Organizational Legitimacy in Entrepreneurial Contexts: Hybridity, Crowdfunding, and Social Entrepreneurshi

This dissertation contains three essays investigating entrepreneurship under conditions of institutional uncertainty; conditions in which clear, well-defined rules or logics are not available. Under such conditions, new organizations experience greater difficulty in building legitimacy, a critical first step for new ventures seeking capital and other necessary resources. This dissertation builds on prior research in social entrepreneurship, conceptualizing social enterprise as a type of hybrid organization---organizations that combine institutional logics in new and often unexpected ways---and explores the effects that hybridity has on legitimacy and crowdfunding outcomes. Essay 1 develops and validates a multi-dimensional, perceptual measure of legitimacy over the course of five studies. While this dissertation is focused on the context of entrepreneurship, a measure of perceived legitimacy should be most useful to researchers interested in the "microfoundations" of institutional theory. Essays 2 focuses on social entrepreneurship (social enterprise) as a form of hybrid organization. By definition, social entrepreneurs use market-based mechanisms to achieve a specific social cause or purpose. As a result, they simultaneously act as both a commercial organization as well as a charity, resulting in what is referred to as a hybrid identity. This can create conflicting sets of expectations in terms of how these organizations should behave, which can be a threat to an organization's legitimacy. Essay 2 uses an experimental design and the measures developed in Essay 1 to examine how social entrepreneurs' hybrid identities, in combination with the organization's chosen legal form (for-profit, non-profit, B-Corp), influence perceptions of the different dimensions of organizational legitimacy. Essay 3 examines the relationship between social entrepreneurs' hybrid identities and legitimacy by exploring the success/failure of crowdfunding campaigns. Using data gathered from a unique crowdfunding platform specific to social enterprise, the results of this study demonstrate that contrary to what prior research would predict, communicating a hybrid identity improves crowdfunding outcomes for social entrepreneurs. The results show that emphasizing the utilitarian elements of a hybrid identity has a positive effect on the amount of capital raised in a crowdfunding campaign due to the legitimate distinctiveness it bestows on these types of organizations.