Perceived Institutional Ambiguity and the Choice of Organizational Form in Social Entrepreneurial Ventures

Abstract

Social entrepreneurship (SE) is emerging as a common approach to meeting social needs. However, SE founders appear to be organizing under both for–profit and nonprofit organizational forms to engage in essentially the same activities. We investigate this lack of consistency regarding the choice of organizational form by examining two possible explanations: a difference in motivational goals among social entrepreneurs or perceived ambiguity regarding trends in core dimensions of the institutional environment. Overall, we argue that founder perceptions of an ambiguous institutional environment are leading to the variance in choice of organizational form for SE ventures. Both theoretical and practical directions for future research are discussed as well.