A configural framework of practice change for B corporations

Abstract

There is increasing scholarly attention toward understanding how enterprises seeking prosocial impact organize their practices. However, this research has primarily explained changes in isolated practices and has not fully explored the mechanisms for such changes. This omission is relevant for social entrepreneurship scholars who seek to better understand how practices operate not simply internally but can effect a positive impact. We address this omission by drawing from a unique longitudinal dataset – assessment scores of enterprises seeking to be certified and recertified as B Corporations (B Corps). We also conducted 24 interviews with B Corp leaders, B Lab staff, and venture fund managers. We found that B Corps shifted their practice configurations as they underwent assessment and reassessment for certification. We also found that exogenous factors such as size and sector, and endogenous factors such as the nature of practices explained shifts in practice configurations. Our contribution is twofold. First, we test deductive claims that social enterprises re-organize for impact. We show that enterprises update their practice configurations over time. Second, we propose an inductively derived theoretical framework with three building blocks: affordability, interpretability, and social referents to explain the shifts in practice configurations.