BRINGING SOCIAL INNOVATION TO SCALE: LEVERAGING RELATIONAL CAPITAL AND RISK-TAKING BEHAVIORS OF ACTORS IN COMPLEX ECOSYSTEMS by JIMEKA J. HOLLOWAY Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy Weatherhead School of Management Designing Sustainable Systems CASE WESTERN RESERVE UNIVERSITY May, 2017 CASE WESTERN RESERVE UNIVERSITY SCHOOL OF GRADUATE STUDIES We hereby approve the thesis/dissertation of Jimeka J. Holloway Candidate for the degree of Doctor of Philosophy*. Committee Chair Richard J. Boland, Jr., Ph.D., Case Western Reserve University Committee Member Paul F. Salipante, Jr., Ph.D., Pace University Committee Member David Hammack, Ph.D., Case Western Reserve University Committee Member Roman Shermata, Ph.D., Case Western Reserve University Date of Defense November 29, 2016 *We also certify that written approval has been obtained for any proprietary material contained therein. © Jimeka J. Holloway, 2017 All rights reserved. Dedication To my loving family and dear friends who have supported me every step of the way. To my Dad, who wants me to make a difference in this world, and for his genuine love and support for me to continue my education. Most of all, to my mother, Constance Holloway, who I know would be grateful that I accomplished this endeavor that she prayed for each day. I dedicate this to God who helped me through his Holy Spirit to complete my doctoral studies. Table of Contents List of Tables ...................................................................................................................... x List of Figures .................................................................................................................... xi Abstract ............................................................................................................................ xiii CHAPTER 1: INTRODUCTION ....................................................................................... 1 Section 1: Overview ............................................................................................................ 1 Section 2: The Problem ....................................................................................................... 3 Section 3: The Key Actors and the Basic Relationships Between Them ........................... 7 Distinct Actors within the Social Innovation Ecosystem ................................................ 8 Social Enterprises ............................................................................................................ 9 Beneficiaries of Social Enterprises ............................................................................... 11 Social Impact Investors ................................................................................................. 12 Charitable Foundations ................................................................................................. 13 Governmental Entities ................................................................................................... 14 Individual Champions ................................................................................................... 14 Nonprofit Organizations ................................................................................................ 15 Intermediary Organizations ........................................................................................... 15 Section 4: Concepts Relevant to the Problems Related to the Key Actors ....................... 16 Social Innovation........................................................................................................... 16 Charitable Foundations ................................................................................................. 18 Nonprofit Organizations ................................................................................................ 18 Social Enterprises .......................................................................................................... 20 Social Impact Investments ............................................................................................ 20 Section 5: A Mixed-Methods Design to Address the Problem of Practice and Research Question ............................................................................................................ 23 A Call to Research......................................................................................................... 23 Research Design................................................................................................................ 25 Summary of Problem of Practice ...................................................................................... 26 CHAPTER 2: CONCEPTUAL DEVELOPMENT .......................................................... 27 Theoretical Framework ..................................................................................................... 27 Service Dominant Logic................................................................................................ 28 Resource-Based View of the Firm/Absorptive Capacity .................................................. 29 v Resources ...................................................................................................................... 29 Complexity .................................................................................................................... 30 Social Network Theory ................................................................................................. 32 Social Capital ................................................................................................................ 35 Ecology.......................................................................................................................... 36 Research Design and Methodology .................................................................................. 37 Overall Methodological Strategy and Research Design ............................................... 38 CHAPTER 3: BRINGING SOCIAL INNOVATION TO SCALE WITHIN URBAN COMMUNITIES: IGNITING THE ‘ENTREPRENEURIAL SPARK’ OF SOCIAL ENTERPRISES................................................................................................................. 40 Introduction ....................................................................................................................... 40 Research Question ............................................................................................................ 43 Literature Review.............................................................................................................. 44 Entrepreneurial Spark .................................................................................................... 44 Culture ........................................................................................................................... 49 Social Network .............................................................................................................. 53 Methodology ..................................................................................................................... 55 Participants & Sample Demographics........................................................................... 56 Data Collection .............................................................................................................. 57 Data Analysis ................................................................................................................ 57 Findings ......................................................................................................................... 59 Informative Prior Experiences ................................................................................... 60 Social Networks: Capitalizing on Faith, Cross-Cultural Connections, & Informal Moments ..................................................................................................... 62 Engaged Philanthropy................................................................................................ 64 Discussion ......................................................................................................................... 69 Limitations ........................................................................................................................ 77 Implications for Nonprofit Practitioners ........................................................................... 77 Implications for Future Research ...................................................................................... 78 Conclusion ........................................................................................................................ 80 CHAPTER 4: CONTRIBUTING FACTORS OF MULTI-SECTOR SOCIAL INNOVATION: RESOURCES AND CAPABILITIES OF BELOW MARKET MISSION INVESTMENTS IN THE U.S. ....................................................................... 82 vi Introduction ....................................................................................................................... 82 Theoretical Foundation ..................................................................................................... 84 Dynamic Capabilities of Foundations and Intermediary Network................................ 85 Absorptive Capacity of Investees .................................................................................. 87 Hypothesis Development .................................................................................................