The assistant professor of entrepreneurship’s research assesses how changes in legal structure can affect outcomes of social enterprises.
Elena Kennedy, assistant professor of entrepreneurship in the Martha and Spencer Love School of Business, examined how legal structure change altered core business model components of social enterprises in an article published in the Journal of Social Entrepreneurship.
In the article “Forging Ahead or Grasping at Straws? The Affects and Outcomes of Social Enterprise Legal Structure Change,” Kennedy and co-author Nardia Haigh studied 24 cases of social enterprises that changed their legal structure after initial formation to see how the business model of the organization was innovated.
Using case study and qualitative comparative analyses, the authors identified four patterns of business model innovation that compared the motivation for change with the component of the business model that was innovated. They found the value proposition and value creation mechanisms were more likely to be changed when the enterprise was motivated by opportunity, and that the value creation and value capture mechanisms were more likely to be changed when the enterprise was responding to weaknesses or threats.
To evaluate post-change survival, the authors reevaluated the cases four years after the initial interviews and found a quarter of the sample was no longer operational. They utilized qualitative comparative analyses to determine which of the business model innovation patterns were more likely to lead to organizational survival and which were more likely to lead to organizational failure. Their findings indicate that the business model component altered depends on the motivation for legal structure change and that survival favours enterprises that build value creation and value capture components first, while others enter a downward spiral from which it is difficult to recover.
Kennedy joined Elon in 2016. Her research focuses on the strategic decision making of social entrepreneurs. She earned her doctorate in organizations and social change from the University of Massachusetts-Boston.