Case 6.

1 – Social Enterprise: A Living Management Debate

The following e-mail debate took place between Jon Griffith, Rory Ridley-Duff,
Tim Curtis and Doug Foster between 12th – 20th March 2009. The material has been
edited to remove repetition but the wording of the original e-mails has been retained.
This conversation is discussed in Chapter 6 as a means of outlining the scope of
management debates about social enterprise.

Jon Griffith, 12th March 2009.

The problem with [the idea of mixed boards as a panacea for problems of governance] for me
is that a social enterprise might be a voluntary organisation which has turned to trading, and
has an unbreakable commitment to its double-bottom line, but remains a company limited by
guarantee with an un-elected board of directors, or a registered charity with an un-elected
group of trustees, or an incorporated association with an un-elected management committee,
and no-one involved gives a flying +%@# about its democratic credentials, because that is
not what they happen to be interested in, because they don't come from the world of co-
operative politics and economics.
The assertion that SEs, qua SEs, ought to do any particular thing – whether in terms of
practice, or management, or governance, or policy - is a restriction of the third-wayist kind:
i.e. it's like saying they are the third way and must manifest the third way in everything they
do, and we cannot allow them to be first way or second way or fourth way in any respect.

This is an apparent politicisation (edgy groundbreaking SEs at the forefront of social change),
but it's really a de-politicisation, because it removes the possibility of debate between and
within SEs about what to do, and how best to do it; or, to put it slightly more fairly and
reasonably (as I should), it's a politicisation of SEs at one level (the macro - their collective
place in the economy) but a de-politicisation of SEs at the meso and micro level.
Now (as ever) please don't get me wrong: I like co-ops a lot, and I would dearly like to see
them grow towards the dizzy heights of 10% of the economy, and then maybe eventually
20% or even 50% if the country really turns upside down. But that is me as a private citizen
saying what I think ought to happen. This is a completely different thing from me as a
professional observer needing to pay attention to what is actually happening.
Jon

Rory Ridley-Duff, 13th March 2009

On the continent, the definition of a social enterprise initially depended on democratic
organisation and was later extended to cover 'non-profit' distribution of goods and services
for social reasons. The same shift happened in the UK, but in a slightly later time frame
(about 5 years behind other parts of Europe).

Implicit in Jon's argument, therefore, is something along the lines:

"...because there are many 'social enterprises' that have no interest in democracy, we should
not privilege discussion of democratic governance as a central issue in social enterprise..."

Rory Ridley-Duff, Jon Griffith, Tim Curtis and Doug Foster, 2010 Creative Commons 3.0, Attribution No Derivatives
This begs the question of how these organisations ended up being regarded as social
enterprises in the first place (i.e. how the definition was modified to include them). This is a
prime topic for both critical management research (both inside and outside the Third Sector)
and social enterprise research (inside the Third Sector). While the idea of social enterprise as
'trading for a social purpose' has currency now, it had little currency when, in 1997, Social
Enterprise London triggered this bandwagon by writing its Memorandum & Articles of
Association. Back then, democratic trading and social organisation was the assumption of all
the founder organisations. It changed quite quickly in the run up, and particularly during, the
2002 / 2003 consultations on the Community Interest Company. It is interesting to re-read
the responses in the consultation on the question of democracy. You can (literally) see the
number of organisations from outside the original social enterprise movement advocating the
position the government took afterwards. This changed the definition of social enterprise
itself (at least amongst those close to the consultation process).

Rory

Jon Griffith, 14th March 2009.

I think I have said only that there is a flaw in the argument you offer, in defence of the
position (crudely summarised) that a test of how much something is a social enterprise is how
interested they are in democratic governance. The flaw in the argument, for me, is the
evidence that many are not, or are much more interested in other things; this raises a question
for me about what kind of argument it is, because I think that you too can see the evidence
that many SEs are not that much interested in governance - so is the argument that they ought
to be? If this is the argument, then it's prescriptive. There's nothing wrong with prescription,
but it's different from description, and I think we have to be clear what kind of argument we
are offering.
Please don't tell me it's definitional, and that they aren't really social enterprises - they are
only not what you define social enterprises as being.

