Where is the ‘social’ in social enterprise?

Len Arthur (UWIC, Cardiff ), Tom Keenoy ( University of Leicester ), Molly Scott Cato (UWIC, Cardiff ) Russell Smith (UWIC, Cardiff ).

Abstract

The paper argues that a ‘business case’ narrative and discourse is being privileged in the practice of social enterprise research to the detriment of providing conceptual and theoretical recognition of the social. It identifies a lack of engagement between the social enterprise studies and those in the area of social movement studies and radical geography. Through an exploration of some recent writings in these areas an evaluation is offered on the extent to which these may provide a way of understanding the social in social enterprise. A distinction between diachronic and synchronic social change is used to evaluate the main debates in social movement studies proposing that the concepts of ‘boundaries’ and ‘autonomous’ and ‘alternative social space’ can be useful to this task and we suggest that a new term ‘deviant mainstreaming’ helps to capture the social processes involved. Such alternative spaces however can be seen to be in ‘contained contention’ and we then explore the extent to which they could be seen as being in ‘transgressive contention’ and we suggest a new term ‘incremental radicalism’ again helps to capture the process. Possible key factors are suggested as ways of identifying these social processes within social enterprises: these can be used to identify whether the social is being sustained.

The business case

Ten or so years ago it would have seemed like an oxymoron to amalgamate the terms social and enterprise. Since that time the concept has rapidly passed from obscurity to the status of orthodoxy by - it seems - the recent embrace of all the main parties and has been embedded in the policy and administrative practice of the Department of Trade and Industry (DTI). A 2002 policy statement from the same Department called ‘Social Enterprise: a strategy for success’ promoted the Government’s vision of a ‘dynamic and sustainable social enterprise sector strengthening an inclusive and growing economy’. A more recent and widely quoted mapping report of UK social enterprises produced by that Department (2005) suggests that there are 15,000 social enterprises employing 475,000 people and generating ￡14.8 billion from trading activities. Clearly, the great majority of these enterprises have been in existence for many years, but the new concept has swept them together under the DTI definition of social enterprises being ‘… first and foremost a business … engaged in some form of trading … to support a social purpose’.

At one level it is easy to see how a conjoining of enterprise with social purpose fits closely the New Labour purpose of finding a third way that tries to reconcile the demands of market driven competition with social aims and public good benefit. The embrace has not been that easy with the notion of ownership and control associated with cooperatives, being excluded from the DTI social enterprise definition; a great reluctance to provide administrative and financial support specifically for the sector; a slowness of policy implementation – at least 4 years between conception and publication of the mapping exercise; and, more recently, the implementation of Community Interest Company (CIC) form, which is regulated top down, instead of bottom up: support has been tempered with a certain wariness and an attempt at being even handed.

Another driver helping to develop the legitimacy of social enterprise has been a number of key publications that have attempted to envision and mainstream the idea that there is not necessarily a fatal contradiction between economic success and social benefit (Leadbeater 1997; Michie 1999; Gates 1999; Mayo and Moore 2001; Pearce 2003). These publications, often rooted in a strong desire to find a way out of the neo-liberal impasse enacted by 18 years of Tory Government, have had a considerable impact and are widely quoted as source and foundational support in specialist magazines such as Social Enterprise, that have grown during the same period. A number of the authors are and have been supporters of the cooperative movement, but found that terms such as the social economy and social enterprise enabled the mainstreaming process. Finally, the economic and social theories of class have been pushed into the background by a more all embracing collection of concepts of the process and relationship between power and inequality described as forms of social and economic ‘exclusion’ (Amin et al 2002). Essentially the multiple and overlapping forms of exclusion from forms of capital (Mouzelis 1995) can be seen to give support to local and community ‘inclusion’ by a strengthening of civil society

‘…generating an inclusive associational ecosystem matched by a strong and democratic state, in which a multiplicity of independent public spheres enable equal participation in setting the rules of the game’ (Edwards 2004) p 94.

A central stress on one of the forms of capital, to the exclusion of the others, namely ‘social capital’ has been extensively used to evaluate and justify the role of social enterprises (Amin et al 2002; Fine 2001; Svendsen and Svendsun 2004).

The position that has been legitimised is one where the tension between social and enterprise aims is not just one that has to be managed, but has moved toward one that if the business activities are a success in the market it will follow that the social aims will in essence take care of themselves. This reasoning is embedded in the DTI definition of social enterprise, in the mainstreaming of social enterprise support in the normal practice of business advice and is reflected in the editorial and reporting policy of leading magazines such as Social Enterprise, where entrepreneurial success stories, business growth and advice, dominate over examples of more qualitative social impacts and outcomes. The general argument is that social aims can be achieved if organisations move ‘from grant dependency to financial self-sufficiency and, if possible, a trading profit’ (Schofield 2005) and as he goes on to point out this model is not appropriate for many voluntary and community groups and could serve to put the blame for difficulties they encounter on their own shoulders, for not showing ‘sufficient entrepreneurial spirit’. A similar criticism of the potential ‘sink or swim’ hands off approach to overcoming social exclusion is also raised by Amin et al (2002) who draw the conclusion from a survey of over 250 social enterprises across the UK that survival is very dependent upon a sympathetic support network of activists who are involved for reasons that derive from social commitment as opposed to simply financial and commercial success and this tends to be absent in the most isolated and deprived geographic areas. They argue that the Government’s policy toward social enterprise could be seen to have the consequence of allowing those in the most deprived areas to take the blame for their failure to overcome their exclusion. Moreover, the apparently useful linking of government economic objectives and social problems through the conceptual framework that has been developed through the discourse on social capital can be fundamentally questioned through a reconsideration of the sociology of power (Fine 2001).

