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Eight paradoxes of the social enterprise research agenda

Ken Peattie and Adrian Morley
ESRC Centre for Business Relationships, Accountability, Sustainability and Society, Cardiff University, Cardiff, UK
Abstract
Purpose This paper summarises key issues arising from a comprehensive research monograph and accompanying discussion paper on social enterprise that reviewed over 150 sources. It aims to provide insight into the future development of the social enterprise research agenda, and how to attract scholars new to the eld to contribute to it. Design/methodology/approach The paper seeks to identify and address some of the difculties faced by social enterprise researchers, in terms of dening their eld, overcoming institutional pressures that may deter scholars from tackling the social enterprise research agenda and in dealing with some of its complexities. Findings In developing the monograph, two key themes were diversity and distinctiveness. Social enterprise is a form of business that is distinctly different to conventional commercial enterprise and that has an extraordinary diversity in organisational form, legal structure, purpose, culture, scale and scope. There are also a number of paradoxical elements to the research agenda for social enterprises arising from their hybrid nature. Research limitations/implications These ndings create many challenges for researchers, practitioners and policy-makers, not least in terms of dening social enterprises consistently, and also in terms of understanding what makes them different to commercial enterprises and what the implications of those differences are. Originality/value The insights provided by this discussion should help to resolve and explain some of the debates and conceptual and practical difculties that have hampered the development of the social enterprise research agenda. Keywords Business enterprise, Corporate social responsibility, Enterprise economics, Research Paper type General review

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Received May 2008 Accepted May 2008

1. Introduction During 2007, as part of the consultation process in the commissioning of a new Third Sector research centre, a seminar series was organised by the social enterprise coalition (SEC) and the ESRC (one of the new Centres funders). A research monograph and accompanying discussion paper (Peattie and Morley, 2008a, b) were also commissioned to review the current state of research into social enterprise (SE[1]), and to consider the agenda that such a new centre might address. The BRASS Research Centre at Cardiff was asked to develop this monograph for two reasons: (1) as an ESRC Research Centre tackling an emerging area (in their case, business sustainability and corporate social responsibility), it had experience of the challenges involved in establishing a new centre and its research agenda; and (2) it had recently conducted several projects with a focus on SE.

Social Enterprise Journal Vol. 4 No. 2, 2008 pp. 91-107 q Emerald Group Publishing Limited 1750-8614 DOI 10.1108/17508610810901995

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The authors accepted the monograph commission, partly because BRASS had conducted a SE literature review during 2005, within a project developing sustainability performance indicators for SEs. They would have accepted it rather less casually had they realised the extent to which the SE literature had expanded during 2006 and 2007! The nal monograph ran to forty pages and summarised ndings from more than 150 sources. It also beneted from insights generated during the research seminars and from the suggestions of a range of expert reviewers that drafts were circulated to, and who the authors would like to express their gratitude to. The monograph focussed mostly on UK research and on SEs as organisations as the main level of analysis. It did not seek to give equal attention to social entrepreneurship and social entrepreneurs at a more micro level (for a comprehensive discussion see Nicholls, 2006; Mair et al., 2006; and Perrini, 2007), or to the social economy or Third Sector at a more macro level (Evers and Laville, 2004). This paper seeks to extract some of the key issues that emerged whilst attempting to develop a holistic and systematic review of the existing research literature concerning SE. It tries to avoid presenting just a summary of the monograph, since that will be widely available online, and the authors would encourage those who would like to learn more to consult it. Instead this paper seeks to explore why, when SEs are a form of business (one of the most researched phenomena on the planet), they are often signicantly different, and particularly challenging, to research, understand, develop and manage. 2. Background: the state of research into social enterprise Alter (2006) highlights as paradoxical the contrast between SE as a relatively under-developed eld of knowledge and thought, and yet as an area of practice with vast potential that is experiencing an explosion in practitioner numbers. The exact scale and scope of SEs contribution to economies and societies worldwide is difcult to delineate and measure accurately, but there seems to be universal agreement that it has grown signicantly. Commonly quoted gures based on the UK Governments annual Small Business Survey in 2005 suggested that there could be as many as 55,000 UK SEs (equating to 5 per cent of businesses) turning over 27 billion. The economic, social and political value of SEs is reected in increasing interest within the public policy-making arena, and underlined by increasing public investment into promoting and supporting them. Despite this, they remain an under-researched phenomenon, particularly if compared to the business mainstream. Desa (2007), searched the seven top-ranked academic management and business journals from 1985 to 2006, and found no articles on either social enterprise or social entrepreneurship. The situation is gradually improving, with an increase in practical mapping exercises aiming to better understand the scale, scope, distribution and nature of SEs and growing academic interest in the eld. Several distinct types of research contribution can be identied. 2.1 Over-arching reviews of the eld Some major edited collections have been published recently (Nyssens, 2006), along with other wide-ranging reviews such as Alters (2006) 100 page review which seeks to create a unied classication system and understanding of the eld, based mainly on experience from Latin America; or the review by Jones et al. (2007) covering 111 SE orientated documents (from a Scottish policy perspective) structured around ve key dimensions of the SE literature including denitions, regulation, policy, support and investment.

