Understanding Legitimacy Formation in Multi-Goal Firms: An Examination of Business Planning Practices among Social Enterprises

Abstract

The value of business planning to new business ventures and small firms has been the subject of debate among entrepreneurship researchers. In this paper, we examine business planning practices as a function of legitimacy formation among Australian social enterprises, drawing on a mixed‐methods study. We find that business planning practices are driven by demands to establish legitimacy with external stakeholders as well as organizational performance imperatives, although legitimacy is the stronger driver. Findings also suggest business planning processes serve unique communicative and relational functions among social enterprises. This has implications for understanding legitimacy formation within multi‐goal and multi‐stakeholder businesses.

Social entrepreneurship in the fishing sector of La Guajira

“…According to these results, the company uses the available resources in a consistent manner, designs plans in conjunction with its collaborators respond to community problems through support activities, which agrees with what was stated by [11], that the Planning is used to support a coherent message of community benefit among the intra-entrepreneurs of the organization. On the other hand, the communication in the organization is directly related to the administrative functions fostering the relationship between the actors of the company, the information is transmitted in a fluid way and the effectiveness in these communicatiion processes is considered.…”

The Role of the External Accountant in Business Planning for Starters: Perspective of the Self-Determination Theory

“…This study contributes to the lively debate on the (un)importance of business planning for starters [109][110][111][112]. Developing a business plan should support entrepreneurs in making informed decisions, launching their business successfully, and monitoring the overall viability efficiently [7][8][9][10][11][12][13][14][16][17][18][19][20]113]. However, Gonzalez [5] notes that "there is a growing and evolving body of work advising that traditional startup planning has become obsolete and unnecessary" (p. 193).…”

“…Consequently, they experienced a feeling of pressure. Entrepreneurs often develop a business plan to meet the external expectations from third parties such as the government, investors, and service providers [10,16,56]. The second type, introjected motivation, was framed in terms of internalized pressures such as behavior undertaken to avoid feelings of guilt or shame.…”

“…The business plan is therefore assumed to be a very valuable instrument to identify opportunities and possible threats or problems in advance [15]. Moreover, this plan should enable entrepreneurs to make the right decisions based on relevant data and to subsequently assess the overall viability of the company [7,14,[16][17][18][19][20].…”

Applying Enterprise Architecture to Business Networks

“…In the business network context, some of these captured artifacts can be exposed to business partners in order to perform a business operation. This makes the exposed artifacts visible from an EA standpoint and traceable to the related layer inside the organization (network planning) [Barraket et al, 2016, Koppenhagen et al, 2016. Therefore, from an EA point of view, network planning can be related to internal operation planning, as the same artifacts are involved.…”