Building on the literature on hybrid organizations, this manuscript explores the relationship between the organizational activity of social enterprises backed by venture philanthropy investors and income inequality. Using Ashoka’s portfolio of Indian social enterprises as empirical context of Western venture philanthropy investing activity, our results suggest that Indian municipalities with social enterprises that have received venture philanthropy investments experience a decrease in income inequality level and when these social enterprises are dominated by a collectivistic organizational identity (...) orientation the effect is stronger. Our findings have implications for the research on hybrid organizations, financing of social entrepreneurship and grand ethical challenges. (shrink)

This study focuses on the managerial issue of should social enterprises become more marketing oriented. It adapts the Kohli et al. MARKOR marketing orientation scale to measure the adoption of marketing by SEs. The items capture Vincentian-based values to leverage business in service to the poor as a measure of a Vincentian marketing orientation. A VMO is an organisational wide value-driven philosophy of management that focuses a SE on meeting its objectives by adopting a more marketing orientated approach to (...) serve the needy and poor in a just and sustainable manner. SEs that exhibit a VMO seek to understand and respond to both the needs of their beneficiaries and stakeholders. They are constantly generating, disseminating, and responding to environmental, beneficiary, and stakeholder information and develop their business propositions to more effectively and efficiently meet the needs of the poor, while guided by a philosophy of leveraging business for social good. This study of SEs in Australia found that a VMO is strongly and positively correlated with social, economic, and environmental performance. These findings suggest that SEs may benefit by leveraging marketing capabilities to better serve their beneficiaries and stakeholders. (shrink)

This article examines how organizational experience influences social enterprise responses to impact assessment practices. Limited attention has been paid to why organizations resist or challenge impact assessment practices or how prior experience with impact assessment may shape organizational responses. The study draws on interviews with practitioners involved in social enterprise–impact investor dyads in Australia and the United Kingdom. The findings reveal that social enterprises enact either combative or collaborative responses in their relationships with impact investors (...) based on past experiences with impact assessment. The study shows how more experienced social enterprises reach a state of impact lock-in—where they become committed to particular approaches to understanding, measuring, and reporting impact. The article contributes to the literature on impact assessment and impact investment by showing how organizational experience shapes divergent reactions to the demands imposed by impact investors, creating complementary forces of institutionalization and contestation of impact assessment practice. (shrink)

In Australia young people have emerged as a popular target for social enterprises and enterprising activities (Barraket, Mason and Blain, 2016). The reasons for engaging young people in enterprise-based projects include claims that they help address young people's deficits in entrepreneurialism and risk-taking as well as prepare young people to thrive in risky futures characterised by uncertain labour markets and precarious work (Foundation for Young Australians, 2015, 2016a, 2017a). The risk category is also central to a good deal (...) of policy concerning young people and underpins many agendas and programmes that aim to govern what many people claim to be young people's 'natural' tendencies to experiment and take risks (Bessant, 2008). This article explores how differing and arbitrary accounts of the relationships between young people and risk help to justify enterprise-based initiatives into young lives that might not serve young people's best interests. (shrink)

This study explores social enterprises’ strategies for addressing mission drift. Relying on an inductive comparative case study of two Italian social enterprises, we show how stakeholder engagement combined with social accounting can successfully support a social venture to re-balance its positioning between wealth generation and social value creation. Indeed, stakeholder engagement helps the internal actors of a social enterprise to rationalize and embody pro-social values previously abandoned, while social accounting reinforces this (...) embodiment process by showing the reintroduced social commitment of the social enterprise to external audiences. Conversely, strategies focused only on social accounting and without significant engagement of external stakeholders prove to be unsuccessful in counterbalancing mission drift because they fail to activate the necessary process of internal re-introduction and operationalization of pro-social values and objectives. (shrink)

This paper is motivated by a puzzling observation made when conducting a case study of ProCredit, a well-known social bank. The HR practices that this social enterprise adopted to cultivate mission identification were unfavorably impacting its retention rate. Building on prior research and our analysis of the case, we argue the need for SEs to embrace HRM systems that are both mission-identification proactive and employee-retention preemptive. It theorizes that these HRM systems should be attuned to the labor (...) market conditions that frame how SEs develop and sustain Person-Organization fit. Attuned HRM systems are adapted to labor market conditions and tuned to support SEs’ adeptness to operate against the grain of country and industry norms. (shrink)

Social enterprises in the microfinance industry need to adhere to both financial and social demands. Critics argue that there is a mission drift away from the social mission, and this has motivated the introduction of social rating agencies to strengthen the business ethics of microfinance institutions. Using a global dataset of 204 socially rated MFIs from 58 countries, we assess the factors that drive the social performance ratings of MFIs. Overall our results show that (...) class='Hi'>social ratings of MFIs are significantly related to financial performance, greater outreach especially in rural areas, well-defined social objectives, staff commitment, service quality and an enhanced customer service. We observe that various rating agencies attach different importance to each of the social indicators. The public policy implication is that social rating agencies need to become more transparent, to reduce the information asymmetries between heterogenous socially motivated investors and the focal MFI. (shrink)

