Experience the practice: Understanding Social Enterprise Theory And Practice
Make sure that: Understanding Social Enterprise Theory And Practice:
This introductory article attempts to answer questions for:
1. Those in the private sector wondering if social enterprises are a threat or an opportunity for them (and how they might alter their own practice to remain competitive).
2. Those in the voluntary sector trying to work out their medium/long-term subsequent (whether they should engage or resist the notion of social enterprise).
3. Those in the public sector being asked to develop, column or commission work from social enterprises.
4. Those who self-define as fragment of the social enterprise sector, wondering how to understand themselves and make apparent the appraisal of their approach to others.
In recent years, a newfangled expression - social enterprise - has been promoted throughout the world (Borzaga and Defourny, 2001). The problems surrounding its meaning can be explored by reviewing the contexts in which the name is now achieving recognition. A national economy can been conceptualised as having three sectors (Billis, 1993; Pearce, 2003). Firstly, there is an economy that supports the state, a public / state sector comprising state institutions as fit as publicly owned and funded organisations. Secondly, there is a private economy that co-exists and competes with the state: it is comprised of businesses that enable people to earn loot and make a living. Thirdly, there is a sector with organisations established by tribe on a voluntary basis to pursue social, charitable and community goals.
The problem with a three-sector analysis of the economy is that it tends to marginalise organisations that transgress the boundaries of these commanding definitions. For example, co-operative enterprises (owned by employees, producers or consumers) cross the boundary between the private and voluntary sectors (Oakeshott, 1990). They regularly chalk up a social or community goal, but are usually set up to negotiate and distribute social and financial benefits equitably rather than prioritise the social and financial goals of the founders (Ridley-Duff, 2002). In addition, they frequently adopt the democratic practices of the state sector by having elections for senior positions and assemblies of people who can directly third degree executive authority.
The Emergence of the Third Sector
The continued evolution and up of co-operative forms of enterprise, and 'mutual help' as a commercial principle led to the emergence of a au courant title in the early 1990s - Third Sector. This spell covers more than voluntary bodies and charities to combine mutual organisations (e.g. building societies), social firms and producer, marketing and consumer co-operatives (descry OFT, 2008). One social value that pervades the entire Third Sector is a concern that modern private and public sector management principles have contributed to the social exclusion of disadvantaged groups and vulnerable individuals. For some in the sector, the goal is to address (and find alternatives to) powerful political and financial interests that disempower citizens (Morrison, 1991; EAO, 2008). various Third Sector organisations, therefore, share a common mark of reducing social exclusion. They may perform this in a mixture of ways: by providing services expanded cheaply to disadvantaged groups; by using collective bargaining power to negotiate access to scarce or expensive resources; by organising themselves in a style that enfranchises and empowers several members (and gives them a collective political vocalization); by adopting traditional approaches that redistribute surplus assets to disadvantaged groups nailed down charitable practices and organisations.
The identification and extension of the Third Sector has been accelerated by changes in the public sector. Since the early 1980s, there has been a shift away from welfare completed state institutions and increased use of agencies and contractors (Chandler, 2008). The concept of inexperienced Public Management underpins a commercialisation agenda (attempts by government to knock out greater use of markets and private sector thinking in public service delivery to 'save' finances). Accompanying this is the contentious belief that vocation practices and managerial solutions will straighten out the 'performance' of both the public and voluntary sectors (Paton, 2006; Chandler, 2008). disposed that many in the Third Sector regard private and public sector management principles as the motivation of social exclusion, it is no surprise that there is resistance to the idea that the twin techniques can solve contemporary social problems.
Nevertheless, it is this thinking that drives change in the UK national Health Service (NHS). As in other parts of the world, the NHS exemplifies the trend towards a "contracting culture" in which grants and state funding are replaced by commercial contracts for service delivery. So, in recent years, the boundaries between the private and public sector (in term of mart thinking and managerial practices) hold started to blur traditional distinctions between particular sectors of the economy (Bull, 2006, 2007). Secondly, the emergence of radical business alternatives with a well-founded social orientation, democratic organisation, and certain attitude to profitable trading has led to a unusual language that describes relationships and organisation forms that bridge the boundaries between sectors (Seanor, Bull and Ridley-Duff, 2007).
The Emergence of Social Enterprise
In the behind 1990s, as a director of Computercraft Ltd, Rory played a small role in discussions to place a new business buttress agency. Around the table were medium and trading organisations from the co-operative sector (ICOM, Poptel and Computercraft) and representatives from public sector training and enterprise councils (TECs). All the parties were looking for an idea (and autograph) that captured the goals for a unused sustentation agency. They decided on the epithet Social Enterprise London. Poptel (a phone co-operative) and Computercraft (an IT co-operative) provided political stake and organisational know-how. The TECs and ICOM provided the same, plus assets and funding streams that enabled Social Enterprise London to lodge itself (SEL, 2008).
Whether this is the first organisation to systematically use and promote the period 'social enterprise' throughout the UK is unclear, but the role of Social Enterprise London in helping to bring the thought (and language) to public consciousness is not in query. It helped to plant the first undergraduate Social Enterprise degree courses at the University of East London (UEL, 2008) as robust as the first Social Enterprise memento that is now owned and published by Emerald Publishing (JMU, 2008). Its first Chief Executive (Jonathan Bland) went on to head the sector's leading political organisation, the Social Enterprise Coalition.
