As different countries and regions continue to develop policy and legal frameworks for social enterprises this paper offers new insights into the dynamics of legal structure choice by social entrepreneurs. The potential nodes of conflict between exogenous prescriptions and social entrepreneur’s own orientation to certain aspects of organization and what social entrepreneurs actually do in the face of such conflict is explicated. Kite-marks, standards and legal structures privileged by powerful actors are cast as political artefacts that serve to discipline the choices of legal structure by social entrepreneurs as they prescribe desirable characteristics, behaviours and structures for social enterprises.
This paper argues that social enterprises should not be understood as the homogenous organisational category that is portrayed in government policy documents, kite-marks and privileged legal structures but as organisations facing a proliferation of structural forms which are increasingly rendered a governable domain (Nickel & Eikenberry, 2016; Scott, 1998) through the development of kite marks, funder / investor requirements and government policy initiatives.
Further, that these developments act to prioritise and marginalise particular forms of social enterprises as they exert coercive, mimetic and normative pressures (DiMaggio & Powell, 1983) that act to facilitate the categorising of social enterprises in a way that strengthens institutional coherence and serves to drive the structural isomorphism (Boxenbaum & Jonsson, 2017; DiMaggio & Powell, 1983) of social enterprise activity. Whilst the actions of powerful actors work to maintain (Greenwood & Suddaby, 2006) the social enterprise category the embedded agency of social entrepreneurs acts to transform it (Battilana, Leca, & Boxenbaum, 2009). The prevailing Institutional logics (Ocasio, Thornton, & Lounsbury, 2017; Zhao & Lounsbury, 2016) that serve to both marginalise and prioritise those legal structures are used to present argument that the choice of legal structure for a social enterprise is often in conflict with the social entrepreneur’s orientation to certain aspects of how they wish to organise.
Where the chosen legal structure for a social enterprise is in conflict with the social entrepreneur’s own organising principles as to how they wish to organise then this can result in the social entrepreneur decoupling (Battilana, Leca, & Boxenbaum, 2009) their business and/or governance practices from their chosen legal structure in order to resolve the tensions that they experience. Social entrepreneurs also experiencing the same tension enact a different response in that they begin to create and legitimate new legal structures on the margins of the social enterprise category through a process of institutional entrepreneurship (Battilana, Leca, & Boxenbaum, 2009; Hardy & Maguire, 2017).
- Social enterprise
- Legal structures
- Structural isomorphism
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