Legal structure and outcomes of social enterprise: The case of South Yorkshire,
United Kingdom AbstractOver the past two decades the discourse on social enterprise has emerged as a powerful intervention for addressing socio-economic deprivation in communities across the globe. Although the concept is increasingly attracting academic interest, there are still several areas requiring further scrutiny. One such key area is how the legal structures of social enterprises influence their outcomes. Drawing on a qualitative case study approach in South Yorkshire UK, this study contributes to ongoing debate on social enterprise by providing insights into the nature of legal structures and related operational issues across the region. The findings revealed that type of legal structure is intricately linked to social enterprises' ability to achieve their objectives. Rather than rely on traditional legal structures, social enterprises in South Yorkshire have adopted innovative legal vehicles that help them to achieve financial sustainability while at the same time maintaining their social ethos.
KeywordsSocial enterprises, legal structures, South Yorkshire, extraction of value, economic development 2
IntroductionThe concept of social enterprise derives from discourses on the social economy that dates back to the nineteenth century industrial revolution (Hines, 2005; Teasdale, 2011). As a concept, this type of business is politically contested and subject to different interpretations (Dacin et al, 2011;Kerlin, 2010;Weerawardena and Sullivan, 2006). Despite different views on its meaning, there is a general consensus that a social enterprise is, first and foremost, a competitive business engaged in some form of trading to produce a financial surplus which helps to sustain its social ethos (Defourny and Nyssens ,2010; Doyle,2013;Zahra et al, 2009). Historically social enterprises have utilised legal structures that support their philanthropic origins and their not-for-profit business activities. A legal structure (or form, structure or constitution) provides an operating framework for social enterprises and it relates to the way these enterprises are set up and the rules and regulations that govern them (SEL, 2003;Snaith, 2007). The advent of globalisation, largely typified by liberalisation of trade and scarcity of resources, appears to have prompted social enterprises to re-evaluate their legal and governance structures so as to maximise mobilisation of resources (Peattie and Morley, 2008;Snaith, 2007). Current discourses therefore suggest a move by some social enterprises to align their structures with the demands of their institutional environment (Lewis et al, 2004).They reveal a gradual shift towards hybrid models of social enterprise, supported by more innovative governance and legal structures to improve their competitiveness in the market (Lewis et al, 2004;Low, 2006;Salamon and Anheier, 1996). Though research interest in the legal structures of social enterprises has increased over the past decade, there is still a...