The Best of Both Worlds? Impact Investors and Their Role in the Financial versus Social Performance Debate

27 Pages Posted: 9 Sep 2014 Last revised: 1 Apr 2020

See all articles by Sérgio G. Lazzarini

Sérgio G. Lazzarini

Insper Institute of Education and Research

Sandro Cabral

Insper Institute of Education and Research; Federal University of Bahia (UFBA)

Leandro Pongeluppe

University of Toronto, Rotman School of Management

Luciana Carvalho de Mesquita Ferreira

Insper Institute of Education and Research

Angelica Rotondaro

University of St. Gallen

Date Written: September 7, 2014

Abstract

We address how organizations can cope with the tensions involved in the creation of blended economic and social value. Drawing from the literature on organizational complementarities, we employ grounded theory to understand the heterogeneous ways through which impact-oriented investors and entrepreneurs choose organizational attributes promoting an alignment between social and economic goals. We contend that tensions involved in the pursuit of blended value derive from misaligned choices that fail to mitigate potential counter-synergistic effects between these goals. We then identify key attributes whose combination leads to a typology of alternative, self-reinforcing models of blended value creation. By highlighting the importance of complementary choices supporting the creation of blended value, our study advances existing discussions on the challenges faced by organizations seeking multiple—and sometimes conflicting—dimensions of performance.

Keywords: Impact investing, financial performance, social performance, corporate social responsibility, shared value

Suggested Citation

Lazzarini, Sérgio Giovanetti and Cabral, Sandro and Pongeluppe, Leandro and Ferreira, Luciana Carvalho de Mesquita and Rotondaro, Angelica, The Best of Both Worlds? Impact Investors and Their Role in the Financial versus Social Performance Debate (September 7, 2014). U. of St. Gallen Law & Economics Working Paper No. 2015-06, Available at SSRN: https://ssrn.com/abstract=2492860 or http://dx.doi.org/10.2139/ssrn.2492860

Sérgio Giovanetti Lazzarini (Contact Author)

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil
55-11-45042387 (Phone)

HOME PAGE: http://www.insper.edu.br/docentes/sergio-lazzarini-en/

Sandro Cabral

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

Federal University of Bahia (UFBA) ( email )

Av. Reitor Miguel Calmon, s/n
Vale do Canela
Salvador, Bahia
Brazil

Leandro Pongeluppe

University of Toronto, Rotman School of Management ( email )

Toronto, ON
Canada

Luciana Carvalho de Mesquita Ferreira

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

Angelica Rotondaro

University of St. Gallen ( email )

Dufourstrasse
St. Gallen, 9000
Switzerland

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