Abstract

Public benefit corporations (PBC) were formed to provide a legal framework for companies seeking to address social and environmental goals in tandem with shareholder profits. Current research involving benefit corporations focuses on clarifying definitional elements as either a form of corporate social responsibility (Hiller, 2013) or as part of a typology included in hybrid organizations or social enterprises (Lee & Battilana, 2014). Some authors have argued the potential benefits of new legal form (Clark & Vranka, 2012), while others have expressed skepticism regarding sustainability of benefit corporations (Andre, 2012). Accordingly, PBCs provide an interesting context in which to evaluate the effect of organizational form to meet needs beyond those of financial stakeholders.

Specifically, our study aims to explore whether legal form enhances the ability of young ventures to acquire resources by attracting stakeholders with shared values, or present challenges due to legal obligations to attend to this larger group of stakeholders. In a survey built from unique data of PBC founders, we focus on theory building (Eisenhardt, 2009) as to how and why organizational form impacts relationship quality of both financial and non-financial stakeholders.

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