An abductive study of social innovation in nonprofit organizations : evidence from the Australian disability sector

As an exploration into the nascent topic of 'social innovation', this thesis builds upon recent transformations in management scholarship to argue for a reconnection of research to realworld relevance. It showcases an impactful research design based on logical steps of inquiry that closely entwine practical and theoretical realities. Social innovation, briefly defined as a novel solution that addresses a social problem and primarily accrues societal benefits, is an emerging concept. Although practitioners from different sectors have long engaged in this practice-led phenomenon, academic research has not kept pace and significant gaps in knowledge remain. Consequently, the social innovation literature is 'pre-theoretical', with contested conceptualizations and a lack of empirical evidence for how social innovations are developed in different contexts and the impacts they generate. This thesis addresses these shortfalls by drawing on abductive logics of inquiry, complexity theorizing, and set-theoretic analytical methods to build practice-theory links that provide a novel route forward for the study and practice of social innovation. Using the Australian disability sector as an illustrative example and embedding this context in the research design, the aim of this thesis is to explore organizational capabilities for social innovation and the outcomes of social innovation in nonprofit organizations (NPOs) as part of developing a theory of social innovation in NPOs. The Australian disability sector is undergoing a significant structural shift with the introduction of the National Disability Insurance Scheme, which potentially intensifies the need for social innovation. An 'abduction' process is employed in the first phase of a two-phase project. Abduction is a method of inquiry for finding new knowledge, particularly for poorly-understood topics, and involves actively studying the phenomenon at close range. This entailed two months of embedded fieldwork, termed 'researcher-in-residences', at two disability NPOs. Semistructured interviews were conducted with 52 individuals, including managers, staff and clients of NPOs, and daily observational notes were recorded. Integral to this initial phase of inquiry, complexity theorizing was used to combine complementary theoretical viewpoints to develop the concept of Nonprofit Social Innovation (NSI). This is defined as innovative services and processes that promote the broader community's inclusion of people with disabilities. Five capabilities are hypothesized to be pivotal for the development of NSIs. The societal outcomes flowing from them is further theorized to depend upon multi-leveled enabling conditions. To test these suppositions, a second phase of inquiry was conducted involving a survey of all disability NPOs in the Australian disability sector. The survey received 308 responses from CEOs and senior managers, representing a 42% response rate. Using fuzzy-set Qualitative Comparative Analysis (QCA), the results reveal several combinations of organizational capabilities used by these organizations to develop NSIs. These combinations vary according to organizational size and geographical location. The QCA analyses also highlight theimportance of collaborative conditions for successful NSI implementation. However, the analyses found that collaboration must be combined with either 'person-focused' approaches or a 'risk tolerant environment' in order to attain high levels of societal benefits. To verify and gain a more in-depth understanding of the QCA findings, 14 additional semi-structured interviews were subsequently carried out with CEOs who participated in the survey. This thesis makes a number of contributions to the theory and practice of social innovation. The first phase of this study formulates an NSI framework that deepens our understanding of how various actors and mechanisms are influential in driving social innovation within NPOs. The second phase tests and builds upon the initial theoretical construct to reveal the systemic dynamics of NSI through the configurational analysis of NPOs at a whole-of-sector level. Identifying the complex causal dynamics of social innovation, the findings in this thesis culminate not in theory as edifice, but as 'theories in practice' that incorporate non-linear pathways to social innovation. This new knowledge has meaningful implications for both management scholarship and NPO managers as they work towards social change.