Governance, entrepreneurship and effectiveness: exploring the link

Abstract

PurposeThe purpose of this paper is to explore the role of the Board of Directors in encouraging entrepreneurship as a strategy for goal achievement among newly formed social purpose organizations.Design/methodology/approachIn the absence of empirical work on board behaviour, a qualitative case study approach is adopted whereby multiple data collection methods – including in‐depth interviews and non‐participant observation – are drawn upon in the investigation.FindingsOrganizations found to be most effective in achieving their goal(s) had a higher level of entrepreneurial intensity than less effective organizations. Three opposing themes emerged when comparing the social processes adopted by the Boards. In embracing social processes that fostered entrepreneurial behaviour. Boards assumed the role of change agent, with the leveraging of social capital being instrumental. Other social processes encouraged behaviour that was reactive and risk adverse in nature, serving to reinforce the fiduciary role those Board had assumed.Originality/valueA review of the extant literature indicates that this is the first reported empirical investigation of board behaviour. In having access to Board meetings, unique insights into social processes were garnered that might otherwise have gone undetected if interview data were relied upon as the sole source of evidence. As such, this paper makes a key contribution in beginning to address the void in our understanding of social enterprise governance. In particular, it highlights the influence of governance on entrepreneurship and goal achievement among newly formed social purpose organizations. When viewed through a social constructionist lens, the results indicate that while organizations strive to achieve both legitimacy and identity, effectiveness was greater among organizations that emphasized the latter.

A Fair Trade-off? Paradoxes in the Governance of Fair-trade Social Enterprises

“…However, the articulation of this as a paradox is largely absent, with only a few studies to date focusing on the stories of individuals and teams within social enterprises, and what this reveals about social/enterprise tensions (Dey and Teasdale 2013;Pache and Santos 2010;Nicholls 2010;Smith and Lewis 2011). The paradox is constituted by barriers to achieving a balance between social and economic benefit, including: under-developed organizational identities, poor stakeholder management, mission drift, corruption, legal form issues, resistance to professionalization, and governance failure (Bull 2008;Diochon 2010;Ebrahim et al 2014;Jones and Keogh 2006;Mason 2010;Ramus and Vaccaro 2014;Seanor and Meaton 2008;Smith et al 2013).…”

“…These two aims often conflict where the creation of appropriate structures and processes are sub-optimal, hindering the achievement of multiple, shared objectives among partners (Diochon 2010). Resource dependence theory is useful in explaining how access to resources are secured from the influence of external partners (such as Government) who are co-opted onto the board (Heimovics et al 1993).…”

Entrepreneurial orientation and corporate governance structures at the firm level in the South African oil and gas industry

“…This narrow focus on traditional issues of CGS does not adequately address how elements of governance structures may support or hinder corporate innovation, risktaking and proactive behaviour in the face of technological change and environmental uncertainty (Core, Holthausen & Larcker, 1999;Cutting & Kouzmin, 2002;Diochon, 2010;Ensley et al, 2002).…”

Corporate Governance: International Context and Trends from 2005 to 2015

“…In particular, this action contributes to goal attainment and improved innovation (Diochon, 2010). Otherwise, homogeneity and the lack of skill by the board of directors foster corruption (Adegbite, 2014).…”