Legitimation in institutional complexity: a study of social enterprises in a multi-dimensional, emerging market context

This doctoral research works to understand how social enterprises legitimate in emerging markets, characterised as eco-systems of institutional void, where the absence of institutions is conspicuous, and “pernicious” (Dhanaraj and Khanna, 2011, p. 687).

The lens selected for the study is institutional theory which has as a central construct, the organisations ability to build, retain and maintain legitimacy. Yet how do organisations legitimate in eco-systems of structural deficiency?  Organisations build legitimacy by working to conform to the eco-system across its cognitive, normative and regulatory pillars, by taking decisions that focus on aligning to the demands of the eco-system (Oliver, 1991; Suchman, 1995; Dart, 2004). It is through legitimacy that organisations are able to attain, maintain and retain resources: in the words of Dart (2004) “from legitimacy, flows benefits” (p. 415).”

This study explores how social enterprises build legitimacy. In doing so, it challenges the characteristics of emerging market contexts as eco-systems of institutional void, instead positioning a multi-dimensional environment that is institutionally complex, with multiple levels of governance and accountability.

The study explores how social enterprises navigate this complexity: by exploring what (and if) tensions manifest, and if so, how these are managed. This approach is premised on the work of Smith, Gonin and Besharov, (2013), where tensions arise as a result of competing logics.

The research questions tackled are:

Research question 1: Institutional void or complexity? The South African environment for social entrepreneurship.

Research question 2: How do social enterprises legitimate, in institutional complexity?

This exploratory study uses a qualitative case research approach.  The sample group is organisations that have a ‘degree’ of legitimacy, in that they have been through a competitive process and received funding from the country’s largest investors in the field: multi-national brewer ABN-Inbev through its SAB Foundation; and through government agency the Industrial Development Corporation.

By the time of presentation, two exploratory data collection processes will have happened:

A survey of the sample group on how they perceive the institutional environment.

A fictional case based on the work of Smith, Gonin and Besharov (2013) that identifies whether the two tensions aligned with institutional theory (performing and organising) are identified and and ‘managed’ by the sample group.

This first phase ensures that the research does not assume tensions are experienced by social enterprises; whilst exploring their experience of the eco-system and its structures. The presentation will include the results of the first phase, and how this informs phase 2, which is a case approach. Here a minimum of five social enterprises plotted across the for-profit-not-for-profit spectrum will be studied, ensuring contrasting cases are researched, until theoretical saturation is reached (Eisenhardt, 1989; Sassmannshausen and Volkmann, 2018).

This study is inspired by a question posed by Seanor and Meaton (2007) to investigate how societal institutions impact social enterprises ability to gain legitimacy and sustain hybridity.

Theoretically it responds to calls to study the impact of an eco-system devoid of regulation, or complex in its institutional contradictions, on the entrepreneurial organisation (Bruton, Ahlstrom and Obloj, 2008; Pache and Santos, 2013; Stephan, Uhlaner and Stride, 2015); and builds on a recommendation by Littlewood and Holt (2015, p. 252): “We need further research on social entrepreneurship in South Africa, and other non-Western and non-traditional contexts if we are to more fully understand this important global phenomenon.”

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pp. 411–424.

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Sassmannshausen, S. P. and Volkmann, C. (2018) ‘The Scientometrics of Social Entrepreneurship and its establishment as an Academic Field’, Journal of Small Business Management, 56(2), pp. 251–273. doi: 10.1111/jsbm.12254.

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