Legitimacy Acquisition and Social Enterprises

Abstract

Social enterprises typically are founded to fulfill social objectives that are underserved by the state and the private sector. Social enterprise sustainability often hinges on the continuing legitimation by multiple stakeholders who may have conflicting interests. Without such legitimacy, the enterprise will neither attract resources to sustain itself, nor will it be able to serve its constituents according to its original mission. Several authors on corporate social opportunity and social enterprise have recognized legitimacy as essential for the organization. However, few have examined how social enterprises establish socio-political, pragmatic, normative, and cognitive legitimacy. In this chapter, the authors explore the question of legitimacy acquisition by social enterprises founded and managed by social entrepreneurs. The chapter presents three cases of social enterprise in India, which serve in agriculture, healthcare, and housing. The case studies demonstrate that the process of legitimacy acquisition for a social enterprise parallels that of a profit-oriented entrepreneurial organization with some significant differences. Implications for legitimacy and sustainability of social enterprise are discussed.