Social Innovation and Earned Income – Antecedents and Outcomes of the Institutional Logics in Hybrid Social Enterprises

This paper discusses two organizational logics which have been proposed as being symptomatic for hybrid social enterprises by Dees and Anderson (2006): a social innovation logic which aims to transform sectors by propagating more effective solutions, and an earned income logic which prioritizes income from sold products and service over grants and donations. Based on existing literature, we advance a model in which we identify four factors (a willingness to share knowledge, stakeholder driven decision making, a use of salaried employees, and dividend payments) that predict the emergence of these logics in social enterprises. Moreover, we propose that whereas social enterprises adopting a social innovation logic tend to go along with increased social impact ambitions, social enterprises with earned income logic tend to favor the likely fundability of social enterprises. These hypotheses are tested through a sample of 441 emerging social entrepreneurs who are in the process of starting a social venture and a second sample of 245 managers at mature social enterprises. Results from the nascent social enterprise sample confirm all hypotheses. Correlations are less strong for the mature social enterprise sample and for three hypotheses we could no longer deliver significant results.

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