This study endorses the use of data envelopment analysis, which uses benefit-of-the-doubt weighting to evaluate the social, economic and overall performance of social enterprises. This methodology is especially useful for creating composite indicators based on multiple outputs expressed in different measurement units, and allows for enterprise-specific weighting of the different objectives. Applying this methodology on a unique longitudinal dataset of Flemish sheltered workshops suggests that social enterprises may face different types of mission drift. Further, our results (...) show that top-performing social enterprises are more economically and socially efficient than low performers. These top performers also have a stronger economic orientation, which sheds new light on the balance between social and economic orientations in social enterprises. (shrink)

ABSTRACT:In a world filled with poverty, environmental degradation, and moral injustice, social enterprises offer a ray of hope. These organizations seek to achieve social missions through business ventures. Yet social missions and business ventures are associated with divergent goals, values, norms, and identities. Attending to them simultaneously creates tensions, competing demands, and ethical dilemmas. Effectively understanding social enterprises therefore depends on insight into the nature and management of these tensions. While existing research recognizes tensions between (...) class='Hi'>social missions and business ventures, we lack any systematic analysis. Our paper addresses this issue. We first categorize the types of tensions that arise between social missions and business ventures, emphasizing their prevalence and variety. We then explore how four different organizational theories offer insight into these tensions, and we develop an agenda for future research. We end by arguing that a focus on social-business tensions not only expands insight into social enterprises, but also provides an opportunity for research on social enterprises to inform traditional organizational theories. Taken together, our analysis of tensions in social enterprises integrates and seeks to energize research on this expanding phenomenon. (shrink)

ABSTRACT:In a world filled with poverty, environmental degradation, and moral injustice, social enterprises offer a ray of hope. These organizations seek to achieve social missions through business ventures. Yet social missions and business ventures are associated with divergent goals, values, norms, and identities. Attending to them simultaneously creates tensions, competing demands, and ethical dilemmas. Effectively understanding social enterprises therefore depends on insight into the nature and management of these tensions. While existing research recognizes tensions between (...) class='Hi'>social missions and business ventures, we lack any systematic analysis. Our paper addresses this issue. We first categorize the types of tensions that arise between social missions and business ventures, emphasizing their prevalence and variety. We then explore how four different organizational theories offer insight into these tensions, and we develop an agenda for future research. We end by arguing that a focus on social-business tensions not only expands insight into social enterprises, but also provides an opportunity for research on social enterprises to inform traditional organizational theories. Taken together, our analysis of tensions in social enterprises integrates and seeks to energize research on this expanding phenomenon. (shrink)

In this article, we contend that due to their size and emphasis upon addressing external social concerns, the corporate relationship between social enterprises, social awareness and action is more complex than whether or not these organisations engage in corporate social responsibility (CSR). This includes organisations that place less emphasis on CSR as well as other organisations that may be very proficient in CSR initiatives, but are less successful in recording practices. In this context, we identify a (...) number of internal CSR markers that may be applied to measuring the extent to which internal CSR practices are being observed. These considerations may be contrasted with the evidence that community based CSR activities is often well developed in private sector small to medium sized enterprises (SMEs) (Observatory of European SMEs, 2002), a situation which may be replicated in social enterprises especially those that have grown from micro-enterprises embedded in local communities. We place particular emphasis upon the implications for employee management. Underpinning our position is the Aristotelian-informed capabilities approach, a theory of human development and quality of life, developed by Sen (1992; 1999) and Nussbaum (1999) which has been developed further, in an organisational context, (e.g., Cornelius, 2002); Cornelius and Gagnon, 2004; Gagnon and Cornelius, 1999; Vogt, 2005. We contend that the capabilities approach offers additional insights into CSR in social enterprises in general and internal CSR activity in particular. Our article concludes with proposals for future research initiatives and reflections upon social enterprise development from a capabilities perspective. (shrink)

Social enterprises are hybrid organizations that primarily pursue social missions while also seeking economic gains. Drawing on workplace diversity and conflict theories, this article addresses recent calls for further research to explore how employees within social enterprises experience internal conflicts arising from the organizational pursuit of dual, competing missions (i.e., social and economic), and how social enterprises manage, and potentially overcome, these challenges. In the context of Korean social enterprise, we conducted a quantitative (...) study that built on an initial explorative qualitative study. Our research examined whether perceived participatory human resource management practices and diversity climate increase employees’ affective commitment by reducing their relational conflict. We further explored a boundary condition, perceived social impact, which strengthened this mediation relationship. Our results offer significant insights into social enterprise, business ethics, and broader management literature. Implications for future research and practice are also discussed. (shrink)

