How can social entrepreneurs change the institutional
environment in and around institutional voids
B.R. Smith
DDM Advanced International Business Management & Marketing
Newcastle University Business School
Rijksuniversiteit Groningen
Supervisors:
Dr. A. J. van Hoorn
Dr. J. Kimmitt
E-mail: b.r.smith@student.rug.nl
Newcastle University student number: 140174076 RUG student number: s1912828
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TABLE OF CONTENTS
ABSTRACT ... 4 1. INTRODUCTION ... 5 2. LITERATURE REVIEW ... 7 2.1. DEFINITION OF CONCEPTS ... 7 2.1.1. Institutions ... 7 2.1.2. Institutional voids ... 7 2.1.3. Social entrepreneurs ... 8 2.2. INSTITUTIONAL THEORY ... 9 2.3. INSTITUTIONAL VOIDS ... 10 2.4. INSTITUTIONAL CHANGE ... 122.5. TRADITIONAL BUSINESSES TRANSFORMING INSTITUTIONS ... 14
2.6. SOCIAL ENTREPRENEURSHIP ... 16
2.6.1. Differences between commercial and social entrepreneurship ...16
2.6.2. Social entrepreneurs transforming institutions ...18
3. LINKING INSTITUTIONAL AND INSTITUTIONAL VOIDS THEORY TO TRADITIONAL BUSINESSES AND SOCIAL ENTREPRENEURSHIP THEORY ... 21
3.1. PROPOSED INTEGRATED FRAMEWORK ON INSTITUTIONAL CHANGE ... 21
4. METHOD ... 23
4.1. RESEARCH DESIGN AND METHOD ... 23
4.2. CASE STUDY SELECTION ... 23
4.3. DATA COLLECTION AND RESEARCH SITE ... 25
4.4. DATA ANALYSIS ... 26
5. RESEARCH FINDINGS ... 27
5.1. I-CARE: EMPOWERING WOMEN IN RURAL KENYA ... 27
5.1.1. Spatial context - poverty, myths and differences between urban and rural areas ...28
5.1.2. Experiencing resistance ...30
5.1.3. Strategy - Hosting a process of discourse ...30
5.1.4. Strategy - Providing trainings ...31
5.1.5. Strategy - Cooperation with other parties ...32
5.1.6. Social Impact...33
5.2. MUSONI: IMPROVING THE LIFE OF THE UNBANKED THROUGH MOBILE MICROFINANCE ... 34
5.2.1. Spatial context: regulations, inflation and differences between urban and rural areas ..35
5.2.2. Experiencing resistance ...36
5.2.3. Strategy - Relation and reputation building ...37
5.2.4. Strategy - Technical Leadership ...37
5.2.5. Strategy - Cooperation with other parties ...38
5.2.6. Social Impact...39
6. DISCUSSION ... 40
6.1. STRATEGIES TO ACHIEVE INSTITUTIONAL CHANGE ... 40
6.2. COMPARISON BETWEEN SOCIAL ENTREPRENEURS AND TRADITIONAL BUSINESSES ... 42
7. CONCLUSION & IMPLICATIONS ... 44
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7.2. THEORETICAL IMPLICATIONS ... 44
7.3. PRACTICAL IMPLICATIONS ... 45
7.4. LIMITATIONS & FUTURE RESEARCH ... 45
REFERENCES ... 46
APPENDIX I - CASE DESCRIPTION ... 50
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How can social entrepreneurs change the institutional
environment in and around institutional voids
Abstract
Social entrepreneurship is on the rise in recent decades, however, academic interest in the topic is limited. This research aims to examine how social entrepreneurs are changing the institutional environment in a context were institutional voids are present. Furthermore, the research aims to make a comparison between the strategies that social entrepreneurs deploy and the strategies that traditional businesses are using. In order to address these question, case studies are conducted at two social enterprises which are operating in Kenya. The results illustrate that social enterprises are using a repertoire of different strategies in order to realize institutional change. The strategies that have been identified are; relation and reputation building, technical leadership, hosting a process of discourse, providing training and cooperation with other parties. Furthermore, which strategies the social enterprises are using are highly determined by the context in which they are operating. These strategies are quite similar to the strategies that traditional businesses are using. However, due to the social objective of the social entrepreneur, social entrepreneurs are sooner able to operate and realize change in areas that are not profitable for other actors, i.e. traditional businesses, to operate in. This research illustrates that social entrepreneurs can have viable micro solutions to reduce poverty and to empower and improve the lives of people from the bottom of the pyramid. Furthermore, this research contributes to the institutional theory and the entrepreneurship literature and connects both literature streams and speaks to the call for more research on how social entrepreneurs influence and transform institutions.
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1. Introduction
In 2010 there were over 2.4 billion people who lived on less than $2 US dollars a day (World Bank, 2014). There has been some progress in the field of poverty reduction, however we continue to see a wide gap between rich and poor and sometimes this gap is even further widening. Therefore, access to healthcare, electricity, safe water, schools and other facilities are elusive for many people in developing economies (World Bank, 2014). For these reasons global poverty reduction can be viewed as one of the most important challenges of our time.
Apart from the moral reasons to reduce poverty there is also an economic reason to improve markets in the developing countries and thereby trying to reduce poverty. According to Prahalad (2012) the bottom of the pyramid market (consisting of the 2.4 billion people living on less than $2 US dollars a day)has a purchasing power parity of around $5 trillion. This market is still largely untapped and served by the unorganized sector. This leads to a major challenge of converting the unorganized and fragmented markets to an organized private sector (Prahalad, 2012).
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actors with limited resources that are trying to change or de-institutionalize rules that restrain social and economic development (Mair and Marti, 2009).
One of these smaller actors, the social entrepreneur, has been on the rise in recent decades (Austin, Stevenson and Wei-Skilleren, 2006). Despite the importance of the social entrepreneur at the field level, academic interest in the subject is still limited (Nicholls, 2009). Therefore, there is a need for exploratory research on the concept of social entrepreneurship. Besides the lack of attention to smaller actors that are trying to change the institutional environment, in general, a theory of action in the institutional literature is missing as well (Hirsch and Lounsbury, 1997).
This research aims to address these limitations by examining the role of social entrepreneurs in and around institutional voids. In this way, the study contributes to our knowledge on which strategies social entrepreneurs deploy to influence and change their institutional environment. Furthermore, this research contributes to the integration of existent work on institutional theory, institutional voids and social entrepreneurship theory. Moreover, the study also tries to contribute to the knowledge of how social entrepreneurs could help in overcoming the challenge of converting bottom of the pyramid markets into a more organized private sector in order to tap its full potential. In doing so, a theoretical framework will be developed on how social entrepreneurs influence and change the institutional environment in cases of institutional voids and which mechanisms they are using.