2.2 Regional studies In addition to the report by Jones et al., there have been several studies investigating SE with a regional focus. Examples include Gordons (2006) research in South Yorkshire, the 2002 Social Economy Network/Welsh Development Agency review for Wales (Adamson, 2003), or Lloyds (2003) review across the English RDAs, Wales, Scotland and Northern Ireland. Borgaza and Defourny (2001) also provided a review of SE across Europe which revealed much about its geographical diversity. 2.3 SE sub-type reviews There is a growing, and in some elds long-established, research literature concerning specic forms of SE such as FairTrade organizations, credit unions or cooperatives (and for reasons of space these sub-type reviews were not generally included within the monograph). A second amongst the paradoxical dimensions of SE research that this paper highlights, is that SE is unusual in being a business discipline in which several of its sub-disciplines are signicantly more mature and extensive than the over-arching parent discipline. A crude proxy measure to demonstrate this comes from submitting the terms Fair Trade and Co-operatives into the Google Scholar search engine, which return four and ve times as many studies, respectively, as a similar search conducted on Social Enterprise. 2.4 Key issue studies A growing number of studies look at specic issues relating to SEs, and the monograph brought together key ndings and future research needs from a number of these, including studies on: . governance, particularly in terms of competing stewardship and stakeholder based approaches (Mason et al., 2007; Low, 2006); . nancing, particularly the challenges ses face in accessing funding and their need for new forms of patient capital (Brown and Murphy, 2003; Perrini and Marino, 2006); . factors associated with se success or acting as barriers to it (Sharir and Lerner, 2006); . relationships with the public sector (Chapman et al., 2007); . external business support services for SE (Hines, 2006); . marketing, particularly some of the difculties SEs tend to have in marketing relating to their understanding of pricing dynamics and the need to be competitive in packaging and labelling quality and information provision for customers (Shaw, 2004; Bird and Aplin, 2007); and . human resource management, particularly the challenge of managing organisations typically staffed by a blend of volunteers and paid workers (Royce, 2007). 2.5 Research agenda setting studies One of the most useful of these came in an earlier Social Enterprise Journal contribution by Haugh (2006), who listed eight broad thematic needs for future research.

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Although the authors did not seek to use Haughs analysis as a template for their monograph, her eight themes are difcult to improve upon as a top eight: (1) Dening the scope of social entrepreneurship. To help resolve some of the denitional problems referred to below and to make international comparisons more feasible. (2) The environmental context. In terms of the political, economic, social, cultural and technological trends that inuence social enterprise and entrepreneurship. (3) Opportunity recognition and innovation. To better understand why SEs are able to innovate and seize opportunities, and also the barriers that sometimes prevent them from doing so. Despite the research that exists about the founding and early growth of SEs, Desa (2007) notes that there is relatively little research about where the initial ideas come from, and how particular opportunities are identied and evaluated. (4) Modes of organization. To better understand and compare different institutional forms and legal formats. The conventional business literature is dominated by a single business model, the public company with distributed ownership through shareholding. Although other legal forms of enterprise such as private companies, family companies or partnerships are acknowledged, and sometimes studied, the large publicly held company is the business school norm. SEs by contrast are predominantly small organisations, in which ownership is often distributed through community rather than public ownership, and which are characterised by diversity. There are a number of different legal structures in the UK commonly associated with SEs including a charity (that trades), trust, community interest company (CIC), company limited by guarantee, company limited by shares, community benet society, industrial and provident society and unincorporated association. There are also forms that belong to particular sectors such as housing associations and credit unions. In some cases, SEs exist as a trading-orientated departments or projects within a larger parent organisation such as a charity. (5) Resource acquisition. To understand the sources, management and sustainability of the physical, nancial and human resources that SEs rely upon. Desa (2007) provides a particularly good analysis of the way resource constraints often shape the early development of SEs and the value of a bricolage perspective to understand how they access and mobilize resources. (6) Opportunity exploitation. To understand how SEs are able to bring resources together, develop networks and formulate and implement strategies to develop a viable organization and exploit the market opportunity they have identied (Hockerts, 2006). (7) Performance measurement. To create appropriate ways to measure the multi-faceted nature of the performance and contribution of SEs. There is a particular need to be able to systematically capture and express all aspects of their social value (Paton, 2003; Somers, 2005; Bull, 2006). (8) Training education and learning about social entrepreneurship. To understand how SEs learn, and how we learn about them.

