ABSTRACT
During the last decade, entrepreneurial non-profit organizations and social enterprises have rapidly expanded and become a focus of research in Europe, the US, and many other countries (Anheier and Salamon 1992; Borzaga and Defourny 2001; Anheier and Ben-Ner 2003; Borzaga and Spear 2004; Nyssens 2006; United Nations Development Programme 2008). The process of defining the key features of social enterprises has been advanced by legislation introduced in the UK during 2004 and in Italy during 2005.1 Given these important developments in the social and legal domains, a coherent theoretical framework is needed to account for the economic nature and effects of social enterprises. This framework cannot ignore the history of producers’ associations, cooperatives, and not-for-profit organizations with an entrepreneurial character, since social activism has played an important role in creating entrepreneurial ventures with social goals (Stryjan 2004; Borzaga and Ianes 2006; Ianes and Tortia forthcoming). For example, worker cooperatives have often been created with the aim of reducing unemployment through the open door and of improving job stability through employment protection. Better working conditions and a more inclusive organizational model can also favour the moral development of the membership through closer, non-hierarchical, and more transparent relations between the main patrons of the organization-workers, users/clients, and managers. In a similar fashion, non-profit organizations have been developed in order to alleviate social problems that for-profit firms and public agencies are unable to manage. Furthermore, over the last decades cooperatives and non-profits have spread in systems characterized by high levels of social capital based on trust and embeddedness. In these contexts, a process of cumulative causation has occurred as social ties have been reinforced through the influence of organizations in which private and self-seeking objectives are weaker, and intrinsic and otherregarding motivations assume a prominent role (Jones and Kato 2007). This exemplifies the way in which culture and institutions co-evolve, since social ties based on trust and personal relations favour the establishment social enterprises, while the operations of social enterprises reinforce the process of accumulating social capital (Borzaga et al. forthcoming).
