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This paper aims to explore the complete process and underlying mechanism that social enterprises obtain legitimacy during interactions with stakeholders from theoretical integration of institutional theory and organization ecology perspective.

Based on theoretical classification, this paper selects six typical Chinese social enterprises and conducts a multi-case analysis.

The study finds that social enterprises aim at legitimizing single entity or industry and shaping stakeholders’ cognitive boundary simultaneously. Therefore, by adopting constrained cooperation and competition activities, social enterprises use normative isomorphism to achieve personal legitimation and combining ecological niche construction, social enterprises achieve organizational legitimation. By adopting fragmented cooperation-dominant or competition-dominant activities, social enterprises use mimic isomorphism supplemented by competitive isomorphism or population structure creation to obtain industry legitimation. By adopting dynamically integrated coopetition activities, social enterprises use mimic isomorphism and reflexive isomorphism to reach field legitimation.

This paper proposes a mechanism model that the coopetition with stakeholders influences the legitimation process, identifies four stages of social enterprise’s legitimation process and the types of legitimacy obtained in each stage and fills the gap of Chinese indigenous social enterprise research.

Social enterprises pursue growth through business model innovation, and acquiring legitimacy is critical to ensuring such innovation. The purpose of this paper is to examine how business model innovation and legitimacy affect the performance of new social enterprises during different development stages.

This paper uses the hierarchical regression analysis and fuzzy-set qualitative comparative analysis (fsQCA) to examine social enterprise performance and constructs and verifies a moderated mediation effect of business model innovation, based on a survey of 183 new social enterprises in China.

This paper finds that business model innovation has a positive effect on social enterprise performance and an organization's legitimacy, acting as the partial mediator between them. The mediating effect of legitimacy is more positive when social enterprises are in the early growth stage. A more detailed analysis of fsQCA explores the necessary and sufficient conditions for the growth of social enterprise performance across different stages and reveals five configurations that improve the performance of social enterprises.

This study explores the role of business model innovation and legitimacy in social enterprise growth and provides empirical evidence about the causal configuration of high-performing social enterprises.

This research clarifies two antecedents of social enterprise performance and proposes a more inclusive framework that addresses the factor of dynamic development stages. This paper deepens the understanding of social enterprise performance in China.

This paper aims to propose a social enterprise legitimation mechanism by combining the established logic and transformational logic to test the validity of the conceptual model.

The authors construct the theoretical framework based on integrating organizational identity theory, attention-based view and collected 128 social enterprises data during the post-pandemic period in China. The authors applied multiple hierarchical regression analysis and mediation analysis to test the research hypothesis.

The results show that strong organizational identity contributes significantly to the cognitive legitimacy of social enterprise. Besides, we found that social welfare logic and digital transformation can positively mediate the correlation between organizational identity and cognitive legitimacy.

Social enterprises enhance legitimacy significantly by social welfare logic comparing with commercial logic, which indicates that social enterprises should allocate more internal resources and attention to present the organization's social value through various distributions. More importantly, social enterprises should embrace digital transformation to enhance transparency and efficiency, decrease transaction costs, enlarge organizational social impact to strengthen cognitive legitimacy.

The paper first proposed and empirically tested that digital transformation is an important mechanism to enhance the social enterprise's cognitive legitimacy.

Theoretically, the paper aims to provide locus of legitimacy as a framework to not only introduce a multidimensional perspective on legitimacy but also expand the understanding about resource acquisition strategies of social enterprises. Empirically, the authors test the theoretical predictions by using cases from South Korea and Taiwan. Practically, the authors intend to assist chief executive officers (CEOs) of social enterprises in their effort to secure valuable resources and provide policy implications so that both South Korea and Taiwan learn from each other.

The authors use case methods to find evidence of the proposed theoretical framework. The initial search for target companies showed that social enterprises in South Korea and Taiwan were ideal samples. In-person, email and phone interviews were conducted on CEOs, and archival data on institutional environments and various aspects of social enterprises were collected. Collected data were analyzed using the locus of legitimacy framework to find out how different emphasis on locus of legitimacy impacted critical decisions of social enterprise, such as human, financial and network resources.