ABSTRACT:In this study, we investigate how different internal and external stakeholders influence the innovation strategy of a social enterprise to adopt product, process, and partnership innovations that impact either social or commercial performance. Relying on survey data from a sample of work integration social enterprises, we find that in situations of turbulence, administrative leaders do not significantly influence the innovation strategy of a social enterprise. Instead, board members and external stakeholders seem to play a (...) role. Our study contributes to strategic and business ethics research on social enterprises and, more broadly, to the literature that explores how business organizations combine social value creation and wealth generation. (shrink)

Thus far, the academic focus has been limited to understand how hybrid organizations balance goal plurality. However, the question how hybrids engage (or fail to engage) local communities in this process and the potential challenges involved has remained unaddressed. Relying on an inductive multiple case study of six Canadian community forest enterprises (CFEs), we describe dilemmas that arise between community engagement and CFEs’ other goals that form their social mission, as well as a distinct set of compromise tactics to (...) address them. We further identify a tension that arises from two distinct dimensions inherent to community engagement that are inherently interwoven yet contradicting. We add to research on paradox by showing that tensions not merely arise between outcome-focused goals that stem from organizational hybridity, but demonstrate that individual goal prescriptions in itself entail elements that cause tension, and warrant paradoxical management to ensure hybrids’ success in fulfilling their overall mission. (shrink)

Social enterprises combine activities, processes, structures, and meanings associated with multiple institutional logics that may pose conflicting goals, norms, values, and practices. This in-depth multi-source case study of an ecological social enterprise in Malaysia reveals how the enactment of the family logic interacts with the market and ecological logics not only in conflicting but also in synergetic ways. By drawing attention to the institutional logic of the family in social entrepreneurship, this study highlights the heterogeneity of (...) social enterprises. The findings have implications for research with social enterprises and family-owned firms in relation to the ethical obligations of these organizations and the interactions of multiple logics. (shrink)

Individuals start and join social enterprises to catalyze social impact but may not subjectively experience their work as impactful. In this article, we inductively uncover when social enterprise members question the impactfulness of their work and how they engage in sensemaking to experience their work as impactful. Exploring the experiences of members across two social enterprises with different missions, we provide insights into instances creating ambiguity of or discrepancies in impactfulness and unearth how individuals navigate (...) these in different circumstances with two distinct sensemaking practices: internalizing and compensating. We reveal the efforts required to experience work as impactful, highlight the heterogeneity and agency in maintaining this perception, and suggest a potential dark side for members and missions of social enterprises. (shrink)

Social enterprises, as typical hybrid organisations, are embedded in a plural institutional environment in which some stakeholders regard achieving social goals as fundamental, while others see economic profit as the priority. A great challenge for social enterprises is dealing with the conflicts resulting from the diverse expectations of stakeholders. Based on the existing works on organisational legitimacy and the social business model, we propose a legitimacy-based social enterprise model composed of three main phases, namely, (...) legitimacy proposition, legitimacy strategy planning, and legitimacy strategy implementation. Our model is meant to serve as an effective legitimacy-building tool for social enterprises of various kinds. (shrink)

In this article, we explain the mechanisms that allow social enterprises to balance their missions, and the risk of mission drift as organizations grow. We empirically explore Incubator-BUS (I-BUS), a student organization within a private Brazilian university, which sought to incubate cooperatives for vulnerable groups. Although initially successful in balancing its missions, I-BUS then failed. We show how scaling-up can complicate the balancing of different missions within the same organization. We propose that, to balance their missions, social enterprises—especially (...) recently formed and democratically managed enterprises—need not only “spaces of negotiation,” as suggested in the literature, but also “herding spaces” that connect an organization to its institutional context. We indicate why herding spaces are critical, but then show how scaling-up can result in organizational “compartmentalization” that undermines them. (shrink)

How can a critical analysis of entrepreneurial intention inform an appreciation of ethics in social enterprise business models? In answering this question, we consider the ethical commitments that inform entrepreneurial action and the hybrid organisations that emerge out of these commitments and actions. Ethical theory can be a useful way to reorient the field of social enterprise so that it is more critical of bureaucratic and market-driven enterprises connected to neoliberal doctrine. Social enterprise hybrid (...) business models are therefore reframed as outcomes of both ethical and entrepreneurial intentions. We challenge the dominant conceptualisation of social enterprise as a hybrid blend of mission and market by reframing hybridity in terms of the moral choice of economic system and social value orientation. We deconstruct the political foundations of charitable trading activities, co-operative and mutual enterprises and socially responsible businesses by examining the rationalities and ethical commitments that underpin them. Whilst conceptual modelling of social enterprise is not new, this paper contributes to knowledge by developing a theory of social enterprise ethics based on the moral/political choices that are made by entrepreneurs when choosing between systems of economic exchange and social value orientation, then expressing it through a legal form. (shrink)

