Institutional change in the social innovation process: Evidence from an emerging context

Abstract

Institutional change has been identified as inherent to social innovation proposals, especially in developing contexts. However, it is still unclear how these changes occur in the social innovation process. Therefore, our study seeks to answer the following research question: How do attempts at institutional change occur in the social innovation process in an emerging context? We use the qualitative approach to investigate two Brazilian social innovation cases striving to change the institutional environment in which they operate. Our data reveals that institutional change may be necessary before the scalability stage of the social innovation process. We suggest that this finding is related to the developing context, which requires social entrepreneurs and their teams to break institutional barriers to expand their social innovation initiatives. We have also identified some mechanisms used for the attempts to institutional changes: competition with government organisations, influence in formulating laws, and support for the market growth and the entry of new participants.

Keywords

social innovation institutional change scalability emerging context qualitative research Brazil

Introduction

Social innovation has been gaining prominence in the literature and the empirical field due to its objective of seeking solutions to complex social problems. Examples of social innovation are varied, including microcredit (Nakano and Magezi, 2020), fair trade (Duggan and Kochen, 2016), citizen participation in political discussions using new technologies (Mehmood and Imran, 2021) and the close relationship between food producers and consumers (Alberio and Moralli, 2021). Although some studies indicate that the social innovation concept is characterised by a lack of consensus (Cajaiba-Santana, 2014; Jenson and Harrisson, 2013), others consider that the adoption of a single definition is a challenge due to the different areas of knowledge involved (Cajaiba-Santana, 2014), and the complexity and contemporaneity of the topic (Morais-da-Silva et al., 2016; Turker and Vural, 2017).

Social innovation proposals are understood as new answers to social problems that are more efficient than previous practices (Mulgan, 2006; Phills et al., 2008) and support the creation of positive social value (Nicholls et al., 2016; Phills et al., 2008). When the term social value is used, the focus of private gain is inverted to actions that are good for the collective (Lautermann, 2013), such as the satisfaction of social needs related to employment, food, health and housing, or needs of common interest, as safety and environmental preservation (Dohrmann et al., 2015).

As social innovation seeks to offer new solutions to traditional and difficult-to-solve challenges, its development and implementation are complex (Bruin and Read, 2018; Westley and Antadze, 2010). Implementing social innovation initiatives often involves adjusting some institutional environment dimensions and changing the status quo (Purtik and Arenas, 2019; Von Jacobi et al., 2017). Thus, institutional change in social initiatives is widely relevant because it provides new actions, models and practices to be put into practice (Chandra, 2017), allowing changes to occur both concerning the intended social change as well as connecting actions with other groups involved in the institutional environment (Vasquez-Delsolar and Merino, 2021).

Although the recognition that some institutional changes may be required, the existing models that address the social innovation process (Belayutham et al., 2019; Benneworth and Cunha, 2015; Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013; Gasparin et al., 2021; Herrera, 2015; Morais-da-Silva et al., 2016; Mulgan et al., 2007; Murray et al., 2010; Slimane and Lamine, 2017; Vézina et al., 2019) showed some disagreements. In most of them, there is no mention of institutional change. In others, this step is presented as the last in the process. Also, few studies address the process of social innovation based on data from emerging contexts. Traditionally, the institutional environment is seen as weak in developing countries (Elert and Henrekson, 2021).

Given the need for new studies on social innovation and institutional change, considering an emerging context, we propose to answer the following research question: How do attempts at institutional change occur in the social innovation process in an emerging context? For this, we selected two social innovation cases in the Brazilian context, which operate in housing for poor people and sustainable projects for the remuneration of people living in rainforests. In common, both proposals endeavoured to change the institutional environment in which they operate. To discuss our findings, in addition to the dialogue with the social innovation literature, we also use the theoretical background of institutional entrepreneurship, which is characterised as “activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones” (Maguire et al., 2004, p. 657).

Our study seeks to contribute to the literature by better clarifying the gap related to institutional change in the social innovation process in an emerging context. We also seek to contribute by presenting some mechanisms that may be used in attempts to institutional change through the effective action of social innovation proposals. In managerial terms, our findings may be helpful for managers to realise that institutional change may be necessary to ensure the scalability of their proposals. It may also serve public policymakers to consider creating an institutional environment more conducive to developing and expanding innovations focused on creating positive social value.

