Article
Does Leadership Matter in Performance of Social Enterprises in
South Korea?
Seokwon Chang
1
and Mugoan Jeong
2,
*
Citation: Chang, S.; Jeong, M. Does
Leadership Matter in Performance of
Social Enterprises in South
Korea? Sustainability 2021, 13, 11109.
https://doi.org/10.3390/su132011109
Academic Editors: João Carlos de
Oliveira Matias and Paolo Renna
Received: 13 September 2021
Accepted: 4 October 2021
Published: 9 October 2021
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4.0/).
1
College of Business, Kwangwoon University, Seoul 01897, Korea; swchang@kw.ac.kr
2
College of Business, Kyungnam University, Changwon-si 51767, Korea
* Correspondence: duryjmg@kyungnam.ac.kr; Tel.: +82-55-249-2487
Abstract:
In social enterprises, which are hybrid organizations that create social and economic values,
the role of leaders is important to achieve goals. However, prior research on social enterprises
overlooked the importance of a leader, and some research that considered leadership was insufficient
to concern the characteristics of social enterprises. This study aims to find whether there is no problem
in applying the leadership emphasized in a profit-firm to a non-profit-firm such as a social enterprise,
since social enterprises pursue economic and social objectives simultaneously.
To do
so, we examined
the effects of four leadership styles (transactional leadership, transformational leadership, servant
leadership, and entrepreneurship) used mainly in commercial enterprises on the performance of
social enterprises. In review of prior studies, it was assumed that transactional leadership would not
have a significant effect on performance, and the other three kinds of leadership were hypothesized to
have a positive effect on performance. Additionally, to clarify the relationship between leadership and
performance of social enterprises, leader trust and calling were considered as mediators.
Using the
list of Korea Social Enterprise Promotion Agency, questionnaires were distributed via e-mail to
employees of 318 social enterprises located in Seoul, and 251 copies were collected and analyzed.
The results
of this study show that transactional leadership only affects economic performance and
does not show significance with the rest of the variables as was expected. Transformational leadership
had positive relationships with variables considered as performances of social enterprises, and the
mediating effects of leader trust and calling were also verified. Entrepreneurship was positively
related to three performances of social enterprises, but servant leadership had a positive relationship
with organizational commitment. This study contributes to highlighting the need for research to find
appropriate leadership styles that focus on the characteristics of social enterprises.
Keywords: leadership of social enterprise; performance of social enterprise; leader trust; calling
1. Introduction
The interest in social enterprises, companies established to achieve social goals,
continues to grow as the community demands that companies more actively implement
social responsibility and ethics. Unlike for
−
profit companies that are concerned only with
economic profits, social enterprises must constantly have balance and tension between
economic profits and social goals. Because of this, the organizational identity of social
enterprises is complex and has more difficulties [
1
–
3
]. Smith et al. [
4
] insisted that the social
and commercial sides of a social enterprise are not isolated from one another.
They drew
on
paradox research to build a theory about the challenges and associated skills for effectively
managing the tensions emerging from the juxtaposition of social mission and business
outcomes. Pache and Santos [
5
] presented cases of how social enterprises were internally in-
tegrated even though the two values (social, commercial) were logically different from each
other. Ko and Liu [
6
] suggested social enterprise as the legitimacy of a socio
−
commercial
business model. Nevertheless, social enterprises are being called on to solve more prob-
lems in the community and implement the interests of more stakeholders [
7
]. There is an
increasing need for research on how to successfully run social enterprises.
Sustainability 2021, 13, 11109. https://doi.org/10.3390/su132011109 https://www.mdpi.com/journal/sustainability