But I also accept that it's not your argument alone. I think lots of people share this view, that
by nature of being SEs, SEs will invariably be interested in this issue; I think that everyone
who thinks this way is mistaken, so it's definitely not a personal matter, it's a problem (in my
view) with the argument, with it involving a blurring between description and prescription.
Jon

Rory Ridley-Duff, 16th March 2009

Jon,

Are you seriously saying that we (as academics and/or practitioners) should accept any claim
by any person or organisation regarding their status as a social entrepreneur / social enterprise
without scrutinising either their reasons or the perceived legitimacy of their claim? Let's
consider one of your statements.

"Please don't tell me it's definitional, and that they aren't really social enterprises - they are
only not what you define social enterprises as being."

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I might respond to your statement (acting as a devil's advocate):

"Please don't tell me it's not definitional, and that anyone who claims they are a social
enterprise is really a social enterprise - you are simply including whatever you wish to define
as social enterprise."

If we are to study what is happening "on the ground", a statement such as yours needs to be
considered in light of a great many people establishing the legal basis of social enterprise, as
well as others seeking to establish the democratic credentials necessary for social enterprise
through quality marks, national accounting systems, etc. People are trying to limit
definitions of social enterprise. If they are doing so, it serves political or economic interests
to do so. People are trying to remove the limits of the definition and spread it. This also
serves various political or economic interests (and academics cannot be outside this). Both
trends are worthy of study and critical comment.

So, as people are judging - in every RDA, in every support agency, in every CIC regulator
application, in every quality mark application, in every social enterprise award ceremony, in
every grant/loan application from a social enterprise fund - what is/is not a social enterprise,
and what is/is not worthy of being promoted as social enterprise, the question of whether they
are/are not “democratic" in their orientation comes under constant scrutiny. Democratic
values - how they are expressed, embedded, enacted, or avoided, undermined, destroyed etc. -
is central to many of these judgement calls and decisions.

Rory

Tim Curtis, 16th March 2009.

I was struck by the BBC4 film the other night about Rough Trade records and how their
espoused values shifted and morphed through democracy, a focus on the music, a focus on
the customer and then a focus on the artists as the beneficiaries of the ethic. But, as well as
having different motivations (perhaps informed by the generation in which we engage with
SE as a movement) we may also be aware of the extent to which this is also an internal
discourse - as we develop as individuals and make sense of the movement through different
periods of our lives. When we all intersect these changing ethics with that of our colleagues,
workers and beneficiaries, we can get a sense of how woefully under-theorised 'the social' is
in social enterprise.
Tim

Doug Foster, 18th March 2009.

Hi all,

I think we can assume, i.e. 'take things for granted', for convincing reasons or none at all -
frankly I'd rather go with the former, and I suspect even postmodernists would go for a
'narrative of reasoning' even if they saw it as one amongst many.

There might indeed be a great plurality of organisational forms, but social enterprise may
'prove' to be a mere passing aberration, and in ten years we go back to talking about

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cooperatives and ethical businesses - or we find there is yet another groovy sort of
organisation that seems to have a new name (but of course has a long history of previously
unrecognised examples of this in the past). Yet such a 'discovery' might only come about
through us challenging our own and others experience of social enterprises, rather than
prizing it like the received grace of God - we call ourselves 'critics' after all.

Doug

Jon Griffith, 19th March 2009.

My argument isn't about organisational forms: it's about the hugely varied characteristics of
the whole population of things called social enterprises - what they do, why they do it, how
they do it, where they came from, how they are structured, who is in them, who they serve,
etc. (and yes, this includes what people think they should be doing, as well as what they are
actually doing, the debates which are taking place within them, between them, and about
them, and the ones that aren't).

For me, it's an uncontentious argument: that since they are as plural as root vegetables, or
bureaucracies, or this season's re-interpretations of Weber, it's important to know which ones
specifically we are talking about in order to have a sensible conversation about them, whether
it's a short casual conversation in the pub or the kind of long serious conversation entailed in
a research programme; and that it's more useful to talk about them in the context of their
industry, rather than in the context of the phenomenon of social enterprise as whole, in a
fruitless search for a shared meaning which was never there, and is never going to be there.

Jon

Doug Foster, 19th March 2009.

Hi,

Interesting. But if social enterprises are anything, then they are an organisational form or
forms. And who decides 'they' are a 'social enterprise'? The government (55, 000
apparently)? Those who set 'one' up (one what?)? Academic experts? Practitioner
experts/consultants? Anybody else who wants to jump on the bandwagon? Or perhaps we
might start by claiming that 'social enterprise' is a fiction?

