B-Corps are recent organizational models that are opening a path between the traditional business and the nonprofit organizations to support the sustainable development. Since their arrival to South America, they have become an attractive alternative to address socio-environmental issues in a profitable way. To become a B-Corp, organizations needs to certify that they meet rigorous standards of social and environmental performance, accountability, and transparency. This new kind of enterprises started in the US around 2006, and arrived to South America around 2012. In fact, these all came together in the tendency of for profit organizations adopting the social purposes through CSR initiatives, and non-profits implementing business logics to develop and scale their social projects.
The convergence between these two sectors (social and business) call the attention of scholars around the world, and some researchers focus on the institutional changes of such integration. Literature has studied the managerial dilemmas that this organizations face using the concept of hybrid organizations by considering legal, financial, commercial and organizational dimensions (Battilana & Lee, 2014). These dimensions determine the underlying identity of the organization understood as the underlying logic for decision-making.
Identity changes and evolution affects organizations´ structures, but also social cognition. Through the hybridization, social structures to assess the organizational outcomes change, and can affect the organization legitimacy. According to the institutional theory, legitimacy is a socially built construct based on stakeholders’ perceptions about organizational outcomes (Suchman, 1995). Cognitive legitimacy exists when social actors believe that certain types of organizations contribute to the public good. Social and environmental value migration represents a change on the structure and framework that society has to assess organization´s contribution to the public good, and implies a challenge in cognitive legitimacy management.
The aim of this article is to explore how organizational identity of the B Corps evolved over time, in order to identify the main organizational mechanisms these organizations use for managing organizational identity and cognitive legitimacy.
To develop the study we analyzed four B-Corps working in Colombia. Two of them, La Tercera Mirada and Green Factory, working in the service sector (consultancy); the other, Hybrytech, a company that offers sustainable solar energy to low income population in isolated rural areas of the country; and the last one, Alcagüete, a business model that seeks to offer better nutrition alternatives to green consumers and low income children. These cases showed a clear example of hybrid organizations, with both commercial and socio-environmental logics at their core business.
Findings of the study highlight the role of the entrepreneur in the legitimation process, as well as the importance of the certification as B-Corp to enforce the social understanding around their business model.
Likewise, the analysis of the evolution of this B-Corps, allow us to identify key stakeholders who influence in the legitimation process, as well as the main tensions that the organizations face to maintain the commitment with the social, environmental and economic value generation.
5a Corporate sustainability strategies (and sustainable entrepreneurship)