As predicted in the locus of the legitimacy framework, the analyses confirmed that locus of legitimacy did explain critical decisions of social enterprises in South Korea and Taiwan. First, significant institutional forces existed, shaping social enterprises behavior. For example, Taiwanese Jinu showed that greater emphasis was given to internal legitimacy, while South Korean Sohwa was higher in external locus of legitimacy. Such differences systematically impacted choices made on resource acquisition strategies. Jinu showed a greater similarity to those of for-profit companies, aligning key decisions of resource acquisition strategies to achieve financial viability as a top priority. However, Sohwa, though financial performance was still important, put more emphasis on meeting institutional demands from South Korean Government.

This study is one of early studies that attempts to understand the structure of legitimacy faced by social enterprises. The authors argue that organizations can play a more proactive role in securing legitimacy. The authors believe that locus of legitimacy framework complements the existing understanding about legitimacy in institutional theory. By introducing a multidimensional perspective about legitimacy, the authors add additional explanations about how firms exposed to different institutional forces can have diverse alternatives in resource acquisition strategies.

Hypocrisy often observed in the social responsibility practices of commercial enterprises is more likely to occur in social enterprises. However, this issue has received little research attention. This study explores, from a consumer perspective, the formation of perceived hypocrisy and its impact on the cognitive legitimacy of social enterprises.

This research conducted two experiments, and data were collected from 515 subjects in China to test the proposed hypotheses.

Behavioral inconsistency in social enterprises leads to consumers' perceived hypocrisy. The higher the perceived hypocrisy towards social enterprises, the weaker their cognitive legitimacy of social enterprises. At a lower level of inconsistency, the perceived hypocrisy of social enterprises was lower than that of commercial enterprises. Egoistic attribution to prosocial behavior moderated the negative effect of perceived hypocrisy on cognitive legitimacy. The stronger the egoistic attribution, the greater is the negative effect of perceived hypocrisy on the cognitive legitimacy of social enterprises.

Social entrepreneurs should be acutely aware of the harmful effects of hypocrisy on social enterprises. Social enterprises should not exaggerate their propaganda or be consistent with their words and actions.

This study innovatively analyzes the damage to the cognitive legitimacy of social enterprises caused by the hypocrisy that tends to occur in commercial enterprises and argues from the consumer viewpoint. These findings enrich the perspective on exploring social enterprise legitimacy.

This article aims to explore the role of organisational legitimacy in understanding the emergence and development of “cross‐sector collaboration” between social enterprises and corporations.

An in‐depth case study of a long‐standing but fragile partnership between a UK‐based Fair Trade social enterprise and a large corporate retailer provides exploratory findings on the role of legitimacy at different stages of the collaboration process.

The findings highlight how pragmatic and moral legitimacy are mobilised by the social enterprise to justify collaboration throughout three major stages: the very decision of cross‐sector collaboration; the choice of the partner and the framing of the partnership; and the evolution of the collaboration.

While Fair Trade is not the only sector in which social enterprise‐corporate partnerships take place, it has been a pioneering domain revealing the potential as well as the challenges of such partnerships. Taking into account the role of legitimacy throughout the collaborative process is crucial both for comprehensive research and for informed practice.

Although it is documented by a single case study, this paper opens new research avenues to examine social enterprise‐corporate collaborations by developing a “non‐functionalist” view of such collaborations and showing the importance of legitimacy in understanding why and how they emerge, develop and sometimes fail.

The purpose of this paper is to review the growing emphasis on quantifiable performance measures such as social return on investment (SROI) in third sector organisations – specifically, social enterprise – through a legitimacy theory lens. It then examines what social enterprises value (i.e. consider important) in terms of performance evaluation, using a case study approach.

Case studies involving interviews, documentary analysis, and observation, of three social enterprises at different life-cycle stages with different funding structures, were constructed to consider “what measures matter” from a practitioner's perspective.

