Abstract
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Social entrepreneurs create hybrid ventures that combine revenue-generating business models with social impact models to produce value for two primary stakeholder groups: consumers and beneficiaries. The interactions between social entrepreneurs and their beneficiaries are heavily studied. However, consumers’ responses to a venture having a social impact model have received almost no scholarly attention even though a large number of hybrid ventures rely heavily on consumers to make their business models viable. In this study, we draw from legitimacy theory and pair an experimental design with structural equation modeling to examine consumer responses to ventures with a social impact model. We hypothesize and find that a social impact model influences consumers’ perceptions of venture legitimacy. Legitimacy perceptions are, in turn, related to consumers’ purchase intentions and willingness to recommend the venture to others. Our findings produce insights into how social entrepreneurs appeal to consumers to create financially sustainable ventures.
