“The influence of social entrepreneurship orientation and competitive advantage on the performance of rural social enterprises”

The development gap between urban and rural areas is a concern in many countries, including Indonesia. Currently, the government has introduced rural businesses to overcome this problem. This study aims to analyze the effect of social entrepreneurship on the performance of rural social entrepreneurs and test competitive advantage as a mediator. The population includes village-owned enterprises in Riau Province, Indonesia; the sample was stratified randomly. Village-owned enterprises are distributed based on classification, namely basic, growing, developing, and advanced. Respondents are managers of village-owned enterprises. Each village received five questionnaires, and 399 company managers decided to join the survey. The study employed structural equation modeling partial least squares to prove that competitive advantage influences organizational performance with a p -value of 0.000 < 0.05. Social entrepreneurial orientation influences competitive advantage and company performance with a p -value of 0.000. Competitive advantage is proven to mediate the relationship between social entrepreneurial orientation and performance, with a p -value of 0.000. The research results stress the importance of social entrepreneurship in improving company performance in rural areas. For this reason, the government should provide high-quality social entrepreneurship training.


INTRODUCTION
The sustainable development goals compiled by the UN member states in 2015 are expected to be achieved by 2030.They aim to reduce inequality between the countries in the world as this gap impacts the disparity in community well-being between regions.Additionally, this element of regional development disparities is significant for how regional governments formulate regional development policies.
Governments around the world are beginning to prioritize rural development as a solution.For instance, rural firms in the UK significantly boosted the supply and their capacity to export goods and services (Phillipson et al., 2019).Rural-urban enterprises have been set up by the Chinese government to actively boost the rural economy (Kania et al., 2021).In Indonesia, the government has also formed companies in rural areas called village-owned enterprises (VOEs).VOEs were founded to help village development and improve community welfare.Even though the number of VOEs is experiencing rapid growth yearly, many have not shown optimal performance.By 2024, the number of village-owned enterprises in Indonesia will reach 58959 (Kemendesa, n.d.).Based on this number, around 30% of VOEs have not made an optimal contribution to the rural economy; in fact, the majority of VOEs are still in the underdeveloped category (Basri et al., 2023).
To address rural economic problems, recent entrepreneurship studies have emphasized social entrepreneurs' creative skills as prospective new players in addressing socio-economic issues in structurally underdeveloped rural areas and driving sustainability.Thus, some previous studies have shown that rural communities are suitable for social entrepreneurship because they have substantial social capital and a history of group problem-solving.Conversely, social capital is an essential organizational asset for creating social entrepreneurship models.However, several characteristics of the rural institutional setting, both in a social and regulatory sense, might place significant barriers in the way of social entrepreneur's ability to generate innovation in structurally underdeveloped areas.

LITERATURE REVIEW AND HYPOTHESES
This study uses resource-based view (RBV) theory to explain the relationship between variables.Wernerfelt (1984), who believed that company resources and capabilities are crucial since they are the primary basis of company competitiveness and performance, pioneered the RBV hypothesis.According to Barney (1991), RBV theory is a theoretical framework that analyzes how organizations can obtain a competitive advantage by managing and using step-by-step, valuable, difficult-to-imitate, and non-substitutable resources.
The criteria for these assets can be a competitive advantage for companies because companies can utilize these resources effectively to create added customer value and generate significant profits.
Some forms of resources can give competitive advantages, such as physical resources (machines, buildings, or production equipment), human resources (employee skills and knowledge), organizational resources (management systems and operational procedures), and intellectual resources (trademarks, patents, and copyrights) (Barney, 1991).
The application of social entrepreneurship orientation (SEO) is taking on the theory of resourcebased view (RBV).RBV is an idea developed to explain how a company's resources might provide a competitive edge (Wernerfelt, 1984).Following RBV, the resources owned by the organization, including intangible resources, such as entrepreneurial orientation, can be a competitive advan-

METHODOLOGY
This study focuses on village-owned enterprises, which are the largest rural social enterprises in Indonesia.Village-owned enterprises in four areas were selected: Kuansing, Inhil, Rohil, and Meranti Regencies.The current study utilized primary data, which refer to data directly collected from the main source, namely the company management.A total of 5 questionnaires were sent to each company.
The operational definition of a variable is a definition that shows how a variable is measured or car-ried out in a study.This study uses measurement variables adopted from previous research, as outlined in Table 1.Company performance variables are adapted from Basri et al. (2023).The social entrepreneurship orientation variable was adopted from Weerawardena and Mort (2006), and the competitive advantage variable was adopted from Satyagraha (1994).Each variable is measured using a 5-point Likert scale, namely 1 = strongly disagree to 5 = strongly agree. The

RESULTS
Out of the total of 500 questionnaires handed out, 399 questionnaires were collected and processed (79.8%).Table 2 shows the characteristics of the respondents, and Table 3 shows descriptive statistics.The convergent validity test revealed that the factor loading indicator variable value has a value of > 0.5, and AVE showed a value of > 0.5.It indicated if the convergent validity can be met.The discriminant validity test, namely cross-loadings, also demonstrates that the loading value of the indicator block for each variable is also higher than the other indicator.This also shows that discriminant validity is met (Hair et al., 2010).Furthermore, reliability testing using Cronbach alpha and composite reliability can be seen in Table 5.The results of hypotheses testing can be seen in Table 6 and Figure 1.For hypothesis 1, a p-value is 0.000 (<0.05) and an original sample estimate is 0.392.The results show that social entrepreneurial orientation influences company performance.This paper accepts H1.

