The purpose of this paper is to understand how social enterprises (SEs) sustain social focus as they shift their legal format from nonprofit to for-profit. The investigation is driven by the understanding that historical persistence of organizational action can influence the sustenance of social focus.
The paper uses a case study approach and traces the commercialization process of two microfinance organization from India. The data come from interviews and archival documents spanning across the biography of the selected organizations. The constitutive elements of the commercialization process are identified by using the lens of path creation.
Evidence suggests that the framing of purpose for microfinance as empowerment of women formed the triggering event to path creation. The organizations retained the focus on social goal by adopting a community centered delivery model of self-help groups. The organizational practices adopted after commercialization helped these organization to address the issues of drift actively.
The paper suggests that framing of organizational purpose can play a crucial role in sustaining hybrid character in SEs. It reinforces earlier findings that stakeholders can exert significant influence in balancing social and commercial goal. The aspiration to be identified as a pro-community organization is another critical driver in sustaining social focus. Finally, for SEs to sustain their social focus, proactive engagement with the community should become an integral part of organizational practices.
The paper explores the constitutive elements of path creation and demonstrates the sustenance of social focus through three stages of organizational path development. It also offers insights into the literature on historical imprinting by exploring the internal process through which imprinting is sustained and amplified and by presenting sources and outcome of imprinting.
Sarma, S.K. (2020), "Retaining the social goal: role of path creation in for-profit social enterprises", Journal of Management History, Vol. 26 No. 1, pp. 77-98. https://doi.org/10.1108/JMH-08-2018-0039
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