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2. Literature review
This paper relates to multiple strands of literature. First of all, based on the multiple areas of literature a common working definition is given for the most important concepts of this paper, such as institutions, institutional voids and social entrepreneurs. All of these concepts do not have a general, commonly agreed on definition, but for the purpose of this paper one definition is chosen to work with. Secondly, institutional theory literature and the concept of institutional voids is elaborated on, by reviewing relevant literature about the concept to provide more information about the context of this paper. Thirdly, academic literature on institutional change and how traditional businesses influence or transform institutions are reviewed. Lastly, social entrepreneurship theory related to the concepts of institutions and institutional voids are examined.
2.1. Definition of concepts
2.1.1. Institutions: Institutional theory gained importance over recent years. Institutions
can be seen as the rules of the game (North, 1990), consisting of formal and informal rules, i.e. cultural values or legislation. Another way of defining is that institutions are 'multifaceted, durable social structure, made up of symbolic elements, social activities and material resources' which can be transferred across generations (Scott, 2001). One way of differentiating between different forms of institutions is by using the measurement instrument developed by Kostova (1997), which distinguishes between regulatory, cognitive and normative institutions. The regulatory form of institutions reflects the existing laws and rules in a specific environment. Cognitive institutions relate to the social knowledge and cognitive structures shared by the people in a certain environment. Normative institutions reflects the values, social norms, beliefs and assumptions about human nature and behaviour of a certain group of people (Kostova, 1997).
2.1.2. Institutional voids: As can be derived from the definition of institutions stated
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from participating in market activities’ (Mair and Marti, 2009). This definition does not suggest a sort of institutional vacuum, but institutional voids are viewed as the absence of institutions that support markets and market mechanisms, whereas other institutional arrangements in these contexts are strong and the context can be rich in traditions and informal institutions (Mair and Marti, 2009). According to Khanna and Palepu (2000) institutional voids may differ across countries. In this particular paper institutional voids can be viewed as opportunities for social entrepreneurs.
2.1.3. Social entrepreneurs
:
There are very broad definitions of social entrepreneurship in which social entrepreneurship refers to ‘innovative activity with a social objective in either the for-profit sector, or in corporate social entrepreneurship or in the non-profit sector, or across sectors’ (Austin, Stevenson and Wei-Skilleren, 2006). Similarly, underlying almost all definitions is the principal of creating social value instead of merely personal or shareholder wealth. Therefore, social entrepreneurship can be viewed as a practice that integrates economic and social value creation. A more narrow definition states that social entrepreneurship gives higher priority to social value creation than capturing value, by driving social change and/or addressing social needs (Mair& Marti, 2006). Social entrepreneurs are in between the non-profit sector and the commercial sector, and the notion of social entrepreneurs implies a blurring of sectors (Dees, 1998). Therefore, a new business spectrum has been developed as is depicted in Figure 1.Figure 1: Hybrid business spectrum
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2.2. Institutional theory
In institutional theory a totalistic perspective of organizational and social structures is taken, meaning that the importance of the social context in which organizations operate is emphasized (Scott, 2008). As already mentioned earlier, institutions are comprised of regulative, normative and cultural-cognitive elements, that provide stability and meaning to social life. These three elements or pillars, are viewed as vital ingredients of institutions and are the central building blocks of institutional structures (Scott, 2008). Early researchers in the field of institutions merely focused on settled institutions and their effect on organization and institutions were assumed to be resistant to change. However, more recent research suggests that institutions change over time and that they are not uniformly taken-for-granted. Thus institutions can be powerful in driving change but institutions themselves can also change in character and potency over time (Dacin, Goodstein and Scott, 2002).
Institutional theory is also applied on business and economics. The importance and the effects of institutions on economic activity and wealth creation has already been widely studied from various literature fields, i.e. institutional theorists, sociologists and developments economists (Mair and Marti, 2009). The central outcome of these various studies is that institutions constrain and determine action and behaviour (Nee, 1996). Thus, market activity, access and participation are influenced by the cultural, political and social institutions in which they are embedded (Polanyi, 1944). This outcome highlights the importance of studying institutions and how they can be influenced in order to promote wealth creation and to reduce poverty. In the last decades development organisations have increasingly focused on transforming and developing institutions that improve markets and enables poor to participate in market activities (Mair and Marti, 2009). The underlying assumption behind this increased focus on transforming institutions that support markets is that markets are viewed as an effective mechanism in wealth creation and increasing living standards (World Bank, 2002).
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(consistent of regulatory, normative & cultural-cognitive elements) Building of Markets Functioning of Markets Market participation
exchange and governance structures. Scholars also elaborated on institutions needed for a market to function, i.e. enforcement and governance mechanisms and disclosure requirements (Mair and Marti, 2009). Recently, there is also more attention paid to the institutions that enable market participation.
An ongoing discussion within the institutional theory field is whether primarily attention should be given to regulative rules in order to structure action or whether primacy should be given to built-in, constitutive rules, which creates distinctive types of actors and action (Scott, 2008).
Summarizing the key points of current institutional theory is that institutions are comprised of regulative, normative and cultural-cognitive elements and when relating this to economic markets it can be seen that institutions not only influence the building and functioning of markets, but also influence market participation, as is illustrated in Figure 2.
Figure 2. Relationship between institutions and markets
2.3. Institutional voids
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lead to these market failures, i.e. inefficient judicial systems, information problems and misguided regulations. Khanna and Palepu (1997) argue that (business) groups can fill some of the institutional voids in the areas named above in imperfect markets and that they should take responsibility for a wide range of functions that will help them do their business effectively. Imitating some of the institutional functions of advanced economies enables them to add value, however it is important to bear in mind that it is unclear whether one set of institutions is superior to others (Khanna and Palepu, 1997). Descriptive literature on how business groups fill a subset of institutional voids illustrates the benefits it can give to them, i.e. Leff (1976).
Institutional voids are not only viewed as opportunities for business groups that can be beneficial, it can also be seen as a threat to investments. Institutional voids could lead to political, economic and country-specific risks affecting the profitability of an investment that would not exist if the business environment was more developed and stable and if more legal institutions supporting the functioning of markets were present (Kesternich and Schnitzer, 2010). This is illustrated in studies that examine the determinants of foreign direct investment, which can be defined as 'cross-border investments by a resident entity in one economy with the objective of obtaining a lasting interest in an enterprise resident in another economy' (OECD, 2013).
