Models of social enterprises in Russia from the perspectives of the welfare triangle

In international studies is becoming increasingly popular "synthetic" approach to the definition of social enterprises on the basis of different "models" which are identified according to the different criteria and have... [ view full abstract ]

In international studies is becoming increasingly popular "synthetic" approach to the definition of social enterprises on the basis of different "models" which are identified according to the different criteria and have different historical and economic origin. It is based on the idea of pluralism of welfare (welfare pluralism), according to which social enterprises perform the function of mediation in the interaction of three main actors – State, business and communities (ICSEM, 2013; Gordon, 2015; Evers, 1995).

In Russia, the emergence of social entrepreneurship (which relate with social enterprises as a process and its organizational embodiment) goes today simultaneously with the reform of the public social service system.

The state offers to small businesses and NGOs different support mechanisms for their involvement in the provision of public social services, but they either don't want the involvement or a support doesn't fit them. Instead against the background of maintaining the predominant role of public organizations in the provision of social services in the third sector are created the hybrid organizations that complement the functions of the state in different ways. The standard mechanisms of activity of commercial and non-commercial organizations either intermix or invert.

The aim of the study is to describe the most prominent models of social enterprises in Russia and to interpret them on the basis of the welfare triangle (Gordon 2015; ICSEM 2013). For that we use two databases.

Quantitative basis of the study  is 206 social enterprises - the winners of social entrepreneurship taken from the lists of three funds specializing on the promotion of SE. We assumed that the criteria of social entrepreneurship in them would vary and proceeded from the fact that the phenomenon of social entrepreneurship in Russia is generated through the interaction of actors involved in its promotion including SE themselves. Therefore, in view of the impossibility of obtaining a formally representative sample, the list of companies received from the key actors of SE development most likely represents an actual landscape of social enterprises and the current state of their understanding. From the point of view of forms of legitimation, this situation reflects the legitimation via discourse (Teasedale, 2012) and more generally – a cognitive type of legitimation (Suchman, 1995). When analysing this list with the aim of the model identification, we used 2 main criteria – the form of ownershi of the company and the target group of customers. In addition we used a qualitative database consisting of 45 in-depth interviews with social entrepreneurs from the same list.

Data analysis is not finished yet. As preliminary findings are of interest the following observations:

- 60-70% of social enterprises are for-profit organizations, and in addition at least 15% are enterprising NGOs characterizing by minimal level of democratic procedures in decision-making

- traditional third sector organizations -  such as community organizations and charities play rather modest role in the functioning of social enterprises

- in some cases, in order to implement their functions social enterprises use at the same time 2 types of organizational forms – that of commercial and non-commercial as well as introduce some non-standard conditions into a commercial enterprise  

- many organizations heavily rely on the informal economic relations to increase flexibility and to overcome the volatility in the marketplace

- despite the predominance of commercial organizations in a long list of organizations, not all of them can be confidently attributed to the model of social business

- the role of the state in shaping different models of SE has rather indirect than direct character, which hinders the development of the model of substitution of state functions.

The Russian experience may be interesting from an international perspective in several aspects: 1) as an example of the development of social enterprises and, more generally, hybrid third sector organizations in condition of the weakness of traditional non-commercial organizations in Russia; 2) as an illustration of the development of social enterprises from scratch breaking with the historical tradition of pre-revolutionary cooperative movement or the Soviet WISEs; 3) as a version of a modern reform of the welfare state in an environment different from the Western democracy.  

References

Alter S.K. (2007) Social Enterprise Typology. Virtue Ventures LLC. Nov. 27 

Battilana, J., & Lee, M. (2014). Advancing research on hybrid
organizing: Insights from the study of social enterprises. Academy of
Management Annals, 8(1)

Gordon, M. (2015) “A Typology of Social Enterprise ‘Traditions’”, ICSEM Working Papers, No. 18, Liege: The International Comparative Social Enterprise Models (ICSEM) Project.

Hockerts K. (2015) How Hybrid Organizations Turn Antagonistic Assets into Complementarities // California Management Review vol.57, No. 3 Spring

Pestoff, V. (1998) Beyond the
Market and State: Social Enterprises and Civil Democracy in a Welfare Society,
Aldershot/Brookfield: Ashgate