Social impact and performance measurement systems in an Italian social enterprise: a participatory action research project

Purpose The purpose of this paper is to investigate the multidimensional nature of social and nonprofit organisations' accountability and performance measurement systems (PMSs). It further considers how these systems help in defining outcome performance indicators downward to beneficiaries Design/methodology/approach The paper discusses participatory action research (PAR) within an Italian social enterprise. In order to increase dialogue, participation and engagement, the researchers adopted focus groups as a preferred method of investigation and conducted a broad documental analysis from July 2016 to March 2018. The paper discusses the gathered data in light of the social impact value chain as well as the multiple-constituency approach. Findings The findings support the idea that social and nonprofit organisations lack the expertise and resources to evaluate outcomes and impact; however, through PAR, the organisation defined their desired outcomes and ascertained which internal output measures were most likely to be correlated with these outcomes. Moreover, the findings highlight that nonprofits develop outcome measurements less frequently because they have more control over their immediate activities and outputs. Practical implications This research suggests the need to reinforce lateral and downward accountability based on mission and mission-based activities in order to make the performance management system of social and nonprofit organisation linked to the organisational strategies. Originality/value This paper innovates methodologically in two directions: 1) it adopts action research as a qualitative method, allowing the researcher to generate solutions to collectively-identified problems and 2) the paper's arguments are strongly supported by rich empirical exploration that occurred over a period of 20 months in an Italian social enterprise.