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Towards an understanding and measurement of autonomy in nonprofit

ventures

Fredrik O. Andersson

University of Wisconsin-Milwaukee

Jurgen Willems

University of Hamburg

Paper presented at the 11th International Conference of the International Society for Third Sector Research (ISTR),

University of Muenster, Muenster, Germany, July 22 - 25, 2014

Social entrepreneurship continues to attract attention among nonprofit practitioners and scholars.

This interest is not surprising since social entrepreneurship has been described as a powerful way

to improve organizational sustainability and generate substantial social impact and change

(Austin, Wei-Skillern, and Stevenson, 2006; Boschee, 2006; Martin and Osberg, 2007).

Although our overall understanding of how social entrepreneurship manifests itself within

nonprofit and civil society organizations is growing (Morris, Webb, and Franklin, 2011), several

conceptual, theoretical and methodological challenges remain (Short, Moss, and Lumpkin,

2009). Specifically, little is known about the antecedents and conditions under which these

socially entrepreneurial behaviors emerge (Lumpkin, Moss, Gras, Kato, and Amezcua, 2013).

The purpose of this research is to explore autonomy as one potential antecedent of social

entrepreneurship in nonprofit organizations. Autonomy is an organization-level concept that

expresses the extent to which an organization is free from internal (i.e. internal autonomy) and

external (i.e. external autonomy) limitations to identify, develop and pursue strategic, tactical and

operational opportunities. Internal limitations are related to internal structural features of and/or

(lack of) available resources for an organization, while external limitations primarily relate to

characteristics and constraints emanating from the environment in which an organization

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operates (e.g. external stakeholders, applicable laws, etc…). We provide a more in-depth

discussion of the two forms of autonomy in the literature review section.

To date, few studies have investigated how autonomy contributes to the social

entrepreneurial process within civil society organizations (for an exception see Pearce, Fritz, and

Davis, 2010). The dearth of discussion focusing on the role and impact of autonomy in social

entrepreneurship is somewhat surprising given that autonomy as a construct is far from new in

management research (e.g., Hackman and Oldham, 1975; Kanter, 1983) or in entrepreneurship

research (Lumpkin and Dess, 1996). Generally speaking, autonomy is deemed important for

entrepreneurship because without autonomy organizations will be restricted in their ability to

leverage their internal capabilities to the fullest and restrain its opportunities for fostering

entrepreneurial behavior throughout the agency. Thus, autonomy is “[…] required for

entrepreneurial initiatives to emerge and thrive, and constitutes a basic feature of

entrepreneurially oriented organizations” (Lumpkin, Cogliser and Schneider, 2009 p. 49).

Including autonomy as a central feature when trying to understand social entrepreneurship in

nonprofit organizations is important for several reasons. First, much of the current social

entrepreneurship literature tends to emphasize behaviors and impact of single and individual

social entrepreneurs (Short, Moss, and Lumpkin, 2009). In contrast, the autonomy construct

directs attention to the organizational level and key organizational functions such as governance

and stakeholder relations. For example, since the board of directors and other stakeholders, who

possesses formal power and exercise oversight and control, are key players in establishing the

internal infrastructure and ground rules of a nonprofit agency these actors and their behavior are

also likely to impact the level of internal and external autonomy of the organizations.

Furthermore, while a governance lens can be applied to explore how nonprofits set up structures

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for cultivating autonomy, for example by breaking down internal hierarchies, the autonomy that

ultimately matters for socially entrepreneurial behaviors must go beyond just structure as

organizations “[…] must actually grant autonomy and encourage organizational players to

exercise it” (Lumpkin and Dess, 1996 p. 142). Hence, studying autonomy requires researchers to

explicitly emphasize inter-and intra-organizational relations as well as organizational features

typically downplayed or omitted in individually oriented studies of social entrepreneurship.

Second, the autonomy dimension brings to light the many demanding choices nonprofits must

make in their efforts to be more entrepreneurial. As Cornforth (2004) has pointed out, the

strategic management and governance of a nonprofit organization is a matter of dealing with the

tension between controlling and managing paradoxes. Managing these paradoxes requires the

ability to balance simultaneously the constraining and liberating elements of autonomy, which is

indeed a formidable challenge (Gebert, Boerner, and Lanwehr, 2003; Taylor and Lansley, 2000).

Yet, it is important to point out that autonomy is not a given nor a permanent feature, and

nonprofit boards and leaders seeking change and transformation via social entrepreneurship must

realize that autonomy, in the words of Lumpkin, Cogliser and Schneider (2009 p. 63), “is a

scarce capability that is granted to organizational members, and cannot be assumed but must be

perpetually negotiated.” Third, besides providing insights into how autonomy can contribute to

fostering social entrepreneurship in nonprofits, the inclusion of this dimension into existing

models also helps internal and external nonprofit stakeholders to build awareness of what

prevents nonprofits from behaving entrepreneurially. As Morris, van Vuuren, Cornwall and

Scheepers (2009 p. 432) observe, many organizations “[…] naturally drift in the direction of

control, structure, and bureaucracy” and thus become resistant engaging in entrepreneurial

behavior as they mature. Moreover, to clarify the roots of such resistance important clues can be

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found in the delicate internal architecture agencies construct for balancing autonomy as they

evolve. Also, scholars have long recognized that nonprofits tend to rely on a variety of resource

providers to support their mission-related work and this “resource imperative results in the

adaptation of organizations to requirements of important resource providers” (Froelich 1999 p.

