Social Welfare Logic Research Articles

Institutional Complexity and Social Innovation: The Case of Chinese Social Enterprises

Abstract Social enterprises (SEs) have emerged throughout the world to address societal challenges through market-based activities and innovation. Research has focused on how SEs manage the tensions arising from the combination of social-welfare and market logics, neglecting the institutional complexity that arises in authoritarian regimes where the state plays a dominant role. Based on the institutional logics perspective and interview data of 42 SE leaders in China, we find that key tensions arise from the state and social-welfare logics and that state logic (re)configures the social–market relationships to be compatible. Chinese SEs employed depoliticization and localization to adapt to this unique form of institutional complexity in their social innovation efforts. This study advances research on SEs, institutional complexity, and hybrid organizing.

Institutional pressures and greenwashing in social responsibility: reversing the link with hybridization capability

PurposeDespite the ongoing scholarly interest in greenwashing, it is not well known the impact of multiple institutional pressures on greenwashing in corporate social responsibility (CSR). Following the institutional logics perspective, this study investigates how three distinct logics – commercial, public, and social welfare – drive greenwashing and whether organizational capability for blending diverse CSR expectations reverses this link.Design/methodology/approachThe current study conceptualized and tested an original model on how three institutional logics influence greenwashing in CSR, with the mediation effect of hybridization capability as a response to logic plurality. Partial least squares structural equation modeling was performed on a survey data, which was collected from 150 middle managers in Turkey.FindingsThe results show that while commercial logic has no direct or indirect impact on greenwashing, public and social welfare logics drive greenwashing in CSR. However, these effects are reversed when the CSR hybridization capability increases.Practical implicationsThis study contributes to the understanding of what predicts CSR greenwashing by integrating a comprehensive theoretical framework involving multiple institutional logics, conflicting stakeholder demands, and organizational hybridity.Originality/valueTo the best of our knowledge, this is the first study that theoretically and empirically analyzed how the exposure of multiple external pressures affects the CSR greenwashing and how it can be reversed by CSR hybridization capability. This capability mitigates the threats and challenges of multiple logics and turns them into an opportunity to gain legitimacy in the eyes of stakeholders by preventing greenwashing.

Supplier selection at the base of the chain: navigating competing institutional logics for shared mutual value

PurposeTraditional purchasing best practices primarily follow a commercial logic and may not necessarily be applicable for social enterprises (SEs) supplier selection. This study examines how SEs focused on poverty alleviation select suppliers amidst competing institutional logics to achieve both social impact and economic performance.Design/methodology/approachA grounded theory methodology is applied to guide semi-structured interviews with 18 fair trade verified SEs. Constant comparison methods aided in determining the point of data saturation was reached.FindingsThe results of this study indicate that SEs select marginalized suppliers based on implicit criteria that is initially based on social-welfare logic and then through a blend of commercial and social-welfare logic based on company structure.Originality/valueThis study is the first to reveal that SEs addressing social issues do not follow the traditional criteria for supplier selection but have their own unique selection criteria when selecting suppliers.

Logics and Founder Identity: The Enabling Effect of Identification

Past work experience exposes entrepreneurs to the logics of pertinent institutional fields. Entrepreneurs integrate elements of these logics (e.g., values, meanings, beliefs, norms) into their founder identity—that is, what is important to them as a founder and what they do in their startup firm. Nevertheless, this process can be contingent on individual characteristics, and it is unclear why elements of some logics are integrated while those of others are not. Leveraging recent research on identification, we develop a theory about how institutional identification moderates the relationship between past exposure to logic and the formation of founder identity. We conducted a survey study with entrepreneurs from young startups to understand how past exposure to the social welfare logic and identification with this logic independently and jointly affect the dominant social welfare (over commercial) tendency of their founder identity. Our findings suggest that past exposure to logic and identification with logic are not significantly associated with the dominant social welfare tendency of entrepreneurs’ founder identity on their own, but they interact to influence founder identity. More specifically, past exposure to the social welfare logic negatively predicts entrepreneurs’ dominant social welfare tendency of founder identity when their identification with this logic is low. Our study contributes to the micro-foundations of institutional theory by identifying critical boundary conditions of how logics influence individuals’ identities and behaviors.

