The image and development premises of social

organizations from romania: implications for

strategic management of social organizations

Laura BACALI1, Oana-Bianca BERCEA2, Elena-Simina LAKATOS2,, Alina-Monica

DANCIU1,2 and Roxana-Lavinia PACURARIU1,2
1Technical University of Cluj-Napoca, 28 Memorandumului Street, 400114, Cluj-Napoca, Romania
2Institute for Research in Circular Economy and Environment “Ernest Lupan”, 71-73 Dorobantilor
Avenue, 400609, Cluj-Napoca, Romania
*Corresponding author: simina.lakatos@ircem.ro

Abstract. This research paper portrays the image of Romanian

social organizations and it identifies their development premises
based on a survey involving 235 respondents. These aspects have
major implications in the strategic management process of social
organizations. The results show a low trust and perceived
transparency of social organizations while the social enterprises
related characteristics are considered important in the decision of
respondents to get involved as volunteers, donors or buyers. Lack of
adoption by the management of a strategy to improve the image of
the social organization can adversely affect their financial
sustainability.

1. Introduction
Social organizations, by their nature, depend on external resources that can be grouped
in 4 categories [1, 2]: government grants and subventions, private contributions, commercial
revenues and member fees. Salamon et all. [3] assert that member fees and taxes and not
private contributions such as philanthropy represent the primary source of social
organizations revenues [3]. Studies show that 53% of social organizations revenues come
from taxes for services and commercial revenues, contributions and other commercial
sources. In 24 out of 34 analyzed countries, member fees represent the primary source of
revenue excepting grants [4].
The institutional environment and the field of activity have a primordial role for the
financial sustenability of the social organization [5], some activities being more encouraged
than others through private or public financial allocations. In this context of differetiation, a
new form of social organization rises – the social enterprise – a bussines like approach that
provides another source of revenues [6].
Social enterprises are entrepreneurial organizations that innovate to solve problems.
These can take form of a profit or non-profit organization, resulting into a fusion between
social and financial benefits [7]. The rationale for creation of social enteprises varies from a
state to another, but the common argument is that social enteprises addresses social and
environment problems more effectively than public administration [8]. Thus, this concept
provides a mechanism for attaining a dual purpose, of social and economic development for
poverty abolishment. The social enteprise uses the business model as an instrument of social
development [9]. The business model of these hybrid organizations is built to serve markets
that are not covered by firms and govenrment. Such a market is the labour market composed
of disabled people [10].
The sustenability of social organizations, including social enterprises, can be represented
through a function composed of three causal influences: the accumulations of capital, a
recognizable community need and perceived organizational legitimacy [11]. The ability of
these organizations to provide goods and services increases or decreases with the
disponibility of capital [12,13], thus the development of “innovative business models and
strategies that balance the risk of mission drift with the risk of financial insolvency is vital”
[14].
The success of a social enteprise is defined through its social side and not the business
one. The ability of being financial viable through a financing source mix, inclusively
commercial activity represents only a mean to achieve its social goal [15].
The lack of financing opportunities remains one of the major disadvantages of social
enteprises, as manny of them “survive only through the largesse of government subsidies,
charitable foundations, and a handful of high-net-worth individuals who will make donations
or accept lower financial returns on their investments in social projects” [16]. Though,
hybrid organizations that are engaged into an activity with growth and profitability potential
are characterized by self-financing [17].
In Romania, social enterprises have gained legitimity through the enactment of social
economy law. Any organization can be recognized as social enterprieses by a social
enterprise certificate, and optionally by a social insertion mark. Their development potential
though remains uncertain, therefore a research regarding this subject from the perspective of
potential users of goods and services provided by social enteprises might be useful for the
organizations that are considering to get their certification. Social organizations, by their
nature, depend on external resources that can be grouped in 4 categories: government grants
and subsidies, private contributions, commercial revenues and member fees [18, 19].
Salamon et all. [3] assert that member fees and taxes and not private contributions such
as philanthropy represent the primary source of reveneus of social organizations [20]. Studies
show that 53% of social organizations revenues come from taxes for services and commercial
revenues, contributions and other commercial sources. In 24 out of 34 analyzed countries,
member fees reprezent the primary source of revenue excepting grants [21].
The institutional environment and the field of activity have a primordial role for the
financial sustenability of the social organization [22-25], some activities being more
encouraged than others through private or public financial allocations. In this context of
differentiation, a new form of social organization rises – the social enterprise – a bussines
like approach that provides a less volatile source of revenues [26].
Social enterprises are entrepreneurial organizations that innovate to solve problems.
These can take form of a profit or non-profit organization, resulting into a fusion between
social and financial benefits [27]. The rationale for creation of social enteprises varies from
a state to another, but the common argument is that social enteprises addresses social and
environment problems more effectively than public administration [28]. Thus, this concept
provides a mechanism for attaining a dual purpose: social and economic development for
poverty abolishment. The social enteprise uses the business model as an instrument of social
development [29]. The business model of these hybrid organizations are built to serve
markets that are not covered by firms and govenrment. Such a market is the labour market
composed of disabled people [30].
 The sustenability of social organizations, including social enterprises, can be represented
through a function composed of three causal influences: the accumulations of capital, a
recognizable community need and perceived organizational legitimacy [31]. The ability of
these organizations to provide goods and services increases or decreases with the
disponibility of capital [32, 33], thus the development of “innovative business models and
strategies that balance the risk of mission drift with the risk of financial insolvency is vital”
[34].
2. Methodology
The research was conducted using the survey and the research instrument is the
questionnaire. The questionnaire was distributed online through social networks and emails
to people living in Romania, especially in the North-West region, but it was not restricted
them. Due to financial restraints, we used a non-probability sample method and we collect
our research data from a convenience sample of 235 respondents.
Our research started from 5 hypothesis of reseach:
H1 - People’s trust in social organization is influenced by their transparency.
H2 - Certification of social enterprises is important for the potential involvement of
people in the development of social organizations.
H3 - Most of respondents indicate quality as the primary buying decision factor of a good
or service provided by a social organization.
H4 - The internet represents the main source of information regarding the activity of
social organizations for most of respondents.
H5 - Respondents’ disponibility of financial involvement in the development of social
enterprises depends on their monthly income.

