Organisational Agility of Social Enterprises: A Phenomenological Study of Microfinance Institutions in Ethiopia

Abstract

This doctoral study examines whether MFIs in Ethiopia have developed the managerial readiness to face emerging threats and seize the opportunities within the context of unpredictable changes and turbulences. The interpretative phenomenological approach (IPA) has been used to collect, shape, and interpret the lived experiences, intuitions, and insights of 10 CEOs of MFIs. The data were interpreted using the double hermeneutic and analysed through the lenses of the theory of organisational agility and the Cynefin framework to make decisions. The premise of this study is that MFIs without agile organisational capability may fail to prepare and respond to changes in the external environment. The study results show multiple impediments that restrict MFIs from being adaptive towards achieving double bottom lines, i.e., the creation of social and financial value. MFIs in Ethiopia suffer from “pain points” such as inflation, illiquidity, and turbulences. The challenges include: the weak governance practice of nominal shareholders, outdated decision-making processes causing delays, staff turnover reducing enterprising capacity, and MFIs lacking sufficient digital and technological infrastructure. The study found most MFIs are incapable of responding quickly and innovatively to seize opportunities or to overcome adversities. The conclusion is that MFIs in Ethiopia have inadequate agile organisational capability to make strategic choices and execute operational processes during multiple and complex changes. The findings of the research are important, and pertinent for a better understanding of the organisational agility of social enterprises. The study has provided five recommendations to enhance policies and practical actions to build the agile organisational capabilities of social enterprises.