Mapping out social enterprises development: a framing perspective

Abstract

We integrate the predictions of institutional theory, the threat-rigidity hypothesis, and prospect theory to map out how the development of social enterprises depends on whether social entrepreneurs perceive environmental shifts as threats or opportunities to resources-related and control-related legitimacy of their social enterprises. Given the apparent challenges and opportunities in the context, we propose some avenues for future development of social enterprises. When facing legitimacy-related loss of resources, social entrepreneurs may compete with other social enterprises, private sector, and nonprofit organizations. When an environmental shift is perceived as legitimacy-related gain of control, they are more likely to form into some networked social enterprises, and/or develop more innovative products and services. On the other hand, when social entrepreneurs perceive that they are facing legitimacy-related gain of resources, they are more likely to use cooperative strategies in the form of tri-partite partnership, and social franchises. When the environmental situation is interpreted as legitimacy-related loss of control, social entrepreneurs are likely to upgrade their skills, and enhance the governance structure of their social enterprises. Implications for theory and practice are also discussed.