can’t evaluate what you don’t define, you can’t define what you don’t understand, and you can’t succeed without management.” Based on this assertion by W. Edwards Deming, a statistician and pioneer in quality management, the authors highlight what is essential in the process of understanding social impact assessments.


The process starts with defining the scope. It may be well defined and related to core activities if the definition of impact is narrow and intentional. The next issue involves deciding which range of impacts to assess: in the short and medium term (outcomes) or in the long term (impact). Next, it is worth observing what makes sense to evaluate, considering the stage of development/maturity of the business. Finally, it is necessary to choose between customized or standardized evaluation approaches and the indicators: quantitative, qualitative or mixed.


The path to establish a social enterprise based on positive impact is guided by a theory of change, which accompanies and manages the process. This theory has the following components:

  • Inputs
    Resources needed
  • Activities
    Strategies implemented
  • Outputs
    Immediate products of activities
  • Outcomes
    Results in the short and medium term


According to the researchers, when a theory of change is adopted as a guide for impact management and assessment, it is advisable to define key indicators for each of the elements, organized in stages.


It is difficult to pinpoint a single indicator for assessments. One possible form of classification is to use two categories:

  • Lagging indicators
    These can also be called occurrence indicators. They offer a picture of the current state of what is evaluated, as a result of past actions.
  • Leading indicators
    These indicators are those that can drive expected performance and they should be monitored more frequently.

The approach taken in the study in question was to incorporate the notion of lagging and leading indicators into the impact evaluation process, to turn them into a management mechanism. “The aim is to balance the perspective of processes (with a greater focus on efficiency, effectiveness and monitoring of the implementation of the action plan) with results (focusing on long-term social transformation),” write Rodrigues and Melo.

Possible paths

In addition to the long-term monitoring of impact businesses, it is extremely important to also achieve short to medium-term results. Thus, the more complex mechanisms adopt outcome indicators based on a theory of change.

“Although these process indicators do not replace the impact assessment itself, once thought out and structured based on a theory of change built in a robust way, they can be used both for management and for relations and communication with strategic stakeholders,” the authors conclude.

To read the full article, click here.


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