The process of the new inter-organizational format of social franchising from a social network theory approach: Institutions, social entrepeneurship povile, innovation and the argument of embeddedness

Abstract

The inability of the public sector to satisfy social needs- like poverty alleviation, social inclusion of disadvantaged groups, unemployment, health and education - are redefining the relationship between the governments and their citizens by making the latter play an active role as the provider of the welfare state. Citizens through their entrepreneurial activity have been pulled to the third sector leading to the emergence of new organizational forms like social enterprises and social franchises. The main focus of this research study is the investigation of the new interorganizational format of social franchising which has received ‘scunt’ research attention up to now. The behaviour of actors and organizations in the social economy sector are influenced by the properties and dynamics of elements coming from the political, social, organizational and individual level. We have adopted a systems approach of social network theory. A grounded theory named Social Franchise Model (SoFraM) has been induced from an exploratory empirical mixed method study conducted at various stages and from different sources during a time frame of thirty months. Primary data were raised through six case studies in the UK and Greece, more than 143 interviews with social entrepreneurs and various stakeholders and three action research projects which were the subject of analytic induction supported by archival analysis of secondary data coming from governmental, European Commission, local authority and other sources. Our findings indicate that the formation, growth and success of social franchises is heavily shaped through: firstly, law, regulations, and incentives introduced by centralized or formal institutions- both supranational and national- as well as their driving logics; secondly, the relational and structural embeddedness of actors in networks and the social norms that subsequently emerge; thirdly, the characteristics of the individual social entrepreneurship profile; and finally elements of the social innovation model adopted. The properties of the system of informal or decentralised institutions of networks have been further explored through a pilot quantitative study on mainstream franchises in the UK and Greece. An online self-administered questionnaire has been created based on our conceptual framework of the Franchise Network Model (FNM) drawn from existing scales from literature. The findings indicate that relational and structural embeddedness of actors and organizations in networks determine choices of formation, partner selection, governance mode and the subsequent performance of franchise systems.