Research project P7/42 (Research action P7)
Objectives
This project focuses on the theoretical study of social enterprises, defined as organizations which combine an entrepreneurial dynamics to provide services or goods with the primacy of their social aims. The project aims to capture and theorize the specific features of social enterprises, at the crossroads between market, state and civil society. Despite growing research in this field, much remains to be investigated and theorized concerning why and how entrepreneurs identify opportunities for social innovation and exploit them through a not-for-profit scheme (If not for profit, for what?). Moreover, several research gaps can be identified as to how social enterprises are managed and how their models are diffused (how?).
The emergence of social enterprise and brings basic research questions which this project aims to investigate
∙ Through better understanding the motivations and rationale behind the creation of social enterprises and their support by for-profit and public actors
∙ Through putting forth the business models and diffusion strategies that enable social enterprises to fulfill their roles successfully
Beyond contributions to basic research on social enterprises as specific types of organizations, this project also offers the potential of enriching existing literatures on nonprofit organizations and co-operatives (two major sub-types of social enterprise) as well as more general theoretical frameworks on organizations and on entrepreneurship. Indeed, as social enterprise represents a particularly complex and hybrid organizational model combining private (or quasi-private) property, economic activity and social aims, it challenges some central assumptions in economics and management. Through building in-depth and interdisciplinary knowledge on social enterprise and through mobilizing and questioning in a joint effort a range of theoretical frameworks used by the partners (mainly micro-economics, organizational sociology, entrepreneurship and organizational psychology), the proposal aims to enrich extant paradigms on such central concepts as the firm (organizational level) and the entrepreneurial process (identification of opportunities and value creation). Documenting the role and functioning of social enterprises may indeed contribute to the broader research on “organizational diversity” in our economies.
Description of the proposal
The proposal is structured around 6 work packages corresponding to the main knowledge gaps identified. All the work packages will examine to what extent the social enterprise model questions research in at least two ways: if not for profit, for what? and how? They thus form a coherent whole responding to a global basic research effort shared by the partners.
• Work package 1: Social innovation and social opportunities
To build a “supply-side theory”, the processes of social entrepreneurship must be better understood, particularly the identification and exploitation of social opportunities. This may help capturing how social enterprises generate social innovation, defined as “innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly developed and diffused through organizations whose primary purposes are social“ (Mulgan, 2007:8).
• Work package 2 : Financing social enterprises
Social enterprises differ from traditional businesses in the way they finance their activity. This WP aims at developing building blocks of a coherent financial theory specifically geared towards social enterprises, taking into account their “double bottom-line”, which implies financial and social performance. It will deeply explore four blocks: (1) the relationship between equity and debt (capital structure), (2) the extension of the benefits theory by linking the operational resources to the benefits, the life-cycle stage and the model of social enterprise, (3) the existence of social banks and their role in credit markets for social enterprises and, (4) the link between the types of subsidies and the global performance of social enterprise.
• Work package 3: Employment and human resource management
Social enterprises implement specific incentive mixes that orient employee efforts towards the organizational mission. Those specificities influence, for instance, the degree and the type of labor monitoring, working conditions, and labor market discrimination. Moreover, the combination of paid and unpaid labor questions the relationships between individuals as members of various social groups. These questions are addressed through mobilizing insights from labor economics, human resource management, organizational psychology and gender theories.
• Work package 4: Governance in social enterprise
Social enterprises have a number of specific governance features: search for democratic decision-making, participatory nature including possible participation of the ‘beneficiaries’, funders and other stakeholders, and as a consequence, multi-stakeholder boards in a growing number of cases. The presence of different stakeholders, including beneficiaries, in the governance structures, brings specific questions about how social enterprises interact with their environment and negotiate organizational goals and strategies. Relying on institutional and resource dependence theories, this work package aims to theorize governance models taking into account the specific practices of social enterprises
• Work package 5: Social enterprise models and institutionalization processes
First, the emergence of social enterprise models will be theorized using institutional theory. Such an exercise will address both macro, structural factors and endogeneous strategies through which social enterprises, as “institutional entrepreneurs”, participate in shaping public policies and broader institutional arrangements in a way that legitimizes their specific models (Lawrence & Suddaby 2006, Battilana et al. 2009). This sub-theme not only aims to apply institutional theory to the case of social enterprise but also to contribute to theoretical development through examining the role of social enterprises, as hybrid actors, in shaping broader field- and society-level institutional arrangements. The social enterprise models will then be further examined and compared in different countries, testing the influence of a set of cultural, economic and socio-political factors (with a special attention to public policies) through comparative country studies.
• Work package 6: Integration of findings and theoretical contributions
A last work package will be devoted to integrating the major findings of the previous packages. The idea is to examine how these findings contribute to questioning extant theories on nonprofits, on social enterprises and on organizations in general.
Methodologies
Methodologies used will rely on both quantitative (multivariate analyses, econometrics) and qualitative tools (case studies, content analyses, discourse analyses, diachronic perspective), following the respective expertise of each partner. The relevance of our theoretical proposals will be tested in five main fields where social enterprises are prominent, mainly in the Belgian (and European) context but also –when relevant– in other parts of the world: health care, personal services, microfinance, renewable energies and integration of low-skilled workers.