In another but related context – workplace democracy - Johnson (2006) argues that the social and ethical values involved in democracy have a significance that is not possible to be judged simply on the grounds of the efficiency and effectiveness of a ‘business case’. He goes on to suggest that it is essentially a teoleogical and functionalist case and that the ‘ interconnection of politics, ethics, knowledge together with more consideration of the values and particularism which underpin trust in hierarchy, whence organisational democracy can best gather its rationale and legitimation’. The social enterprise narrative describing the emphasis on market success outlined here, is compatible with Johnson’s understanding of what is a business case, and his evaluation indicates that if the social side of social enterprise is too tied to a business case, then when, as they surely will, some significant social enterprise failures start to happen, the social aims and purpose will be difficult to salvage and re-legitimate: essentially the baby may go out with the bathwater.

At a less contentious level it is not surprising that once social enterprise turned toward the market, that the business case has come to dominate the discourse. The literature on business and management is vast, has an orthodoxy and international legitimacy, is well structured and apparently offers both theoretical and practical solutions. Critical management, a current within this field has developed since the early 1990s, and has produced a wealth of compelling re-evaluation of the business case drawing upon the approaches of critical realism and critical theory (Grey 2005). However, there has been a reluctance within critical management to consider alternative practice and application, although a recent dialogue may suggest a turn in this direction (Reed a,b, 2005; Contu and Willmott, 2005). Where the social is discussed within the context of social enterprise it tends toward the assertion of social values and purpose (Leadbeater 1997; Gates 1999; Pearce 2003) which serves the political and policy discourse well, but does not directly help the necessary and underpinning theoretical and research process.

An example of the gap in engagement is research work on cooperatives. Cooperatives have the longest tradition of social enterprises and have been the site of social research for at least the last 100 years (Potter 1899; Cole 1944; Bonnor 1961) with an impressive expansion between the 1960s and early 1990s. This work has hardly featured in recent social enterprise discussions and is almost hermeneutically sealed from related academic debates in the relevant areas of social movement studies and the autonomist discussion in radical human geography. International literature searches for works relating social movements with cooperatives, results in barely a handful of references and for similar searches in relation to social enterprise the results are even less. It appears then that it would be useful, in taking the theoretical, research and consequent application of the role of the social in social enterprise forward to explore if it is worth bridging this gap. It is hoped that this paper will help to make a contribution to this process by starting to review the key debates in social movement studies and those of radical geography with the aim of providing some insight into the extent that they aid an understanding of the ‘social’ in this context. Some reference will also be made to our research in this area.

Social movement studies

This is not the place for a detailed introduction to this academic field. Works such as those by Della Porta and Diani (1999); Crossley (2002); and Buechler (1999) ably fulfil this role. What these and more specific works in the field indicate - as is to be expected - is that theoretically and conceptually defining and pinning down the mechanisms involved in social movements is itself a contentious area. It is, however, relatively safe to suggest that there are two traditions to the social movement discourse within this field: between resource mobilisation theory (RMT) and that which relates to new social movement (NSM). It would be wrong to suggest that the terms can be used assuming that there are clear boundaries around these discourses and that there is little useful dialogue; the contrary is the case. Buechler (op cit) in particular has made a good attempt at pulling together the main themes and suggesting a synthesis. NSM approaches have also been criticised successfully through evidence that indicates that the type of movements it seeks to describe are not in fact ‘new’, but have traditions and features that stretch back into industrialisation. Again the introductory texts referenced here, offer a thorough guide to this debate. However, as suggested in a recent review of new social movement publications (Ryan 2006) despite the criticism it is difficult to move away from the term NSM and it will be retained for the purposes of this paper.

This paper is suggesting that the discourse between RMT and NSM is particularly useful to explore in relation to the potential usefulness of social movement studies to understanding the social in social enterprise. In other papers [Arthur et al 2004 a&b] we have explored this discourse and have argued that NSM approaches enable an understanding of social movements as different and alternative social space, offering a more relevant epistemology for social movements such as social enterprises. In the same context RMT approaches tend – as the phrase suggests – to privilege collective mobilisation within economic and political contexts. This has been characterised as stressing the why of a social movement as opposed to the how. One example of the consequences of the difference revolves around the issue of contention (Macadam et al 2001). Social enterprises such as cooperatives can be seen as either being in ‘abeyance’ (Bagguley 2002) or as ‘contained contention’ (Macadam op cit) as their ability to effectively challenge wider social power and domination is effectively restricted by the self limitation of the boundaries of their social space. This is comes close to the ‘islands of socialism’ type argument, or that social enterprises face real difficulties in preventing a process of degeneration, which they cannot escape from as they do not have the ability to mobilise on a broader basis. In relation to cooperatives this case was most effectively put by Mellor et al (1988).

The problem of ‘contained contention’ raised by RMT for a social movement that is seeking wider social change is a real challenge that has an evidence base in the history and experience of the cooperative movement. Macadam et al (op cit) propose that that ‘contained contention’ can be contrasted with ‘transgressive contention’ where social movements do offer a wider challenge. They propose a number of indicators that would mark such a transgression. This terminology, in turn, provides a useful way of engaging in the epistemological discourse in a way that is relevant to social enterprise. What social movement space can appear to be contained from the RMT perspective, from that of NSM perspective can be seen to have transgressive impacts and that it is in this area that the discourse has most value for an understanding of social enterprise.