An increasing amount of research has examined the management of competing logics, and possible tensions arising between them, within “hybrid organizations.” However, the ways in which the relationships of hybrids with other organizations shape the conciliation of these logics and tensions have received limited attention so far. In this theoretical paper, we examine how hybrid organizations deal with interorganizational collaboration, in particular whether and how their hybridity can be maintained when they partner with “dominant-logic organizations.” Drawing on empirical literature on (...) social enterprise–corporate collaborations, we develop a framework and several propositions on how competing logics and their balancing within hybrid organizations may be affected by interactions with organizations underpinned by one dominant logic. We suggest that influences will mostly depend on the type of collaboration pursued. A collaboration based on a lower level of engagement and interaction between the two partners is likely to give precedence to one logic over the other, reducing inter-logic tensions but possibly compromising organizational hybridity. By contrast, a collaboration featuring numerous interactions and mission compatibility may facilitate sustained hybridity if tensions are acknowledged and managed. Our propositions contribute to the literatures on hybrid organizations, interorganizational collaboration, and social enterprise. (shrink)

Social enterprises, like almost all organizations, continuously strive for external legitimacy. To be perceived as externally legitimated by society, social enterprises often engage in strategic partnerships. However, scholars have only recently turned their attention to the legitimating function of such partnerships. The purpose of this article is to address the hitherto neglected construct of inter-partner legitimacy. Drawing on institutional theory, we hypothesize that such inter-partner legitimacy affects the resource transfer among partners, which will, in turn, be recognized by (...) society and will subsequently affect each partner’s external legitimacy. Dyadic data of 121 strategic partnerships between social enterprises and their key partners confirm our hypotheses. We add to institutional theory by integrating the often ignored dimension of inter-partner legitimacy into our analysis and demonstrate its relevance to each partner’s external legitimacy and to resource transfer. Further contributions to the literature on institutional theory, legitimacy, social entrepreneurship, and inter-organizational relationships are identified. (shrink)

Social enterprises are a new concept, integrating corporate profitability and social purposes. SEs seek to realize sustainable social values, rather than short-term profits. It is therefore important to study the factors that affect the sustainable management of SEs. Corporate social responsibility is known to improve corporate image and performance; it can also promote the sustainable development of companies. Innovation has been described as the driving force behind corporate growth and ultimate performance. This study aims to investigate (...) whether CSR can affect sustainability through the economic and social performance of SEs. In addition, it attempts to verify the moderating role of innovativeness in the relationship between CSR and social enterprise performance. Using survey data from 226 employees of 204 SEs in Korea, we have empirically tested this conceptual framework. The results suggest that, while CSR can improve sustainability through economic and social performance, innovativeness has no moderating effect on the relationship between CSR and SE performance. This study enriches our understanding of the important role played by CSR in driving SE sustainability. It provides new insights into the mechanisms through which SEs can achieve sustainable development. It also contributes to the literature by emphasizing the need for innovation through technical support for SEs. (shrink)

Social enterprises, promising organizations for solving societal problems with innovative approaches, rely upon their members’ active roles for workplace innovation. However, we still have a limited understanding about how social enterprises can foster employees’ endeavors for innovation. By focusing on employee learning and innovative behavior, we investigate the influences of perceived social mission, value congruence, and human resource management (HRM) practices in social enterprises. We conducted two complementary studies to answer our research questions. In Study 1, (...) with a survey of 369 employees from 68 social enterprises, we examined a multilevel moderated mediation model with firm‐level and individual‐level data. We found that perceived social mission promoted learning and innovative behavior by increasing value congruence, and that commitment‐based HRM practices enhanced the overall process from mission to employee efforts for innovation. In Study 2, with 300 daily surveys from 60 employees participating in an experience sampling study, we found that those with high‐value congruence showed a significantly more stable pattern with less variance in innovative behavior than in learning behavior. Our study adds novel implications to the underdeveloped literature on employee innovation and HRM in social enterprises by uncovering the positive effects of social mission and value facets for boosting learning and innovative behaviors. Our research also suggests that social enterprises should benefit from pursuing and emphasizing the social mission and commitment‐based HRM bundle together, which will promote the prosperity and well‐being of business and society. (shrink)

