Microfoundations of Dynamic Capabilities for Social Innovations in Small Non-Profit Organizations

Abstract

The promotion of social innovations by non-profit and business organizations has gained increasing interest. Yet, there has been limited research on routines that organizations use to facilitate social innovations. This paper uses a dynamic capabilities framework to understand the microfoundations of dynamic capabilities for social innovation in small non-profit organizations. Through analysis of routines of 20 small organizations in five European metropolitan areas, the paper demonstrates that many microfoundation aspects resemble generic abilities of opportunity identification, alliancing, user engagement, networking, and organizational learning. However, their orientation toward public values requires incorporating commitments to social value and principles of ethics, responsibility, and sustainability, into different organizational processes. We suggest that social impact does not always require substantial investment and can be achievable through modest changes such as repurposing surplus resources. Building flexible routines that enable such incremental changes is a key element of organizational capability to adapt to changing contexts.