In this paper, we shed light on the question of how resource providers influence governance settings of social enterprises in Germany. In particular, we aim to understand who the resource providers are, what the nature of the... [ view full abstract ]
In this paper, we shed light on the question of how resource providers influence governance settings of social enterprises in Germany. In particular, we aim to understand who the resource providers are, what the nature of the resources that they provide to the social enterprises is and if and how they affect the governance of social enterprises.
While there has been much discussion about the tension between social and commercial purposes in social enterprises (Battilana et al., 2012; Mair and Marti, 2006; Pache and Santos, 2013) and the resulting risk of mission drift (Ebrahim et al., 2014; Spear et al., 2009), governance has only recently been identified as a mechanism that allows organizations to cater to logics that different stakeholders draw on (Battilana & Lee, 2014; Jay, 2013; Mair et al, 2014; Pache & Santos, 2013). Governance is subject to a multitude of external and internal influences (Anheier, 2013, 2014; Ebrahim, 2007; Ostrower and Stone, 2006, 2010) and resource providers are one of the main categories of stakeholders that social enterprises are accountable to. More attention given to the way in which they affect the governance of social enterprises can give further insight to the particularities of these organizations.
The better understanding of the mechanisms through which these providers affect governance of social enterprises is of both practical and theoretical importance. Practically, social enterprises need to be able to navigate an environment and field of practice that is inchoate and characterized by competing demands and principles. Appropriate governance mechanisms play an important role in steering such organizations and enabling them to achieve their objectives.
Theoretically, the paper connects different theoretical strands on resources with an interactionist perspective that emphasizes the importance of negotiation processes and the social dynamics between resource providers and social enterprises. We will look into three main schools of thought discussing resources: organizational theory and in particular resource-dependence theory that also incorporates power aspects (Pfeffer and Salancik, 1974), social movement theory (McCarthy and Zald, 1977; Edwards and McCarthy, 2003) and the strategic management literature with its approach to resources as competitive advantage (Barney, 1991) and as the basis for why firms exist (Penrose, 1995). We relate these strands of research to an interactionist tradition applied to inter-organizational negotiation processes (Strauss, 1978; Barley, 2008), and attempt to introduce the analytical and theoretical focus on resources to institutional theory.
From a methodological perspective, the paper is based on inductive analysis drawing on qualitative data from three in depth case studies about social enterprises which adopt different legal forms and different arrangements of their commercial activities. This is also reflected in diverse relationships that the social enterprises develop with their resource providers, as well as in different governance mechanisms they employ. The analysis goes beyond economic resources and accounts for how other types of resources such as moral, cultural, social organizational and human resources (Edwards and McCarthy, 2003) provided by the organizations’ environment influence the development of governance.
This paper contributes to a better understanding of organizational governance through research on how the interactions between social enterprises and various resource providers shape governance mechanisms. By drawing on the main patterns identifiable in the three cases and connecting them with the insights of the three schools on resources, we pinpoint to mechanisms underlying the relation between governance and resources for social enterprises.
Keywords: organizational governance, resources, interactionism, social enterprises, mechanism
Ioan__Alexandra_EMES_No_strings_attached.pdf 