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dependent on the absorptive capacity, the ability to assimilate, acquire and align new information/knowledge, of the host country (Durham, 2004). Thus, even if it seems difficult to accrue direct benefits from FDI, the policies that are put in place in order to promote FDI, can still have an impact on long-term economic growth, besides the effects of FDI (Asiedu, 2006).
2.4. Institutional change
There is not a commonly agreed on idea about how institutions come into existence and how they are constructed. The ideas about institutional construction vary according to how much of the construction is intended or whether it is more an evolutionary process. Nation-states and professionals are assumed to play important roles in building institutions (Scott, 2008). The state, and thus the government is most often hold responsible for the building of institutions (Fligstein and Mara-Drita, 1996; North, 1990; Stark, 1996). There is an ongoing discussion about the degree of state intervention and how they should intervene, ranging from merely setting property rights (De Soto, 1989), to a much more central role of the state. However, in case of weak and/or corrupt government structures, sometimes businesses are stepping in. The role that governments and large businesses play in constructing and developing institutions is sometimes over emphasized, and smaller actors, such as social entrepreneurs, receive little attention.
Once institutions are constructed they spread through differing mechanisms. Cognitive/cultural institutions are dependent on the widening circle of people who accept their claims as valid and self-evident. Normative institutions prosper if the parties involved increasingly share commitment. Regulatory institutions mainly develop due to the increased returns they provide to people managing them (Scott, 2008). The view on organizations and institutions has gradually shifted from a one-way approach in which institutions determine and create organisations to a view in which organizational actions can also influence and shape institutions, so that organizations are viewed as active players in the institutional environment (Scott, 2008).
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institutions were put in place and then exercised their effects, but that they were resistant to further change. Moreover, institutional theory used to focus on homogeneity of institutions. However, recently scholars have acknowledged that institutions vary and change. These scholars examined arguments and situations involving institutional change in a way that existent forms were deinstitutionalized and replaced by new arrangements (Scott, 2008). There is also the possibility that multiple institutional logics exists and that they are competing for attention, which illustrates the importance of examining the relational contexts (Dacin et al, 2002).
The process of deinstitutionalization, in which institutions weaken or disappear, is less explored (Dacin et al, 2002). Three major sources of pressure on institutionalized practises or norms haven been identified by Oliver (1992), namely; political, functional and social sources. Political pressures results mainly from shifts in the power distributions that are supporting the existent institutions. As a response to environmental changes, performance crises or other factors that lead to question the legitimacy of a current practise, political shifts might occur. Functional pressures arise from perceived problems in performance levels and may be tied to major environmental changes, i.e. intensified competition for resources. Social pressures could result from differentiation of groups or changes in social expectations and laws (Dacin et al, 2002).
In order for institutions to change, or to be created, legitimacy is required, so that other alternatives are seen as less desirable or appropriate. Even if pressures for deinstitutionalization are present, this does not automatically lead to a breakdown in institutional norms. Pressures are firstly interpreted, and responded to by actors (Dacin et al, 2002). According to Greenwood, Suddaby and Hinings (2002) 'changes in prevailing norms go through a critical stage of theorization and legitimization by existing or new actors', as is depicted in their model of institutional change.
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2.5. Traditional businesses transforming institutions
There is a growing body of literature on developing countries suggesting that business groups step in if the government fails to provide the necessary institutions needed for markets to exist and function. The main driver of business groups to step in and to fill these institutional voids is to create and to capture economic value (Mair and Marti, 2009).
The filling of similar institutional voids by multiple MNEs could eventually lead to new intermediaries and this may drive a variety of stakeholders to push for changes in the existing institutional framework. Thus, the filling of institutional voids could lead to more institutional spill over effects (Verbeke, 2009).
The phenomenon of business (groups) engaging in these activities relates to the concept of institutional entrepreneurship, which refers to activities of actors that are interested in particular institutional arrangements and who are using resources to create or to transform existing institutions (Maguire, Hardy and Lawrence, 2004). Most often this concept tend to embrace the image of a powerful actor with sufficient resource as the institutional entrepreneur (Mair and Marti, 2009). These powerful actors try to influence the institutional context by using strategies such as lobbying for regulatory change, technical and market leadership and discursive action (Lawrence and Suddaby, 2006). Moreover, Lawrence and Suddaby (2006) argue that powerful actors with enough resources are better able to deploy theorizing and educating strategies, than smaller actors who lack resources.
In the study of Greenwood et al (2002) the role of such a powerful actor(s) in a changing institutionalized organizational field is examined and they outline a model of institutional change as depicted in Figure 3.
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exemplary others and are perceived to provide economic benefit (Greenwood et al, 2002). Other ways of gaining legitimacy is by 'hosting a process of discourse through which change is debated and endorsed: first by negotiating and managing debate within the profession; and, second, by reframing ideas as they are presented to others outside the profession' (Greenwood et al, 2002: 59).
Figure 3: Stages of institutional change
(Source: Greenwood et al, 2002)
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Another way of transforming and restructuring institutions can be found in the case of Nike. Nike had to change their business model after suffering from reputational damage due to accusations about operating sweatshops. However, adopting responsible practices lead to a fear of competitive disadvantages if competitors would not adopt the same standards. Therefore, Nike involved in creating mandatory global standards in the industry by co-opting with multi-stakeholder organizations as the Fair Labour Association (Verbeke, 2009).
2.6. Social entrepreneurship
In the body of research on institutional change, there is a focus on professional and powerful actors with sufficient resources that engage in institutional change. Even the notion of institutional entrepreneurs often features the role of powerful actors such as professions and the state (Greenwood et al, 2002). However, this direction prevents attention to the sources of new practices. Since the emergence of new practices and changed institutions result from heterogeneous, spatially dispersed actors with varying degrees of resources and not only from powerful actors (Lounsbury and Crumley, 2007). The focus on these 'institutional entrepreneurs' often invokes 'hero imagery' and diverts attention away from other actors (Lounsbury and Crumley, 2007). For this reason there is also less information on how less powerful actors, such as social entrepreneurs, address institutional voids. Therefore, it is important to extend the current research in this field by analyzing the activities of social entrepreneurs (Mair and Marti, 2009). Academic literature on social entrepreneurship is characterized by no unified definition and largely idiosyncratic approaches. Furthermore, social entrepreneurship is embedded in or related to other forms of entrepreneurship, so that lessons from, i.e. conventional or institutional entrepreneurship can be applied to social entrepreneurship (Dacin, Dacin and Matear, 2010). Therefore, entrepreneurship in general will firstly be examined after which the difference between commercial and social entrepreneurship will be highlighted. Secondly, the relationship between social entrepreneurs and institutional change will be examined.
