An Identity-Based Approach to Social Enterprise

TLDR

Social enterprise is widely praised for addressing social and environmental problems yet struggles to balance conflicting social welfare and commercial goals, and little is known about how entrepreneurs mix these logics when creating new organizations. The study develops an identity‑based theoretical model to explain how commercial and social welfare logics influence entrepreneurship, how entrepreneurs perceive their tension, and the implications for opportunity recognition, thereby extending opportunity‑recognition frameworks to better account for social enterprise creation. The model is constructed by applying identity theory to map the relevance of commercial and social welfare logics, entrepreneurs’ perception of tension, and the resulting opportunity recognition and development processes.

Abstract

Social enterprise has gained widespread acclaim as a tool for addressing social and environmental problems. Yet because social enterprises integrate social welfare and commercial logics, they face the challenge of pursuing frequently conflicting goals. Studies have begun to address how established social enterprises can manage these tensions, but we know little about how, why, and with what consequences social entrepreneurs mix competing logics as they create new organizations. To address this gap, we develop a theoretical model based in identity theory that helps to explain (1) how commercial and social welfare logics become relevant to entrepreneurship, (2) how different types of entrepreneurs perceive the tension between these logics, and (3) what implications this has for how entrepreneurs recognize and develop social enterprise opportunities. Our approach responds to calls from organizational and entrepreneurship scholars to extend existing frameworks of opportunity recognition and development to better account for social enterprise creation.