Strategic Advantages through Social Responsiveness: The Case of Certified B-Corps

Abstract

While there has been increasing scholarly interest in hybrid organizations that seek to address social and financial missions, much research has focused on the incompatibility of their missions. Some scholars have described their category-spanning nature that leads to several internal and external tensions and conflicts. Prior research shows that third-party certification can aid the process of category membership. However, it is still not clear whether certification can help firms establish their category to internal and external audiences in a context where the phenomenon of hybrid enterprises is new.

My inductive analysis using case studies helps identify and understand the processes whereby B-Corp certification can bring about a change in perception and practices at different levels. In this study, I analyze certified B-Corporations to understand the change of processes and perceptions at the level of the:

(i) founder/firm leader,

(ii) organization and employees and

(iii) external environment.

I explain how these changes enable the reinforcement of dual logics in hybrid enterprises and lead to internal and external category establishment.

My study contributes to the literature on organizational categories. It also adds to the literature hybrid firms by suggesting that certifications can play a role in reinforcing their logics of profitability and social welfare. For practitioners in social entrepreneurship, my study suggests how they may be able to sustain the dual logics of their firms, by seeking external endorsement such as the B-Corp certification and undergoing certain changes that it entails.

Keywords: Social Entrepreneurship, Hybrid Organizations, Organizational Category, B-Corporation