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2022

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06

Social Entrepreneurship, Legitimacy Construction and Social Enterprise Growth -- A Longitudinal Case Study Based on Shenzhen Can You Group


Abstract:In recent years, the mode of social enterprises using commercial means to solve social problems is rising day by day. Constructing legitimacy is the necessary way for emerging social enterprises to obtain resources and the key mechanism in the process of growth, but the existing research on how to obtain legitimacy in emerging markets is lack of in-depth discussion. Through the analysis of the development process of the typical social enterprise-Shenzhen Canyou Group, the research discovers the legitimacy construction process and corresponding strategies of the social enterprise in the Chinese context, summarizes the dynamic model of the social enterprise's timely adjustment of the legitimacy strategy with the change of the institutional environment, and summarizes a case of social entrepreneurship that operates in the mode of commercial enterprise and is jointly managed by the government with the help of private foundations, reveals the unique growth patterns of social enterprises in emerging markets.

 

Key words:social entrepreneurship; social enterprise; legitimacy construction; emerging market

 

Abstract: Recently, social enterprises have used commercial means to solve social problems creatively. Constructing legitimacy is a necessary way for emerging social enterprises to obtain resources and it is also a key mechanism in their growth process. However, less attention has been paid to the legitimacy strategies that social enterprises adopted in their growth and the impact of different types of legitimacy on the growth process of social enterprises. There is still a lack of in-depth research on the dynamic evolution of social enterprise legitimacy strategies, especially in the context of China's rapidly developing and changing institutional environment. This study is to explore how social enterprises construct legitimacy in emerging market and enrich related theoretical research.Case study is effective for exploring and discovering rare phenomenon. It is used to summarize concepts and then format theories from new phenomenon. As a new form of business organization, there's limited research on legitimacy construction of social enterprises in emerging markets. Moreover, the growth of social enterprises usually involves a long-term dynamic process. Using single case study method can help researchers to track their legitimacy construction process and strategies adopted in a comprehensive and detailed manner. It is also beneficial to realize specific context and details of the case. Therefore, the study adopts single longitudinal case method. Following the principle of theoretical sampling, this study uses longitudinal case analysis of Shenzhen Canyou Group to explore how it construct legitimacy during its growth. Established in 1997, Canyou Group is a typical case of social enterprise and is also one of the first batch of certified social enterprises in China. It is of large scale and has a long history and profound influence over the country.Canyou Group focused on employment of the disabled, with typical business and social welfare characteristics. This research strictly follows the basic procedures of single case method to collect data from multiple sources, including field survey data, interview data and archival data to achieve triangular verification, and to ensure the overall validity of the data. The data was coded and analyzed following the basic coding procedure and through continuous data feedback and supplementation to increase the validity of the study.This study divides the development of Canyou Group into three stages, including initial stage, growth stage and mature stage. In the initial stage, Canyou Group mainly gained informal legitimacy. During the growth period, Canyou Group initially acquired regulatory legitimacy. In the mature period, Canyou Group basically gained formal regulatory legitimacy.During the whole process, the institutional environment is also gradually evolving, from the initial complex institutional environment to an increasingly mature environment. In this continuous interaction and symbiosis with institutional environment, Canyou Group gradually constructs its own legitimacy. In different development stages, Canyou Group has shown different legitimacy construction strategies. First of all, the study found that when social enterprises are founded in an immature institutional environment, they face many constraints. Therefore, it is very important for social entrepreneurs to choose the opportunities of social entrepreneurship. Moreover, the guidance of personal spirit of social entrepreneurs plays an important leading role in the overall development of the entrepreneurial team and the social enterprise. Secondly, social enterprises should grow based on their basic business in the development process, with the purpose of providing products and services to enhance social well-being. What they need to rely on is the competitive advantage of the enterprise in the market. Finally, social enterprises must choose a reasonable operating model and governance structure. Social enterprises are similar to general commercial enterprises in that they will use commercial methods to solve problems, but social enterprises also need to pay attention to the realization of social value, which is different with normal business enterprises.To conclude, this study has summarized the development of Canyou Group's social entrepreneurship work and its legitimacy construction process. In addition, this study also concludes how social entrepreneur identify social entrepreneurship opportunities, choose legalization strategies properly and make corresponding action to promote the growth of social enterprises. This study sums up various legitimacy construction strategies adopted by a typical social enterprise under different institutional conditions, as well as how it make timely adjustment in response to the change of institutional environment. This study summarizes a case of social entrepreneurship that operates as a business enterprise model with the help of a bottom-up private foundation and is co-governed by the government. It reveals the distinctive growth of social enterprises in emerging market.

 

Key words: social entrepreneurship; social enterprise; legitimacy construction; emerging market

 

Authors: Zheng Gang, Chen Xiao, Hu Shan

Author: School of Management, Zhejiang University

The full text has been published in Science and Science and Technology Management, Issue 1, 2022.

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