247). In other words, another preventive source of nonprofit entrepreneurial activity could be the

lack of external autonomy from external resource providers and other influential external

stakeholders.

Based on the notion that our understanding of social entrepreneurship in nonprofit

organizations is incomplete without a better understanding of autonomy, the goal of this paper is

to utilize the autonomy concept to explore more concrete antecedents of social entrepreneurship

in nonprofit organizations. Specifically we aim to identify distinct factors to help explain social

entrepreneurial behavior within and by nonprofit organizations.

In the subsequent section we discuss the key distinctions between internal and external

autonomy, and also their particular relevance for social entrepreneurship in nonprofit

organizations. From this literature review, we propose a set of detailed autonomy measures that

we translate into survey items for an exploratory study. First we test the content validity of the

respective internal and external autonomy items with a rater analysis. Second we do a

preliminary factor and discriminant analysis of the items based on an online survey among

nonprofit managers (n = 212). This allows us to distill potential antecedents in the broader area

of autonomy to explain social entrepreneurship. From our findings we derive and discuss

avenues for future research.

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Autonomy and social entrepreneurship: Two dimensions

Scholars have long suggested that as organizations grow and mature, autonomy becomes a vital

ingredient for those who seek to maintain an emphasis on flexibility, adaptability, creativity and

innovation (Burns and Stalker, 1961). Furthermore, the presence of autonomous agents within

established organizations have been considered essential for organizations to overcome inertia

and resistance to change (Schön, 1963). Hence, it is no surprise that entrepreneurship researchers

have a great deal of interest in the autonomy construct. Acknowledging the importance of

independent and resourceful agents, entrepreneurship scholars have posited that in order for

entrepreneurial actions and initiatives to develop and flourish within an existing organization it

must grant organizational members freedom to not only come up with but ultimately enact

creative and/or novel ideas (e.g. Burgelman, 1983; Lumpkin and Dess, 1996; Kanter, 1983). In

an influential article, Lumpkin and Dess (1996) explicitly refer to this critical dimension as

autonomy and argue it is required for entrepreneurship to thrive in an organization. Thus,

autonomy depicts a key component in fostering an entrepreneurial organizational culture and as

an enabler of entrepreneurial organizational behavior (Kanter, 1983; Lumpkin, Cogliser and

Schneider, 2009)

However, despite its intuitive appeal many find the autonomy concept hard to pin down. So

even though the autonomy element has long been considered an important element for

understanding the entrepreneurial behavior of organizations, the absence of a robust measure

have made many scholars in both business and nonprofit studies hesitant to include autonomy in

their research (Lumpkin, Cogliser and Schneider, 2009). In addition to just trying to capture the

degree of autonomy one must also take into consideration that there can be different types of

autonomy (Janz, Colquitt, and Noe, 1997). In this paper we concentrate on two types of

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autonomy, internal and external (Nordqvist, Habbershon and Melin, 2008). The internal element

is related “to empowering individuals and teams within an organization, providing them with

sufficient freedom to be creative” and the external element reflects “[…] autonomy towards

external stakeholders and monitors.” (p. 112) Both forms of autonomy are characterized by an

independence/dependence tension and the challenge of loosening control without losing control.

We argue it is essential to capture and comprehend how nonprofits deal with these

independence/dependence tensions if we are to understand how and why social entrepreneurship

manifests itself within nonprofit organizations.

Internal autonomy

More than fifty years ago, Schon (1963) noted that organizations often “waste” existing

innovative resources by setting up internal barriers and administrative buffers preventing new

ideas and innovations from being promoted and realized within organization. Twenty years later

Burgelman (1983 p. 241) attempted to understand the forces that unleash entrepreneurial

activities within organizations and concluded: “the motor of corporate entrepreneurship resides

in the autonomous strategic initiatives of individuals at the operational levels in the

organization.” Thus, entrepreneurial initiatives are believed to be strongly influenced by the

independence, freedom and flexibility given to individuals and/or teams within organizations

(Galbraith, 1982; Kanter, 1988). Lumpkin, Cogliser and Schneider (2009 p. 47) summarize the

relation between entrepreneurial behavior and autonomy in the following way:

In organizations with strong entrepreneurial cultures, practices aimed at fostering

autonomy, […], are designed to create environments where autonomous behavior

stimulates entrepreneurial outcomes. Autonomy may be even more important in

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settings where strategic renewal occurs only because key individuals champion

entrepreneurial initiatives that transform an organization’s strategic posture

Lumpkin, Cogliser and Schneider (2009) also differentiate structural from strategic internal

autonomy, or the autonomy of means from the autonomy of goals. Viewed from a top-

management perspective, enabling an individual or a team to solve a particular problem or

achieving a certain objective by letting the individual/team determined the necessary means to do

so would represent a structural autonomy approach. Enabling individuals and/or teams to also

define the problem or objective to be pursued constitutes a strategic autonomy approach.

