The Impact of the Utilization of Control Systems for Continuous Improvement and Organizational Capabilities on the Performance of Social Enterprises

[Purpose] The purpose of this study is to explore the use of control systems for continuous improvement and multidimensional organizational capabilities from a management accounting perspective as factors influencing the performance of social enterprises. [Methodology] This study conducted an empirical analysis based on survey data collected from social enterprises participating in the 2021 Social Progress Credit (SPC) program implemented by the Center for Social Value Enhancement Studies (CSES). To test the hypotheses, the study employed the Partial Least Squares Structural Equation Modeling (PLS-SEM) method. [Findings] Firstly, the empirical analysis revealed that the use of control systems for continuous improvement does not directly impact the performance of social enterprises, while contributes to enhancing multidimensional organizational capabilities. Secondly, product and service competitiveness positively influenced both dimensions of performance. Marketing and cooperation capabilities were found to have a positive impact on economic performance, while stakeholder management capabilities positively influenced social performance. Lastly, the use of control systems was found to indirectly contribute to the performance in social enterprises via the mediating effects of organizational capabilities. [Implications] This study emphasizes the role of control systems and organizational capabilities in the qualitative growth of social enterprises, highlighting their importance for strengthening sustainability and independence.