Social innovation

The social innovation topic has gained prominence in the literature in the last two decades (Farinha et al., 2020; Pacheco et al., 2018; Van der Have and Rubalcaba, 2016). The term was initially used at the beginning of the 20th century, from a sociological perspective, to designate the change in the living standards (Ayob et al., 2016). The social innovation perspective has been studied in several fields, such as community psychology, creativity research, social and societal challenges, and local development (Van der Have and Rubalcaba, 2016). In the management area, two are the main conceptual perspectives adopted. The first one refers to the sociological aspect of the concept comprising social innovation as “new social practices created from collective, intentional, and goal-oriented actions aimed at promoting social change through the reconfiguration of how social goals are accomplished” (Cajaiba-Santana, 2014, p. 44). In this perspective, individuals’ participation in social innovation development stages is relevant since they are proponents and beneficiaries (Dawson and Daniel, 2010).

The second perspective understands social innovation from an economic point of view, in which the marginalised population receives the results of social innovation projects as a beneficiary. Thus, there is no need for them to participate in the stage of proposing innovation. In this way, it is considered that “an innovation is termed a social innovation if the implied new idea has the potential to improve either the quality or the quantity of life” (Pol and Ville, 2009, p. 881). Social innovation is proposed and disseminated mainly by organisations with explicit and intrinsic social objectives for their business (Lettice and Parekh, 2010; Mulgan, 2006).

In our study, by adopting the second perspective, we understand the social innovation as “a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals” (Phills et al., 2008, p. 36). While there is no direct participation of beneficiaries throughout the social innovation development process, the proposal focuses on delivering social value to these populations through innovative proposals.

Institutional entrepreneurship

Due to their high degree of originality and intention to resolve complex social problems, social innovation initiatives often go beyond the local level and reach higher dimensions, such as the institutional level (Bruin and Read, 2018; Cajaiba-Santana, 2014). The classic view defines institutions as “the rules of the game in a society”, formal or informal, generally consisting of rules, norms and beliefs (North, 1990, p. 3). Institutions place pressure on organisations, which change their strategies and activities because they can be more efficient than others and seek to gain legitimacy in the market (Dimaggio and Powell, 1983; Meyer and Rowan, 1977). Organisations should adapt to these institutional expectations to be recognised and legitimised by society (Dimaggio and Powell, 1983).

In distinction to this view of the more passive actors’ position, the concept of institutional entrepreneurship emerged. Institutional entrepreneurship is a term that refers to how actors act proactively and independently to try to change the institutional environment (DiMaggio, 1988). They may be one or more organisations (Aldrich, 2011; Battilana et al., 2009) that initiate changes that break the status quo and actively participate in these changes, even if they are not successful in their implementation (Battilana et al., 2009). This dynamic and active picture contrasts emphatically with the traditional understanding that the structural pressures of the environment induce passivity, conformity, and the homogeneity of agents (Levy and Scully, 2007).

Institutional entrepreneurs, in conjunction with their allies (Battilana et al., 2009), act in certain institutional arrangements by mobilising resources to create or modify existing institutions to meet their own interests (Maguire et al., 2004). In addition to the resource mobilisation process, institutional entrepreneurship defines the form of agency, which may vary between strategy, routine and sensemaking, and perceive the opportunities in the environment to change the institutional dynamics (Dorado, 2005). The actions of institutional entrepreneurship that seek to change the game's rules, even when the expected natural trend may be conformity, have been drawing attention for decades.

The literature has already worked on institutional entrepreneurship and social entrepreneurship jointly (i.e. Chandra, 2017; Dacin et al., 2010; Pacut, 2020). For Chandra (2017), the two concepts have many similarities since both have the search for change as their essence and act directly in creating new organisational models, practices, and rules. The main difference between them is intentionality, since social entrepreneurship goals are more related to benefits for society, while in institutional entrepreneurship, this is not a requirement (Chandra, 2017). Social entrepreneurs may also act as institutional entrepreneurs in three central positions: the individual as agents of social change; the collective to change the business regime; and the institutional, connecting the niche of social entrepreneurs and other groups in the institutional environment (Vasquez-Delsolar and Merino, 2021).

Institutional changes in the social innovation process

Due to the characteristic of seeking to solve complex social problems and significant social challenges (Bruin and Read, 2018; Carl, 2020), social innovation initiatives generally need to achieve institutional-level changes (Cajaiba-Santana, 2014; João-Roland and Granados, 2020; Purtik and Arenas, 2019; van Wijk et al., 2019). Institutional changes regarding social innovations seek to change the status quo concerning norms, values, laws and rules that may prevent the mission of the social innovation initiative from being achieved (João-Roland and Granados, 2020; Von Jacobi et al., 2017; Westley and Antadze, 2010).

