Social Enterprise Places: A Place-Based Initiative Facilitating Syntactic, Semantic and Pragmatic Constructions of Legitimacy

Abstract

Social Enterprises are becoming a significant force of social as well as economic good despite facing many difficulties that are brought about by their unique characteristics. Chief among these is the question of their perceived legitimacy that impinges upon their ability to gain funding, acquire contracts and appear as capable organisations to potential partnering institutions. This study explores the means by which Social Enterprises are legitimized through participation in the Social Enterprise Place (SEP) programme in the UK. By examining the Boundary Objects (BO) that span the intersections of the incumbent social groups it identifies three pillars upon which SEPs have facilitated SE legitimacy. These pillars comprise (i) the place-based language (syntactic BO), that enables the identification of (ii) common social goals (semantic BOs), and thereby enables the (iii) mobilization of resources toward their resolution (pragmatic BOs). This research provides insight into the facilitation of legitimacy for Social Enterprises that are engaged in a place-based initiative. By responding to Peterson’s (2016) call for macromarketers to take more note of meso level marketing dynamics in different industries the paper highlights the potential for place to facilitate the legitimacy of SEs. In addition, it reveals a further macromarketing dimension to Boundary Object plasticity whereby they may evolve through syntactic, semantic and pragmatic forms over time.

Does social performance contribute to economic performance of social enterprises? The role of social enterprise reputation building

“…Whilst this would enable the social enterprises to institutionalise their social imprint and remain focussed on the social causes, issues relating to the financial system, processes and capacity may develop, affecting long-term sustainability and growth (Battilana et al, 2015). Thus, whilst socially oriented stakeholders may welcome the additional effort to create social value, the weaker economic viability of the social enterprise may put off traditional investors who predominately focus on business viability with specific operational and practice demands and may struggle to understand the value and proposition of the social enterprise (Samuel et al, 2022;White et al, 2018). The inability to develop legitimacy in the eyes of this group would create a governance challenge, in turn limiting the capacity of the social consortium and may further exacerbate solvency problems in the longer term (Foster and Bradach, 2005;Jay, 2013;Massetti, 2008;Tracey et al, 2011).…”

“…Conversely, social enterprises that seek to increase their economic viability may attract involvement from financially-orientated stakeholders, but their rigorous operational and practical requirements, such as a competitive bidding process, may steer social enterprises towards a development path that may be less socially ambitious and risk compromising their legitimacy amongst users and social-orientated stakeholders (Battilana and Dorado, 2010;Doherty et al, 2014;Lehner and Kansikas, 2012;Samuel et al, 2022;White et al, 2018). In other words, the hybridity view lays out a "trade-off" dilemma (Besley and Ghatak, 2017), or value/performance compromise (Samuel et al, 2022), whereby social enterprises face the choice of either exerting caution and foregoing an opportunity to increase their commitment to social objectives to ensure better financial returns and, thereby, sustainability of the organisation in the long run that would please some of the stakeholders (Child, 2012), or steering away from reliance on financially-orientated stakeholders in order to retain complete control of their social objectives, even though it may have economic consequences and reduce their scope.…”

“…Thus, although many social enterprises are doing much good work, the fact that these virtues cannot always be easily identified means that the latter may have difficulty evaluating them (Stevens et al, 2015). Such performance ambiguity (Samuel et al, 2022), in turn, creates barriers to their involvement and inhibits social enterprises' growth (Davies et al, 2019;Diochon and Anderson, 2011). Signalling theory (Spence, 1974) illustrates such imperfections of information between the agent, the social enterprise, the principals and the other stakeholders.…”

“…This line of literature points to "hybrid complexity", highlighting a "trade-off" relationship between the economic and social objectives (Battilana and Dorado, 2010;Battilana and Lee, 2014;Battilana et al, 2012Battilana et al, , 2015Foster and Bradach, 2005;Jay, 2013;Massetti, 2008;Tracey et al, 2011;White et al, 2022). On the other hand, the "win-win" paradigm (Child, 2012;Samuel et al, 2022;White et al, 2022) outlining a complementary relationship between social and economic objectives is becoming increasingly prominent (Bhattarai et al, 2019;Glaveli and Geormas, 2018;Weerawardena et al, 2021). This camp argues that social enterprises can deliver superior economic performance by innovatively exploring economically viable, market-based solutions to resolve societal challenges (Kickul and Walters, 2002;Piboonrungroj, 2012;Samuel et al, 2022;White et al, 2022).…”

“…On the other hand, the "win-win" paradigm (Child, 2012;Samuel et al, 2022;White et al, 2022) outlining a complementary relationship between social and economic objectives is becoming increasingly prominent (Bhattarai et al, 2019;Glaveli and Geormas, 2018;Weerawardena et al, 2021). This camp argues that social enterprises can deliver superior economic performance by innovatively exploring economically viable, market-based solutions to resolve societal challenges (Kickul and Walters, 2002;Piboonrungroj, 2012;Samuel et al, 2022;White et al, 2022). This paradigm presents a promising proposition for practitioners and policymakers: if social enterprises focus on delivering social goods, they can simultaneously generate economic gains.…”