Working Paper
Projects Strategy and management research has increasingly focused on understanding the role organizations play in society, offering valuable guidance for measuring social impact. In this article, we build upon multiple streams of this literature to propose an integrated approach for managing social impact. Starting with a general definition of ‘impact’ as the difference between the states of the world with and without a given initiative, we propose a two step approach for managing its social impact. The first is an analysis step, where the consequences of the initiative are evaluated descriptively in terms of: (a) goal realization, i.e., the extent to which it achieves its stated goals for contributing to society; (b) other outcomes, i.e., the extent to which it affects other financial or social outcomes; and (c) opportunity cost, i.e., its effectiveness relative to alternative means of organizing to achieve the same goals. The second is an assessment step, where the initiative’s full set of benefits and costs from the first step are normatively assessed using (and potentially triangulating across) one or more of three methods: (a) using Pareto improvement as the basis for comparison; (b) calculating net impact using a single metric for aggregation; and (c) confronting the nature of the trade-offs involved (relative magnitude, equity, certainty, and agency). In addition to integrating relevant streams of existing work into a systematic approach for managing social impact, we offer an agenda for further research applying concepts and insights from management research to questions related to social impact.
Faculty
Professor of Strategy