Previous research clearly indicates that structural autonomy represents an important step for

organizations that want to craft a more entrepreneurial posture (Galbraith, 1982; Kanter, 1988).

However, as Lumpkin, Cogliser and Schneider (2009) argue, if we are primarily interested in

capturing and understanding variance in entrepreneurial behavior within and/or between

organizations, our focus should be on strategic autonomy.

Thus, high levels of formalization, controlling policies and hierarchical organizing tend to

hide creativity, talent and innovative capacity in organizations (Robinson, 2001), which indicates

that internal strategic autonomy may indeed represent a critical element to free these capacities in

entrepreneurial organizations. Still, it is vital to recognize that autonomy does not mean anarchy

or no strings attached, nor is it useful to think of autonomy in terms of good or bad or for that

matter as an absolute concept. Just as other types of organizations, nonprofits must find a way to

balance constraining and liberating elements simultaneously both internally and externally as

they seek to fulfill their missions and visions (Kanter, 1988; Taylor and Lansley, 2000). For

example, Kanter (1988) argues that entrepreneurial efforts in organizations typically fail because

they are overly constrained or because they are undermanaged. This implies that the internal

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autonomy and social entrepreneurship in nonprofit organizations are likely to be closely related

to the governance and strategic management functions of nonprofit agencies. Drawing on

Lumpkin, Cogliser and Schneider’s (2009) work, we propose that internal autonomy refers to the

ability of a nonprofit organization’s internal actors (e.g. board members, managers, and/or

operational staff) to work independently, make decisions, and take actions aimed at bringing

forth an idea or vision and carrying it through to completion.

External autonomy

In addition to internal autonomy one must also consider the autonomy of the nonprofit

organization vis-à-vis its environment and external stakeholders. In order to acquire and maintain

adequate resources, nonprofits must continuously interact with individuals and groups that

control important resources. Consequently, nonprofits are, as stated by Froleich (1999 p. 247),

“not totally autonomous entities pursuing desired ends at their own discretion. Rather,

organizations are constrained by the environment as a consequence of their resource needs.” In

other words, the degree of external autonomy is related to the degree and type of dependence

experienced by the nonprofit, which in turn is related to the importance and concentration of

resources provided by external stakeholders (Pfeffer and Salancik, 1978). Indeed, nonprofit

scholars have a long tradition of investigating how inter-organizational collaborations and other

central-local relationships between a nonprofit and its stakeholders can affect autonomy and the

ability to maneuver and experiment within such structures (e.g. Taylor and Lansley, 2000;

Tsasis, 2009). For example, several studies have examined nonprofit-government interactions

and indicated participating in government-funded programs can lead to less overall

organizational autonomy and also restrain the room for innovation and experimentation (Jung

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and Moon, 2007; Nikolic and Koontz, 2007). Thus, external actors can and often will have direct

or indirect impact on the external autonomy of a nonprofit organization that in turn affects the

entrepreneurial behavior of that organization.

Again, the degree of external autonomy is neither given nor constant but linked to the ability

and approaches a nonprofit takes to manage these resource dependencies. For example, an

agency may select to simply comply with any demands emerging from key stakeholders or

resource providers, which will result in less external autonomy compared to an organization

taking steps to avoid, modify or control the locus of their dependence (Oliver, 1991). For

example, one way to obtain greater external autonomy is to seek greater levels of economic self-

sufficiency by using earned income strategies. Thus, we propose that external autonomy refers to

the freedom a nonprofit organization has to make independent decisions and carry out its

operations free of constraints imposed by external stakeholders (e.g. individual donors,

institutional donors, regulatory bodies, community partners, or advocates).

Measuring internal and external autonomy

In the social entrepreneurship literature, the need for autonomy is sometimes emphasized as one

element driving individual social entrepreneurs to break away from societal norms and

frameworks to seek different ways to address and/or solve social problems (Light, 2009).

However, autonomy seldom plays a pivotal role when social entrepreneurship is discussed from

a nonprofit organizational perspective. Although researchers have begun to conceptualize and

measure key components of social entrepreneurship behavior in nonprofit organizations, few

studies include measures of autonomy (Morris, Webb and Franklin, 2011). Moreover, the

empirical findings from the few studies on social entrepreneurship that included an autonomy

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construct are mixed. Voss, Voss and Moorman (2005) explored entrepreneurship in nonprofit

theatres and detected a weak relation between employee autonomy and stakeholder support,

defined as different types of revenue. However, we chose not to interpret autonomy as a social

entrepreneurial characteristic but rather as a contextual enabling that is felt by managers, as

creativity and artistic freedom are essential norms of many nonprofit organizations. Another

autonomy measure can be found in the work by Pearce, Fritz and Davis (2010 p. 227) were

autonomy is defined as “the ability to take independent action that affects strategy." Without

specifying in any great detail how this measure was developed they found a significant relation

between autonomy and performance, measured as member attendance and congregational giving,

in a large sample of religious organizations. This construct has several positive features but was

developed with congregations as the main unit of analysis, which might have limited

applicability to other types of nonprofit organizations.

