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Supportive Ecosystems for Social Enterprises: The Role of Family Firms

Published onJun 21, 2023
Supportive Ecosystems for Social Enterprises: The Role of Family Firms
Abel Diaz Gonzalez1, Jennifer J. Griffin5, Philippe Eiselein2,4,  Nikolay Dentchev2,3
1School of Business and Economics, Maastricht University (The Netherlands) 
2Vrije Universiteit Brussel (Belgium)  
3University of National and World Economy (Bulgaria)  
4Odisee University of Applied Sciences (Belgium) 
5Loyola University Chicago (US)  


Social Enterprises, Family Firms, Ecosystems, Support, Institutional Theory

Extended Abstract

Entrepreneurs founding social enterprises (SEs) are known for their aspirations to address challenging social and environmental issues by creating innovative business solutions (Mair & Marti, 2006; Smith & Woodworth, 2012). SE business models are driven by the dual ambitions to pursue social impact and financial sustainability, creating a complex, hybridized business environment (Grassl, 2012). To stay financially viable and scale social impact entails managing tensions among and the resources provided by team members, funders, suppliers, clients, and government officials who impose multiple, often conflicting pressures (Ebrahim, Battilana, & Mair, 2014).

SEs need to develop particular competencies, access to capital, approval from governments, and interpersonal skills (Kyndt & Baert, 2015) to attract and leverage different resources (e.g., human, monetary, technical, informational) to keep their businesses afloat (Battilana, Sengul, Pache, & Model, 2013; Doherty, Haugh, & Lyon, 2014). As a result, social enterprises operate within a complex setting of uncertainties, due to the founder, dependence upon resources, and the ambitions to create an organization delivering value and addressing complex social issues (Saebi, Foss, & Linder, 2018). Often SEs operate in challenging local environments with ongoing entrenched issues that have not been solved by local governments, nonprofits, SMEs, and other institutions. Collaboration to catalyze effective change might require re-imagining the scale of the social issues (Weick, 1984), bringing in new resources, or experimenting with new collaborations among non-traditional partners and local actors to catalyse effective change (Phillips, Lee, Ghobadian, O'Regan, & James, 2015).

Embedding SEs in a supportive ecosystem is seen as one mechanism to resolve some longstanding SE challenges. Supportive ecosystems are composed of a variety of actors with complementary knowledge and resources encouraging interaction that is beneficial for the involved actors (Autio et al., 2014; Roundy, 2017). Ecosystems become a flexible backbone connecting SEs, linking resources to ideas, providing encouragement, and coaching as advisors willing to give frank advice. By providing unglamorous mutual support that frequently may not show up in profit and loss statements, ecosystems can help a phoenix emerge from the ashes. Ecosystem support for SEs can range from access to different types of resources such as human, financial, and physical including knowledge, information, and networking expansion possibilities (Biggeri, Testi, & Bellucci, 2017; Goyal, Sergi, & Jaiswal, 2016; Letaifa, 2016).

How the underpinning mechanisms of a supportive ecosystem enable SE success remains underexplored (Theodoraki, Dana, & Caputo, 2021). For instance, current research on SEs often focuses on the individual entrepreneur (e.g., training, access, personal network) and/or the organizational resources and capabilities (e.g., geography/location, governance, products) rather than the enabling environment of a supportive ecosystem for SEs (c.f., Gonzales, 2021), and more specifically, the role of family businesses in nurturing and scaling social enterprises. Multi-generational family firms may be an overlooked actor that could uniquely enhance a supportive SE ecosystem. A well-established family, engaged for a long-term in the community, providing a viable business model, with a large number of siblings, cousins or next generation descendants that may want to start a new business can influence SE ecosystems. They might have a variety of resources (e.g., monetary, information, technology, networks) with a prosocial/community orientation of some family firms.

In this paper, we explore if and how family firms may contribute to an enabling environment for social enterprises as part of the SEs supportive ecosystem. To guide our research question, we borrow insights from institutional theory (DiMaggio & Powel, 1983; Galaskiewicz, 1991; Scott, 2005) to analyse the meso level of organizational contexts. That is, the external normative, mimetic, and coercive pressures that guide organizational behaviour and enhance the probability of survival through isomorphism. We complement institutional theory’s focus on norms and rules with a resource dependency perspective (Pfeffer & Salancik, 2003) which suggests that senior management coalitions and access to the specific resources that the firm depends upon, influences the organizational behaviours. That is, examining the type, and depth of support that SEs are dependent upon (e.g., financial or non-financial resources and relationships) from its ecosystem, inclusive of family firms, is related to the SEs ability to remain financial viable and sustain its social impact. We develop our arguments based on several case studies (Eisenberg & Miller, 1987; Yin, 2003) of family firms s that support social enterprises.

We gather data on several case studies through participant observations and secondary data in news articles and the web and are guided by our two research questions:

  • What type of support can SEs expect from FFs?

  • How do SEs and FFs benefit one another (uni- or bi-directional support) when cooperating within an ecosystem?

Our study intendedly examines the direct, and indirect, relationships that potentially emerge among FFs and SEs. We are keen to examine the benefits across the ecosystem (financial, non-financial) in establishing an enabling environment for attaining SEs socially desirable goals (Margolis & Walsh, 2003).

We hypothesize that family firms can facilitate SEs directly through tangible resources such as dedicated infrastructure and funding sources. In some cases, the family members might be the social entrepreneurs and/or create several SEs. Alternatively, established family firms may indirectly support SEs through the provisioning of intangible resources/capabilities such as information networks, access to providers of capital/material (e.g., other family members or other family firms), management acumen as counsellors, or encouragement of an entrepreneurial spirit, to nurture nascent ideas during the early stages of start-ups. Overall, we expect SEs to have a higher probability of achieving social objectives and financial viability if they have a supportive ecosystem with family firms. Further, we expect family firm members directly affiliated with supportive ecosystems are likely to have a higher probability of SEs achieving social objectives and financial viability; and a larger number of SEs moving beyond the start-up phase and scaling not only their social impact but also improving their business performance and operations.

Further, it is our intention to advance theory on how can FFs and SEs coexists: how are these relationships created, what are the main motives and to what extent this can be mutualistic. In our study, we explore if social enterprises initiated by members of a family business are more likely to thrive/prosper due to the dense network of resources (technology, connections, monetary, support) of an enabling ecosystem of the family and/or the family firm. This research complements the oft-considered resource-based environment (i.e., monetary resources) of social enterprises as we explore tangible and intangible resources that might be uniquely available to family members including stakeholder relationships, familiness including identity (Frank et al., 2017), entrepreneurial spirit, or mentorship. Innovatively combining intangible resources (Surroca, Trio, & Waddock, 2010), we believe, may contribute to increased probability of social enterprise start-ups and/or success. We continue to collect different cases of different family firms in Belgium that have been involved in supporting SEs across the ecosystem. By the time of the conference, we hope to have finalized our data collection process and drafted a full version of this paper.


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