What should social enterprises know about the balance between external legitimacy & internal morale?
Unintended Negative Effects of the Legitimacy-Seeking Behavior of Social Enterprises on Employee Attitudes. Frontiers in Psychology, 9(1991).
In an emerging field such as social enterprise, it is important for an organization to
secure legitimacy to obtain resources and sustain its business. Specifically, when a
government distributing subsidies does not have adequate information to decide which
organization is trustworthy, it is the legitimacy-seeking activities of a social enterprise
that determines who receives a subsidy; this, in turn, decides which organization will
survive. One of the most effective ways to gain legitimacy is to explicitly emphasize
in the public promotion that the organization devotes to its social mission. In the
case of Work Integration Social Enterprises (WISEs), an organization emphasizes its
social employment of the disadvantaged individuals. However, we argue that social
enterprises’ public promotion that emphasizes social employment can lower the
expected wage, job satisfaction, and organizational commitment of the employees
who are hired due to their disadvantaged social status. This is because such obvious
promotional messages makes the employees more keenly aware of their disadvantaged
status; as a result, this reinforces their self-prejudice that they are not competitive
enough in the labor market. We test our hypotheses in the context of South Korean
WISEs and found general support for our arguments.