Managing Social-Business Tensions: A Review and Research Agenda for Social Enterprises

Abstract

In the last ten years, organizations that pursue social missions through business ventures have spread across industries from health care to financial services to retail and beyond. Research on these “social enterprises” has noted the tensions and challenges that arise from combining social and business objectives. Yet, we lack in-depth, systemic insight into the nature and management of these tensions. We address this gap, enriching research on social enterprise by recognizing the inherent tensions between social missions and business ventures and developing a research agenda that takes these tensions into account. We first review existing literature, identifying and categorizing tensions within social enterprises. We then consider how four key organizational theories—paradox, stakeholder theory, organizational identity, and institutional theory—address these tensions. Our analysis contributes to the literature by showing how tensions and contradictions, which have sometimes been recognized in past research but rarely been the focus of sustained empirical study, are a prevalent and persistent aspect of social enterprises, and are critical to their long-term performance. It further establishes a research agenda for understanding tension management with social enterprises, while also showing how studying social enterprises can offer insights into the management of competing demands within organizations more broadly.

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