Measuring sustainability of suppliers: Strategies for competing institutional logics

While the growing literature has examined the strategies of buyers to ensure the sustainability of suppliers, the underlying theoretical dynamics and measurement of such strategies have been overlooked. Drawing on institutional logics perspective, this study develops and tests a measurement model of sustainable supply chain strategies. The study identifies three theoretically-driven strategies as performance-oriented strategy for commercial logic, risk avoidance-oriented strategy for public logic, and collaboration-oriented strategy for social-welfare logic. Then, a measurement construct is developed through the review of extant literature and corporate practices as well as using the findings of a semi-structured interview with 21 managers in nine suppliers. The construct is tested based on a survey data drawn from a sample of 131 suppliers of Western companies in Turkey. The analysis confirms a three-dimensional measurement model. Considering the importance of knowing how to strategically approach a supplier to ensure its sustainability, both scholars and managers can use this model to investigate the implications of formulation and implementation of diverse sustainability strategies at supply chain context.

Blended Social Impact Investment Transactions: Why Are They So Complex?

Blended social impact investment (SII) transactions, in which multiple types of capital are combined to support attainment of social impact, are a pervasive, yet not closely examined, feature of the SII market. This paper seeks to describe and understand blended SII transactions through the lens of institutional theory. Specifically, we use the institutional logics theoretical frame to shed light on the implications of combining several institutional logics in SII transactions. Consistent with other SII research, we find that parties to blended SII transactions combine financial/commercial and social welfare logics. However, in blended SII transactions, different combinations of these logics are enacted by different stakeholders in a multi-hybrid-logic structure. As such, we propose that blended SII transactions are hybrids-of-hybrids. We argue that it is this hybrids-of-hybrid characteristic that differentiates blended SII transactions from other forms of SII and increases the potential for significant logical misalignment and resultant conflict and contestation. From a business ethics perspective, blended SII transactions cast light on the critical and often unrecognized role that grants and concessionary capital frequently play in enabling SII in not-for-profit, charitable ventures. We speculate that this can distort understanding of SII with adverse implications at the transaction and field levels.

Toward social enterprise sustainability: The role of digital hybridity

A key insight of social enterprise research has been that the joint pursuit of social outreach and financial sustainability causes social enterprise hybrids to face more constraints in seeking sustainability compared with commercial ventures, and to be vulnerable to changing environmental conditions. In this paper, to enhance social enterprise sustainability, we propose a concept called “digital hybridity” to depict the phenomenon of deploying digital innovation to blend social welfare logics and commercial logics. Through conducting an in-depth case study, we observe how social enterprise sustainability is catalyzed by digital hybridity, and empirically provide a grounded process model, in which we elaborate on three mechanisms and their interactions for underpinning scaling both social impacts and financial incomes over time. Rather than focusing on individual capabilities and workforce composition to embrace tensions arising from hybridity, our evidence provides an alternative technological solution to accounts of sustainability in which digital innovation affords social enterprises the ability to blend the competing institutional logics that they embed internally.

How social enterprises gain cognitive legitimacy in the post-pandemic period? Social welfare logic and digital transformation

PurposeThis paper aims to propose a social enterprise legitimation mechanism by combining the established logic and transformational logic to test the validity of the conceptual model.Design/methodology/approachThe authors construct the theoretical framework based on integrating organizational identity theory, attention-based view and collected 128 social enterprises data during the post-pandemic period in China. The authors applied multiple hierarchical regression analysis and mediation analysis to test the research hypothesis.FindingsThe results show that strong organizational identity contributes significantly to the cognitive legitimacy of social enterprise. Besides, we found that social welfare logic and digital transformation can positively mediate the correlation between organizational identity and cognitive legitimacy.Practical implicationsSocial enterprises enhance legitimacy significantly by social welfare logic comparing with commercial logic, which indicates that social enterprises should allocate more internal resources and attention to present the organization's social value through various distributions. More importantly, social enterprises should embrace digital transformation to enhance transparency and efficiency, decrease transaction costs, enlarge organizational social impact to strengthen cognitive legitimacy.Originality/valueThe paper first proposed and empirically tested that digital transformation is an important mechanism to enhance the social enterprise's cognitive legitimacy.

A Signaling Theory Perspective on Social Impact Accelerators' Selection Decisions.