In summary, even though autonomy has long been considered an important element for

understanding entrepreneurial behavior of organizations the absence of a robust measure have

made many scholars in both business and nonprofit studies hesitant to include autonomy in their

research (Lumpkin, Cogliser and Schneider, 2009). Thus, there is a need to develop and test

constructs and measures of internal and external autonomy and explore how these constructs

relate to socially entrepreneurial activity in nonprofit organizations.

Methodology

Our analysis contains multiple parts. First, we introduce a definition for each of the two

autonomy constructs. Based on the above discussion we define internal autonomy as the ability

of a nonprofit organization’s internal actors (e.g. board members, managers, and/or operational

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staff) to work independently, make decisions, and take actions aimed at bringing forth an idea or

vision and carrying it through to completion, and we define external autonomy as the freedom

that a nonprofit organization has to make independent decisions and carry out its operations free

of constraints imposed by external stakeholders (e.g. individual donors, institutional donors,

regulatory bodies, community partners, or advocates).

Second, from the existing literature and inspired by existing scales we have derived a set of

items for measuring internal and external autonomy (Dess, Lumpkin and Covin, 1997; Lumpkin,

Cogliser and Schneider, 2009; McGrath, 2001; Oliver 1991). A first list of 40 items was

composed: 22 items measuring internal autonomy and 18 measuring external autonomy. Due to

the results of the next step (rater analysis), small changes were made and two items were added.

The final list of 42 items, and the classification between internal and external autonomy can be

found in Table 1.

Third, we performed a rater analysis to examine the extent that items measure what is stated

in the respective definitions of internal and external autonomy (content validity). Three raters

were given the initial definitions of internal and external autonomy and the initial items,

randomly listed. Furthermore, they were asked to (1) classify the items as indicators of either

internal or external autonomy, and (2) provide comments on the wording, readability, and

straightforwardness of the various items. To assess rater consistency, we calculated the Fleiss’

Kappa index (Fleiss, 1971), which is a number between 0 and 1, with 0 indication no agreement

and 1 indicating full agreement. High agreement suggests a similar interpretation of the items

and the definitions, which indicated high content validity (Boyer and Verma, 2000).

Fourth, we developed an online survey in which the autonomy items were asked, using a 7-

point likert scale: Strongly Disagree (-3), Disagree (-2), Somewhat Disagree (-1), Neither Agree

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nor Disagree (0), Somewhat Agree (1), Agree (2), Strongly Agree (3). Items were randomly

shuffled for each respondent. Furthermore, the questionnaire included a construct measuring the

perception of the social entrepreneurial status of the organization. A definition of social

entrepreneurship, based on Helm and Andersson (2010), was given, and subsequently

respondents were asked: “Based on the above definition, please fill out the following three

statements:” followed by three 7-point Likert scale items (same scale as autonomy items). Our

definition of social entrepreneurship and the items are shown in the Appendix. The internal

consistency of the three items was high (Cronbach’s alpha is 0.822). The mean of the averaged

construct score is 2.10 on scale from – 3 till 3 (s.e. is 0.061), while skewness is -1.701 (s.e. is

0.167), showing a tendency to score on the positive side of the scale. Given (1) the highly

perceptual nature of this measurement potentially influenced by various individual and social

constructionist elements (Willems et al. 2014), (2) the presumable social desirability in such a

self-evaluation by managers (Green and Griesinger, 1996) and (3) the potentially substantial

common method bias resulting from probing in the same short questionnaire for both autonomy

and social entrepreneurship, we only use this measurement to clarify preliminarily the potential

(and mainly constructionist) relatedness of autonomy factors with social entrepreneurship.

Regardless these limitations for thorough interpretations it does however provide basis and a first

insight for developing more concrete avenues for further research.

We applied a convenience snowball sampling procedure and utilized several channels to

reach a variety of nonprofit managers. In total, 212 questionnaires were completed (from which

167 came from nonprofit mangers in developing countries including Bangladesh, India, Nepal or

Sri Lanka, 32 from Malawi, South Africa or Uganda, and 13 from elsewhere). Of all

respondents, 139 (65.6%) indicated they were one of the founders of the organization.

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Subsequently, we performed an exploratory factor analysis on the 42 autonomy items (with vari-

max rotation) in order to discover independent autonomy factors. As our aim is exploratory, i.e.

discovering various and more concrete antecedents within internal and external autonomy, we

focused on extracting a variety of factors, rather than on proposing a few but robust factors (e.g.

for immediate further confirmatory analysis or hypotheses testing). Nevertheless, once the

various factors are documented, we verify internal consistency (based on cronbach’s alpha

values). This allows for the postulation of further steps, not only about methodological

improvements, but we can also investigate the relatedness of each of these factors with social

entrepreneurship. Hence, for the factors meeting the internal consistency criterion, we explore

their relatedness with the perception based measurement of social entrepreneurship. For this we

apply a partial least square structural equation model (SEM, with SmartPLS). The advantage of

such variance based structural equation analysis is that it enables the evaluation of the factors

regarding their explanatory value (in contrast to more traditional covariance based SEM analyses

that focus on validation a set of relations between various latent variables) (Ringle, et al., 2005;

Hair et al., 2012).

