Knowing what Social Enterprises know

Social Enterprises (SEs) are businesses that trade to tackle social problems, and to improve communities, people’s life chances, and the environment (Social Enterprise UK, 2013). The impact of these organisations has... [ view full abstract ]

Social Enterprises (SEs) are businesses that trade to tackle social problems, and to improve communities, people’s life chances, and the environment (Social Enterprise UK, 2013). The impact of these organisations has significantly increased in recent years, with 70,000 SEs in the UK contributing at least £18.5 billion to the UK economy and employing almost a million people (based upon 2012 Small Business Survey, 2013), with 38% of SEs concentrated in the most deprived communities (State of Social Enterprise Survey, 2013). Consequently, these organisations are attracting the attention of governments and private organisations alike, as a response to mitigate current failures in the public, private and non-profit sectors. However, there is still a lack of empirical knowledge about how these organisations operate, perform, innovate and scale up (Haugh, 2005; Muñoz, 2010; Peattie & Morley, 2008; Robinson, Mair, & Hockerts, 2009; Shah, 2009). This results in an increasing need for more research and empirical evidence that describe and explain the idiosyncratic characteristics of SEs, and explore different strategies to maximise their social and environmental impact.

The strategy I am exploring in this research is the development of Knowledge Management Capabilities (KMCs). This strategy is based on the understanding that, under the growing pressures of complexity and globalisation, enterprises that effectively capture organisational knowledge and distribute within their operations, production and services, have a strategic advantage over their competitors (Drucker, 1991; Kogut & Zander, 1992; Quinn, 1992). Developing adequate capabilities to manage knowledge is therefore important and has resulted in considerable empirical and theoretical research studying how organisations can develop Knowledge Management Capabilities (KMCs) to obtain positive outcomes (Gold, Malhotra, & Segars, 2001; Lee & Choi, 2003; Leonard-Barton, 1995; Mills & Smith, 2011). This research has been mainly undertaken within large, for-profit organisations, where resources and competitive conditions can trigger the use of Knowledge Management (KM). However, I concur with other researchers that there are additional sectors and organisational types, or sizes, that could also develop these capabilities and improve their organisational outcomes, such as small businesses, Social Economy enterprises, and more specifically SEs (Hume & Hume, 2008; Ruiz-Mercader, Meroño-Cerdan, & Sabater-Sánchez, 2006).

In order to obtain more theoretical and empirical understanding of how SEs can develop KMCs, this papers explores what SEs currently know and the activities followed to manage that knowledge. Four knowledge activities are accessed, acquisition, conversion, application and protection, with a mixed methods study, consisting of a quantitative survey with 393 responses from owners and senior members of SEs in UK, and 21 interviews to survey respondents.

The study demonstrates that SEs knowledge varied from completely tacit knowledge that is kept ‘in our directors’ heads’ or in the ‘collective consciousness’, to completely explicit knowledge that is kept in shared servers and datasets. The type of activities described by participants suggest that SEs are mainly acquiring knowledge, and not necessarily converting, applying and protecting it. Moreover, it was confirmed that SEs did not follow the formal and recognised practices of KM. Instead, they developed more informal activities that support the management of knowledge but are not visualised as such. This can imply that, as was found in SMEs and NGOs (Desouza and Awazu, 2006; Hume and Hume, 2008; Hutchinson and Quintas, 2008; Kong, 2008), SEs are using KM more at an operational level, rather than at strategic and tactical levels of the organisation.

The findings from this research, specifically the evidence of SEs' type of knowledge required or managed, may prove useful not only to SEs to improve their practices, but also to decision-makers and managers in organisations supporting SEs when defining programmes and proposals for enhancing and supporting the sector.