What to Be (or Not to Be): Understanding Legal Structure Choices of Social Enterprises from a Resource Dependence Perspective

Latha Poonamallee
Associate Professor of Management and Social Innovation
Chair of Management Programs
Milano School of Policy, Management, and Environment
The New School

Choice of legal structures is a key decision that social enterprises make early in their lives. The range of options now includes not only the traditional for-profit and non-profit structures, but also the new hybrid structures. Viewing legal structures primarily as ‘governance mechanisms to support the mission’, the current social enterprise literature regards ‘mission’ as the normative basis for legal structure choices. Empirical work in the non-profit and social enterprise literatures, however, surfaces another salient, yet under-theorised concern driving legal structure choices, namely resources. In this paper, we aim to develop resource dependence perspectives as an alternate theoretical lens to understand legal structure choices. In this study of 14 New York based socio-tech enterprises, we uncover how, in an interplay of resource needs, autonomy and legitimacy concerns, legal structures emerge as strategic tools to attract the external resource providers that the social enterprises want to form resource relations with and avoid the ones they are wary of. Our findings contribute to advancing the notion of legal structures as a ‘vehicle for resource mobilisation’, and to lay the foundations for a resource dependent framework to examine social enterprise legal structure choices.

Dr. Latha Poonamallee is a tenured Associate Professor of Management & Social Innovation and Chair of the Faculty of Management at the Milano School of Policy, Management, and Environment & School of Undergraduate Studies, and University Fellow at The New School.

She works on two major research areas both focused on how management, organizations, and leadership can be vehicles to create a more sustainable, prosperous, just, and equitable world.

She serves as Editor in Chief of the Society of Advancement of Management Journal, a preeminent journal that has been published for over 75 years. She also received a Fulbright Scholarship to assist Botswana government, USAID, and Botswana Civil Society in developing a nation-wide social entrepreneurship ecosystem.

She is also the co-founder and Chairperson of In-Med Prognostics, a neuroscience firm that uses AI and Deep Tech to develop brain health predictive analytics. This firm has received accolades such as the Falling Walls Conference (Germany), BIRAC grant (Government of India grant), and GE Health Care’s Edison Startup Collaboration Venture.

Dr. Poonamallee received her Ph.D. in Organizational Behavior from Case Western Reserve University, M.B.A. from Pondicherry University, and B.A. and M.A. from University of Madras.