Despite this understanding, existing models on the social innovation process do not explicitly address this stage. After a careful analysis of the literature, we identify eleven studies that explore the social innovation process as a primary goal (namely Belayutham et al., 2019; Benneworth and Cunha, 2015; Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013; Gasparin et al., 2021; Herrera, 2015; Morais-da-Silva et al., 2016; Mulgan et al., 2007; Murray et al., 2010; Slimane & Lamine, 2017; Vézina et al., 2019). Although each study considers the social innovation process, a recent systematic literature review provided a general characterisation. According to João-Roland and Granados (2020, p. 777), the social innovation process “starts at a micro level, with an entrepreneur or a small group of people, and ends at a macro level, with changes in the social system and development of new laws, business models and structures”.

Nonetheless, only two (Belayutham et al., 2019; Murray et al., 2010) of the previously mentioned social innovation models address the institutional change, both as the last stage of the process. The other models do not delimit a specific phase for institutional change, and some of them end the social innovation model in the scalability or diffusion phase (Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013; Gasparin et al., 2021; Morais-da-Silva et al., 2016). The low representativeness of institutional change in existing models can consider that (1) the models failed to observe this stage in the process or (2) the contexts in which the analysed social innovation processes were developed did not demand this action.

It is worth noting that the institutional environment may vary considerably between regions and countries (Liedong et al., 2020). Regarding each of the eleven studies named, a few studies have a researcher from a developing country as their first author. Most studies have the first author's affiliation with a United Kingdom organisation (Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013; Gasparin et al., 2021; Mulgan et al., 2007; Murray et al., 2010), followed by the Netherlands (Benneworth and Cunha, 2015), France (Slimane and Lamine, 2017) and Canada (Vézina et al., 2019). Only three studies present institutions in developing countries as the affiliation of the first author, including Brazil (Morais-da-Silva et al., 2016), Malaysia (Belayutham et al., 2019) and the Philippines (Herrera, 2015).

Even if we consider only empirical articles, most of them analyse the field in developed countries. Only three pieces use cases from developing countries, including India (Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013) and Malaysia (Belayutham et al., 2019). The studies with Indian data adopt a more general social innovation process based on three phases: initial, development and scalability (Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013). There is no specific mention of institutional change in the Indian case studies; only comments are made about the difficulty of building proposals for social innovation in the country. One of the studies said that “[the cases] were founded in the absence of institutional support. Hence, there is a clear need for institutions and government agencies to collaborate and develop an ecosystem that supports social entrepreneurship in India” (Bhatt and Altinay, 2013, p. 1786).

The Malaysian study (Belayutham et al., 2019) deals with social innovation in five phases (problem, idea, development, outcome, and systemic change) in a project related to the lack of affordable housing in the country. A large local university led the initiative. The initiative consisted of developing a methodology, with indications of materials and construction methods, for lower-cost residences with low construction difficulty. As a social innovation phase, the systemic change includes the joint work between the university and the private sector to develop houses that are easy to build by people with little education or volunteers. Although the authors do not mention other aspects of institutional change, the less complex methodology of building houses is treated by them as a result of systemic change.

It is still unclear how institutional change is part of the social innovation process. Only two studies (Belayutham et al., 2019; Murray et al., 2010) clearly show institutional change as a phase of the social innovation process. However, this finding goes against the general understanding that in most cases of social innovation, there is a need for institutional change actions, especially in less developed contexts.

Methods

Strategy and case selection

To answer our research question on how institutional change is included in the social innovation process in an emerging context, we investigated two social innovation initiatives in Brazil. Our empirical investigation used the qualitative approach (Merriam, 2009), based on the case study strategy (Yin, 2015). We decided to use two cases to increase our explanatory power about the phenomenon (Eisenhardt and Graebner, 2007).

Our cases were selected from an intense search for social innovation cases with potential attempts at the institutional level regarding changes in the legislative, regulatory, and market environment, for example. For that, we consulted the PIPE social base in Brazil for social impact business (the largest database of such organisations in the country), the Folha de São Paulo Social Entrepreneur Award (from one of the most representative media groups in the country), as well as free internet searches to find cases with theoretical representation for the study. Our cases followed the criteria of theoretical representativeness, so we looked for cases that should best help answer our research gap.

We identified two cases with a potential contribution to the study. The first one (Fair Housing = FH) developed a social innovation that consists of a conflict resolution service for housing in Brazil. These traditional conflicts involve large landowners and illegal occupants, generally members of poor local communities. The organisation's proposal in the last two decades ago consists of identifying these areas, negotiating the property's value with the legal owner, considering the payment capacity of the occupying families, and managing the payments in instalments for the properties. After the process, families receive documentation of their properties and improvements in local infrastructure through agreements established between the organisation that generates social innovation and the city council. The organisation, founded in 2001, charges a percentage of the owner's amounts to maintain the structure.