Results

For the rater analysis, two items could not be classified by one of the three raters. As a result

they were not included in the agreement test. All remaining items except one were classified the

same by the three raters. Consequently, the Fleiss’ Kappa value is both high and significant when

we tested the agreement among the raters (0.964; p < 0.001), and it is 0.973 (p < 0.001) when

comparing the raters’ classifications and the original classification. In general, we conclude high

content validity from this test. Furthermore, some minor changes on the wording of the items

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were also performed based on the comments from the raters. The items not coded or for which

disagreement existed where changed and two new items were added to perform the next step of

our analysis (factor analysis).

For the factor analysis we use the eigenvalue criterion (eigenvalue of factor equal or lager

than 1) to decide on the number of factors. We acknowledge that this is an arbitrary cut-off point.

Yet, given the exploratory aim of our study, using this criterion resulted in a number of factors

that covers a substantial part of the variance observed in the items. As we have no prior

knowledge from earlier studies, at this stage we therefore consider it valuable to get a holistic

insight into the various potential autonomy antecedents. From the analysis, 10 factors emerged,

accounting for 61.0% of the observed variance. The factors are documented in Table 1 (along

with explained variances, factor loadings and Cronbach’s alpha values). We used 0.400 as the

cut-off to consider loadings relevant. With the same cut-off value, items with too low loadings

where excluded, and also items with too strong cross loadings (These 6 items are listed at the end

of Table 1).

Except for one factor (Factor 4), all factors can be classified as an antecedent within either

the internal or the external dimension. The first factor (explaining 23.4% of the total variance,

with Cronbach’s alpha 0.85), focuses on the existence of various internal procedures within the

organization. This factor contains 9 items from which 7 items are coded as internal autonomy

(Cronbach’s alpha value for only the internal autonomy items is 0.83). Therefore this factor can

predominantly be considered as an internal autonomy antecedent, although internal procedures

might be related to external elements such as external laws and regulations urging such internal

procedures (given the two external items loading on the same factor). The second factor

(explaining 8.5% of the total variance, with Cronbach’s alpha 0.84) is entirely composed of

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external autonomy items and deals with the extent to which an organization adjusts its strategy

and practices based on preferences of funders and donors. In contrast, the third factor (explaining

7.0% of the total variance, with Cronbach’s alpha 0.72) entirely consists of internal autonomy

items, and focusses on the extent that employees within an organization are empowered to act

independently. The fourth factor (explaining 4.3% of the total variance, with Cronbach’s alpha

0.71) is a miscellaneous factor with two internal and two external items. However, the factor

deals with the extent that bottom-up and beneficiary-driven initiatives are encouraged in the

organization. This opens an interesting perspective that, at least in the context from which we

collected data, where beneficiaries are not necessarily seen as ‘being outside’ the organizations.

We discuss is the next section an important further avenue regarding the perceived boundaries of

a nonprofit organization when focusing on social entrepreneurship. The fifth factor (explaining

4.0% of the total variance, with Cronbach’s alpha 0.71), entirely consists of internal autonomy

items, and focusses on the extent to which relationships within the organization are informal and

have an ad-hoc approach. The remaining five factors discovered have either a low Cronbach’s

alpha value or only consist of one dominant item. Therefore, at this stage of our exploratory

analysis they add little value in terms of any further analysis. However, given that they emerged

from the exploratory analysis, they indicate the likeliness that other relevant factors, and thus

other potential antecedent might exist. In order to explore them, additional items in a subsequent

study could be useful. From the content of these items it appears as if they each focus on specific

elements such as the level of equal status among people in an organization, (need for)

communication with external stakeholder, relationships with other organizations in the sector,

and freedom to allocate financial recourses. Depending on the particular context, they might

deserver more attention for more in-depth insights.

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We have analyzed the first five factors in relation to the perceptual measure of social

entrepreneurship by use of a partial least square path analysis. Each factor was modeled as an

independent variable to explain the perception based measurement of social entrepreneurship.

Comparing the average variances explained (AVE) of each construct’s items to each construct’s

squared correlations with the other constructs in the model – which can serve as a discriminant

evaluation of the factors and the measurement (Fornell and Larcker, 1981) – indicates that

constructs can be considered sufficiently different to be used in a single analysis. However, only

the fourth, and mixed factor regarding bottom-up beneficiary involvement appears to

significantly relate to the perception based measurement of social entrepreneurship (path

coefficient is 0.259; with R² of the social entrepreneurship measurement being rather limited to

0.154).