Understanding entrepreneurial actions that addresses pressing social and environmental challenges has become an emergent and important area of research interests. Blending of market-based logics and social welfare logics has created new opportunity spaces for prosocial ventures, albeit it comes with acute challenges of resource acquisition. This gap can be filled by social impact accelerators (SIA)s short-term, limited duration, cohort-based educational programs for nascent prosocial ventures, that apart from providing seed funding often utilize extensive consultation with mentors, program directors, customers, guest speakers, alumni, and peers, help solidify their value proposition. Hence it is crucial for prosocial ventures to get selected into the accelerator programs as that could later translate into venture success. Despite the recent proliferation of accelerator research, research on Social impact accelerators (SIA)s has been limited. SIA is a new form of accelerator that selects prosocial ventures, those ventures that display potential to generate financial returns along with social impact into their cohort-based programs. Specifically, how SIAs process external information to make cohort admission decisions. This study uses signaling theory layered with pecking order and static trade-off theory to conceptually analyze how entrepreneurial behaviors about capital structure decisions impact selection decisions into SIA.

Social Entrepreneurship and Nonprofit Management: Negotiating Institutional Complexity

Nonprofit organizations (NPOs) increasingly view social entrepreneurship as means to expand their mission scope while simultaneously diversifying revenue streams and strengthening financial foundations. However, the pursuit of social entrepreneurial ventures often incites a tug-of-war phenomenon between the deep-rooted social welfare logic of the parent nonprofit organization and a newly-evolving commercial logic at the subsidiary social enterprise. The present study seeks to understand how nonprofit organizations navigate such logic conflicts as they strive to become more entrepreneurial. Based upon case studies of two NPOs, we found divergence in organizational identity, legitimacy, and mission/vision between parent nonprofits and their subsidiary social enterprises as they struggled with a defining question: Are we a program or are we a business? Our research indicates that organizations reconcile such cognitive dissonance through four distinct processes: connecting, variegating, separating, and augmenting social welfare and commercial logic spheres. We thus contribute to the social entrepreneurship and nonprofit management literatures by illustrating ways in which non-commercial organizations may address issues of logic divergence when engaging in revenue-generating commercial activities.

Know Your Counterparts: The Importance of Wording for Stakeholder Communication in Social Franchise Enterprises

Social enterprises pursue a dual mission: on the one hand, they strive for social purpose, while on the other, they try to achieve economic stability despite scarce resources. To achieve the dual mission, social enterprises avail themselves of both for-profit and non-profit institutional logics. Due to this combination of multiple institutional logics, such enterprises can be classified as hybrid organizations. This study focuses on these organizations and investigates tensions between social enterprises and various stakeholder groups caused by the use of commercial logics within the social sector. In particular, we examine the perception of commercial versus social welfare logics by various stakeholder groups, and investigate the effects on organizational communication. Our study is centered on social franchise enterprises. We use an exploratory qualitative research approach based on semi-structured interviews with 21 social franchisors and social franchisees of seven social franchise enterprises. Our main results suggest that the use of commercial logics in the social sector tends to decrease the legitimacy of social franchise enterprises in the eyes of internal stakeholders, the general public, and various (but not all) external stakeholder groups. Many stakeholders of social franchise enterprises show a strong aversion to commercial logics, and particularly to commercial terminology. Overall, we conclude that social franchise enterprises very consciously apply commercial and social welfare logics and use alternative terminology where necessary to retain legitimacy and prevent tensions.

Commercial yet social: The practices and logics of bringing mini-grid electricity to rural villages in Kenya

Private mini-grid developers, which deliver power to rural communities in developing countries through for-profit business models, represent an alternative organisational model compared to traditional state-led, donor-led or community-driven models of rural electrification. However, as the ‘private model’ covers many different ways of doing business, this paper seeks to broaden our understanding of its complexities. This is done by using insights into organisational hybridity as a defining characteristic of organisations that have a dual mission consisting of social and economic aims and by applying the analytical concept of institutional logics. The paper explores how four different mini-grid firms in Kenya draw on both a commercial logic and a social welfare logic in their everyday operational activities in order to achieve their goals. By studying the practices, activities and sense-making of the four firms, as well as the effects of these practices in the targeted areas, the paper illustrates how some firms prioritise one logic over the other, while other firms blend the two logics in their work. The paper finds that firms using a blending approach seem to derive synergies from integrating the two logics into their work. However, more research is needed to improve understanding of this link and of the organisational drivers that underpin each approach.