2.6.1. Differences between commercial and social entrepreneurship
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Venkataraman, 2002). These entrepreneurial opportunities differ from other opportunities because they require the discovery of new means-ends relationships, whereas other opportunities are comprised of optimization processes within already present/existent means-ends frameworks (Kirzner, 1997). From the existent stream of literature on entrepreneurship, it can be noticed that recent studies indicate a positive relationship between entrepreneurial activity and prosperity, wealth creation and economic growth (Baumol, 1996; Global Economic Monitor, 2005).
The incentive for many actors to pursue an opportunity is the possibility of entrepreneurial profit (Shane and Venkataraman, 2002). This is different for the social entrepreneur which incentive is to create social value. Another difference is that even though social and commercial entrepreneurs both try to pursue an opportunity, the nature of what an opportunity is fundamentally differs (Austin et al, 2006). Especially when looking at the effect of market failure, which creates differing entrepreneurial opportunities for commercial and social entrepreneurs. For a commercial entrepreneur market failure can be viewed as a problem since a structurally attractive industry and a growing market size is preferred. However, for the social entrepreneur market failure and a recognized social need often guarantees a sufficient market size and can be seen as an opportunity (Austin et al, 2006). As already mentioned before, the mission of commercial and social entrepreneurs also differ. The ultimate objective of social entrepreneurs is sustainable development based on economic and social progress in the countries of operations. Thus, instead of social value creation being a by-product of economic value creation, creating social value is the primary objective (Dacin et al, 2010). Therefore, they are placed in the middle of the hybrid business spectrum (see Figure 1). Commercial entrepreneurs are aiming at creating profitable operations resulting in private gains, which places them at the end of the business spectrum.
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ability to tap from the same capital markets as commercial entrepreneurs due to its social purpose (Austin et al, 2006).
However, when comparing the differences between commercial and social entrepreneurs, it should be noted that the distinction between commercial and social entrepreneurship is not entirely clear cut. Social entrepreneurs and commercial entrepreneurs can be ranged in a continuum from purely economic to purely social. Which relates back to the hybrid business spectrum of Figure 1, and that both actors still share similarities and that there is a varying degree in how they differ (Austin et al, 2006).
2.6.2. Social entrepreneurs transforming institutions
Austin et al (2006) propose a framework for social entrepreneurs (see Figure 4) which illustrates the key elements that social entrepreneurs need to manage in order to create social value. These elements are opportunity, people and capital and there needs to be a dynamic fit between these elements in order to create social value. Since institutional factors are affecting and disturbing all these elements and the social value creation, it is important to consider these factors. Thus try to examine whether institutional factors, i.e. taxes, macro economy, regulatory, socio-cultural, political and demographics, can be controlled or even changed or influenced.
Figure 4: Social Entrepreneurship Framework
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This is in contrast with the conventional entrepreneurship literature where little attention is given to managing external resources, such as regulatory structures or social infrastructures. The focus is on how to control internal resources and factors while context and external resources are little discussed (Dacin et al, 2010). However, in the social entrepreneurship theory there is a focus on and an engagement with these external resources, which is a distinguishing aspect of social entrepreneurship.
For social entrepreneurs a 'hostile' institutional environment may lead the social entrepreneurs to change institutions, since the social problems they want to address are sometimes deeply embedded in existing institutions (Austin et al, 2006)
In order for social entrepreneurs to exploit an opportunity and to solve identified social problems by changing perceptions and discourses, social entrepreneurs are required to creatively leverage different resources. These resources include certain social skills, i.e. negotiating, alliance building, networking and framing (Dacin et al, 2010). Due to the focus on social change regardless of institutional or organizational boundaries, social entrepreneurs will look for alliances and resources wherever they may be found most easily. Therefore, they are engaging with NGO's, governments, banks and the commercial market in order to secure funding and support where necessary (Nicholls, 2006). Legitimacy of their operations is most often gained by the social nature of the operation and is valued as an important resource for social entrepreneurs in general. If social entrepreneurs are operating in environments were institutional voids are present, entrepreneurs that are able to recognize how weak institutional frameworks can facilitate the development of their enterprise are likely to achieve long-term sustainability (Dacin et al, 2010). Therefore, the ability to create a resource that addresses the lack of institutions in a specific context is of high importance. Examination of how social entrepreneurs create certain resources and how they are able to build or transform institutions can provide useful in-depth knowledge for the sector.
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3. Linking institutional and institutional voids theory to traditional
businesses and social entrepreneurship theory
After reviewing the different literature streams that are related to institutional change and the actors that can bring about change, it is possible to link the different concepts. The linking of the different theories resulted in a proposed integrated framework on institutional change. The framework is illustrated in Figure 5.
3.1. Proposed integrated framework on institutional change
From institutional theory it is learnt that institutions are everywhere and that institutions influence the building and functioning of markets, but that they also influence market participation. Institutional voids exist if institutions that are needed to support markets are weak or absent. When market functioning is failing or if markets are absent this could lead to pressures for institutional change. The main sources of pressures on institutionalized practices are functional, political or social. Thus, if markets are not functioning, there is a functional pressure to change the underlying institutions in order to improve the functioning of markets. There can also be social pressures to improve market participation conditions. All of these pressures could lead to changes in areas such as capital markets, product markets, labour markets and legislation. However, in order for institutional change to be realized firstly a general failing needs to be specified. After recognizing and specifying a failure it should be determined what type of institutions should be transformed, deinstitutionalized or maybe even need to be built. Therefore, it can be convenient to distinguish between normative, regulatory and cultural/cognitive institutions, since these institutions also spread through different mechanisms. An ongoing discussion is whether the focus should be primarily on regulatory institutions or whether primacy should be given to more in-built types of institutions.
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(consistent of regulatory, normative &
cultural-cognitive elements) Building of Markets Functioning of Markets Market participation Institutional voids (in the areas of capital, product,
labour en regulatory market)
Pressures for institutional change
Different actors seek to change institutions and to legitimize proposed solution
Traditional Business Social entrepreneurs
Strategies for institutional change: - lobbying - market/technical leadership - internalising - cooperation - process of discourse
try to internalise specific institutions in order to overcome market failure. However, most of these strategies are not available to social entrepreneurs since these are lacking resources. Still social entrepreneurs are able to impose institutional change and therefore it is interesting to examine what strategies they use and how these differ from traditional businesses.