Discussion and further research

From our results we can derive some important further steps, both methodological and

theoretical. First, based on the factor analysis, and combining our findings with the rater analysis,

we were able to document several potential autonomy antecedents of social entrepreneurship,

and that these antecedents were situated either in the internal or in the external autonomy

dimension. This supports the theoretical value of differentiating between the two types of

autonomy. Also for further analysis, this opens opportunities to take a more focused but also

more robust approach to deepen insights into the two dimensions. For example, future studies

can focus on a set of particular antecedents in either the internal or the external dimension, but

with a more robust measurement and validation of antecedents and indicators of social

entrepreneurship. Preliminary, three potential internal antecedents were identified, respectively

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dealing with degree to which (1) internal procedures have to be followed, (2) employees are

empowered to decide independently and (3) informal relationships are relevant within the

organizations. An additional external potential antecedent focusses on the extent to which

organizational decisions are dependent on preferences of funders and donors. However, none of

these factors seems to relate significantly to the preliminary measurement of social

entrepreneurship that we used. Of course, such finding urges a re-evaluation and or a more

elaborated version of this measurement.

Second, as one of the factors includes both internal and external items, and came up as the

only significant factor to the perception based measurement of social entrepreneurship, we need

a more clear-cut definition of the boundary between internal and external autonomy. The factor

at stake regards the extent that bottom-up initiatives, from beneficiaries, are encouraged within

an organization. As beneficiaries could from a traditional point of view be seen as external

stakeholders (Van Puyvelde et al., 2012) in the context of social entrepreneurship and/or grass

root initiatives, we might have to reconsider such classification. More concretely, involving

stakeholders that are at the core of an organization’s mission could be considered as a necessary

condition for good nonprofit governance (Willems et al. 2012), which in turn enables a more

entrepreneurial environment. In addition, this opens further avenues regarding the need for a

further exploration of nonprofit governance practices, such as intensively involving beneficiaries

and other stakeholders in the decision process, as potential antecedents of social

entrepreneurship. For example, one way to gain more insight into the role of beneficiary input is

to pay attention to membership organizations where the members are extensively involved in the

governance processes of the organization. Such focus can be applied to build a better

understanding of how autonomy is managed through beneficiary involvement and whether this

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results in more favorable social entrepreneurial behaviors by members. Consequently, the impact

of power and power distribution in an organization might also deserve attention to fully

understand who is really in charge and who has the ability to influence the internal as well as

external side of autonomy. In this context, it might be relevant to elaborate in further studies on

potentially more complex theorizations where an optimal level of autonomy has to be managed,

between too much and too little autonomy in order to obtain the desired entrepreneurial behavior

of stakeholders to increase organizational performance (Rainey and Steinbauer, 1999).

Third, as the factor analysis shows, most likely more antecedents might be relevant. In

particular from a methodological point of view this urges the development of more robust

measurements to get additional insights in very concrete and manageable antecedents. One

element long considered an important element for independent action is organizational slack.

Including capacity, access to capital or lack of it – focused on with the slack concept – could be

used as very concrete measures of autonomy, to investigate impact on social entrepreneurship.

For example, to what extent are endowments and other forms of financial capacity related to

social entrepreneurship. Also, to what extent are nonprofits with different revenue models (e.g.

donative, commercial or mixed) more or less likely to engage in socially entrepreneurial efforts?

A second feature with the potential to impact the likelihood of socially entrepreneurial

organizational activity is life-stage. For example, as organizations age and in many cases get

bigger, they often become more bureaucratic and prone to inertia. At the same time, mature

organizations often have more resources and capacity as well as legitimacy. In contrast, new

organizations may be more nimble and willing to test new ideas but often lack the financial

muscles to put such ideas into practice. Finally, it seems feasible to think that not all nonprofits

have the same incentives or interest in socially entrepreneurship. Depending on the mission and

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vision of the organization, some may not want to grow or test new ideas whereas others will

frequently develop new programs and test new things as part of their overarching mission (e.g.

arts organizations).

Conclusions and limitations

We made a literature based distinction between internal and external autonomy as areas of

potential antecedents for social entrepreneurship. Items derived from this literature were tested

for face validity with a rater analysis, and subsequently their factor structure was explored based

on survey responses form an online questionnaire. Several factors could be distinguished, and

could be classified as either an internal or an external antecedent. However, one particular factor

includes both internal and external items, which urges further research steps and theorization on

where the boundaries of organizations should be drawn for the particular context of social

entrepreneurship. Our preliminary interpretation focuses on the dynamic and early stage

character of social entrepreneurship, suggesting the relevance of bottom-up beneficiary

empowerment and stakeholder involvement in governance processes. We have provided several

options for further and more detailed research on how internal and external antecedents can be

further elaborated or in practice be quantified for further empirical validation.

As a way of further validation we aimed at investigating the relatedness of the factors found

with a perception based measurement of social entrepreneurship. However, we acknowledge the

substantial limitations that this might have caused with respect to common method bias, social

desirability and atomistic fallacy (Willems et al., 2014). Consequently, only limited

interpretations could be given to the single confirmed relationship between ‘bottom-up

beneficiary empowerment’ and perceived social entrepreneurship. Given this important

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limitation, we suggest for further research a more objective and detailed, and potentially also an

external evaluation of social entrepreneurship.

References

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26

Appendix: perceptual measurement of social entrepreneurship.

