Sustainable Business Model Innovation in Social Enterprises: An Institutional Logic Perspective

Abstract

Sustainable business model innovation in social enterprises (SEs) is a crucial means of enhancing social welfare, yet its mechanisms remain underexplored. This paper aims to reveal how different institutional logics drive the sustainable business model innovation in SEs at various stages of their lifecycle. In order to achieve this goal, an exploratory longitudinal single-case study approach was employed to systematically analyze the development trajectory of a typical Chinese SE. Our findings indicate that SEs are influenced by different institutional logics over time and achieve sustainable business model innovation through differentiated resource orchestration strategies. During the founding stage, driven by public welfare logic, SEs establish the service-oriented business model through resource building. During the growth stage, by introducing market logic, SEs develop the platform-based business model through resource bundling. During the integration stage, SEs further embed government logic and build the ecosystem-based business model through resource leveraging. In doing so, we are able to expand on the understandings of sustainable business model innovation in SEs and the impact of institutional logic on such innovation.