Exploring social enterprise legitimacy within ecosystems from an institutional approach: A systematic literature review and research agenda

Abstract

AbstractThe legitimation of social enterprises is contingent upon the institutional context and targeted stakeholders; however, this claim has not been explored systematically, considering existing legitimacy strategies. Understanding the reasons behind the pursuit of legitimacy and the strategies that can be employed in specific contexts is paramount for social enterprises to obtain legitimacy and enhance positive social impact. This paper undertakes a systematic literature review at the intersection of social enterprise legitimacy, institutional theory and entrepreneurial ecosystems. Drawing on articles in journals included in the Web of Science database, the review enhances understanding of social enterprise legitimacy research through institutional contextualization by answering the question: ‘Why and how do social enterprises aim to obtain legitimacy in different contexts and towards which ecosystem actors?’ Six main reasons why social enterprises pursue legitimacy are identified, namely: to acquire tangible (financial and material) and intangible (community support and trust) resources; to compete with commercial businesses and non‐governmental organizations; to comply with stakeholder demands; to overcome institutional challenges; to create social impact; and to bring about institutional change. Alongside these reasons for legitimacy pursuit, legitimacy strategies and the addressed actors and institutions are identified and synthesized into three categories: institutional context dependency; closeness to the audience; and multidimensionality and process perspective, identifying promising avenues for further research that are more context‐sensitive. The review provides guidance for social enterprises seeking to identify and adapt legitimacy strategies, enabling them to address the pressing issues of legitimacy deficits that continue to hamper the generation of social impact.