While recent studies have increasingly suggested leadership as a major precursor to corporate social responsibility, empirical studies that examine the impact of various leader aspects such as style and ethics on CSR and unravel the mechanism through which leadership exerts its influence on CSR are scant. Ironically, paucity of research on this theme is more prevalent in the sphere of social enterprises where it is of utmost importance. With the aim of addressing these gaps, this research empirically examines (...) the interaction between ethical leadership and CSR and, in addition, investigates organic organizational cultures as mediators in the above interaction. To this end, a model was developed and tested on the sample of 350 middle- and top-level managers associated with 28 Indian healthcare social enterprises, using Structural Equation Modeling Analysis, Bootstrapping and PROCESS. Results reveal that ethical leadership both directly and indirectly influences CSR practices. The indirect influence of ethical leadership involves nurturing clan and adhocracy cultures, which in turn influence CSR. These findings are significant for social enterprise leaders seeking to encourage their organizations’ socially responsible behavior. (shrink)

Process models are valuable conceptual tools to help in understanding the approaches to value creation in social enterprises. This teaching case illustrates the application of a process model about creating, building, and sustaining a social enterprise with a mission to provide clean water to communities in need. The social enterprise generates revenue in support of community water projects and works with community stakeholders in different locations throughout the world to provide sustainable clean water solutions. The (...) case study uses primary data from semi-structured interviews, direct observations of a community project, and archival sources to demonstrate application of the process model. The study shows how the social enterprise developed as a promising idea; was implemented through an operating model with resources to support social impact; and continues to build and evolve while guided by the social mission. The paper concludes with a discussion and teaching note on ways to use the case for educational purposes to enhance learning about the social value creation process. (shrink)

This paper explores how fair trade social enterprises manage paradoxes in stakeholder-oriented governance models. We use narrative accounts from board members, at governance events and board documents to report an exploratory study of paradoxes in three FTSEs which are partly farmer-owned. Having synthesized the key social enterprise governance literature and framed it alongside the broader paradox theory, we used narratives to explore how tensions are articulated, how they can be applied within an adapted paradox framework, and how (...) governance actors seek to mitigate paradoxes. The paper contributes to current debates in social enterprise scholarship concerning hybridity :455–476, 2010; in Institutional logics in action, Part B, 2012), hybrid organizing :397–441, 2014) and operational tensions :407–442, 2013) by illustrating empirically how the central social/enterprise paradox manifests in FTSEs governance arrangements. We build on the paradox categories proposed by Lüscher and Lewis :221–240, 2008) and adapted in Smith et al. :407–442, 2013) by developing a recursive model of legitimacy-seeking governance processes, conceptualizing how boards seek to mitigate, but not necessarily resolve, paradoxes. (shrink)

Given the urgency of global crises, interest abounds in alternative organizational forms (e.g., multistakeholder social enterprises, MSEs), promising structural solutions to engage diverse stakeholders in the creation of joint social, economic, and democratic values. Yet, studies of the who, how, and why of stakeholder engagement are predominantly rooted in for-profit contexts, assuming objective boundaries between insider/outsider stakeholders and engagement as a means to an end. The context of MSEs challenges both of these assumptions. Based on interviews with leaders (...) of 28 French MSEs, I show how the latter made sense of their expectations versus the reality of stakeholder engagement. Leader sensemaking strategies informed the enactment of (revised) stakeholder engagement strategies to maintain coherence, or address misalignment, between expectations and reality. The article contributes to the literature by challenging assumptions of stakeholder engagement in for-profit firms. It also cautions against an overreliance on designated organizational forms to enable substantive stakeholder engagement. (shrink)

Process models are valuable conceptual tools to help in understanding the approaches to value creation in social enterprises. This teaching case illustrates the application of a process model about creating, building, and sustaining a social enterprise with a mission to provide clean water to communities in need. The social enterprise generates revenue in support of community water projects and works with community stakeholders in different locations throughout the world to provide sustainable clean water solutions. The (...) case study uses primary data from semi-structured interviews, direct observations of a community project, and archival sources to demonstrate application of the process model. The study shows how the social enterprise developed as a promising idea; was implemented through an operating model with resources to support social impact; and continues to build and evolve while guided by the social mission. The paper concludes with a discussion and teaching note on ways to use the case for educational purposes to enhance learning about the social value creation process. (shrink)

This paper investigates how social enterprises navigate through the ethical complexity of social change and extends the ethical quandaries faced by social enterprises beyond organisational boundaries. Building on the emerging literature on the ethics of SEs, I conceptualise ethics as an engagement with power relations. I develop theoretical arguments to understand the interaction between ethical predispositions of a SE and the normative structure of the social system in which it operates. I applied this conceptualisation in a (...) hierarchical and heterogeneous rural Indian context to provide insights into the moral ambiguity of ethical decision-making and suggest pathways for ethical actions. Taking a qualitative case study approach, I followed an exemplary SE’s implementation process in India. I observed ethical challenges in designing the implementation process, selecting the beneficiaries and sustaining the programme. I also identified three actions of the SE—the action of recognition, the action of reposition and the action of collaboration—and developed a transformative process model. I discuss the theoretical implications of this research for SEs and recommend a critical engagement with ethical theories to address systemic problems. (shrink)