Findings highlight a priority on quality outcomes and impacts in primarily qualitative terms to evaluate performance. Further, there is a noticeable lack of emphasis on financial measures other than basic access to financial resources to continue pursuing social goals.

The practical challenges faced by social enterprises – many of which are small to medium sized – in evaluating performance and by implication organisational legitimacy are contrasted with measures such as SROI which are resource intensive and have inherent methodological limitations. Hence, findings suggest the limited and valuable resources of social enterprises would be better allocated towards documenting the actual outcomes and impacts as a first step, in order to evaluate social and financial performance in terms appropriate to each objective, in order to demonstrate organisational legitimacy.

Findings distinguish between processes which may hold symbolic legitimacy for select stakeholder groups, and processes which hold substantive, cognitive legitimacy for stakeholders more broadly, in the under-researched context of social enterprise.

The purpose of this paper is to explore how social enterprises as an emerging organizational form in market economies acquire legitimacy to attract the support of their constituents and stakeholders.

Employing a qualitative case study of ten UK-based social enterprises, data for the empirical inquiry was collected using semi-structured interviews and documentary evidence (e.g. Internet web pages, newsletters, and marketing materials).

We found cross sector partnerships, community engagement and capability building and, compassionate enterprise narratives as quintessentially embedded managerial initiatives and practices which give form to the legitimating activities of social enterprises.

Proactive investment in the practices identified could help social enterprises to shore up their legitimacy to garner more societal support. In particular, they can draw on their partnership ties to locate, and recruit benevolent co-optees, strategically manipulate their community engagement activities to avoid goal displacement, and employ their compassionate enterprise narratives as an external communication tool to highlight their social objectives to their audiences.

The study highlights relevant organizing practices and activities that social enterprises employ to build legitimacy to attract the necessary support, relationships, and investments they require to function and grow.

The purpose of this paper is to understand how important networks are for the emergence and growth of social enterprises as well as how social enterprises use their networks throughout the life course of their organisation. A comparative approach is used by contrasting social enterprises with traditional commercial enterprises along the dimensions of obtaining resources and legitimacy through their networks.

An abductive approach is used starting from existing knowledge on how commercial enterprises use networks during the start-up and growth of their enterprise. Qualitative interviews with 23 entrepreneurs were conducted. Using a matched-pairs design, the network importance and use of social and commercial enterprises is compared.

It is found that networks are highly important for both commercial and social enterprises throughout their life course. However, they substantially diverge in how they use their networks. Social enterprises tend to access more intangible resources through their networks than do commercial enterprises. Moreover, social enterprises rely more strongly on their networks for legitimacy in both the start-up and growth phase of the enterprise.

This paper takes a novel approach by empirically comparing the networks of social and commercial enterprises. New insights are offered in the resource flows within networks and how entrepreneurs use resources obtained from their networks.

This paper seeks to address the questions of how and why the negative consequences emanating from a stricken social enterprise spread to other social enterprises, threatening viability of social enterprises as a whole.

Based on social categorization theory, a conceptual model is developed to understand how and why the perception of stakeholders on one single, stricken social enterprise can spread to other social enterprises, and ultimately affecting viability of social enterprises.

A conceptual model outlines how a violation of the legitimacy of a single social enterprise results in bad perception of this stricken enterprise, and which in turn evokes negative responses from stakeholders. Then stakeholders are likely to further conclude that other social enterprises may have similar problems. As a result, they spread their negative responses to other social enterprises as the initially stricken enterprise. These negative consequences can seriously damage a social enterprise and threaten viability of other social enterprises as well.

To regain legitimacy, social entrepreneurs of a focal social enterprise need to upgrade their skills, rationalize operations and enhance governance structure. Given the harmful spillover effect(s) that may inflict other social enterprises, social entrepreneurs of these social enterprises need to differentiate themselves from the focal social enterprise. Social investors need to take the spillover effects into consideration when making investment decisions.

This paper seeks to contribute to social enterprise literature by highlighting the importance of cognitive processing of stakeholders that is subsumed under social categorization theory, while advancing the understanding of viability of social enterprises from a critical perspective.