How do Social Enterprises Build Trust?

Abstract

This study investigates the intricate process by which social enterprises build trust, focusing specifically on the Bottom of the Pyramid (BoP) in India—a context defined by socio-economic marginalization and pervasive trust deficits. Trust is essential for social enterprises to embed themselves within communities and foster sustainable operations. The research examines how trust-building serves as a linchpin for developing sharing economy models and achieving lasting social impact. India, as a low-trust society, offers a compelling case study, with less than 20% of individuals reporting trust in one another. Adopting a qualitative methodology grounded in the Gioia framework, the research examines multiple cases of social enterprises operating in BoP environments. These enterprises face unique challenges, including poverty, limited resources, infrastructural deficits, and weak institutional frameworks. The analysis identifies key dimensions of trust-building, such as leadership characteristics, the role of social capital, and the influence of institutional and cultural contexts. It highlights the transformational leadership qualities of social entrepreneurs, who simultaneously inspire, innovate, and create systemic change. The study proposes a four-step framework for trust-building, emphasizing initial trust development, consistent ethical behavior, collaborative engagement with stakeholders, and the creation of measurable socio-economic benefits. The findings underline the importance of relational and institutional trust for overcoming systemic barriers and fostering cooperation among marginalized populations. By addressing trust deficits, social enterprises can catalyze the adoption of sharing economy practices, thereby enhancing financial inclusion, community cohesion, and resource-sharing in BoP contexts. This research contributes to the academic discourse on social entrepreneurship by bridging the gaps in understanding trust dynamics in resource-constrained environments. It offers actionable insights for policymakers, practitioners, and academics aiming to foster trust and advance social and economic equity in marginalized communities.