The second case (Amazon Carbon Credit = ACC) also involves social innovation in services. It is a methodology for remunerating people who live in forested areas while preserving the space in which they live. To this end, conservation, certification, and commercialisation of carbon credit for large areas of the Amazon rainforest are used. In technical terms, ACC uses an adaptation of the REDD (Reducing Emissions from Deforestation and Forest Degradation) mechanism in Brazil to sell carbon credit to large national and multinational corporations, as well as countries outside Latin America. With the intermediation of a local NGO and the local government, the received values are applied to local infrastructures, such as access to electricity and clean water, community centres, roads, etc. The organisation, founded in 2008, retains part of the funds received from carbon credit sales to maintain the structure.

Data collection

The data were collected through interviews and documentary research. We interviewed thirteen key informants, including the entrepreneur, in both cases. Interviews with key informants provide information that would hardly be obtained from any ‘ordinary’ person in the investigated context (Lokot, 2021). We sought to interview the largest number of people in each case, as long as they have participated since the first stages of the investigated social innovation. Interviewing a reasonable number of people with different backgrounds, experiences and roles is important for the variability of the information collected (Rowley, 2012). The inclusion of informants was done according to the interviewees’ indications (snowball), which led us to include one external partner for FH and two for ACC, who actively participated in the respective processes. The details of the interviews are presented in Table 1.

Table 1.

Interviews.

Case	Interview number	Interviewee	Duration (min)
FH	1	Founder and Director	38
	2	Chief Financial Officer	35
	3	Analyst	49
	4	Analyst	38
	5	Analyst	47
	6	Impact Investment Fund Director - Partner	35
ACC	1	Founder and Director	27
	2	Founder	47
	3	Administrative and financial manager	13
	4	Commercial assistant	51
	5	Technical responsible for forestry projects	56
	6	Impact Investment Fund Director - Partner	22
	7	Non-Government Organization Director - Partner	34

Source: the authors.

The interviews were conducted based on semi-structured guides, in which the informants were asked about (i) the general characterisation of social innovation; (ii) the history of social innovation as a whole, from the idea to nowadays; (iii) and the needs for changes in the organisation's external environment (institutional environment, in academic terms). To complement our data collection, we also analysed 30 documents for the first case and 31 for the second, including newspapers, organisation blogs, institutional websites, internal reports conceded by the cases, etc.

Our option for triangulating sources of evidence, using two sources (interviews and documents), is intended to guarantee quality and rigour and rigour to the research. We also use triangulation of information from interviews with different actors in each case, even in small organisations. The wide variety of informants is an important strategy to deepen knowledge about the case studied, triangulating the information in order to better support the findings or to find contradictions (Yin, 2015).

Data analysis

The data were analysed using qualitative content analysis divided into three steps (Bardin, 1993). First, we approached the data from an initial reading of the interview transcripts and collected documents. Then, we categorised the sections according to the codes that emerged about the institutional change attempts. We also categorised the mechanisms used by the cases to try to change the institutional environment, which led us to create new emerging codes. Finally, we refined the identified codes. Our data analysis, whose categorisation occurred emergent, showed two higher categories. The first refers to institutional change as a stage in the social innovation process. The second relates to the strategies that the analysed cases used to change the institutional environment, divided into three subcategories.

To ensure quality and accuracy in data analysis, we return to key informants to seek more detailed information when ambiguous information was found in the collected data, both in interviews and documents. The entire analysis process was done considering the research team, which helped to reduce interpretation bias.

Results

The results of this study are based on the Brazilian scenario. Although the country has an economy that ranks among the largest in the world, holding the twelfth position in 2020 (World Bank Group, 2022a), and a high population that places the country as the sixth most populous in the world (World Bank Group, 2022b), there are many barriers to its socioeconomic development. Regarding social innovation and social entrepreneurship, the country has little international prominence. In an international comparison of the best countries in the world for social entrepreneurship actions, of the 43 locations evaluated, Brazil ranked 38 (Thomson Reuters Foundation Pull, 2019). There is also no specific national legislation for social ventures or their naming variants; only a few states have any legislation that aims to support these initiatives. Based on these findings, as an emerging country, Brazil can also be considered a developing ecosystem in innovation and social entrepreneurship. The following subsections present the institutional changes sought by the investigated cases and their mechanisms.

Institutional change as a stage in the social innovation process

In both cases investigated, institutional change attempts occur before the expansion or scalability of social innovation proposals. Although FH foundation occurred in 2001, it was only after the approval of a law in 2017 that social innovation expansion was accentuated. This law was approved, trying to speed up the land regulation process. Secondary data provided by FH show that the number of families in the process of mediation and approval (negotiation phase) was 10,000 in 2013, increasing to 70,000 in 2016, 73,000 in 2018, 154,000 in 2019, and this number is expected to reach 265,000 in 2022. According to the entrepreneur, this is the moment for expanding the proposal.