To remain financially viable and continue to accomplish their social missions, nonprofits are increasingly adopting a hybrid organizational form that combines commercial and social welfare logics. While studies recognize that individual organizations vary in how they incorporate and manage hybridity, variation at the level of the organizational form remains poorly understood. Existing studies tend to treat forms as either hybrid or not, limiting our understanding of the different ways a hybrid form may combine multiple logics and how such (...) combinations evolve over time. Analyzing 14 years of data from Canadian nonprofits seeking funding for social enterprise activities, we identify two novel dimensions along which a hybrid form may vary—the locus of integration and the scope of logics. We further find that as the commercial logic became more widespread within the nonprofit sector, variants of the hybrid form shifted from primarily emphasizing the commercial logic to more equally emphasizing both the commercial and social welfare logics and integrating the two logics in multiple ways. Drawing on these findings, we contribute a multi-dimensional conception of hybrid forms and theorize how form-level variation in hybridity can arise from organization-level cognitive challenges that actors face when combining seemingly incompatible logics. We then build on this theorizing to offer an alternative perspective on commercialization of the nonprofit sector as a contextually dependent rather than universal trend. (shrink)

This paper advances the conception of social entrepreneurs as caring entrepreneurs. We argue that the care ethics of social entrepreneurs, implying the pursuit of caring goals through caring processes, can be challenged when they engage in the process of scaling up their ventures. We propose that social entrepreneurs can sustain their care ethics as the essential dimension of their venture only if they are able to build a caring enterprise. Organizational care designates the set of organizing (...) principles that facilitate the embedding of care ethics at an organizational level, beyond the imprinting induced by social entrepreneurs’ personal ethics. (shrink)

In recent years, the public sector in many countries has had difficulty keeping abreast of social problems due to restricted financial resources and limited organizational capacities. As a consequence, entrepreneurs have started to address social welfare issues that the public sector has been unable to tackle with an innovative approach called social enterprise. The authors present research on the future prospects of social enterprise as a sustainable business model for industrialized countries. As there is (...) a lack of historical and current data, the authors aim to contribute to and structure the debate about the potential of the concept. Therefore, the authors provide initial data from a Delphi survey on the future development of social enterprise in a multistakeholder environment. Experts from academia, business, nongovernmental and governmental organizations, social enterprise investors, and social entrepreneurs evaluated 16 projections for the year 2030. Based on these results, the authors present comprehensive scenarios of four different possible developments of the future of social enterprise in Germany. (shrink)

Although microfinance organizations are generally considered as inherently ethical, recent events have challenged the legitimacy of the sector. High interest rates and the excessive profitability of some market leaders have raised the question of how to define a fair profit level for social enterprise. In this article, we construct a fair profit framework based on four dimensions: profitability, social mission, pricing, and surplus distribution. We then apply this framework using an empirical sample of 496 microfinance institutions. Results (...) indicate that satisfying all four criteria is a difficult, although not impossible, task. According to our framework, 24 MFIs emerge as true double bottom line organizations. These MFIs are characterized by higher outreach to women, lower portfolio risk, and higher productivity in high-density environments such as South Asia. We argue that excessive profits can be better understood relative to pricing, the outreach of the MFI, and organizational commitment to clients in the form of reduced interest rates. (shrink)

In an emerging field such as social enterprise, it is important for an organization to secure legitimacy to obtain resources and sustain its business. Specifically, when a government distributing subsidies does not have adequate information to decide which organization is trustworthy, it is the legitimacy-seeking activities of social enterprise that decides who receives a subsidy; this, in turn, decides which organization will survive. One of the most effective ways to gain legitimacy is to explicitly emphasize in (...) the public promotion that the organization devotes to its social mission. In the case of Work Integration Social Enterprises (WISEs), an organization emphasizes its social employment of the disadvantaged individuals. However, we argue that social enterprises’ public promotion that emphasizes social employment can lower the expected wage, job satisfaction, and organizational commitment of the employees who are hired due to their disadvantaged social status. This is because such obvious promotional messages makes the employees more keenly aware of their disadvantaged status; as a result, this reinforces their self-prejudice that they are not competitive enough in the labor market. We test our hypotheses in the context of South Korean WISEs and found general support for our arguments. (shrink)

Hybrid organisations combine different elements from the for-profit and non-profit domains, and they usually operate in a resource-scarce environment. For these reasons, they continuously face various resources constraints, yet their hybrid nature could be translated into an opportunity. The purpose of our study was to investigate how a hybrid organisation can overcome resource constraints in developing countries by exploiting their own hybrid nature. In the unique research setting offered by Kenyan social enterprises, we identified five creative approaches implemented by (...) social enterprises. Finally, we present a grounded model that clearly explains which hybrid harvesting strategies can be implemented to overcome resource constraints, exploiting their hybrid potential. Our work contributes to knowledge about resource constraints in the social entrepreneurship literature and extends social bricolage theory. Limitations and future research approaches are also presented. (shrink)

