The Effects of Social Enterprise Characteristics and CEO’s Management Capability on Business Performance: Focusing on Mediating Effects of Corporate Reputation
Authors:   Asia-Europe Perspective Association, Kim kwi-chul , Suh Byung-duk 
Published: June 2018

This study aims to analyze the effects of the characteristics of a social enterprise and its CEO’s management capability on the business performance with the enterprise’s reputation as the mediator and suggest policy implications.
The questionnaire that was created to verify the study model and the hypothesis of this study comprised of 41 questions, and the questions for measuring variables were designed in interval scale using the 5-point Likert Scale.
The questionnaire was distributed to 785 current and prospective social enterprise CEOs and incumbents, 170 of whom completed and returned the questionnaire(21.7%), and 164 of the total returned questionnaires were selected for statistical analysis after disregarding 6 of them for inadequate answers.
Confirmatory factor analysis was conducted for the empirical analysis of the measurement model, and Cronbach’s Alpha was used for testing reliability. For hypothesis verification, regression analysis, mediation regression analysis, Sobel test and the structural equation modelling technique were used.
A summary of the hypothesis verification results is as follows.
First, an analysis on the impact of a social enterprise’s characteristics and CEO’s management capability showed an explanatory power of 68.3% and 73.5%, respectively.
Second, an analysis on the impact of a social enterprise’s reputation on its social and financial performance showed an explanatory power of 52.0% and 50.8%, respectively, in the order of the government’s financial support, pursuit of social purpose, and the government’s marketing support.
Third, an analysis on the impact of a social enterprise’s characteristics on its social and financial performance showed an explanatory power of 50.8% and 46.8%, respectively, in the order of the government’s financial support and marketing support.
Fourth, an analysis on the impact of a social enterprise CEO’s management capability on the enterprise’s social and financial performance showed an explanatory power of 50.2% and 42.1%, respectively, in the order of entrepreneurship and leadership.
Fifth, an analysis on the impact of the characteristics of a social enterprise and the CEO’s managerial capacity(independent variables) on the dependent variable business performance(social and financial performance) with the enterprise’s reputation as a mediator showed that the reputation of a social enterprise partially mediates the relationship between the independent and dependent variables in the order of pursuit of social purpose and the government’s marketing support.
The implications drawn from the results of this study are as follows.
First, as a result of the hypothesis verification, this study has ranked the variables based on their explanatory power(R²) and relative impact per subfactor(β value). These results can be utilized by a government-affiliated organization to determine a priority list for government projects.
Second, among the subfactors of the characteristics of a social enterprise, the impact of the decision structure with the stakeholder’s participation on a social enterprise’s reputation, its business performance(social and financial performance) and mediating effects appeared to be negative(-) or statistically insignificant.
Thus, a need for training on the sociality and entrepreneurship of a social enterprise on its members has been brought to attention.
Third, the reputation of a social enterprise, a mediating factor, seem to partially mediate the relationship between independent(characteristics of a social enterprise and CEO’s managerial capacity) and dependent variables(business performance), validating the reputation’s importance.
Thus, a need for innovating and marketing products and services that can raise social enterprises’ reputation of which consumers are aware has been brought to attention.