In the case of ACC, the scalability of social innovation is expected in the coming years. According to data from the organisation, in thousands of protected hectares, ACC had 520 in 2013, 1221 in 2016, 2446 in 2019 and expects to reach 5304 in 2024. The search for expansion still finds barriers in the relatively low demand in the national market. To expand its proposal in the coming years, ACC has sought to change the institutional environment, mainly creating demand for its product based on regulations. The following excerpts illustrate these findings:

"Here the environmental issue itself already has an intrinsic difficulty. We too … we are, in a way, developing the market, we are creating this, so it took much longer than we imagined”. (Founder and director - ACC)

"Now, without a doubt, the greatest difficulty is the commercialisation of this one. I said that our market today is voluntary. Our main problem is the absence of a regulated market. Companies generate the problem and are not responsible for it. It is particularly challenging for us to actually be able to sell the amount we need to pay for this investment and especially for that money to go back to conservation activities” (Founder and director - ACC).

Considering the data from the two cases investigated, we understand that social innovation proposals grow if changes occur in the institutional environment. This result leads us to realise that attempts at institutional change come before the scalability of the proposals.

Strategies for attempting to change the institutional level

Our study identified that in the two cases analysed, attempts at institutional change happen based on three mechanisms: competition with governmental organisations, influence on the formulation of laws, and support for market growth and the entry of new participants.

Competition with government organisations

The FH case, which operates in the mediation of land conflicts and helps obtain legal housing for low-income people, often collides with governmental organisations serving in this field. The low scale of governmental organisations has opened space for FH to operate. However, this competition has not been considered advantageous by some city councils. According to the informants, some local government sees a form of competition for the public service they traditionally practised in the FH proposal, classifying the new service with discredit. The following excerpts present the evidence about mistrust, the interpretation of the proposal as a competitor of municipal governments and the obstacles that they can generate:

"The difficulties are many, mainly because a private organisation is the main agent and interlocutor. Sometimes it faces distrust from public sector technicians” (Entrepreneur - FH).

"Only we know that they still see us as a competition. We are often not even called to participate in the meetings related to housing in the city” (Analyst - FH)

"It has been a long time, and there is an area in [name of the city has been hidden] that has about 500 to 600 residents who have already paid off the land, and you are not able to hand in registration because the mayor does not prove it. So, like this, there is no other way, and we will have to ‘judicialise” (Analyst - FH).

To overtake these obstacles with some city halls and intense negotiations and attempts to reach an agreement, national and international awards have been helping to “recognise and make the proposal visible” (Entrepreneur - FH). In this sense, FH has competed with local government organisations by staying close to national and international organisations that promote social impact organisations (a term used in the field to include a more significant number of proposals) that operate in the institutional environment. With this, FG begins to change the local institutional setting.

In the case of ACC, there was no direct mention of competition with governmental organisations. However, when dealing with areas mostly owned by the Brazilian State, a close relationship with government agencies is undertaken. The ACC Entrepreneur claimed that “if the government doesn't want to, there is no project. For this reason, they follow everything closely and we must always be careful”. This excerpt reveals a close and potentially conflicting relationship with government organisations.

The conflicts and competition established between the investigated organisations and the government agencies may have an even lesser-known consequence, even by the interviewees themselves. Although the opinion of the interviewees is always negative about the role of the government, in both cases the advancement of these organisations in the field of government domain may have drawn the attention of the regulatory agent. Thus, when progress became difficult to control, practical regulatory actions began to be taken in both sectors. This interpretation lacks new studies that may confirm this finding in social innovation context.

Influence in formulating laws

The two studied cases invest in institutional change strategies based on help in creating and reforming laws. Both cases verified this finding through the influence exercised to change the rules to enable the services provided and the respective proposals’ scalability. According to the informants, this practice consists of frequent contact with politicians from the legislative environment and jurists to help create and change laws. In some cases, laws existed but were not effectively considered in legal proceedings. Some evidence about trying to help formulate laws are described below:

"A very important law emerged in the civil code, a 2002 law that is still not applied to the judiciary at scale. We have been making the judiciary itself understand this mechanism, which is a judicial expropriation when there is this impasse between the owner and the owner. occupant”. (Entrepreneur - FH).

"There is a 2017 law that introduced judicial expropriation, which is the methodology we use as one of the instruments for land regularisation at the national level. This was a whole lobby that the [name of the entrepreneur was hidden] made with the people who were writing the law. So, that opens doors […] we are changing the rules of the game”. (Analyst – FH)

"We also try to influence the formulation of laws so that our business is able to establish itself here in Brazil. I have frequent contact with several political fronts” (Entrepreneur - ACC).

