Influence of Institutional Environment and the Development of Social Enterprise in Nigeria

The ‘concepts and model of social enterprise worldwide’ is increasingly attracting academic interest. With an organisational orientation towards resolution of social problems that are locally embedded in different... [ view full abstract ]

The ‘concepts and model of social enterprise worldwide’ is increasingly attracting academic interest. With an organisational orientation towards resolution of social problems that are locally embedded in different environments, it necessitates the need for empirical and contextual insights (Defourny & Nyssens, 2008; Kerlin, 2006; Rivera-Santos et al., 2015). More so, definitions emanating from different contexts portray the inclinations of individual players (such as governments, entrepreneurs, academics) and divergent interest (Pearce & Kay, 2003; Weerawardena & Mort, 2006; Teasdale, 2011). The different typologies in explaining social enterprise are often attributed to the contextual development of the phenomenon (Defourny & Borzaga, 2001). While research have explored the influence of institutional (economic, legal, cultural, social) differences on social enterprises in some developed and emerging environments. The particular attention has been paid on the European and American context (Kerlin, 2006; Teasdale, 2011), which came up with country and regional consensus. Yet, there is lack of understanding how the differences influence empirical elucidations of social enterprises in different contexts, such as a developing country like Nigeria. Furthermore, there is inadequate evidence on how different institutional arrangements directly influence the organisational forms, sectors, and scope that social enterprises encompass  in developing countries (Kerlin, 2012).

With research suggesting diversity in contextual knowledge, the understanding of the roles of institutional environment on social enterprise conception will be of practical value in advancing theoretical models (Austin, 2006). To address these challenges, therefore, this paper draws on neo-institutional standpoint to advance the understanding of how institutional arrangements (regulations, public policies, laws, socio-cultural understandings and processes) influence the conception and development of social enterprise in Nigeria. By doing so, we argue that  the focus on the organisational level of analysis aligns with the need to focus on structure (Greenwood, Hinings, & Whetten, 2014), rather than the institution alone. It is posited that Nigerian context presents an environment with a weak formal institutional arrangements supporting social enterprises. However, institutional theory posits that robust formal institutional arrangements are partial requirements for organisational homogeneity (Meyer & Rowan, 1977). Thus, rather than advancing homogeneity in structure and practice of social enterprises, heterogeneity could be the scenario in the Nigerian context due to the weakness in formal institutional arrangement. Doing so, it will provide an insight into how the weakness, absence or breakdown of formal institutional arrangement influences social enterprise development in a developing country context.

This article utilises a qualitative method. Using purposive and snowballing sampling techniques, thirty two semi-structured interviews have been conducted with social entrepreneurs and regulatory agency heads in Nigeria. Each interview lasted for thirty to forty five minutes, and were recorded. A verbatim transcription was done and transcripts were imported to NVivo for data analysis. Using a thematic analysis technique, several themes have been generated and analysed. Our Findings reveal that important role culture plays on the nature and character of SE, while noting its key role in engendering social consciousness and advocacy against institutional apathy. Another finding is the increasing awareness of dwindling donor funding and, the structure change, through development of commercial components to SE’s social goals to ensure their sustainability.

Based on the above mentioned, it is important to note that SEs are bridging the gaps and influencing governmental actions through their activities in developing countries in contrast to developed countries where government plays a more pronounced role in SEs activities. This study has implications for policy makers, developmental partners, SEs and researchers.

References

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