By addressing social issues, rather than maximizing profits, social enterprises are said to contribute to the well-being of societies. In this paper, we test whether social enterprises fulfil this expectation. The paper applies regression analysis to a unique dataset obtained by merging survey data from the Global Entrepreneurship Monitor with official statistics on social enterprises in Luxembourg. Results suggest that social enterprises contribute to subjective well-being, which is an encompassing measure of people’s satisfaction with their (...) own life. We find that when the share of social enterprises in a city increases, the ill-being of poor and unemployed people declines. Therefore, policy makers who seek to increase the well-being of economically disadvantaged people could adopt policies to promote the creation of social enterprises. (shrink)

Social enterprises combine social and financial goals. Previous studies have theorized the existence of a dual objective and maintain that it can lead to conflicts and create trade-offs. While the literature on trade-offs is extensively developed, empirical evidence is lacking on how the intensity of trade-offs might vary among organizations. We fill the void by investigating the moderating effect of female directorship on the relationship between the social and financial goals of social enterprises. Using data on (...) 1193 microfinance organizations (MFOs) from 108 countries between 2007 and 2019, we find that a high proportion of women in the boardroom attenuates social-financial trade-offs. Further, our results show that the mitigating effect of female directorship on social-financial trade-offs is more pronounced in nonprofit MFOs, in unsubsidized MFOs, in the period since the recent microcredit crisis, and in countries where women are more empowered in terms of access to higher education, leadership positions, and employment opportunities. We attribute our findings to the distinctive skills, competences, and experiences of women, including an ethical social orientation, as well as their transformational and relational leadership style. The findings are supported by predictions based on resource dependence and leadership style theories. (shrink)

The development of commercial revenue streams allows traditional nonprofit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition. In order to capture commercial revenue-generating opportunities, traditional nonprofit organizations need to deliberately transform themselves into social enterprises. Through the theoretical lens of institutional entrepreneurship, we explore the institutional work that supports this transformation by analyzing field interviews with 64 institutional entrepreneurs from UK-based social enterprises. We find that the route to incorporate (...) commercial processes and convert traditional nonprofit organizations into social enterprises requires six distinct kinds of institutional work at three different domains; these are—“engaging commercial revenue strategies”, “creating a professionalized organizational form”, and “legitimating a socio-commercial business model”. In elaborating on social entrepreneurship research and practice, we offer a comprehensive framework delineating the key practices contributing to the transformation from traditional nonprofit organizations to social enterprises. This extends our understanding of the ex-ante strategy of incorporating commercial processes within social organizations. Furthermore, the identification of these practices also offers an important tool for scholars in this field to examine the connection of each practice with different ethical concerns of social entrepreneurship in greater depth. (shrink)

Social entrepreneurship (SE) enables business consolidation, combined with the production of positive impact and improvements in society. Aligned with 2030 Agenda for the achievement of the United Nations Sustainable Development Goals, it is important to clarify the role of social entrepreneurs, as they are making visible the impact of their creative ideas in several areas, from civic engagement to the environment, health and learning. The main purpose of this study is to specify a model of social entrepreneurial (...) intention (SEI) and explore it by country, based on the dimensions of the Theory of Planned Behavior and how these are mediated by spirituality and optimism. With a convenience sample of 1476 Portuguese and Spanish students, Structural Equation Modeling (SEM) was used. For a deeply understanding, variables within the model were compared by country usingt-rest, and multivariate analysis was done by each one separately. The mean comparison between countries, demonstrated that there are differences only between perceived behavioral control (PBC), Spirituality, Optimism and SEI, with Portuguese students scoring the highest values, in all variables except Optimism. A mediation path was carried out, and Spirituality mediate a significant effect between the three TPB dimensions in Portuguese students, but not in students from Spain. Finally, after discussing the results, theoretical and practical contributions are analyzed, with regard to the field of SE in Portugal and Spain, and alternatives are pointed out for a more social and sustainable entrepreneurial future. (shrink)

How does a social enterprise pursue its ethical mandate of social impact growth while navigating the perils of the most vulnerable stage in a venture’s life—scaling up? We observe a small inclusivity social enterprise attempting to scale up rapidly to create equality for people with disabilities throughout the world. Our embedded, ethnographic study is terminated with the venture’s unfortunate demise after their dramatic effort to scale up failed. By examining scaling decision-making and conflicts around creation (...) reasoning longitudinally, our study identifies over-use of effectual logic—a creation reasoning type considered more ethical and more appropriate for high-innovativeness contexts than causal logic—as a major factor in the venture’s failure. From this insight, we extend the parameters of effectuation theory to scaling up and dimensionalize its ethical implications. Guidance for social entrepreneurs to scale up successfully while maintaining ethical integrity is also provided. (shrink)

