The relationship between organizational identity and social impact scores for benefit corporations

Social entrepreneurship has emerged as an important new sector of the global economy. By coprioritizing economic and social objectives, social entrepreneurs and their social enterprises could positively influence the ailing business-society relationship. Recognized in 20 U.S. states, the benefit corporation is a new socially oriented corporate designation that requires social enterprises to pursue and create a general public benefit. Little is known about benefit corporations and to what degree their organizational identities support creation of social impact. Supported by legitimacy theory, institutional theory, and organizational identity theory, the purpose of this quantitative correlational study was to investigate the relationship between benefit corporations' organizational identity and their social impact scores. Criteria-based sampling produced a dense sample of 30 early-adopter benefit corporations located throughout the United States. Organizational mission statements were used as a proxy to identify organizational identity elements, and statutorily required third-party impact assessment reports provided social impact scores. Through a manual coding and quantitizing process, mission statement contents were transformed to dichotomous data for statistical analysis. Although no significant correlations were observed between organizational identity elements and social impact scores, benefit corporations' social impact scores suggest positive social impact has been created. Implications to society and to professional practice are that early-adopter benefit corporations create a positive social impact and that leaders should focus on developing organizational identity that supports both economic and social outcomes if the new benefit corporation form is to become legitimate.