In EU Policy, Research

Details

Year: 2020
Published in: Journal of Business Ethics (2020)
Cited as: Ko, W.W., Liu, G. The Transformation from Traditional Nonprofit Organizations to Social Enterprises: An Institutional Entrepreneurship Perspective. J Bus Ethics (2020).

Abstract

The development of commercial revenue streams allows traditional nonprofit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition. In order to capture commercial revenue-generating opportunities, traditional nonprofit organizations need to deliberately transform themselves into social enterprises. Through the theoretical lens of institutional entrepreneurship, we explore the institutional work that supports this transformation by analyzing field interviews with 64 institutional entrepreneurs from UK-based social enterprises. We find that the route to incorporate commercial processes and convert traditional nonprofit organizations into social enterprises requires six distinct kinds of institutional work at three different domains; these are—“engaging commercial revenue strategies”, “creating a professionalized organizational form”, and “legitimating a socio-commercial business model”. In elaborating on social entrepreneurship research and practice, we offer a comprehensive framework delineating the key practices contributing to the transformation from traditional nonprofit organizations to social enterprises. This extends our understanding of the ex-ante strategy of incorporating commercial processes within social organizations. Furthermore, the identification of these practices also offers an important tool for scholars in this field to examine the connection (or disconnection) of each practice with different ethical concerns of social entrepreneurship in greater depth.

Subject

The development of commercial revenue streams allows traditional nonprofit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition.

Details

Year: 2020

Cited as: Ko, W.W., Liu, G. The Transformation from Traditional Nonprofit Organizations to Social Enterprises: An Institutional Entrepreneurship Perspective. J Bus Ethics (2020).

Recommendations from this resource

Future Research

1. Future research should adopt large-scale databases to confirm whether the SE sector has any influence on the transformation from traditional non-profit organisations (NPOs) to SEs.

2. This research does not generate any quantitative measurements. The use of a metric scale for different kinds of institutional work would also open up new avenues for quantitative research opportunities.

3. Future research should adopt a longitudinal method to observe the SEs over a period of time to offer a more complete picture of the transformation from traditional NPOs to SEs.

4. Further research can be designed to explore barriers and challenges faced by traditional NPOs to perform each of the individual practices, as well as how institutional entrepreneurs attempt to solve these problems creatively.

Social Entrepreneurs

This work provides a concrete guidelines for managers of traditional non-profit organisations (NPOs) on how to incorporate commercial processes within their organizations.

1. For example, if managers want to lead their organizations to engage commercial revenue strategies, they need to make plans to build commercial revenue-generating mechanisms and establish business partnerships with for-profit organizations.

2. To build commercial revenue-generating mechanisms, NPO managers need to engage in two individual practices: (1) introduce profit-seeking business practices and (2) develop a revenue model for existing social products/services offerings.

3. To establish business partnerships with for-profit organizations, NPO managers also need to focus on two other practices; (1) identify opportunities to actively collaborate with for-profit organizations and (2) manage alliance relationships with for-profit organizations.