Judging a Book by Its Cover: The Role of Corporate Form in Social Enterprise Start-Ups
29 Pages Posted: 8 Dec 2014
Date Written: September 30, 2014
The demand for social goods not met by the government has traditionally been met by the nonprofit sector; over the last decade, however, rising social awareness in the private sector and the use of earned revenue models in the nonprofit sector have led to a new type of organization: the for-profit social enterprise. Many new corporate forms have been born to exploit this new market niche; however, the factors that will determine which of these new species will survive and thrive are unknown. This paper explores the role of corporate form in a small geographical niche of social entrepreneurs with enterprises under two years old. First, contrary to expectations, we find a lack of interest and uptake in specialized corporate forms compared to general ones. Second, once the characteristics of the enterprises have been mapped, the wide within-form variation reinforces the generalist conceptualization of the most popular form. Finally, we develop a scale to compare the forms across the mission-market spectrum and find evidence that justifies the inclusion of existing corporate forms such as the LLC as an essential part of the organizational form discussion in social enterprise.
Keywords: social enterprise, ICSEM
Suggested Citation: Suggested Citation