Social Enterprise Legitimacy: Application of Accountability Mechanisms as a Multi-Institutional Context Strategy

Abstract

Social enterprises, as hybrid organizations with a dual-mission focus and diversity of primary stakeholders, have unique communication and governance challenges when compared to other social mission organizations, such as nonprofits and nongovernmental organizations. To address a gap in the social enterprise literature, we offer a comprehensive framework to illustrate how the application of context-specific ‘accountability mechanisms’ (Ebrahim, 2003) can strengthen organizational legitimacy perceptions and, in doing so, strengthen performance perceptions and stakeholder ties. Given multiple principal stakeholders in the plural institutional environments in which such hybrid organizations operate, our premise is that social enterprises bolster such perceptions by applying relevant accountability tools and processes in each of Ingram and Clay’s (2000) four institutional contexts. Importantly, our framework applies to both strategic and institutional social enterprise legitimacy. As an illustration, we performed a qualitative examination of three established social enterprises, each in a different industry. Findings revealed each of these social enterprises had adopted accountability mechanisms in all four institutional contexts, suggesting that practitioner application of, and future research on, our framework may prove fruitful.