As a result of their (and others) agency, "social enterprise" has started to spread throughout our culture. The appeal of the term across the political spectrum is not onliest the brain why many latest relationships are being forged, but further the reason for confusion and competition over its worth and nature. By 2008, the term "social enterprise" had been appropriated by (and applied to) four distinct groups:
A - Charities and voluntary groups that are embracing a 'contracting culture' by tendering for contracts.
B - Charities and voluntary groups that institute trading operations to generate income for their social missions.
C - Co-operatives / social firms that tackle social exclusion by adopting 'bottom-up' and pluralist approaches to governance and human resource management.D - Businesses that invest or share their surpluses in a 'public interest' or 'fair trade' enterprise.
Three of these contexts (A, B and C) are typically linked to developments in the Third Sector (community businesses, social firms, voluntary groups, charities, co-operatives, credit unions and mutual societies). The last of these (D) is increasingly linked to two other developments. Firstly, there is new Public Management that seeks to reverse the post-WW2 policy regarding the state's role in the delivery of education, health and social services. Secondly, there are private sector led corporate social contract initiatives that create partnerships and joint projects involving stakeholders from expanded than one sector (BITC, 2008).
Confusion and Competition
As a result, the term 'social enterprise' has become highly contested. Advocates for each of these groups may, or may not, recognise the other parties as legitimate social enterprises. This is experienced most sharply when organisations trading for a social purpose, or diagnostic social entrepreneurs, are rejected by social enterprise support agencies on the grounds that they do not organise their activities in a sufficiently transparent way (i.e. do not adopt the charity model), or are trading too much with commercial organisations for 'private' take (i.e. using too many private business techniques).
As a shot on ice these conceptual difficulties, it is accessible to examine how theories of social enterprise are grouped into two competing perspectives (Seanor, Bull and Ridley-Duff, 2007). Firstly, there are those that conceive social enterprises as trading organisations sitting in the middle of a continuum between the pursuit of a social mission (charitable) and trading in a market (private). The issue here (for those supporting their development) is whether they are sufficiently social and charitable in their organisation and trading purposes.
Another perspective, however, breaks out of this linear mode of thinking and views social enterprise as a cross-sector trading organisation or animation (Morgan, 2008) capable of rebuilding and developing social capital where this has been depleted by contemporary political and economic thinking (Laville and Nyssens, 2001). As such it emerges in the boundaries between the public, private and voluntary sectors to inscription the shortcomings of each (Nyssens, 2006; Ridley-Duff, 2008). Holding these organisations up to the norms and 'best practice' of charitable, private or public enterprise at best obscures, at worst devalues, their potential. It not only creates a mindset incapable of recognising their innovative approach, but also has the potential to stifle it. For this reason, the criteria used to determine what is and is not "social enterprise" will remain a key policy debate for as long as different relevance groups compete for the resources allocated to the sector.
Social enterprise is often expressed as an nonpareil type: a multi-stakeholder co-operative or charitable business with a clear social mission, inclusive system of governance and 'social' ownership. The goal is often, but not always, to erode distinctions between 'governors' and 'governed' ('directors' and 'employees' / 'trustees' and 'staff') in order to cumulation responsiveness and democratic accountability both internally and externally. At the same time, there is a renewed emphasis on trading strength in order to conformation resources and impact positively on the lives of parties affected by the enterprise. In this guise, social enterprise moves beyond another model of charity in which wealthy philanthropists or concerned individuals exertion their wealth, time, commitment and business experience to solve social problems (Nicholls, 2006). It becomes an ideology for proactively nurturing wealth creation in a variation of forms by groups of mankind committed to social inclusion, and who insert democratic principles in their management practices, service delivery and product designs (Ridley-Duff, 2008; SEC, 2008).
Social enterprise is a manifold discourse, embracing the language, concepts and practices created by:
- Enterprises that bridge the boundaries between the private and voluntary sectors (e.g. trading charities and mutual societies).
- Enterprises that bridge the boundaries between the private and government sectors (e.g. housing associations and partnerships in the Health Sector).
- Enterprises that bridge the boundaries between government and voluntary sectors (e.g. enterprise / employment means services provided under contract).
- Enterprises that internalise a social orientation, democratic governance and entrepreneurial trading (e.g. co-operatives / employee-owned / co-owned businesses).
In near work, Rory Ridley-Duff, Mike Bull and Pam Seanor will explore how this heterogeneity has come about, and how practitioners can apply emerging knowledge to the practice of social enterprise. Focussed on the UK, but delineation extensively on international examples and position studies to illustrate theory, their likely moil will compare and contrast perspectives on social enterprise emerging amongst practitioners, consultants, academics and policy makers.
AcknowledgementThis article was developed from material in a book proposal approved by the shrewd editorial board in march 2008. The authors pleasure to thank learned Publications for agreeing to the reproduction of material in an article. understanding Social Enterprise: Theory and Practice will be published by judicious Publications in early 2010 (pre-orders from late 2009) to pillar the development of professional, undergraduate and postgraduate curriculum in the university and business support sector.

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