Guest article by Luis Santamaría, and Lola C. Duque. If you are also interested in the field of company innovativeness, please consider submitting to the upcoming special issue in the Journal of Service Management (JOSM).
The 21st century is characterized by the convergence of global challenges of unprecedented complexity, including the climate crisis, systemic inequality, and health crises like the COVID-19 pandemic. In this context, social innovation has emerged as a strategic imperative, not just an option.
Social innovation can be defined as ideas, methods, processes, and outcomes that offer new ways to address social needs (Mirvis et al., 2016). It is the outcome of a new way of thinking and acting, which materialises through new social movements, institutions, social practices or even different structures of collaborative work (Cajaiba-Santana, 2014). According to one of the most cited definitions of social innovation (Phills et al. 2008, p. 38), it is seen as “a novel solution to a social problem that is more effective, efficient, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals”. From the customer perspective, perceived social innovation captures the extent to which a company is perceived as a force for positive change for society and the environment (Aksoy et al., 2019).
Given the increasing relevance of social innovation, it is important for companies to understand how to successfully attain it and, not least, how to communicate to customer the efforts made in this regard. In line with the work carried out by our colleagues Lervik-Olsen, Kurtmollaiev, and Andreassen in their recent SERVSIG newsletter (August 13, 2025), it is essential that there is a good match between what companies understand as social innovation, how they act on it, and how consumers perceive it.
The analysis of the Balay case of study (Santamaría, Martínez-Ros & Duque, 2025) provides us with interesting and valuable insights into the motivations and determinants of social innovation, as well as the key role of communication to effectively convey the company’s social commitment to its customers. But above all, it is a great example of how a company’s consistent approach to social issues and honest communication leads to success in being perceived as socially innovative by consumers. Consistently, within the Spanish market, Balay stands out as one of the most highly regarded companies in terms of social innovation (Spanish Innovation Index reports, 2022, 2023, 2024). Can we explain it?
What underlies an outstanding performance in social innovation?
Balay was founded in 1947 in Zaragoza (Spain). With a beginning oriented to the manufacture of electrical materials, Balay evolved to become a reference in the manufacture of household appliances. Integrated in the BSH group[1] since 1989, Balay has always prioritized technological innovation. In addition, Balay has a long-standing commitment to social innovation, addressing environmental issues such as improving energy efficiency, creating water-saving appliances, and developing eco-friendly products and processes, as well as social issues such as improving quality of life, promoting family and friendship, and supporting cause-related marketing and workplace inclusion for people with disabilities.
We had the opportunity to conduct an in-depth interview with Balay’s brand manager (Santamaria et al., 2025) to discuss various topics related to social innovation, including motivations, determinants, and communication.
Motivations
Because the household appliances sector is highly regulated, it is reasonable to expect Balay to have a reactive attitude when developing social innovations, particularly environmental ones. However, our interview with Balay’s brand manager revealed that the company is proactively working on several improvements that, while not currently regulated, could lead to regulations in the medium term. In this regard, our interviewee states: “Balay has always been ahead of the directives and regulations on environmental issues.”
Balay does not view legislation as a constraint or obstacle in the household appliances sector. On the contrary, they view regulations as an opportunity to innovate. Interestingly, Balay employees feel that the law is pushing the sector in a direction with which they are already familiar. In fact, we were able to extract the following sentences from the interview that reflect this idea: “We worked on environmental issues long before the environment was fashionable” and “It is in Balay’s DNA.” This led us to wonder: Why is Balay so proactive?
Determinants
Proactivity toward social innovation is no coincidence at Balay. There are at least three critical drivers: leadership, organisational learning capabilities, and corporate culture. Our interlocutor points to an individual who worked in a key management position at the company for many years and promoted environmental improvement policies long before they were widely debated. Other employees then took on leadership roles to continue promoting this proactive orientation toward technological and social innovation from within the company.
When we reflected with our interviewee on the key factors for generating social and environmental innovations, we identified the importance of people and organisational learning capabilities. He told us about a significant decentralisation of the decision-making process related to innovation. The teams of engineers working on each project make the decisions, as they are the most qualified and experienced to do so. In this sense, there is an important flow of information from the bottom up within the organisation, especially from people with the relevant knowledge and skills. This approach stems from a corporate culture that prioritises innovation and continuous learning. The self-managed work teams have a high level of technical expertise and solid maturity, enabling them to take risks and embrace new challenges.