This question was asked to measure individual perception of Social Entrepreneurship (based on

work of Helm and Andersson, 2010).

Please read the following definition of Social Entrepreneurship carefully:

Social entrepreneurship is a catalytic behavior of nonprofit organizations that engenders value

and change in the sector, community, or industry, through the combination of innovation, risk

taking, and proactiveness.

In this definition:

(1) Innovation refers to: the creation and use of new programs, services, processes, policies in an

existing or new focus area of the organization.

(2) Risk-taking refers to: the willingness to engage in behavior that will alter the organizations

internal or external operating norms.

(3) Proactiveness refers to: the implementation of a program, service, policy, or process before

other organizations in the sector or community in response to new emerging opportunities.

Based on the above definition, please fill out the following three statements

<SCALE: Strongly Disagree (-3), Disagree (-2), Somewhat Disagree (-1), Neither Agree nor

Disagree (0), Somewhat Agree (1), Agree (2), Strongly Agree (3)>:

My organization can be considered a socially entrepreneurial organization

Donors and funders consider us a socially entrepreneurial organization

Similar service providers consider us a socially entrepreneurial organization

27

Table 1: Factor structure, factor loadings, internal consistency, explained variance and item descriptive of the autonomy scale.

Factor number

1 2 3 4 5 6 7 8 9 10

Cronbach's alpha

0.849 0.842 0.716 0.713 0.709

0.591 0.33

0.3

Explained variance (in %)

23.36 8.517 7.022 4.301 3.896 3.232 2.967 2.663 2.53 2.491

Cumulative explained variance (in

%) 23.36 31.88 38.9 43.2 47.09 50.33 53.29 55.96 58.5 60.98

Items Mean

(St.Dev.)

Range

[min:max]

Factor 1

14 Our internal organizational

processes follow strict standards Internal .745 .149 .020 -.011 -.032 .099 -.027 .210 -.117 .088

2.00

(1.00) [-3:3]

20

In my organization, employees are

encouraged to follow standard

operating procedures as a basis for

their decision making.

Internal .702 .163 .006 .177 -.038 .180 .158 -.002 .006 -.004 1.85

(1.12) [-3:3]

4 Our organization has a strict chain

of command Internal .647 .303 -.019 -.056 .063 -.098 .126 -.030 -.013 .182

1.29

(1.55) [-3:3]

17

Anyone pursuing new opportunities

for this organization is expected to

obtain approval from the board

before making decisions.

Internal .634 .202 .073 .039 -.146 -.048 .136 .052 -.076 .129 1.87

(1.29) [-3:3]

19

When conducting a project,

employees in my organization have

to justify their actions at every stage

of development.

Internal .618 .208 .093 .149 -.025 .022 .176 .252 .130 -.167 1.67

(1.41) [-3:3]

8

In my organization, people are

expected to use existing strategies

as a basis for decision making.

Internal .574 .208 .032 .053 .156 .037 .140 .167 .149 -.279 1.59

(1.34) [-3:3]

28 The way our organization operates

is strongly regulated by state laws External .562 .186 .068 .240 .093 .007 -.278 .061 .368 .056

1.86

(1.32) [-3:3]

13

In my organization, we follow

documented procedures for our day-

to-day activities

Internal .558 .258 .225 .140 -.177 -.052 -.104 -.198 .128 .240 2.06

(1.08) [-2:3]

28

35

My organization adapts strategies to

comply with the expectations of

other organizations in the field

External .490 .333 .088 -.080 .383 .070 .080 .284 -.055 -.125 1.18

(1.64) [-3:3]

Factor 2

31

Our organization continually adjusts

its strategy based upon feedback

from important funders.

External .219 .758 .052 .075 .137 .005 .161 .092 -.011 .119 1.33

(1.59) [-3:3]

32

We seek to involve funders in our

decision-making processes to obtain

their support

External .135 .742 .101 -.043 .109 .169 -.079 -.034 -.075 .009 1.26

(1.61) [-3:3]

34

My organization makes strategic

decisions to comply with the

preferences of our funders

External .247 .729 .087 .091 .083 -.071 .123 -.044 -.013 -.092 1.28

(1.64) [-3:3]

29 Funders and donors have an impact

on how we deliver our services External .200 .674 -.049 .079 -.025 .008 .034 .149 .275 -.076

1.61

(1.49) [-3:3]

23

Our organization collaborates with

funders to shape our organizational

processes

External .208 .670 .292 .027 -.071 .042 -.055 .026 .139 .074 1.59

(1.38) [-3:3]

24

Our organization regularly makes

changes in operations based upon

feedback from donors.

External .197 .641 .078 .064 .211 -.008 .232 .098 -.021 .134 1.22

(1.68) [-3:3]

36

My organization attempts to

actively manage the expectations of

funders to our advantage

External .243 .533 .014 .111 .163 -.216 .035 .252 -.094 -.001 1.42

(1.56) [-3:3]

Factor 3

7

In my organization we believe that

the best results occur when people

decide for themselves what new

opportunities to pursue.

