The emergence of a hybrid market for social enterprises
Creators: name: Luu, Nguyen
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350604
subject: Marketing communications
classificationCode: 350605
subject: Marketing management (incl. strategy and customer relations)
classificationCode: 350608
subject: Marketing theory

description: Social enterprises (SEs) are hybrid organizations that employ business activities to pursue both economic and social goals. Extant research describes SEs as catalysts for social change that not only address social issues and fill gaps in social needs but also solve system problems and make evolutional social changes (Zahra, Gedajlovic, Neubaum, &amp; Shulman, 2009). Hence, SEs could make valuable contributions in developing countries where social issues are prevalent, yet, most studies on SEs are conducted in developed countries (Gupta, Chauhan, Paul, &amp; Jaiswal, 2020). In this thesis, I explore the emergence of social enterprises (SEs) in a developing country.

Furthermore, SE is a multilevel phenomenon but studies on SEs often focus on only one level of analysis (Saebi, Foss, &amp; Linder, 2019), namely, the macro environment and the emergence of SEs (e.g., Defourny &amp; Nyssens, 2010; Hoogendoorn, Pennings, &amp; Thurik, 2010; Kerlin, 2010); SEs as hybrid organizations (e.g., Doherty, Haugh, &amp; Lyon, 2014; Pache &amp; Santos, 2013; Tracey, Phillips, &amp; Jarvis, 2011); or social entrepreneurs and their entrepreneurship process (e.g., Mair &amp; Marti, 2006; Miller, Grimes, McMullen, &amp; Vogus, 2012; Zahra et al., 2009). In this thesis, I offer a multilevel examination of the emergence of SEs in a developing country by adopting the theory of markets and viewing the emergence of SEs as a market emergence process.

Drawing on the theory of markets as a social system (Giesler &amp; Fischer, 2017) and market emergence as a legitimation process (Humphreys, 2010a), I examined the emergence of SEs in a developing country by exploring how the SE market legitimacy is negotiated. In particular, I investigated the SE market emergence through key market actors and their market legitimation practices. Additionally, since SEs are hybrid organizations that span between the public, private, and non-profit sectors (Doherty et al., 2014; Pache &amp; Santos, 2013; Tracey et al., 2011), I assumed that the SE market is a hybrid market formed by SEs transitioning from multiple roots. Hence, I also investigated how the SE market emerges through SEs' transition from their traditional markets to the hybrid SE market. 

The context of this study is Vietnam, where the emergence of SEs is a recent phenomenon. I adopted the interpretivist paradigm and employed multiple qualitative research methods, including archival research, observations, and in-depth interviews to collect data. By triangulating the data collected from the multiple qualitative research methods, I explored the market emergence of SEs in Vietnam through market legitimation practices of key market actors and the transition of SEs from their roots into the SE market.

The findings reveal that market intermediaries played crucial roles in negotiating the SE market legitimacy in Vietnam. I defined market intermediaries as intermediary organizations that aim to drive new market emergence or shape existing markets. In the context of Vietnam, market intermediaries included local and international organizations, which aimed to promote social entrepreneurship. In collaboration, market intermediaries defined and framed SEs, negotiating the market's cognitive and normative legitimacy. Market intermediaries also conducted policy advocacy, negotiating the market's regulative legitimacy. Furthermore, they negotiated the pragmatic legitimacy among potential and existing SEs by offering SE support activities and facilitating the SE community.

The findings also show two types of SEs in Vietnam that emerged from two different backgrounds and underlying logics. The two types of SEs are SEs that emerged from the private sector with underlying market orientation logic and SEs that emerged from the non-profit sector with underlying social value creation logic. Their paths to becoming SEs were motivated by the founders' compassion towards disadvantaged communities and the encouragement of market intermediaries and the SE community. The potential SEs became SEs by selectively retaining, abandoning, or adjusting traditional logics from their roots while selectively adopting new logics and creating new logic combinations. Hence, the hybrid SE market emerged with the co-existence of multiple logics, including the traditional logics from the roots of SEs and new combinations of logics created by SEs in their paths to becoming SEs.

By exploring the complex phenomenon of the emergence of SEs in a developing country, I offer three theoretical contributions. First, I contribute to the theorization of SEs by providing insights at the macro, market, organizational, and individual levels into the emergence of SEs in a developing country. Second, I enrich the growing literature on hybrid markets and hybrid market emergence by demonstrating how the SE market emerged from multiple roots. Third, I extend the theoretical discussion on market and market emergence by revealing the roles of market intermediaries in driving market emergence and delineating their market legitimation practices. Based on the findings, I also propose a model of strategic actions for market intermediaries to drive the emergence of new markets or shape existing markets.