Institutional Complexity and Social Innovation: The Case of Chinese Social Enterprises

Abstract

Social enterprises (SEs) have emerged throughout the world to address societal challenges through market-based activities and innovation. Research has focused on how SEs manage the tensions arising from the combination of social-welfare and market logics, neglecting the institutional complexity that arises in authoritarian regimes where the state plays a dominant role. Based on the institutional logics perspective and interview data of 42 SE leaders in China, we find that key tensions arise from the state and social-welfare logics and that state logic (re)configures the social–market relationships to be compatible. Chinese SEs employed depoliticization and localization to adapt to this unique form of institutional complexity in their social innovation efforts. This study advances research on SEs, institutional complexity, and hybrid organizing.