Internal .156 .063 .772 .090 .077 .080 -.166 .056 -.029 -.104 1.87

(1.26) [-3:3]

9

In my organization, input from

employees determines the selection

of new projects.

Internal .098 .249 .575 .167 .077 .028 .279 -.161 .054 .113 1.71

(1.16) [-3:3]

29

10

My organization supports the efforts

of members and employees that

work independently

Internal .118 .045 .465 .112 .359 .054 .364 .002 -.314 .033 1.82

(1.19) [-3:3]

6 In my organization we highly value

members that work independently Internal .080 .030 .428 .339 .237 -.106 .335 .272 -.123 .069

1.74

(1.33) [-3:3]

21

In our organization we believe that

employees operating outside the

organizational chain of command

get the best results

Internal .053 .303 .410 .106 .350 -.065 .158 .111 -.199 .054 0.67

(1.75) [-3:3]

Factor 4

39

Our organization aims to be

responsive to the preferences of our

beneficiaries

External .081 .054 .009 .789 .066 -.023 .181 .008 -.111 -.038 2.22

(0.96) [-3:3]

5

In my organization, bottom-up

initiatives play a major role in

identifying new strategic

opportunities

Internal .169 .089 .242 .728 .033 .151 .012 -.075 .152 .052 2.13

(0.96) [-2:3]

11

People in my organization are

encouraged to develop innovative

programs.

Internal .051 .037 .058 .635 -.090 .291 -.038 .336 .117 .109 2.44

(0.75) [-2:3]

37

My organization consciously

chooses to comply with the needs

and wants of our beneficiaries

External .381 .104 .114 .401 -.025 .161 -.071 -.021 .209 -.053 2.28

(0.79) [-2:3]

Factor 5

2

In our organization, informal norms

are at the base of our way of

working

Internal -.063 .140 .077 .136 .780 .040 .048 -.007 .031 -.085 1.28

(1.58) [-3:3]

22 In our organization, operations

depend on informal relationships. Internal .038 .049 .017 .021 .719 .170 .116 .188 .061 .197

1.05

(1.67) [-3:3]

16

In my organization, we disregard

procedures if the task at hand seems

to require it.

Internal -.080 .194 .248 -.118 .648 -.005 -.004 -.059 .166 .100 0.72

(1.8) [-3:3]

Factor 6

18 In my organization, people are

treated the same, regardless of rank Internal .127 -.114 .054 .228 .274 .621 .067 .111 .044 .264

2.18

(1.13) [-3:3]

30

or status.

Factor 7

40

My organization spends much time

and effort communicating with

external stakeholders

External .120 .229 .074 .104 .146 -.022 .709 .063 .179 .158 1.42

(1.32) [-3:3]

25

We spend as much time as possible

with our external stakeholders,

listening to what they have to say

about the organization.

External .398 .126 .190 -.002 .040 .314 .530 .102 .067 -.044 1.7

(1.33) [-3:3]

Factor 8

38

We seek to persuade other

organizations to endorse our

programs and projects

External .205 .288 .034 .047 .229 .024 .056 .532 .066 .163 1.32

(1.43) [-3:3]

30

In our organization we feel the need

to maintain good relationships with

other similar service providers

External .259 .169 .092 .297 -.203 .323 .032 .516 -.006 -.051 2.22

(0.83) [-2:3]

Factor 9

41

My organization dismisses demands

from funders if it is not in the best

interest of our mission

External .061 .000 -.027 .148 .142 .181 .279 .114 .725 .083 1.77

(1.48) [-3:3]

Factor 10

42

Our organization has the freedom to

decide where to allocate its financial

resources

External .025 .185 .047 .051 .113 .189 .127 .189 .043 .750 1.68

(1.44) [-3:3]

26

My organizations can decide to

change its strategic direction

without interference from external

actors

External .367 -.292 .208 .177 .218 .114 .073 -.098 .014 .407 1.75

(1.32) [-3:3]

Double or low loading items

31

1

In my organization, people are

encouraged to experiment in order

to identify new service opportunities

Internal -.109 .115 .486 .456 .106 .068 -.032 .271 .184 .168 2 (0.95) [-2:3]

3

In my organization, we believe that

employees are most effective if they

set their own goals and performance

targets

Internal .061 .185 .535 .000 -.037 .505 .166 .024 .136 .019 1.79

(1.34) [-3:3]

12

In my organization, people are

encouraged to think “outside the

box” when making decisions.

Internal .041 -.006 .059 .466 .161 .640 -.015 .038 .087 .116 2.14

(0.97) [-2:3]

15

In my organization, people can

choose themselves what approach

they take to achieve what is

expected from them

Internal .073 -.033 .508 .027 .194 -.020 .158 .455 .149 .194 1.43

(1.44) [-3:3]

27 The way our organization operates

is strongly regulated by federal laws External .537 .119 .152 .069 .169 -.067 -.082 -.062 .481 -.065

1.58

(1.49) [-3:3]

33

My organization actively seeks to

control the demands of external

stakeholders to our advantage

External .305 .383 .170 -.012 .268 -.371 .111 .327 .067 .184 0.85

(1.73) [-3:3]