3. Results and conclusions

• There is a positive relationship between the level of trust in social organizations and
the level of their transparency. The regression model indicates that 29.1% of the variance in
dependent variable „level of trust in social organizations” is explained by the variance of
independent variable „ level of transparency regarding social organizations”.
• The aspects characterising social enteprises are important for respondents in their
decision to contribute at the development of social enteprises through volunteering, donations
or buying goods and services provided by social organizations. The most appreciated
characteristics involve the social or general interest and aim of the organization and profit
allocation for the social purpose.
• The quality of the product was considered the most important factor that influences the
respondents’ decision to buy a product provided by a social organizations, followed by the
involvement of vulnerable persons in the provision of the products.
• Most of respondents gather their information regarding the activity of social
organization from the online environment: social media, online press and websites.
• Respondents’ monthly revenues do not represent an indicator of disponibility to
contribute to the development of social enteprises. The age could have a contribution to
respondents’ disponibility to contribute as a volunteer to the development of social
enterprises. Respondents from the age group between 18-26 years are more likely to be
involved as volunteers than respondents over 26 years old.
• Respondents’ level of involvement in the development of social enteprises depends on
their level of trust in such organizations.
As a general conclusion, the management of social organizations should focus their
efforts to establish strategies that would improve the level of transparency regarding social
actions and resource allocation in order to increase population’s trust in social organizations
and the population’s involvement as volunteers, donors and buyers of goods and services
provided by social organizations. In their commercial activity, social organizations,
including social enteprises, are encouraged to focus their efforts on the quality of the product.
Social organizations could take advantage of the online opportunities to promote their
actions and to demarate campaigns with the aim of increasing their transparency, since
according to respondents, this is their main source of information.

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and its effects on organizational sustainability, Systems Research and Behavioral Science, 27(3), p.
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