Abstract
Social enterprises experience tensions triggered by the incorporation of both a commercial and a socio-environmental logic. This may threaten their functioning during ordinary times. Yet, in the face of shocks, their dual nature may prove an advantage compared to their for-profit and non-profit counterparts. Building on research on institutional logics and uncertainty, we theorize that these organizations, in view of the knowledge, resources, competencies and relations they possess in both economic and social domains, face less risk compared to for profit and non-profit organizations when shocks call them to deal with unexpected demands from both spheres. We believe such theorization could talk to literature on hybrid organizations and risk, on for-profit and non-profit organizational forms, and on ethical issues in the creation of social impact.
Each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders (..). A company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders.
From “Larry Fink’s Letter to CEOs”, Jan 2020.
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Notes
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The SAR NGOs linked to large NGOs such as Save the Children and Médecins Sans Frontières could rely also on strong institutional relationships (Cusumano 2019).
- 3.
NGOs with an explicit political stance against the back-then ruling party faced the opposite effect, attracting more donations as their opposing political adversaries attacked them.
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We thank Riccardo Maiolini, Luca Mongelli and Pietro Versari for their support in the initial phase of this work. We thank the editors and an anonymous referee for their suggestions.
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Capo, F., Rullani, F. (2022). Being for Profit, Non-profit, or Both? The Risk Advantage of Social Enterprises in the Face of Shocks. In: Vaccaro, A., Ramus, T. (eds) Social Innovation and Social Enterprises. Issues in Business Ethics, vol 62. Springer, Cham. https://doi.org/10.1007/978-3-030-96596-9_9
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