1
Miami Univ, Ctr Social Entrepreneurship, Oxford, OH 45056 USA
Abstract
Given the urgency of global crises, social enterprises have emerged as structural hybrids that blend commercial mechanisms with primary social missions. While literature extensively documents how internal managers navigate hybridity, less is known about how the general public decodes this sector blurring. Traditional stakeholder theory predominantly assumes objective corporate boundaries and clear sector categories, evaluating firms along an economic continuum. The context of sector blurring challenges these assumptions by mixing market logics with moral imperatives.
Adopting an exploratory sequential mixed-methods design, this study investigates the cognitive frameworks and moral expectations the public utilizes to evaluate social enterprises. Phase 1 draws on eight focus groups (N = 48) to capture the unprompted mental models used by citizens. Phase 2 tests these insights using a pre-registered randomized survey experiment (N = 1,200) across a nationally representative sample of US adults.
Our qualitative findings reveal that when institutional boundaries dissolve, the public experiences acute cognitive friction, deploying four distinctive sensemaking strategies—particularizing, universalizing, sacred-profane partitioning, and cynical boundary policing—to rationalise behavioral expectations. Quantitative results demonstrate a non-linear relationship between commercial intensity and public trust: a severe "moral penalty" and high charges of hypocrisy are triggered when an enterprise operates in a sacred domain with full market self-sufficiency. However, we demonstrate that process-transparent framing effectively mitigates this backlash by altering the public’s cognitive evaluation from transactional purity to structural independence. The article contributes to stakeholder theory and institutional hybridity by shifting the analytical focus to external public sensemaking.
Brett R, S. (2026). How the Public Makes Sense of Social Enterprises: A Mixed-Methods Study of Sector Blurring and Moral Expectations. Asia Journal of Social Innovation and Development, 2(1), 64–80. Retrieved from https://www.ajsid.org/index.php/pub/article/view/42
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