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4. Method
4.1. Research design and method
Theory on how social entrepreneurs attempt to change institutions and how they introduce new ones is lacking (Mair and Marti, 2009). Moreover, a theory of action in the institutional literature is missing as well (Hirsch and Lounsbury, 1997). Since the phenomenon is thus relatively new and unexplored, an exploratory research strategy is chosen in order to examine the phenomenon (Eisenhardt, 1989). The purpose of this study is to build theory on social entrepreneurship by extending our understanding of how, where and when social entrepreneurs act, especially in and around institutional voids, by using case studies.
Theory building from case studies is a research strategy which makes use of one or multiple cases to create propositions, theoretical constructs and theory from empirical, case-based evidence (Eisenhardt, 1989). 'Case studies are empirical, rich descriptions of particular instances or a phenomenon that are typically based on a variety of data sources (Yin, 2014). Using this kind of method is appropriate for multiple reasons. Firstly, qualitative case studies are well suited for providing knowledge and understanding of phenomena that are not well understood. Secondly, qualitative case studies provide richness and in-depth knowledge that is needed in answering open research questions that are more concerned with how and why (Hennink, Hutter and Bailey, 2010).
The process of theory building occurs via recursive cycling between case data, emerging theory and extant literature (Eisenhardt and Graebner, 2007). Since this approach is deeply embedded in empirical rich data, theory building from cases is likely to produce interesting, accurate and testable theory. Therefore it can be viewed as a natural complement to quantitative, deductive research (Eisenhardt and Graebner, 2007).
4.2. Case study selection
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cases can be chosen because they are unusually revelatory, opportunities for unusual research access or extreme exemplars (Yin, 2014). In this study several selection criteria were used which I explain in the next paragraph.
There were multiple selection criteria for identifying relevant cases. First, only social entrepreneurs were selected that meet the criteria of having as their primary objective to create social value. Moreover, they need to be market-based or in a transition to become market-based. Third, the social entrepreneurs that are selected are likely to achieve wide-scale institutional change. Lastly, the cases that are selected are operating in Kenya, a country in which institutional voids are present. The first case that was selected based on these criteria is I-Care, a social enterprise operating in the rural areas of Western Kenya. I-Care produces reusable sanitary pads for Kenyan school girls in order to fight against school-drop outs. Since the lack of affordable sanitary pads is a key contributor to the high school drop-out rate amongst girls in Kenya. I-Care is in a transition period to become more market-based and less dependent on grants. The second case that was selected is Musoni. Musoni revolutionized microfinance by using mobile technology as the platform for financing, resulting in the first 100% mobile microfinance institution in the world. A few general case details are described in Table 1, for an extensive description of the case studies see Appendix I.
Table 1: General case details
I-Care Musoni
Year Social Enterprise was founded
2011 2009
Location West-Kenya (rural areas) Kenya, and now also Tanzania & Uganda
Number of employees ±20 <10 (Musoni NL)
± 120 (Musoni Kenya) Product Re-usable sanitary pads Management information
system, that uses mobile technology for financing, offering microfinance loans
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4.3. Data collection and Research site
Due to the aim of case studies to gain a deeper understanding of a phenomenon, using a wide variety of data collection methods is common (Thomas, 2004). The data collection in this study is no exception and also involves several sources. Data is mainly gathered from semi-structured interviews, archives and secondary data and literature on Kenya. The primary data source are the interviews, which are efficient to gather rich empirical data, specifically in cases where the phenomenon of interest is highly episodic and in frequent (Eisenhardt and Graebner, 2007). Semi-structured interviews were chosen, since these are well-suited for exploratory research and it provides freedom for the interviewer to adapt questions and the order of questions dependent on the specific context of each interview (Thomas, 2004). The semi- structured interviews were conducted with multiple employees of the social enterprise, all with different functions. Within I-Care the founder, the executive director and the evaluation & monitoring assistant were interviewed. Within Musoni the Chief Technology Officer of Musoni Systems was interviewed. Due to time constraints and the approaching end of the fiscal year, I was not able to interview someone from Musoni Kenya. This slightly limits the data collection. The interviews lasted between 1 and 2 hours. One interview was conducted face-to face, while the other interviews were conducted via Skype or telephone. All interviews were recorded, with permission of the interviewees and later transcribed for analysing purposes.
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though national policy and legislation have been developed to deal with market participation, the implementation and interpretation remains difficult. One of the main problems with the implementation is the institutionalized corruption in the country (Wagner, 2014), which also hampers market participation.
4.4. Data analysis
Analyzing qualitative data consist of three activities; data condensation, data display and conclusion drawing and verification (Miles and Huberman, 1994). Data condensation refers to the process of selecting, simplifying, focusing, abstracting and/or transforming data (Miles, Huberman and Saldaña, 2014). Data condensation occurs continuously throughout the research and is part of the analysis. Data display is the compressed gathering and organization of information that is needed for conclusion drawing. Conclusion drawing and verifying takes place from the start of data collection, since data is directly interpreted and preliminary meaning to data is given (Miles et al, 2014). Therefore, qualitative data analysis is a continuous, repetitious process.
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5. Research Findings
This section presents the main findings of the case studies. Firstly, a brief overview of the activities of the social enterprises is given. Secondly, the context in which both social enterprises operate is examined. Lastly, the strategies that the social enterprises deploy in order to realize social impact are studied.
5.1. I-Care: empowering women in rural Kenya
I-Care produces re-usable sanitary pads. Table 2 offers a brief description of the different functions of I-Care. In most rural areas of Kenya, there are significant less girls enrolled in secondary school than in primary school. One of the main reason that causes this is the menstrual period of girls. Since most girls in these rural areas cannot afford disposable sanitary pads, they make use of unhygienic alternatives and out of shame they stay home from school during their period. As an I-Care employee illustrated:
"The girls are using clothes or leafs, or other materials like parts of a mattress and sometimes they even use cow dung as some sort of cork."
