Participatory Governance in Social Enterprise

Paper emphasizes the importance of participative governance in social enterprise. It argues that social enterprise must be analyzed through a multi-dimensional perspective. Whereas the EMES approach is based on three... [ view full abstract ]

Paper emphasizes the importance of participative governance in social enterprise. It argues that social enterprise must be analyzed through a multi-dimensional perspective. Whereas the EMES approach is based on three dimensions emphasizing the social, economic and political dimension, rather than a single one, many Anglo-American definitions tend to use a one-dimensional spectrum framework (Defourny, Hulgård, Pestoff, 2014; Young & Lecy, 2014). Although many approaches from the outset claim to be cross-sectoral and multi-dimensional scholars often end up analyzing social enterprise and social entrepreneurship along a one dimensional spectrum. Accordingly, social enterprise is often seen as a simple phenomenon that can be arranged along a continuum, ranging from economic to social, or from philanthropy to entrepreneurial where more of one means less of the other. Alternatively, a “unified theory”, based on key elements from a single academic discipline, is proposed; but it fails to acknowledge the multi-disciplinary nature of social enterprise. The multi-dimensional approach of EMES combines economic, social and political elements and, therefore, can more readily promote a truly multi-disciplinary understanding of this complex phenomenon. However, scholars inspired by the EMES approach need to devote greater attention to exploring the interactive and interrelated nature of these three dimensions of social enterprise, especially the governance dimension. The participatory governance dimension is the category that distinguishes social enterprise from CSR and corporate philanthropy activities of large multinational companies and social responsibility performed by SMEs and other agents of social cohesion. The paper argues the necessity of going beyond the simple zero-sum perception of a continuum ranging from purely economic to purely social pursuits. The cross-sectoral, multidimensional perspective can be effectively used to distinguish social enterprises from advocacy organizations and charities as well as firms aiming to promote their sales strategies by using CSR or that support corporate philanthropy. Particularly two shortcomings in the theoretical literature of social enterprise will be addressed. The first concerns the need to specify the governance dimension in greater detail. It is clearly a political criterion related to democracy and democratic participation by members and/or clients and citizens served by a social enterprise. Earlier, scholars affiliated with EMES often spoke of “a decision-making power not based on capital ownership”. Yet, this is a far cry from participatory governance based on democratic decision-making (Pestoff, 2009). The latter needs to be more clearly stated and further research is needed in this area to specify the governance structures and democratic nature of social enterprises. Second, it was argued herein that these three dimensions are interactive and tend to reinforce each other. Taken together, they can provide a measure of the sustainability of a social enterprise and help guard against isomorphic tendencies. If one or more of these criteria is missing we should, therefore, expect that a given enterprise will be less sustainable as a social enterprise and more open or subject to isomorphic tendencies. Thus, the additive or interactive nature of the three dimensions should be studied in greater detail.

References
Defourny, J., L. Hulgård and V. Pestoff (eds.), (2014), Social Enterprise and the Third Sector – Changing European Landscapes in a Comparative Perspective. New York: Routledge.
Defourny, J. and Nyssens, M. (2012), “Conceptions of Social Enterprises in Europe: A Comparative Perspective with the United States”, in B. Gidon and Y. Hasenfeld (eds.) Social Enterprises: An Organizational Perspective. New York: Palgrave-Macmillian.
Nyssens, M. (2014,), “European work integration social enterprises: between social innovation and isomorphism” in J. Defourny , L. Hulgård, and V. Pestoff (eds.), Social Enterprise and the Third Sector – Changing European Landscapes in a Comparative Perspective. New York: Routledge.
Pestoff, V. (2009), Towards a Paradigm of Democratic Participation: Citizen Participation and Co-Production of Personal Social Services in Sweden, Annals of Public & Cooperative Economics, v. 80/2.
Pestoff, V. (2014) The role of Participatory Governance in the EMES Approach to Social Enterprise; Journal of Entrepreneurial and Organizational Diversity.
Ridley-Duff, R. & Bull, M. (2011) Understanding Social Enterprise, London: Sage Publications.
Teasdale, S. (2010), “How Can Social Enterprise Address Disadvantage? Evidence from an inner city community”, Journal of Nonprofit & Public Sector Marketing, 22.
Young, D. and Lecy, J. (2014), “Defining the Universe of Social Enterprise: Competing Metaphors”, paper presented at 4th EMES International Research Conference on Social Enterprise; Voluntas 25.