The Unintended Consequences of Supportive Institutional Infrastructure on Social Ventures

Social ventures—newly founded organizations that blend social welfare and commercial logics to deliver innovation for societal change—while becoming an increasingly popular choice of organizational form for addressing complex social problems, often leave social entrepreneurs faced with tensions and trade-offs stemming from multiple and oftentimes contradictory social and business logics. Although tension is intrinsic to the hybridity of social ventures, it can also be unintendedly induced by the context in which social entrepreneurial activities occur. Extending current understanding of the complex role of institutions in both facilitating and hindering the effectiveness of social ventures, our research identifies conditions under which institutional infrastructures meant to coordinate action around a given social problem, unintendedly threaten the effectiveness of social ventures thriving to contribute to solving the problem. Our proposed theoretical framework suggests that, depending on the level of centralization and multiplicity of actors in the institutional infrastructure, social ventures face legitimating and organizing tensions that are likely to threaten their ability to address and manage social-business tensions and, thus, their ability to produce intended results. This enhanced understanding of institutional configurations and related unintended consequences allows us to provide a number of suggestions regarding institutional correction mechanisms targeted at mitigating the likelihood of causing unexpected drawbacks.