Instead of attempting to encapsulate the analysis of future research needs provided by both Haugh and by the research monograph, this paper reects on some key themes that emerged while developing the monograph, particularly regarding some of the more paradoxical aspects of the SE research agenda and its future development. 3. The denitional mineeld Although there is little value in trying to improve on Haughs research agenda setting commentary within this paper, the rst key theme she identied relating to denitions is worth expanding upon. A distinguishing feature of the SE literature is controversy over denitions and classications (Lloyd, 2002; Nicholls, 2006; Jones et al., 2007), which was also a recurring theme during the 2007 SEC/ESRC seminar series. The monograph used Pearces (2003) comprehensive model of the three sectors of the economy, in Figure 1, as a starting point to consider the relevant labels, actors and sectors. The broad term Social Enterprise includes many organisational types that vary in their size, activities, legal structure and ownership, geographic scope, funding, motivations, degree of prot orientation, relationship with communities and culture. The combination of diversity and denitional difculties acts to hamper attempts to measure the SE sector (Shaw and Carter, 2007), to develop more differentiated policies and forms of investment to support its development (Jones et al., 2007), and to develop propositions that can be generalised from specic research projects. Some argue that trying to dene SEs precisely is somewhat pointless (usually on the basis that you know one when you see one), or that it is more useful to talk in terms of ideal types rather than clear-cut denitions (Defourny, 2006). However, denitions are important both to differentiate SEs from other types of public or commercial organizations, and to help to differentiate between types of SE (Jones et al., 2007). The denitional problems partly stem from a tendency amongst authors to describe SEs in terms of particular characteristics without attempting to differentiate between those that typify SEs and those that dene them. For example, not distributing prots to shareholders is used by some as a dening characteristic, yet longstanding SEs such as Traidcraft and many others established as community interest companies are intended to generate an element of prot for shareholders. SEs are also often described as being small and democratic, and as being participatory in terms of involving the intended beneciaries in decision-making processes (Defourny and Nyssens, 2006). However, there is nothing that prevents a SE from becoming large, and indeed there is an emerging concept of Corporate Social Entrepreneurship that relates to larger businesses (Austin et al., 2005). Similarly there is nothing to prevent a SE from being autocratically run by a founder with a strong sense of social mission, an in practice Aiken (2006) found low levels of worker involvement in governance issues in many types of SEs. Particularly, when compared with forms such as cooperatives. Other suggested dening characteristics of SEs include a high degree of autonomy, a minimum level of paid work and a signicant level of economic risk (Defourny, 2004), yet all are characteristics also shared by organisations that plainly are not SEs. The only clearly dening (rather than typical or desirable) characteristics are: . the primacy of social aims; and . that the primary activity involves trading goods and services. These dimensions reect the delineations in Pearces model between SEs and the private sector in one quadrant, and from the rest of the voluntary and public sectors

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First System Private Profit Oriented

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Figure 1. Three systems of the economy

Third System Self-help Mutual Social Purpose

in another. Perhaps helpfully, these characteristics are also encapsulated within the UK Governments SE denition as:
[. . .] a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise prot for shareholders and owners (DTI, 2002).

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In short, it concerns the use of business means to pursue social ends, and in many ways it is the interaction between the two that underpins the unique dimensions of the SE research agenda. How does having an agenda driven by social goals affect SEs as businesses? What are the implications of choosing business processes as the means for pursuing particular social goals? These are the macro-level questions behind much of the SE research agenda. 4. Social enterprises as paradoxical hybrids The dening characteristics of SEs, of applying the methods of the private sector to achieve the types of primary social aims associated with the public and voluntary sectors, make them a form of organisational hybrid (Defourny and Nyssens, 2006). SEs are typically portrayed as organisations that exist between the private and public sectors and with characteristics that reect both. This is reected in Dees (1998) SE hybrid spectrum model shown in Figure 2, which implies that the organisational dimensions and key stakeholder relationships of SEs will blend those of the conventional commercial and public or non-prot positions. Whether different types of SEs from different sectors will all occupy a central blended position on every organisational dimension, or whether they create more unique patterns of characteristics which are each more representative of either commercial or non-prot sector organisations, would be an interesting issue for future research to explore. Evers et al. (2004) take a slightly broader perspective to portray SEs as three-dimensional hybrids, which combine elements of the goal sets and mixed resource structures from the market, the state and civil society (reected in terms of resources as income, grant support and voluntary contributions). Hockerts (2006) views the hybrid nature of SEs, and their ability to create public benet from running a protable business that also incurs private costs, as counterintuitive to the point of virtual paradox, commenting that:
Management research has no theoretical explanation for these phenomena, nor does it offer guidance for social entrepreneurs who need to navigate the fault line delineating for-prot strategies from the domain of public and non-prot management.

