Agreeableness Can Help Boost Trust in Social Enterprises

Social entrepreneurs face the unique challenge of having to establish an extremely high level of credibility and legitimacy to survive in a rapidly changing business environment. Researchers have found a specific personality trait they can leverage to secure valuable external resources and support to rise above this challenge

By Ella Chen

Social enterprises’ chief mission is focused on the social good. Their objectives can be in the form of intangible or tangible benefits to society at large, local communities, or specific groups of underprivileged people. The means toward this goal are commercial activities through sales of products and/or services.

In contrast to traditional for-profit businesses and non-profit organisations, these hybrid enterprises face the challenges of serving both commercial and charitable constituents. They therefore face the challenge of having to meet higher expectations from multiple stakeholders than the former does. Such a challenge is especially acute in a rapidly changing business and social environment.

Organisations typically need to comply with stakeholder demands to build legitimacy and secure support and resources. How do social enterprises ensure they have the optimal leadership to meet the multitude of stakeholder expectations?

“Agreeableness can help to evoke empathy and promote harmony. Being agreeable allows a social entrepreneur to facilitate and maintain positive interpersonal relationships, not only within the organisation but also beyond.”

Prof. David Ahlstrom

This quest has led to much interest in research about the ways in which social entrepreneurs legitimise their organisation’s decisions and operations through establishing trust with their stakeholders.

A team of researchers led by David Ahlstrom, Emeritus Professor at the Department of Management at The Chinese University of Hong Kong (CUHK) Business School found that social entrepreneurs’ personality traits play a crucial role in establishing their organisations’ credibility among stakeholders. The research team included Dr. Xiao Yingzhao and Prof. Bai Yanzhuang from Tianjin University, and Prof. Liu Zhen from Shandong University.

Their study, entitled Entrepreneurs’ Personality Traits and Social Enterprise: A Legitimation Perspective,  examined the impact of social entrepreneurs’ personality traits on organisational legitimacy.

The researchers found that social entrepreneurs with prosocial personality traits and behaviour are often able to acquire valuable resources and support beyond their organisational boundaries. This in turn can help the enterprises garner approval from stakeholders, enhancing their credibility and their social standing. In other words, their prosocial personality traits can be used as a valuable leverage to achieve their goals.

Benefits of Agreeableness

The focus of the study was on the personality trait of agreeableness. It involved empirical analysis of a survey of 400 social enterprises in China. The survey yielded 230 responses.

The research identified agreeableness as a key trait that can significantly influence a social enterprise’s credibility and legitimacy. Agreeableness, defined as the willingness to cooperate, be trusting, and maintain positive relationships, is considered the trait most likely to generate prosocial inclinations.

Social entrepreneurs high in agreeableness are more likely to exhibit prosocial behaviours such as inter-group cooperation, fairness, patience, and a greater sense of communal responsibility. These behaviours enable them to connect with stakeholders, including employees, customers, and business partners, in a manner that builds trust and understanding.

Building and sustaining relationships with various stakeholders is crucial for social enterprises to garner support and resources. The authors wrote in the research paper: “Agreeableness can help to evoke empathy and promote harmony. Being agreeable allows a social entrepreneur to facilitate and maintain positive interpersonal relationships, not only within the organisation but also beyond.”

“So having leaders who are agreeable goes a long way in securing support and useful resources both within and outside the enterprise,” Prof. Ahlstrom adds.

In addition, Prof. Ahlstrom says agreeableness helps foster social consensus. “When there is consensus and mutual understanding, it’s much easier for the entrepreneur to make decisions and run the business more smoothly.”

Building Legitimacy through Networks

The legitimation perspective in business suggests that organisations must comply with stakeholder demands to gain legitimacy. Consequently, agreeableness in social entrepreneurs plays a vital role in facilitating the establishment of trustworthy relationships with customers, leading to repeat business opportunities.

Furthermore, agreeableness allows social entrepreneurs to gain access to diverse societal resources and broad social capabilities through trust and mutual understanding. This access enhances a social enterprise’s social position, contributing to its legitimacy within the organisational field.

The study also shed light on the role of network centrality as an effective mechanism to establish organisational legitimacy.

Network centrality refers to an organisation’s central position in its relational network, providing access to tangible and intangible resources such as knowledge, information, and emotional support.

Agreeable entrepreneurs are attractive partners in team friendship cliques and networks. This not only enhances social enterprises’ ability to build connections with diverse stakeholders, but to maintain their central network position.

The study hypothesised that a high level of network centrality is beneficial for a social enterprise’s organisational legitimacy. By connecting and reconnecting with different network participants, a social enterprise gains a more profound understanding of the network’s diverse nature, leading to improved interactions with different stakeholders. As a result, these interactions enhance the enterprises’ legitimacy-seeking activities and contribute to overall organisational legitimacy.

Enterprise Developmental Stage

Having investigated the significance of agreeableness in enhancing a social enterprise’s legitimacy, the researchers highlighted the importance of considering the developmental stage of a social enterprise as a moderating factor.

“As social enterprises mature, the direct effect of social entrepreneurs’ agreeableness on organisational legitimacy weakens,” Prof.Ahlstrom says. “When interactions and transactions with stakeholders become more formalised, the reliance on building and sustaining social relationships lessens. Having a charismatic and agreeable business partner is thus less important when the enterprise enters a mature stage of development.”

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In conclusion, social entrepreneurs’ personality traits, particularly agreeableness, play a crucial role in enhancing organisational legitimacy. Their prosocial behaviours and the establishment of social relationships are essential for accessing resources and garnering support. The integration of agreeableness and network centrality can act as an effective mechanism for connecting social entrepreneurs’ personality traits with organisational legitimacy and social acceptance.

To maximise the impact of agreeableness, social entrepreneurs must strategically align their personal characteristics with their venture’s developmental stage. By doing so, they can optimise the effectiveness of leveraging personality traits in building and sustaining organisational credibility in the challenging landscape of social entrepreneurship.

Ultimately, understanding the relationship between social entrepreneurs’ personality traits and organisational legitimacy is vital in fostering the growth and impact of social enterprises in addressing pressing social challenges.