Building on the emerging literature on the ethics of social enterprises (SEs), this paper advances the underexplored role of frontline workers (FLWs) as embedded agents at the interface between communities and SEs. Specifically, we uncover the subjectivity of FLWs as they navigate moral ambiguities while performing their professional roles, dealing with rules and regulations within the organizational hierarchy and living as members of local communities. Based on an inductive case study of a microfinance organization in Cameroon, we find that (...) FLWs engage in three rationalization strategies: cautious disengaging, safeguarding self-interest, and justifying relevance. Our findings offer a better understanding of the ethics of SEs by unpacking the subjectivity of FLWs. We highlight a bottom-up account of caring SEs, identify a boundary condition to subjectivity, and present a nuanced view of FLWs in embedded organizations. We also discuss the practical implications for SEs to improve their compassion and cater for the mental wellbeing of FLWs. (shrink)

Scholars and leaders have assumed that prosocial motivation is the primary driver for social enterprises (SEs) to do good. Despite the significance of prosocial motivation, we argue that it may not be the single driver for SE motivation. A dual-motivations approach based on insights from motivation research is proposed to examine how different types of SE motivation can act together to influence the outcomes of SEs. Empirical findings based on survey data from Hong Kong demonstrate that dual motivations—prosocial-intrinsic and (...) prosocial-extrinsic motivations—explain the outcomes of SEs beyond what the direct effects of prosocial motivation can explain separately. Based on moderation analyses, intrinsic motivation enhances the positive relationships between prosocial motivation and business and social outcomes, whereas extrinsic motivation undermines the relationship related to business outcomes. Implications for research on social entrepreneurship and business ethics are discussed. (shrink)

Much ink has been spilt over the last decade in discussion of the theories and practices of social enterprise — see especially Peattie and Morley2 for a comprehensive review of the field, including of other reviews. This brief paper is about a specific aspect of these theories and practices: the effort to establish social enterprises as distinctive from others in having at least a double bottom-line (or in some cases a triple bottom-line, or even some greater multiple (...) of bottom-lines). The effort to establish this distinction does not fit comfortably with Freeman’s ideas about stakeholders, as exemplified in his suggestion that ‘all of those groups and individuals that can affect, or are affected by, the accomplishment of the business enterprise’ should be taken into account by its managers.3 The main feature of the multiple bottom-line is, on the contrary, that only some interests, not all, should be taken into account in decision making. I do not claim that the multiple bottom-line is the sole distinctive characteristic of organisations defined (by themselves or other) as social enterprises, but it is the only characteristic that concerns me in relation to stakeholder theory in this paper. I also do not claim that stakeholder theory consists only of a view about who should be taken into account by managers, but this is the only element of stakeholder theory that concerns me, in this paper, in relation to social enterprises; and all other aspects of social enterprise theory and practice, and all other aspects of stakeholder theory, will have to wait until another day. (shrink)

Shifts in the philosophy of the “state” and a growing emphasis on the “Big Society” have placed an increasing onus on a newly emerging organizational form, social enterprises, to deliver innovative solutions to ease societal issues. However, the question of how social enterprises manage the process of social innovation remains largely unexplored. Based on insights from both in-depth interviews and a quantitative empirical study of social enterprises, this research examines the role of stakeholder relationships in supporting (...) the process of social innovation within social enterprises. We find that social enterprises are adept at working with their stakeholders in the ideation stage of social innovation. In contrast, they often fail to harness knowledge and expertise from their partners during the social innovation implementation phase. Consequently, we propose a social innovation–stakeholder relationship matrix that provides social enterprises in particular with insight for developing stakeholder relationships to achieve their social innovation missions. (shrink)

Drawing on two long-term ethnographic fieldworks with social entrepreneurs, this article starts to uncover the multilayered nature of the motivations underlying the creation of social enterprises. We investigate the following research question: what types of self-oriented motivations might drive social entrepreneurs? Departing from previous research and popular opinion, which foregrounds the primacy of prosocial intentions, we show the critical role played by self-oriented motives. To explain this finding, we advance three analytical categories of self-oriented motives—entrepreneurial lifestyle, repurposing (...) expertise, and solving a social or environmental puzzle. We then illuminate these categories through the illustrative examples of six social entrepreneurs. Based on our findings, we contend that creating a social enterprise can also be the unintended consequence of adopting entrepreneurial behavior, leading to the creation of a venture guided by these three types of self-oriented motivations. Finally, we consider the implications of this study for the field of social entrepreneurship. (shrink)