On the other hand, knowledge flows not only occur internally, but there is also a constant and proactive search for knowledge outside the organisation. They develop initiatives for generating start-ups, providing support and follow-up in the start-up’s first years. They organise a contest called “Factor Idea”, in which students present projects designed to solve problems and meet needs they encounter. They also supervise several doctoral theses, both of Balay staff studying for their doctorate and of university professors collaborating on projects with Balay. This enables them to engage in highly innovative initiatives (e.g., cutting-edge research) without disrupting more established processes. They have collaborated with a large number of universities, technology centres and companies outside their own sector on highly innovative projects.
Overall, the interview made it clear that Balay’s corporate culture is very innovation-oriented, with everyone involved in the process (top-down, bottom-up, inside-out and out-in). Some projects are developed completely internally, while others are carried out in collaboration with other entities. There are continuous improvement projects leading to incremental innovations, as well as more disruptive ones, especially those linked to doctoral theses. This culture of collaboration (both internal and external) enables them to reinforce their learning and, ultimately, their innovation capabilities. In the words of former CEO José Longás: “At Balay, we are normal people who, when working together, can achieve amazing things”.
Communication
The final topic we discussed in our interview was how Balay communicates its potential as a social innovator to consumers, and how consumers are involved in the innovation process. Firstly, our interlocutor pointed out that consumers find it difficult to perceive the gradual changes taking place, particularly on the technical side, given that household appliance purchases are not so frequent. On the other hand, consumers test the use of household appliances. In any case, Balay has a lot of contact with consumers, especially regarding the use of appliances.
Balay has an internal customer service centre for managing customer relationships. All enquiries, including those relating to product usage, are managed through this centre. Importantly, all incoming product suggestions, whether complaints or possible improvements, are passed on to the product design department to identify “pain points”.
Given Balay’s excellent results in the Spanish Innovation Index, we had an obvious question: why do consumers perceive Balay as highly social innovative?
Our interviewee pointed out that media campaigns are certainly relevant. In this sense, the management has emphasised the importance of talking about the factories. Until the early 2000s, the competition was mainly with other Spanish and European companies that had physical factories in Spain, but currently, this has shifted towards competition with Asian companies that do not have production facilities in Spain. Balay found a way to communicate this and decided that its employees would voluntarily explain their roles in advertisements. This reflects the importance of employees as ambassadors for the company’s social and environmental efforts (Dawkins, 2004). Moreover, this approach makes the communication seem very authentic. They believe that maintaining a consistent message over the years is what has given them recognition as a socially innovative brand. Additionally, Balay is cautious when communicating its social initiatives, avoiding aggressive or over-communication of its efforts, which reduces scepticism (Du et al., 2010).
Our interviewee’s overall assessment is that consumers associate Balay with being a socially innovative company because it has historically addressed environmental and social issues when they were not yet fashionable, regulated or widely debated. This has generated a reputation for Balay as a socially innovative company, which, together with effective and authentic communication campaigns, ensures that consumers retain this perception. This confirms what scientific studies have shown: communicating your values and strengths generates a positive reputation and brand image.
At the end of the day… what do consumers perceive about Balay’s social innovation?
The Spanish Innovation Index annually collects over 24,000 consumer responses from 120 companies and elaborates the Perceived Social Innovation Index per company. This variable is a 100-point score, based on a three-item scale, already validated in the Norwegian and American Innovation Indexes (Kurtmollaiev, et al., 2022; Aksoy et al., 2022).
Data from the Spanish Innovation Index reports for 2022, 2023 and 2024 clearly show that Balay is a prime example of a company committed to society and the environment. This is not just because the company says so, but because its consumers rate it as such. As the following table shows, Balay’s perceived social innovation scores are consistently above 65 out of 100, well above the average for the entire sample, which is between 53 and 56. Balay is usually in the top three in the global ranking, alongside well-known brands such as Toyota and Ikea. Within the home appliances sector, Balay is consistently ranked first or second based on perceived social innovation.
| Balay | PSI Score | Global ranking | Sector ranking |
| 2022 | 66,1 | 2 | 1 |
| 2023 | 65,0 | 2 | 1 |
| 2024 | 65,4 | 6 | 2 |
| 2025* | 67,1 | 3 | 1 |
When we ask consumers why they perceive Balay as an innovative company, their responses offer us various insights. On the one hand, they talk about the quality of its appliances, reliability, creativity, and technological evolution. On the other hand, they highlight the way it cares for the environment, sustainability, and its smart and efficient products. They also mention the good treatment of its employees (social inclusion) and the company’s communication (advertisements, marketing, publicity). Finally, we find words such as closeness, proximity, honesty, seriousness, and tradition.
