Legitimacy approaches for social entrepreneurship in a context of institutional voids

Abstract

Social entrepreneurship in an institutionally void environment is ill-explored, and consequently western paradigms dominate interpretations of the phenomena. Applying institutional theory, this study explores characteristics of social entrepreneurship organisations and their approaches to navigating the institutionally void environment, within varied poverty contexts. By doing so, the study provides insights on how these organisations navigate the institutional environment, and build legitimacy. The study’s sample (n=476) of social entrepreneurship organisations in South Africa, are bound by a single regulatory context, but exist within varied poverty contexts. This enabled the investigation of a hybridity of institutional logics which is one of the study’s core contributions. Using a self-developed questionnaire to collect data, the study adopts a mixed-methods approach in data analysis, involving three sequential phases and inductive, abductive, and deductive reasoning to explore the institutional voids encountered in South Africa and the mechanisms social entrepreneurship organisations adopt to gain legitimacy. The results reveal that social entrepreneurship organisations’ practices of organisational compliance and relational agency contribute to individual and organisational trust. The moderating role of local knowledge in these highly unequal, informal contexts is also highlighted. Overall, the results reveal that social entrepreneurship organisations navigate institutional voids using a blend of institutional logics. It is proposed that this is because the institutional environment – and the voids themselves - are made up of formal and informal logics. Further, the study affirms the characteristics of social entrepreneurship organisations in South Africa, as micro in size, social in orientation, locally embedded and financially insecure. The study’s primary contribution is in its demonstration of this hybridity of institutional logics results which results in a conformity to both the formal and informal pillars of institutional theory as organisations strive for legitimacy. Further, it connects the social-entrepreneurship and difficult-market literatures, addressing the lack of research of social entrepreneurship in non-western contexts.