Table 2: Overview of the different functions, elements and objectives of I-Care
Functions Elements Objectives
Production, Sales & Marketing of I-Care
Production plant
Distribution to schools, women and youth groups
Instruction on using the pad Follow-ups
Evaluating and Monitoring of the product
Providing affordable and hygienically approved sanitary pads to poor girls and women Improving school performances Creating employment
Menstrual Hygiene Management program
Training girls and women in menstrual hygiene
Training teachers Weekly meetings
Discussing relevant issues Performing plays
Empower vulnerable girls and women and increasing their self confidence
Savings program Initial payment of 50 shillings One year to save 250 shillings Notebook for teachers and for girls to keep track of their savings
Making the I-Care pads even more affordable
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Due to the lack of affordable sanitary pads, the educational performance of girls suffer, even leading to school dropouts. Moreover, the self-esteem and self confidence of the girls is very low. I-Care has introduced the use of re-usable sanitary pads that are more affordable to the girls and they are training the girls in becoming more self-confident. When analysing the data, the major themes that are identified are spatial context and resistance which partly influence the different strategies (process of discourse, providing training and cooperation) that I-Care uses in order to realise social impact.
5.1.1. Spatial context - poverty, myths and differences between urban and rural areas
One of the first problem that is encountered when operating in the rural areas of Kenya is the high level of poverty. Around 50% of the rural population lives below the poverty line (Rural Poverty Portal, 2014). Thus in the rural areas, people struggle to fulfil their basic needs, so often it is already a challenge to have enough food. This leads to multiple problems. Firstly, as the founder of I-Care explained, food shortage affect your brains and your ability to think and to learn. People in rural Kenya are in a survival mode, so that they are unable to think in possibilities. Secondly, people are unwilling to invest in products with a more long-term benefit. For example, the disposable pads are 300 shillings and they can use it for one year. However, this is still a large amount to pay if you can also buy food with it. For instance, as an employee of I-Care illustrated to us:
"One I-Care product is 300 shillings, but in the rural areas with 300 shillings you can buy wheat, or meat, or rice or sugar, which the family can use. Well 300 shillings is maybe enough for them to get 3 meals. So do they buy pads or do they buy food?"
Another problem that I-Care comes across, which is related to the high level of poverty, is the mindset in (rural) Kenya which hampers investments. The mindset of Kenyan people is more of living by the day, since you do not know what tomorrow brings, and thus they are quite short-time oriented. An example that an I-Care employee gives is that everyone harvests and sells at the same moment, which leads to low prices of commodities at that moment, due to increased supply. However, if some people would sell their products later, they would be able to get a higher price.
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family members or people who are not even family. If you are closely cooperating and working with someone, that person is also viewed as some sort of family. Therefore it is difficult to distinguish between work and private matters. Moreover, due to their collectivistic culture, employees want to work together on all tasks instead of dividing the tasks between employees, which seems quite inefficient to others.
What is also very present in the rural areas of Kenya is that certain prehistorically myths are being told and passed down the generations affecting the mindset of the people and prescribing them how to behave. Especially around the menstruation of girls/women there are multiple myths existent. As the founder of I-Care told us:
"They have for example the myth that if you are having your menses, you cannot work on the land, because if you would do so this will lead to crop failures. However, which myths are existent differs per village".
So, each and every community has different myths (and also different taboos).
Overall, there is a main difference between the rural and the urban areas. Infrastructure in rural areas is weaker, but there are also other differences.
Even though Kenya introduced free Primary Education in 2003, still 1.2 million children are not going to school mainly in the rural areas (Unicef, 2014). There are also greater gender disparities in rural areas, meaning that a significant number of girls is not enrolled. Furthermore, an I-Care employee explained that schools still charge small amounts for pens, notebooks and examination fees, especially in rural areas. Due to the low income in those areas, parents and children are often unable to pay these amounts and the children then need to go home until they have the requested money.
The language of instruction in Kenyan schools is English, however, in rural areas they often deviate from this. These rural schools often instruct in their own local language, leading to a poor level of English of the children. This also hinders them in their future studies.
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The traditional gender role and poverty influences parenting decisions as an I-Care employee stated:
"The disparities of the parenting decisions is so much distinct in the rural areas, because in rural areas there is no water, girls have to get that. Or boys have to go to the farm to help. In urban areas it is dependent on the family, so if I want to teach my children how to wash clothes or how to cook, I can do this, but it is their own choice."
5.1.2. Experiencing resistance
When first introducing the product, I-Care experienced quite some resistance. The first problem that I-Care encountered when trying to sell the I-Care pads are the taboos on menstruation and menstrual hygiene. Due to these taboos, menstruation was an undiscussed subject surrounded by many myths. However, even if the girls are convinced that using I-Care pads is a better solution, they will still experience resistance when they come home. As an I-Care employee explains, most resistance against the usage of the I-Care pads comes from the older generations. Parents are unwilling to invest in the I-Care pads and grandmothers or mothers wonder why they should use pads, since they have also used leafs or old clothes or other materials.
I-Care also encounters resistance from their competitors in the disposable sanitary pads industry. Since these are more powerful actors with more resources and money, they have more control of the sanitary pads and towels industry. Therefore, they are able to hinder and resist other alternatives.
5.1.3. Strategy - Hosting a process of discourse
The first step in overcoming some of the resistance is that I-Care hosted a process of discourse. Discourse refers to practises of writing and talking and can be viewed as structured collections of meaningful texts, in which texts are viewed as any symbolic expression requiring a physical medium (Phillips, Lawrence and Hardy, 2004).
Multiple times the founder and employees of I-Care highlighted that in order to overcome the taboos on menstrual hygiene it is important to talk about it and to make it discussable. So through a process of discourse inform the girls and women on menstrual hygiene and also explain that certain myths are simply not true and link them to facts as an I-Care employee explained:
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Another way is to 'test' the myths with the girls, so I-Care brings girls that are menstruating to the land and illustrate that this does not lead to crop failure. Other methods are creating plays around sensitive subjects as menstruating, in order to educate and to inform people about the subject and to create awareness.
Besides informing the girls and women on the benefits of using I-Care pads, the negative consequences of using other materials are also highlighted. As an employee of I-Care mentions:
"We tell them that if they use the other unhygienic materials that may cause infections and if you have infection you even need more money to treat it".
Moreover, it is important to involve the parents and the community in the process of discourse. Otherwise, girls will experience resistance when they come home. Therefore the founder of I-Care stated:
"It is important to understand how communities work, and to visit school management meetings, or meetings were parents are involved in order to also overcome the taboos of the older generations".
Furthermore, most rural women and girls in Kenya are shy and passive and afraid to raise their voice. With major problems as sexual abuse, adultery and forced marriages on a community level, it is important for girls and women to learn how to say no. In order to discuss certain problems and issues a booklet is developed with sketches of daily life issues. The girls can play the sketches and afterwards there are some discussion points. This form of playing and acting is a good communication tool, as the founder of I-Care illustrates:
"They really love poetry, music and plays. So if you can implement certain problems and issues in a play, they are able to act and to perform it, which they find fantastic".