Social Enterprises\u2019 Hybridity in the Concept of Institutional Logics: Evidence from Polish NGOs

Social enterprises have gained wide recognition as a tool for solving social and environmental problems. They generate new opportunities in the social sphere, while being active in the commercial field. They are hybrid organizations that face many challenges when pursuing frequently conflicting goals. Social enterprises are therefore an expression of the possibility of different institutional logics coexisting as part of the same organization. Social enterprises running a commercial activity and using business-like practices legitimize the market logic, while the social goal of their operation is consistent with the logic of social welfare. Although there an intense discussion takes place in the literature on institutional logics that may affect nonprofits’ activity as hybrid organizations, so far the topic has been empirically verified only to a limited extent. The aim of this article is to examine the successful coexistence of the market logic and the social-welfare logic in NGOs acting as social enterprises. On the basis of a representative national survey of 3800 NGOs, including 412 carrying out market sales and thereby referred to as social enterprises, a one-factor analysis of variance was carried out. The obtained findings of the study indicate that social enterprises acting as non-governmental organizations successfully combine the market and the social-welfare logics.

Does institutional logic matter in microfinance delivery? An empirical study of microfinance clients

PurposeFrom an institutional theory perspective, the purpose of this paper is to investigate the combined impact of financial capital (microcredit) and human capital development (entrepreneurship training) delivered by financial non-governmental organisations (FNGOs) on the performance of micro and small enterprises (MSEs) in Ghana.Design/methodology/approachAdopting a multiple linear regression analysis, the study used primary data collected from 506 Ghanaian MSEs. Microcredit was measured using four main constructs, namely, loan cost, loan amount, the flexibility of loan repayment and loan accessibility. Entrepreneurship training was measured using four main constructs, namely, training content, training efficiency, training frequency and training accessibility. MSE performance was also measured using three main indicators, namely, sales, employment and profitability growth. The study controlled for business age, industry category, manager’s educational level and gender.FindingsThe results of this study show that the combined delivery of financial and human capital development by FNGOs has a significant impact on MSE performance. The social welfare logic adopted by FNGOs seems to be legitimate to the needs and growth of MSEs in Ghana. However, the cost of microcredit remains a drawback, constraining the performance of MSEs in Ghana.Research limitations/implicationsThis study was carried out in the Volta Region, which is one of the ten regions of Ghana. Even though the sample size suffices, the findings from this study could not be generalised to the whole of Ghana. Also, this study is a quantitative study and could benefit from a triangulated method where the qualitative inputs could offer insights into the findings in this study.Originality/valueTheoretically, this study contributes to the understanding of institutions and the type of impact they have on the growth of MSEs. Practically, the provision of a conducive environment and access to financial capital is crucial to the growth of MSEs. Also, the adoption of the social welfare logic in microfinance delivery could be one of the major steps in promoting the performance of MSEs in Ghana.

The disparate roles of accounting in an amateur sports organisation

Purpose The purpose of this paper is to examine an ongoing process of logic assimilation within an amateur sports organisation (ASO) called the Gaelic Athletic Association (GAA). It seeks to develop our understanding of how forms of accounting mitigated (or exacerbated) the tensions that arose among GAA members due to the consequences of the assimilation of select elements of a professional logic and a commercial logic within its traditionally dominant social welfare logic. Design/methodology/approach Interviews were undertaken with representatives and members of the GAA to understand the effects of growing commercialisation and professionalisation on the organisation’s traditional amateur status and social mission. In particular, the authors sought to understand how accounting, in the form of financial reporting, influenced the extent of the tensions that arose. Interviews were supported by an extensive collection of podcasts and news articles that discussed this topic. Findings The paper’s findings offer unique empirical insights into the role played by forms of accounting in the maintenance of amateurism within an ASO. It reveals the conflicting role of financial reporting within the GAA whereby it was used by the GAA’s management to ease member concerns surrounding logic assimilation while simultaneously being ignored by clubs and counties to facilitate payments to managers thereby eroding the amateur status of Gaelic Games. Originality/value The paper is unique in its exploration of logic assimilation within a form of hybrid organisation that has previously been unexamined in the accounting literature. It extends extant understandings of how accounting influences the co-existence of potentially conflicting logics. The paper also discusses the implications of what accounting makes visible and keeps invisible on the longevity of the traditionally dominant social welfare logic within an ASO.

Will tax reforms alone solve the tax avoidance and tax haven problems?

