The legitimization process of social enterprises across development stages: Two case studies

Abstract

We conduct an inductive dual case study to explore how social enterprises (SEs) gain legitimacy across developmental stages when the institutional environments are underdeveloped. Our analysis suggests that SEs in such contexts could first choose to gain legitimacy through deliberate socialization strategies with micro-stakeholders such as customers and suppliers. Our findings indicate that SEs focus on gaining different aspects of legitimacy over time. During the founding stage, SEs strive to gain relational legitimacy through group socialization to address customers’ demands and concerns. Thereafter, during the growth stage, SEs focus on achieving market legitimacy through task socialization to make their products more competitive in the market. Finally, during the maturity stage, SEs pursue social legitimacy through organization socialization to address the sustainability issue. This study is one of the first to elucidate the role of socialization strategies in SEs’ legitimization process when institutional environments are underdeveloped.