Contextualising social entrepreneurship: innovation, resistance, and hybridity

Abstract

This study defines social entrepreneurship as the process of combining resources in innovative ways for the pursuit of opportunities that simultaneously create both social and economic value through initiatives that manifests in new products, services, programmes, or organizations (Mair & Marti, 2006; Peredo & Chrisman, 2006; Swedberg, 2009). Social entrepreneurship emerges from social and historical contexts. These contexts also bring the institutional norms, routines, and conventions that challenge and constrain innovation processes. These contextual forces resist and refine social innovations such that they become the products of the financial, social, cultural, and political expectations of stakeholders of social entrepreneurship ventures. This research explores how those forces influence the innovation process in social entrepreneurship. A deeper understanding of how context shapes social entrepreneurial action will enable theory development that is built on a more complete understanding of social entrepreneurship as a social process. This understanding includes both the positive and negative influences of resistance on the innovation process. This study empirically and theoretically explores how innovation happens in social entrepreneurship. It is based on a long-term ethnographic investigation of a large international non-governmental organisation (INGO) as it attempts to implement a social entrepreneurship strategy. INGOs are an under-researched context in the study of entrepreneurship given the level of resources they mobilize for social value creation and the strategic threats they are currently facing. This study explores the social entrepreneurship opportunities that these organizations have available as a response to shifting aid policies, evolving donor expectations, the rise of the social enterprise and impact investment, and the changing humanitarian development landscape. However, the established institutional logic of such organizations can inhibit their ability to pursue innovative social entrepreneurship initiatives. The key findings in this regard are that the points of tension in effectively blending institutional logics – hybridizing – lie in the organization’s financial and institutional compliance, risk appetite, business model, value proposition, and governance. Contributions are made through the empirical application of Shepherd and Patzelt’s (2011) framework and its combination with the theory of institutional logics. Building context based theory requires consideration of the social, historical, and institutional context in which the action is taking place (Davidsson, 2008; Watson, 2013; Welter, 2011). The importance of making sense of the role of context is particularly acute in informal, social, sustainable, or cultural entrepreneurship because of the greater influence it has on entrepreneurial processes such as innovation and resource configuration (Newth & Woods, 2014; Newth, 2015). How entrepreneurship happens, and why, in these contexts requires research approaches that account for the context in which the activity is happening. Ethnography immerses the researcher into the context of the entrepreneurial action. This allows for an appreciation of the nuances of the purpose of the entrepreneurship and how this, in concert with the context in which it is happening, influences what is done and how. To this end, the researcher was able to closely observe and participate in the development of social entrepreneurship initiatives and to experience first-hand the manifestations and impacts of contextual forces. The rich data this generates was utilised to generate nuanced insight to the challenges of pursuing social entrepreneurship within the particular institutional context of the participant INGO. The study’s research questions seek to understand how context shapes innovation in social entrepreneurship. This requires an examination of the institutional bases of resistance to innovation in social entrepreneurship and an appreciation of the relationship between social entrepreneurship and hybridisation in non-profit organisations. This understanding of the institutionalised contextual forces that are in play enables an exploration of the micro-level processes of negotiation and contestation that social entrepreneurs engage in with key stakeholders. The findings from this research suggest that social enterprises are the products of the social, cultural, commercial, and political expectations of the innovation’s range of stakeholders, not solely the vision of the social entrepreneur(s). The power of stakeholders to influence the development of an innovation is drawn from their salience and the resources, access, and/or legitimacy that their support might provide. In this way, the actions of social entrepreneurs represent the interests of communities and it is through processes of resistance and contestation that the actions of social enterprises become the manifestations of collective social processes. The resulting empirical contributions from the ethnographic fieldwork demonstrate how the effects of context ultimately shaped their design. The case examples serve as an illustrative example of the ways in which differing expectations, beliefs, and logics of stakeholders induces particular decisions to be made about the design, resourcing, and strategy of social entrepreneurship ventures.