"The thing is, you will be very effective as an organisation when you can influence public policy. There are ways and ways to influence public policy, and there is nothing wrong with that, as long as you do it honestly. So, both our director and I, as well as managers of many other organisations, we live from trying to influence public policy for the things that we think are right” (Founder – ACC)

When trying to pressure the institutional environment in the formulation, readjustment, or practical application of existing laws, both cases investigated seek to influence the institutional environment. These attempts aim to enable market growth for the social innovations themselves.

Support for the market growth and the entry of new participants

Another way of changing the institutional environment was identified in the ACC case from two fronts. The first was to increase the demand for the goods offered (carbon credit) for large national companies. This attempt has been made mainly from pressures for regulations to be created and to induce large companies, generators of large amounts of gases related to climate change, to adhere to the compensation proposed by the REDD mechanism offered by the ACC. According to the entrepreneur of the ACC case:

"Our project generates carbon reductions, but who pays? This is the great challenge. It needs to provoke the demand for carbon, which is linked to regulations and agreements. Much of the time is spent involved in building public policies to create this demand” (Entrepreneur - ACC)

In addition to the attempt to help expand the market, the ACC case has adopted an attitude of opening the market to new entrants. The creation of manuals, with technical information on choosing potential areas, evaluation, certification, sale, and investment of the resources received, aims to help new market entrants. The following excerpts illustrate these findings:

"The idea of preparing this guide came from the perception that, despite the importance that environmental service projects have assumed in the current scenario, there is still no reference for those who intend to carry out this type of project. […] Consider this guide a work tool. It is a tool to assist in the planning and execution of activities, which will be carried out to guarantee the maintenance and / or increase of environmental services in a specific area or region, related to storage and carbon sequestration, to reducing deforestation, the generation and preservation of the soil and its fertility, the maintenance of biodiversity, the stabilisation of the climate, among others, very diverse” (Analyst- ACC)

"We will soon release another manual to help new entrepreneurs understand all of this”. (Entrepreneur - ACC)

Thus, from the data of the investigated cases, we realise that these strategies try to influence public policies so that an environment conducive to carbon credit's commercialisation is created. Besides, at the same time, they seek to motivate and instruct other actors in the field to engage in the proposal.

Discussion and contribution to the theory

Our study concluded that the cases analysed used institutional change strategies to create a market for their services. Studies on institutional entrepreneurship already show this need when agents change the institutional environment to address their interests (Battilana et al., 2009; DiMaggio, 1988; Levy and Scully, 2007; Maguire et al., 2004). Even in the traditional innovation literature, the understanding that institutional changes are essential to legitimise and spread innovative proposals is already widely accepted (Hoogstraaten et al., 2020). However, our contributions to the literature are significant when we look at the field of social innovation.

Our finds suggested that the stage of institutional change occurred earlier than is generally expected in the literature. This finding contradicts a more consolidated understanding that institutional change, which often involves changes in legislation, regulations and general market characteristics, occurs in the last stage of the social innovation process (Belayutham et al., 2019; João-Roland and Granados, 2020; Murray et al., 2010). Other models identified in the literature do not present institutional change as one of the social innovation process phases (Bhatt and Ahmad, 2017; Bhatt and Altinay, 2013; Gasparin et al., 2021; Morais-da-Silva et al., 2016).

Our study, then, advances this field of research by including an alternative explanation of the social innovation process and its relationship with the institutional environment. So, our results may indicate that in a less developed institutional setting, the order of the process stages may be reversed, as there is a need to change the institutional environment's status quo at an earlier stage so that social innovation be expanded. This conclusion may be based on the characteristics of the emerging institutional environment in which the cases operate.

The literature recognises that the institutional environment can vary considerably depending on the region or country (Liedong et al., 2020). In an international comparison ranking involving 43 countries, Brazil ranked 38 in the assessment of the best places to be a social entrepreneur in 2019; the first positions being occupied, in order, by Canada, Australia, France, Belgium and Singapore (Thomson Reuters Foundation Pull, 2019). Thus, they operated in environments less conducive to their proposals due to the cases investigated. So, they often need to act actively in attempts to change and make the environment more welcoming for their social innovations.

Thus, our study proposes that:

Proposition 1: In emerging and less developed contexts for social innovation initiatives, attempts at institutional change may occur before the expansion stage of the process.

Proposition 2: Attempts to change the institutional environment may help create a more conducive environment for expanding social innovation initiatives.