Other ways of delivering the message is by using humour. According to I-Care employees, Kenyans have a great sense of humour. Using humour to discuss sensitive subjects, is a great way of delivering a message.
5.1.4. Strategy - Providing trainings
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menstrual hygiene management. Furthermore, they train school teachers so that they are able to address most issues. Nowadays, the training is not only about menstrual hygiene, but also about personal development and relevant issues the girls encounter in their communities. It is an intensive training program which includes weekly meetings with a club of girls. The objectives of these trainings is not only to inform girls on menstrual hygiene, but to develop their self-esteem, so that girls and women can be in charge of their life. Thus, I-Care is viewed as a mean to provide girls and women with tools to gain more self confidence. Follow-ups of I-Care personnel are used to monitor and evaluate the trainings and the use of the product.
Recently, I-Care also introduced a saving program for the girls. Due to the extreme poverty and the mindset of the Kenyan people they are unwilling or unable to pay the 300 shillings for the product at once. With the saving scheme, a girl receives a subsidized package of I-Care for the first year. She directly needs to pay 50 shillings and then tries to save the remaining 250 shillings during the following year enabling her to pay the next package herself. However, due to the spatial context it remains difficult to convince parents to buy I-Care. Even if they are convinced of the product, they will still try to get the product for free or at a discount. Yet, I-Care always asks for a contribution for the pads. The idea behind this is that otherwise you would teach them what they were taught for over 50 years, that they can just beg to gain support.
5.1.5. Strategy - Cooperation with other parties
When selling a sensitive product like the sanitary pads, as an organization you have to deal with the government. As the founder of I-Care explained:
"It is not allowed to simply enter a school, sell sanitary pads and train girls in menstrual hygiene management".
There is an entire process that needs to be followed, so contacting the governor, the ministry and the districts county are all part of the process before you receive permission to enter a certain school. The process is very bureaucratic, but there is no other option than to include the government and to cooperate with them.
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programs targeted at health and menstrual hygiene together with NGO's, so being known by the government can also be positive for your own market expansion.
Cooperating with other parties in general is quite beneficial. Due to the context in which I-Care operates, for example the weak infrastructure in Kenya, distribution of the product is a major problem. The distribution is expensive and very time-consuming. Therefore, I-Care cooperates with local partners that already have a network in the new or remote areas, so that I-Care can connect to that network. I-Care especially cooperates with parties that are in similar industries or in related industries such as partners that operate in the water and sanitation sector.
Furthermore, I-Care is part of the Afri-Can foundation. I-Care works as the social enterprise that produces, sells and markets the pads. While Afri-Can, which is grant-based, is responsible for the training and education of the girls. Thus, they are using a hybrid business model, which also can be viewed as a cooperation.
5.1.6. Social Impact
The impact that I-Care has in rural Kenya is most visible in the school attendance rates. According to one of the I-Care employees:
"On a general notice we have seen some major changes at some of the schools were we are working, like school attendance is improving by as much as 23% for the girls".
Moreover, there is also a reduction in early school dropouts. In one primary school, all 20 girls who received the pads continued to secondary school. Another positive effect of the use of the I-Care pads is that girls are now also found in the list of the top performers of a school, while previously this list often only contained boys. Now that girls are able to follow classes during their menses they also perform better. But also when examining the impact I-Care pads have on older women that are using the product, change is noticed. These women are now enabled to conduct all of their small businesses activities, while before the use of the pads they needed to stay home due to the materials they were previously using.
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employees and they are willing to discuss delicate issues. The aim is that this leads to behavioural changes, so that people learn how to save, are able to finish their school and maybe even go to university and that they are able to participate in the market. So that people are enabled to fulfil their potential. By investing in the youth, certain traditional structures can be changed.
5.2. Musoni: improving the life of the unbanked through mobile microfinance
Before the introduction of Micro Finance Institutions (MFI) in Kenya it was almost impossible to receive a loan, unless you were able to pay extreme high interest rates. The introduction of MFIs in Kenya enabled the poor to obtain loans. In 2009 Musoni BV was founded in the Netherlands, and at the same time the microfinance institute Musoni Kenya was established. Table 3 offers a brief overview of the different subsidiaries, elements and objectives of Musoni. Musoni Netherlands created an IT platform which enabled Musoni Kenya (the MFI) to easily manage their clients and to enable their clients to receive and repay microfinance loans over their mobile phones.
Table 3: Overview of the different subsidiaries, elements and objectives of Musoni
Subsidiaries Elements Objectives
Musoni System Developing the Management Information System that are used by MFIs
Licensing the technology to other MFIs
Providing a system that improves the life of the unbanked through technology driven microfinance
Musoni Investments Setting up MFIs (i.e. Musoni Kenya) Providing loans to micro entrepreneurs
Measuring Progress out of Poverty Training clients in using the system Employment to loan officers
Participating in an initiative to realise a Kenyan credit bureau
Providing microfinance loans to improve the life of the unbanked
35 Figure 6: Traditional microfinance business process
(Source: Hanouch and Rotman, 2013)
The first and last steps of the process still happens through the mediation of loan officers. When analysing the data collected from Musoni, the major themes that are identified are spatial context and resistance which partly influence the different strategies (relation and reputation building, technical leadership and cooperation) that Musoni uses in order to realise social impact.
5.2.1. Spatial context: regulations, inflation and differences between urban and rural areas
When examining the capital market in Kenya, it can be noticed that banks are normally regulated and the Central Bank of Kenya is relatively good. Regulation is based on old English laws, since Kenya is a former colony of Great Britain. MFIs are not regulated, unless they also provide savings deposits besides loans, then they are obligatory regulated. The main benefit of MFIs not being regulated is that the market is easy accessible for new entrants. At the same time this also means that parties that are offering usurious loans and that are excessive risk-takers also have access to the market. Those parties negatively influence the sector leading to reputational damage.
Another problem that MFIs are facing is the lack of client data. In Kenya there are no credit bureaus or government data on the financial history of clients. As a Musoni employee explained:
"It is even possible for people to get a complete new passport for 10 Euros with a new passport number, so obtaining valid data about your clients is extremely difficult".
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two-third of the adult population). In January 2014 around 43% of the Gross Domestic Product (GDP) flowed through mobile banking transactions. Therefore, mobile financing is increasingly changing the traditional money systems.