And why do you suppose that confining discussion to an 'industry’ is going to make the
conversation any more 'sensible'? You seriously think there is definite agreement as to what
constitutes the 'service industry', the 'tourist industry', the 'health industry' (well why not, it's a
serious money spinner) or any other?

Doug

Rory Ridley-Duff, 19th March 2009.

I guess the question is how we approach the plurality. If the starting point is plurality, it can
be approached by expecting everything to be different, or it can be approached by seeking to
uncover the confluence of processes that lead to differences. One of Jon’s comments stood
out for me.

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“I believe I'm going to find many social enterprises that don't fit whatever the generalising
bill is, because I've spent a lot of time over the last in years being confronted by evidence of
plurality, part of my brain can't see the point in pretending the world is other than I
have found it to be so far, and life's too short to stuff a mushroom!”

It strikes me that the response to the above statement is itself fuelled by our assumptions.
Whenever I see diversity or conformity, my reaction is that diversity and conformity doesn't
happen by accident and that there must be some process (human or "natural" creating or
inhibiting diversity). For that reason, I'm always trying to understand where the diversity
comes from and goes to, and whether there is something as a "higher" (meta-theoretical) or
"more fundamental" (systemic) process that might explain it. I'll never know, for sure,
whether the patterns I see are "real" or "constructed", but because I see (or think I see)
systems at work, I assume they are there influencing the organisation of things and producing
new and interesting relationships all the time.

Rory

Tim Curtis, 20th March 2009.

This is a little like the debate that raged for 25 years in urban sociology - what is urban and
how is it different from rural? Eventually, we ended up researching urban processes (rather
than entities in their own right) and took for granted the urban. Social Enterprises are socially
enterprising through processes and people, not institutions. We needn't fret about identifying
one, as that is a positivistic view of the organisational form. What we should be interested is
the social processes of power (Foucauldian, not Marxist conception) that comprise social
enterprising.

Tim

Rory Ridley-Duff, 20th March 2009.

Tim,

Bit of a cop out that! I'm sympathetic to Foucauldian views, and process views, but there is
no fudging that those wishing to become socially enterprising have to navigate and establish
institutional forms for their activities. I think a rounded understanding of the subject needs
engagement on all these levels otherwise those who have identified the people and processes
will continually find their plans rejected because they have:

* "No company" or incorporated legal entity

* No "bank account" or "financial control"
* "No governance"

...and all the tackle that establishing and maintaining these things entail. And...
* No....anything that anyone else insists they "have" before they will support their
socially enterprising activity

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Of course, innovative individuals might find ways around all the obstacles that others put in
their way, but we need to study the obstacles as well as the ways they navigate around or
through them. And once they have navigated, we need to study if, how and whether they
institutionalise new forms of organisation, and the impact of such institutionalising (in terms
of processes and impacts on people).

Rory

Tim Curtis, 20th March 2009

Can't get away with it that easy!! And I'm surprised that I did not expect your response.

You said yourself "diversity and conformity doesn't happen by accident and that there must
be some process (human or "natural" creating or inhibiting diversity)” which prompted me to
surmise that the issue it not whether there is uniformity to be found or diversity (for that is
really just us imposing patterns on our observed reality. The issue is exploring and exposing
the microprocesses of power, knowledge (not just the Marxist view of an imposition of
power) and resistance that lead to certain forms being adopted in certain circumstances.

The subject is not rounded if we spend most of our time counting how many social
enterprises look like each other and how many look different. You want to know why they
are the way they are, and the means to investigate that is to look at the processes of being and
becoming.

Even stating "anything that anyone else insists they "have" before they will support their
socially enterprising activity" betrays an exercise of power over certain groups and their
worldviews, and there are ways of resisting and subverting those exercises of power (like
adopting a CIC structure because its fashionable, or being a plc social enterprise in order to
stick it to those who think co-ops are the only legitimate form).

Equally, some (Geoff Mulgan popularly, Weick less popularly in social movements theory)
have established that entrepreneurship need not have an institutional form. Entrepreneurship
literature is increasing concerned with intrapreneurship, where a new venture is not required
as the outcome.
Tim

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