Social Entrepreneurship and the Pursuit of Legitimacy: Ethical Perspectives in Primary Stakeholder Engagement

Lorenzo, Diana Lynn
Lips-Wiersma, Marjolein
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Master of Business
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Auckland University of Technology

Social entrepreneurship has been the subject of considerable interest over the past years due to its capacity to address social problems whilst utilising economically viable business models. Despite the growth in literature, however, social entrepreneurship remains an emerging and fragmented construct with unclear boundaries. The study responds to calls for research on the interface between social entrepreneurship and ethics. It aims to sharpen and enrich the definition of social entrepreneurship by shedding light on the ethical dimension of the “social” through an empirical examination of social value creation as it manifests in primary stakeholder engagement. It undertakes an inductive, theory-building case study methodology to draw on twelve individual cases of engagement within a developing country context. The study surfaces four patterns of primary stakeholder engagement that: (1) suggest a characterisation of primary stakeholder engagement that is based on what matters to the primary stakeholder, (2) delineate a two-directional flow of care between the primary stakeholder and the social enterprise organisation, (3) establish a link between social value creation and primary stakeholder engagement, and (4) introduce the concept of primary stakeholder altruism. These four patterns raise two issues that lead to social entrepreneurship legitimation deficits. The first legitimation issue suggests that avenues through which the primary stakeholder may pursue what matters to them must be available in their work engagement, whilst the second issue points to the dark side of primary stakeholder altruism. The study makes significant contributions to social entrepreneurship literature by giving a voice to the previously silent primary stakeholder and by offering insights drawn from the context of a developing country in Asia.

Social entrepreneurship , Social value creation , Ethics of care , Stakeholder engagement
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