Kenya is relatively stable and well developed. The main challenge is fighting high inflation. As the employee of Musoni explains, high inflation makes it more difficult to repatriate money from Kenya to a home country and increases capital risks.
In general the country is flourishing, but the growth is mainly realised in the urban areas. As an employee of Musoni stated:
"The middle class is rapidly growing, but at the same time the growth is mainly realised around the hubs, the market towns, so mainly in large cities like Nairobi".
Musoni Kenya mainly operates in Nairobi and the areas around Nairobi. This also greatly affects the context in which they are operating. Furthermore, infrastructure is also relatively weak, especially in the rural areas.
5.2.2. Experiencing resistance
At first, when Musoni started to introduce mobile microfinance loans, clients and other MFIs were suspicious about the product and the intensions of Musoni. In general, the market first wants to see whether you are a legitimate enterprise, so it takes some time to build a reputation. As a Musoni employee explained:
"When we first started there was a lot of suspicion and distrust. Mobile money transfers were unknown and viewed as dangerous.
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have cash in their branches, which detract from the original idea behind Musoni of being 100% cashless.
5.2.3. Strategy - Relation and reputation building
In this process of gaining legitimacy and overcoming the suspicion about mobile money, the first clients that you obtain are crucial. If the product is correctly demonstrated to them and if they are positive about the usage of the product and are starting to believe in the product than the operation starts to thrive. As a Musoni employee explained:
"Eventually, and this is the case in most African countries, everyone can claim to have an excellent product that everyone needs, however, nobody believes you until your neighbour is using the product and tells you that it works".
Other strategies that Musoni uses to overcome this suspicion is by being transparent and by training people in the usage of the microfinance system. This openness and transparency helps in building a reputation.
In order to influence regulations and to obtain a license it is very important to build a relationship with the central bank. For example, a decision by the central bank on whether or not to grand a license is dependent on the relationship an organisation has with the bank, as an employee of Musoni expressed:
"Those things are purely based on relations".
Therefore, Musoni has regular face-to-face meetings with the central bank, keeps them posted about their operations and they provide information on sector trends.
To decrease the risk of loan defaults the initial loans are offered to members of a specific group of people, where the group guarantees the loan. Often these are already existent groups, that were formed based on similar characteristics, i.e. religion or job sector. The relationship with the group reduces the default rate, since the group takes responsibility for individual loans.
5.2.4. Strategy - Technical Leadership
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The main benefits that Musoni provides to clients are increased efficiency, time-savings and increased security. Efficiency is increased due to less paper work, a shortened time between the request and the receiving of a loan and less physical meetings. Furthermore, clients save time because there is no need to visit bank branches or ATMs. Moreover, since the loans are cashless the risk of theft is reduced. Not only are all of these aspects beneficiary to clients, they also positively influence the performance and operation of Musoni since the same benefits are applicable to the MFI itself, i.e. reduced safety risks for loan officers. The business model of Musoni also leads to a very low default rate (3%) of loans.
Moreover, the technical leadership of Musoni also further strengthens their position in the market of MFIs. As an employee of Musoni explains:
"Due to our pioneers role and our excellent technology, we have build a good reputation with our competitors, our investors and our clients.
Recently, Musoni also has opened their first rural branch. Previously most rural areas were excluded from receiving microfinance loans since these could never be profitable or even sustainable and still these areas are excluded from most traditional loans. The main difference between Musoni and commercial banks and other MFIs is that the critical mass that they need in order to sustain operations is much lower for Musoni. Due to the combination of using new mobile financing technology together with a more social objective of the enterprise these rural areas are now accessible and profitable to enter.
5.2.5. Strategy - Cooperation with other parties
Another strategy that Musoni uses to influence regulators is by cooperating with other MFIs in the AMFI (Association of Micro Finance Institutions). Musoni is part of an association of MFIs that discusses relevant issues and gradually this association gains more influence. However, gaining influence costs time as a Musoni employee states:
"With associations like the AMFI, it takes time to build a relation and a reputation, but in the long term such institutions will become more powerful".
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solely service them. Therefore, Musoni cooperates with cooperation's of farmers or suppliers of inputs for farmers in order to reach these rural clients. So the same product of microfinance loans is provided to rural clients, but different distribution channels are used to reach more clients. Thus, the strategy of Musoni is adapted to the context.
Furthermore, Musoni is participating in an initiative to create a Kenyan credit bureau. Together with 8 to 10 other MFIs, Musoni is providing data about their clients and their loan history in order to improve the sector. Sharing client data leads to better credit decisions and lower default rates.
Lastly, Musoni Systems now also licenses their technology to other MFIs that are operating in Africa. The Musoni system is already licensed in five countries, including Tanzania, Uganda and Kenya. Therefore, other MFIs are enabled to use the mobile micro financing technology to improve their operations.
5.2.6. Social Impact
Generally, one study found that for households in rural Kenya that adopted M-PESA, income increased with 5-30% (The Economist, 2013). Furthermore, there are many individual cases that illustrate the impact of receiving a mobile microfinance loan. Especially, the time between requesting and receiving the loan majorly benefits clients. As one Musoni client stated:
"Musoni has helped uplift my business with their timely loans and as a result, has educated my children. Most importantly, I have become self reliant".
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6. Discussion
Recent research has contributed to our understanding of institutions, institutional voids and institutional change. However, when examining institutional change, the literature mainly focused on powerful and professional actors with sufficient resources that enabled institutional change (Mair and Marti, 2009). Less is known about smaller actors, such as social entrepreneurs, and how these actors change institutions and try to fill institutional voids. It is expected that different strategies are used because smaller actors lack the resources available to more powerful actors. This study speaks to the call for more research on how social entrepreneurs influence and transform institutions and to examine whether this varies within different contexts. The analysis of the operations of two social enterprises in Kenya, contributes to our knowledge on which strategies social entrepreneurs use to change and to influence institutions. Similarly, by examining how I-Care and Musoni work with the institutional infrastructure of markets and changing institutions that influence market participation, the study makes an effort to account for the role of social entrepreneurs in influencing institutions. The findings of this study at least suggest that less powerful actors are indeed able to realise institutional change. Therefore, this study helps to move away from the dominant 'hero imagery' of powerful actors (Lounsbury and Crumley, 2007). Furthermore, the findings of the strategies that social entrepreneurs are using also allows for a comparison between the strategies that traditional businesses are using.
6.1. Strategies to achieve institutional change
