Impact Measurement Tools and Social Value Creation: A Strategic Perspective

29 Pages Posted: 10 Apr 2021 Last revised: 17 Nov 2022

See all articles by Leandro Nardi

Leandro Nardi

HEC Paris - S&O Institute

Sergio G. Lazzarini

Ivey Business School, Western University; Insper Institute of Education and Research

Sandro Cabral

Insper Institute of Education and Research

Date Written: April 8, 2021

Abstract

Recent research in management has examined how organizations, public or private, can generate positive externalities and minimize negative effects to society and the environment. The purpose of this chapter is to discuss the conceptual bases of the operationalization of social value, with particular emphasis on the merits and limitations of the diverse impact measurement tools that have been used in practice. We start by identifying four channels through which impact measurement connects with social value creation: signaling an impact purpose or orientation, creating management tools to monitor the performance of the target populations, assessing causality, and computing welfare gains across various types of interventions and activities. We then argue that tools related to each channel differ according to three central attributes: precision in the assessment of causal impact, comparability across projects, and measurement cost. We posit that it is difficult to combine high precision, high comparability, and low cost. For instance, tools that seek to monetize social outcomes may increase comparability, but they may also reduce precision in cases where there is no concurrent causal assessment of impact. We then suggest potential research areas to advance the analysis of impact measurement and its connection with management practice, including the need to achieve higher transparency and avoid misleading claims of positive impact, the role of organizational capabilities, the use of measurement techniques in tandem with other complementary organizational practices (such as outcome-based contracts), and dynamic effects arising as organizations progressively learn from their adoption of multiple measurement tools.

Keywords: social impact, social value, impact measurement, social responsibility, social performance, performance measurement

Suggested Citation

Nardi, Leandro and Lazzarini, Sergio Giovanetti and Cabral, Sandro, Impact Measurement Tools and Social Value Creation: A Strategic Perspective (April 8, 2021). HEC Paris Research Paper No SPE-2021-1438, Available at SSRN: https://ssrn.com/abstract=3822352 or http://dx.doi.org/10.2139/ssrn.3822352

Leandro Nardi (Contact Author)

HEC Paris - S&O Institute ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Sergio Giovanetti Lazzarini

Ivey Business School, Western University ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

Insper Institute of Education and Research ( email )

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

Sandro Cabral

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

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