DISCUSSION
The outcomes indicate a beneficial connection between the orientation of social entrepreneurship and company performance in rural areas, implying that increasing social entrepreneurship orientation (SEO) in entrepreneurs can improve company performance.This corresponds to Gali et  The data show that the orientation of social entrepreneurship in rural companies is quite high.This is evidenced by the various creativities the business units run that can meet community needs.For example, most companies carry out social savings and loan activities to support community businesses, provide cheap markets, and help build businesses according to village potential.Some villages even have companies in the advanced category.
In line with This paper also supports the RBV theory (Wernerfelt, 1984;Barney, 1991), which states that internal resources such as social entrepreneurial orientation and competitive advantage influence organizational success.Internal factors, such as a strong social entrepreneurial orientation, can cause SEOs to develop valuable capabilities and create competitive advantages competitors can-not easily imitate.Competitive advantage will ultimately have an impact on company productivity.
Although this study can prove the role of SEO in rural companies, it was only conducted in Riau, Indonesia.Therefore, the results cannot be generalized to a wider area.R Square is still low, which means there are still many other factors to be explored in further research.For example, social capital and government assistance are two important elements that influence the progress of companies in rural areas.

CONCLUSION
This study aims to analyze how social entrepreneurial orientation can improve the performance of social enterprises in rural areas by analyzing competitive advantage as a mediator.This paper proves that social entrepreneurial orientation can influence competitive advantage and company performance in rural areas of Riau Province.Competitive advantage has also been shown to buffer the correlation between social entrepreneurship orientation and company performance.
(Islam et al., 2021)stics have the potential to serve as a means of attaining a competitive edge for an enterprise(Barney, 1991).One of the company's resources for increasing productivity is competitive advantage(Azeem et al., 2021).Many qualified human resources, innovative technology, well-known brands, extensive distribution networks, and strong relationships with customers or suppliers can complement this competitive privilege.Companies with a competitive privilege can recruit novel clientele and sustain their existing consumer base.Competitive advantage not only has an economic but also a social impact.For instance, there is an increase in customer satisfaction, company reputation, and employee satisfaction(Islam et al., 2021).
(Mohammad & Wasiuzzaman, 2021)et al., 2019)lberstadt et al., 2021)are difficult to imitate, and cannot be replaced.Behavior-oriented social entrepreneurship is distinguished by the integration of social missions and business strategies to foster the longterm viability and success of social value(Gali et al., 2020;Sulphey & Salim, 2021;Halberstadt et al., 2021).Social value creation refers to the outcome of corporate decision-Furthermore,Schumpeter (1934)states that with an entrepreneurial orientation, an organization can create innovative products or services that can attract customers.By doing that, the product possesses high competitiveness.Social SEO companies have a highly innovative attitude that can create competitive advantages.Entrepreneurial orientation can influence competitive advantage(Kiyabo & Isaga, 2020;Pratono et al., 2019).Social entrepreneurial orientation in rural social organizations may also affect competitive advantage.Behavioral social entrepreneurship is primarily used to accomplish a social objective, where the recognition of entrepreneurial opportunities that generate cash arises from social issues(Pratono et al., 2023).According toBarney (1991), internal factors, such as a strong social entrepreneurship orientation, can cause SEO to develop valuable capabilities, creating competitive advantages that competitors do not easily imitate.Therefore, this study argues that social entrepreneurial orientation can increase competitive advantage.The pursuit of competitive advantage enhances corporate performance by fostering growth in profitability, sales, and client base(Mohammad & Wasiuzzaman, 2021).RBV theory posits that resources possess rarity, value, inimitability, and nonsubstitutability characteristics.Value, rare, inimita-ble, and Based on the literature review, this study aims to examine the influence of social entrepreneurial orientation on the performance of social enterprises by analyzing competitive advantage as mediation.The hypotheses proposed are as follows: Problems and Perspectives in Management, Volume 22, Issue 2, 2024 http://dx.doi.org/10.21511/ppm.22(2).2024.29

Table 1 .
Operational definitions of variables 29)ting with SmartPLS goes through two stages.The outer model testing stage consists of validity testing that includes convergent validity and discriminant validity.Next, reliability testing is carried out.The next stage is testing the inner model, which includes testing model fit and hypotheses testing.http://dx.doi.org/10.21511/ppm.22(2).2024.29

Table 2 .
Characteristics of respondents

Table 5
(Hair et al., 2010)ch's alpha and composite reliability values > 0.9, which signifies high reliability(Hair et al., 2010).The next test was testing the inner model.Testing the inner model involves assessing both the model itself and the hypotheses.Testing the model showed that R Square has a value of 0.227 for performance.It shows that the proportion of changes in performance influ-enced by SEO and competitive advantage is 22.7%.The remaining 77.3% is subject to the influence of additional factors not included in this study's scope.Table6presents hypotheses testing with path coefficients and p-values.

Table 5 .
Cronbach's alpha, composite reliability, and R Square

Table 6 .
Mean, STDEV, t-values, p-values Figure 1.Full structural equation model Islam et al. (2021)2021)andLuetal.(2018),SEO endeavors serve to bridge the divide between social and economic value rationales when organizations actively utilize SEO strategies and explore prospective avenues that yield favorable social outcomes and robust financial gains.Therefore, companies involved in SEO will observe a rise in relative hybridity.The findings demonstrate that social entrepreneurship orientation influences company performance by fostering competitive advantage.This research supportsSchumpeter (1934): SEO influences competitive advantage by creating product or service innovations that attract customers.An SEO is innovative, creative, and proactive and has a social operation to serve the needs of society.The innovation will produce a competitive advantage that can attract the public to receive services from the company.This study supportsIslam et al. (2021)that companies with a competitive advantage can attract and retain new customers.