The next decade will test whether new tax reforms can reverse the trend of tax avoidance and tax havens. Tax policies such as OECD’s BEPS and EU’s CCCTB are being agreed upon and implemented. Our research question is: how effective will these reforms be in significantly reducing the degree of tax avoidance and the problem of tax havens? The effectiveness of tax laws are assessed by focusing on an MNE’s response to these laws when choosing its tax practice – what makes the opportunities for tax avoidance possible and acceptable to MNEs. We take an institutional logics perspective to theorize how the interaction of countries’ tax laws, other MNEs’ tax practices, and the strength of the MNE’s social welfare logic influence an MNE’s cognitive decision processes in choosing a tax practice. We introduce the zone of acceptable tax avoidance opportunities construct whose dimensions imply two complementary approaches to tax reform. Following from theory, we discuss other activities to decrease aggressive tax avoidance whereby countries engage MNE exemplars to help marginalize tax havens.

FNGOs and financial inclusion: Investigating the impact of microcredit on employment growth in Ghana

Financial non-governmental organizations (FNGOs) are regulated microfinance institutions that operate with a social welfare logic in the delivery of microcredit to the financially excluded in Ghana. The microcredit is aimed at supporting the financially excluded individuals to create sustainable micro and small enterprises (MSEs) for the generation of both skilled and unskilled employment. From the institutional theory perspective, this study aims at investigating the impact of microcredit provided by FNGOs on employment growth among MSEs in Ghana. The major contribution of this study is the fact that, there is a little study on FNGOs and their impact on employment growth in the Ghanaian context. Therefore, this is one of the few studies that highlights the role of FNGOs in promoting financial inclusion through the provision of microcredit for employment generation purposes. Through a multiple regression analysis, the study uses primary data collected from 506 MSEs in Ghana. The results show that microcredit which is flexible in repayment mode, accessible and adequate has a positive impact on employment generation among MSEs in Ghana. However, the current cost of microcredit in Ghana has a negative impact on employment growth among MSEs.

Venture Philanthropy and Practice Variations: The Interplay of Institutional Logics and Organizational Identities

While institutional logics and organizational identity become effective theoretical lenses to analyze hybrid organizations, the literature often focuses on tensions between multiple logics or multiple identities and remains relatively silent regarding how logics and identities simultaneously constrain organizations and how organizations respond to incompatibilities as well as compatibilities between logic and identity. To address this gap, the present study draws from burgeoning research that theorizes identity as an integral part of the mechanism from which logics shape organizational decision making. I examined how social-welfare/commercial logics and social/businesslike identities directly and indirectly shape 138 organizations’ practices of venture philanthropy—a hybrid approach combining philanthropy and venture capitalism. The findings confirm identity’s overall mediating effects and offer new theoretical insights into organizational responses to logic–identity incompatibility, especially the dominant role of social identity in consistently suppressing external pressures from commercial logic, whereas businesslike identity overcomes social-welfare logic only associated with the nonprofit status.

Unpacking Variation in Hybrid Organizational Forms: Changing Models of Social Enterprise Among Nonprofits, 2000–2013

To remain financially viable and continue to accomplish their social missions, nonprofits are increasingly adopting a hybrid organizational form that combines commercial and social welfare logics. While studies recognize that individual organizations vary in how they incorporate and manage hybridity, variation at the level of the organizational form remains poorly understood. Existing studies tend to treat forms as either hybrid or not, limiting our understanding of the different ways a hybrid form may combine multiple logics and how such combinations evolve over time. Analyzing 14 years of data from Canadian nonprofits seeking funding for social enterprise activities, we identify two novel dimensions along which a hybrid form may vary—the locus of integration and the scope of logics. We further find that as the commercial logic became more widespread within the nonprofit sector, variants of the hybrid form shifted from primarily emphasizing the commercial logic to more equally emphasizing both the commercial and social welfare logics and integrating the two logics in multiple ways. Drawing on these findings, we contribute a multi-dimensional conception of hybrid forms and theorize how form-level variation in hybridity can arise from organization-level cognitive challenges that actors face when combining seemingly incompatible logics. We then build on this theorizing to offer an alternative perspective on commercialization of the nonprofit sector as a contextually dependent rather than universal trend.

It’s in your biography – how individuals navigate organizational hybridity

This study examines the ability of managers in hybrid organizations to balance and integrate social welfare and commercial logic. We observed the strategy revision process of an NPO where social we...