Our data also showed that the investigated cases used different mechanisms to try to change the institutional environment. The mechanisms identified in our study involve the competition with governmental organisations, influence on the formulation of laws, and support for market growth and the entry of new participants (ACC case). The interaction with the institutional environment may be related to what the literature has named the occupation of institutional voids. The institutional voids “can be defined as the absence, weakness or failure of formal or informal institutions that support the markets” (Turker and Vural, 2017, p. 100). So, institutions do not respond to how they were expected to support markets (Mair and Marti, 2009). It is essential to emphasise that the existence of institutional voids can stimulate the action of social entrepreneurs (Phillips et al., 2015), including in an active way in the social innovation ecosystem (Agostini et al., 2016; Turker and Vural, 2017).

The institutional entrepreneurship literature helps explain the mechanisms used to change the characteristics of the institutional environment. In particular, institutional entrepreneurship uses three main intervention strategies: mobilisation of resources, such as material, financial, political and organisational, to have greater power in a specific field of action (Beckert, 1999; Suddaby and Greenwood, 2006); use of ideational discourses that can convince other actors to support them in the desired changes (Creed et al., 2002; Greenwood et al., 2002) collective actions, through alliances and collaborations, that seek to change characteristics of the institutional environment that are important for all the actors involved (Garud et al., 2002; Lawrence et al., 2002). These three strategies have been highlighted in the literature as means of intention used by institutional entrepreneurship (Hardy and Maguire, 2017; Levy and Scully, 2007).

In our findings, the mobilisation of political resources, by strengthening relations, even if conflicting with the public power, made the demands recognised by these agents. The literature explains institutional entrepreneurs seek to realise their own ambitions, which often puts them in conflict with existing institutional structures (Mutch, 2007; Pelzer et al., 2019). Innovative business models depart from existing norms and often do not obey formal institutions, laws, and historical practices (Kaplan and Tripsas, 2008), which may rise to several conflicts. In social innovation, which has one of the approaches to improving people's quality of life (Pol and Ville, 2009), there is certain complementation of the services traditionally offered by the State. In our study, the competition with the governmental organisation was highlighted as one of the mechanisms used to change the institutional environment, reconfiguring the delivery of social services in specific domains.

The close relationship with the political and legal fields also helped formulate laws that benefit the action of social innovation initiatives. Institutional entrepreneurs often seek ways to change laws and rules to accommodate their new practices and make them legitimate and accepted in the institutional environment (Pelzer et al., 2019). Institutional change often involves lobbying practices, especially when the focus is on changing formal rules (Gasbarro et al., 2018; Marshall, 2010). Our study also showed that the influence on the reformulation of laws was one of the mechanisms used by the investigated social innovation cases, which helped them to accommodate their proposals.

The last mechanism of institutional change identified in our study concerns the actions of support for the market growth and the entry of new participants. Since institutional changes are usually at the level of an organisational field (an industry), institutional entrepreneurs are considered actors who initiate changes in the dominant institutional logic and actively participate in implementing the changes (Battilana et al., 2009). Institutional change may encourage other actors from the same institutional field to enter the market based on the implemented changes. Examples of this are the studies that showed that the institutional change promoted by entrepreneurs was essential to open space for new businesses focused on clean and sustainable energy in Italy (Gasbarro et al., 2018), as well as philanthropic foundations were important to change the institutional environment in the education sector in the United States, improving the institutional environment for the other actors in the same organisational field (Quinn et al., 2014). In our findings, the main way to support market growth and the entry of new participants was the construction of manuals so that new actors may also implement social innovation initiatives in new and specific fields. The literature has also raised the formulation of manuals to guarantee the sector's growth within the performance standards (i.e. Armanios and Eesley, 2021).

Viewing the mechanisms used to change the institutional environment by the investigated cases and the discussion according to the institutional entrepreneurship literature, we may realise that some findings extrapolate the traditional institutional entrepreneurship literature considerations. Perhaps the social inclination of these proposals (Austin et al., 2012; Nicholls, 2006) and the search for the creation of social value (Murray et al., 2010; Phills et al., 2008) can help to explain this differentiated performance.

In addition to these findings and advances, our study also contributes to the progress of the social innovation literature by helping to answer how the organisations involved in this sector change the environment in which they operate. Although there was already a recognition of the importance of institutional change in the social innovation literature (Mair and Marti, 2009; Phillips et al., 2015; Turker and Vural, 2017), there were no explanations about the mechanisms they adopt for this in developing contexts. Thus, our study proposes that:

Proposition 3: social innovation initiatives may use mechanisms to change the institutional environment, including competition with governmental organisations, influence on the formulation of laws, and support for market growth and the entry of new participants.