Some lessons to succeed in social innovation
Balay exemplifies how companies with strong and transformational leadership and high organisational learning capabilities have the suitable conditions to consolidate an innovation-oriented corporate culture. Various leaders at Balay have promoted a corporate culture that drives social innovation. The motivation has been intrinsic rather than forced by external regulations. They have also designed organisational mechanisms to promote organisational learning capabilities through experimentation, risk-taking activities, and internal and external collaboration.
The role of communication is not a minor issue for Balay’s customers in perceiving the company as being socially innovative. Its reputation as a company sincerely committed to society and the environment has been generated by authenticity in communication, consistency with real actions, modesty in the transmission of messages, and the voluntary involvement of employees in advertising.
If you are also interested in the field of company innovativeness, we would like you to consider submitting to the upcoming special issue in the Journal of Service Management (JOSM). More information here.
About the authors
Luis Santamaría is Associate Professor of Accounting, Universidad Carlos III de Madrid.
Lola C. Duque is Associate Professor of Marketing, Universidad Carlos III de Madrid.
References
Aksoy, L., Alkire, L., Choi, S., Kim, P.B., & Zhang, L. (2019). Social innovation in service: a conceptual framework and research agenda. Journal of Service Management, 30(3), 429-448.
Aksoy, L., Buoye, A. J., Fors, M., Keiningham, T. L., & Rosengren, S. (2022). Environmental, Social and Governance (ESG) metrics do not serve services customers: A missing link between sustainability metrics and customer perceptions of social innovation. Journal of Service Management, 33(4/5), 565-577.
Cajaiba-Santana, G. (2014). Social innovation: Moving the field forward. A conceptual framework. Technological Forecasting and Social Change, 82, 42-51.
Dawkins, J. (2004). Corporate responsibility: the communication challenge. Journal of Communication Challenge, 9, 108–119.
Du, S., Bhattacharya, C.B., & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. British Journal of Management Review, 12 (1): 8-19.
Duque, L. C., & Santamaría, L.: Spanish Innovation Index: 24 Report. Universidad Carlos III de Madrid (UC3M), Institute for the Development of Enterprises and Markets (INDEM), nº 3, 2025.
Duque, L. C., & Santamaría, L.: Spanish Innovation Index: 23 Report. Universidad Carlos III de Madrid (UC3M), Institute for the Development of Enterprises and Markets (INDEM), nº 2, 2024.
Duque, L. C., & Santamaría, L.: Spanish Innovation Index: 22 Report. Universidad Carlos III de Madrid (UC3M), Institute for the Development of Enterprises and Markets (INDEM), nº 1, 2023.
Kurtmollaiev, S., Lervik-Olsen, L., & Andreassen, T. W. (2022). Honey or Condensed Milk? Improving Relative Brand Attractiveness through Commercial and Social Innovations. In The Routledge Companion to Corporate Branding (pp. 211-227). Routledge.
Mirvis, P., Herrera, M. E. B., Googins, B., & Albareda, L. (2016). Corporate social innovation: How firms learn to innovate for the greater good. Journal of Business Research, 69(11), 5014–5021.
Phills, J., Deiglmeier, K., & Miller, D. (2008). Rediscovering social innovation. Stanford Social Innovation Review, 6 (4), 34-43.
Santamaría, L., Martínez-Ros, E., & Duque, L. C. (2025). Building a corporate culture committed to society: a case study. In Kurtmollaiev S., Lervik-Olsen, L., and Andreassen, T. (eds.). Exploring Commercial, Social, and Digital Innovation from the Customer Perspective. Routledge (forthcoming).
[1] Along with Bosch, Siemens, Gaggenau and Neff