The three propositions presented in this study developed in Brazil can be used in future studies. Investigating how social innovation proposals try to change the institutional environment and how these attempts fit into the innovation process is relevant to the advancement of studies in social innovation literature.

Conclusion

Our study sought to understand how institutional change attempts occur in the social innovation process in an emerging context. Our data revealed two main theoretical contributions that can help advance the literature. The first presents an alternative explanation of the stages of the social innovation process. Thus, the institutional change stage might be necessary for emerging contexts before the scalability or expansion social innovation stage. This necessity may occur due to the lower institutional development level in emerging contexts and the institutional void. Our second theoretical contribution demonstrates the mechanisms social innovation proposals may use to change the institutional environment. In general, the existing social innovation models reveal little about the micro-foundations of the institutional change stage.

From a managerial point of view, our study should help entrepreneurs and their teams involved in social innovation projects about the probably need for institutional changes in their activity fields. Also, the mechanisms used in the two cases presented here can serve as inspiration for entrepreneurs. Our results may also contribute to public policymakers and other agents understanding the need to help develop an environment more conducive to developing and expanding social innovations.

Regarding limitations, it is worth noting that our two cases are still seeking to change the institutional environment they operate, so it is not a “finished” process. Although the indications we found, exactly which mechanisms will produce practical effects in the field is unknown. For this reason, we prefer to use the term “attempt” for institutional change to say that these are micro-level actions used by the actors to seek some change in the status quo, which does not necessarily mean that these changes will always occur or that they will take effect. These limitations may open space for new studies that use cases with more experience, in which there is the possibility of an understanding of the complete process.

Future studies may identify other intervention strategies of social innovation organisations to change the institutional environment. These new researches can also assess the effectiveness of these strategies, considering the degree of ecosystem development. We also suggest that partnerships focused on social innovation also deserve to be studied in the context of institutional change, as there is widespread understanding in the field regarding this. Still, our data showed few mentions of this point. Finally, we also suggest that the search for opening space for new social entrepreneurs by established organisations be investigated, since this finding seems to be unprecedented in the field of institutional entrepreneurship.

Footnotes

Author's note

Indira Gandhi Bezerra-de-Sousa, State University of Piauí, Almir Benvindo Street, Aeroporto, Uruçuí, Teresina, 64.860-000, Brazil. Gelciomar Simão Justen, Federal University of Mato Grosso, 2367 Fernando Corrêa da Costa Street, Boa Esperança, Cuiabá, Mato Grosso, 78060-900, Brazil.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Brazilian research funding agency CNPq - National Council for Scientific and Technological Development (grant number 0001).

ORCID iD

Rodrigo Luiz Morais-da-Silva

Dr Rodrigo Luiz Morais-da-Silva (rodrigolms.silva@gmail.com) is a adjunct professor at the School of Management at the Federal University of Paraná (UFPR) in Brazil. Rodrigo holds his PhD in Management from the Federal University of Paraná in 2018. His main research interests are social innovation, social enterprises and partnerships. Address: School of Management, Federal University of Parana, 632 Prefeito Lothário Meissner Street, Jardim Botânico, Curitiba, Parana, Brazil – 80210-170. +55 41 3360-4465.

Professor Dr Andréa Paula Segatto (andreapsegatto@gmail.com) is a full professor at the School of Management at the Federal University of Paraná (UFPR) in Brazil and Visitor Professor at Stanford University in United States of America. Andréa holds her PhD in Management from São Paulo University (USP). Her main research interests are innovation, technology transfer and cooperation. Address: School of Management, Federal University of Parana, 632 Prefeito Lothário Meissner Street, Jardim Botânico, Curitiba, Parana, Brazil – 80210-170.

Dr Indira Gandhi Bezerra-de-Sousa (indirabs16@gmail.com) is a adjunct professor at the State University of Piauí (UESP) in Brazil. She holds her PnD in Management at Federal University of Paraná in 2022. Her main research interests are social enterprise, social innovation, knowledge transfer and impact investment funds. Address: School of Management, Federal University of Parana, 632 Prefeito Lothário Meissner Street, Jardim Botânico, Curitiba, Parana, Brazil – 80210-170.

Dr Gelciomar Simão Justen (simao.justen1984@gmail.com) is an adjunct professor at the Federal University of Mato Grosso (UFMT) in Brazil. He holds his PhD in Management from the Federal University of Paraná (UFPR) in 2021. His main research interests are social enterprise, social innovation, territorial development and sustainability. Address: School of Management, Federal University of Paraná, 632 Mayor Lothário Meissner Street, Botanical Garden, Curitiba, Paraná, Brazil – 80210-170.

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