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Motives, methods, and goals Beneficiaries Key Capital stakeholders Workforces

Purely Philanthropic Appeal to goodwill Mission driven Social value Pay nothing

Mixed motives Mission and market driven Social and economic value Subsidized rates, or mix of full payers and those who pay nothing Below-market capital, or mix of donations and marketrate capital Below-market wages, or mix of volunteers and fully paid staff Special discounts, or mix of in-kind and full-price donations

Purely Commercial Appeal to self-interest Market driven Economic value Market-rate prices

Donations and grants

Market-rate capital Market-rate compensation Market-rate prices

Volunteers

Suppliers

Make in-kind donations

Figure 2. Dees social enterprise hybrid spectrum

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Certainly, one observation from the process of developing the monograph was that the nature of SEs often contained curious elements which, if not always completely paradoxical, were often counterintuitive or at least ironic. These are presented below as six further interlinked paradoxes of SE research. 4.1 The research tradition paradox It is ironic that the two strongest foundation stones of the SE literature base appear to be lodestones with an opposing philosophical charge. One is the literature on social entrepreneurship, a branch of the entrepreneurship literature with a strong emphasis on individualism and the social entrepreneur as a heroic individual. The other is drawn from the literature of the co-operative movement with its fundamental emphasis on collectivism and co-operative effort. These opposing traditions create some very different ideas about where the entrepreneurship in SEs comes from. Some authors emphasise the role of the social entrepreneur as a bold, opportunist, individualistic change agent applying business skills to create and sustain social value (Dees, 2001). Others suggest that it may also be inappropriate to think of the social entrepreneur only as an individual, because entrepreneurship in some places and cultures may emerge more from groups and communities (Peredo and McLean, 2006). Spear (2006) suggests that the image of the social entrepreneur as an heroic individual may be something of a myth in many cases, and that success is often based on groups using concepts of distributed entrepreneurship and circles of entrepreneurial activity that involve a range of internal and external stakeholders. One curious observation from the literature relates to the direction from which social entrepreneurs and social enterprises emerge. Individual social entrepreneurs can emerge either from a background in the social issue in question, or from a commercial background as they seek to apply their business skills to a new eld, either because they are serial entrepreneurs (Vega and Kidwell, 2007), or are seeking to make a social contribution having achieved their ambitions in nancial or business terms. As organisations, the SE literature shows many examples of voluntary sector or public service organisations evolving to adopt the methods of business to become social enterprises, but very few commercial enterprises travelling from the other direction to adopt primarily social goals (Chew, 2008). This suggests that it may be easier for the priorities of individuals to be changed and reordered than it is for those of business organisations. 4.2 The innovation paradox A common perception within the SE literature, and one strongly rooted in the entrepreneurship tradition, is that they are inherently innovative (Dees, 2001; Bornstein, 2004; Vega and Kidwell, 2007). Perrini and Vurro (2006) stress the innovative and entrepreneurial aspects of SEs by using the label social entrepreneurial venture. Others debate the extent to which SEs tend to be innovative and question why they are acknowledged to be innovative by nature (at least in process terms) when they are not widely involved in research and development activities and spending (Jones et al., 2007). One potential answer to this question may reect that although both primarily-for-prot and social entrepreneurship requires creativity and innovation, in the social context this is often manifested by applying novel market-based solutions to intractable social problems, rather than through technical innovations in products, services or technologies. In other words the

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innovations that SEs are good at tend to be social (particularly in terms of nancial or commercial relationships) rather than technological. Another explanation is that a lack of resources often prompts SEs to be innovative on a shoestring or by rediscovering or translating old or existing technologies between sectors and applications. Elements of this paradox are apparent in the role of SEs in the housing and construction sectors. On the one hand, innovations in social housing have been largely based on innovative nancing solutions, ownership arrangements and stakeholder relationships, rather than on new types of buildings or building materials. On the other, experience from the construction sector suggests that many key innovations in building eco-design are emerging from a range of SEs including Hill Holt Wood, the Eden Project, Earthship Fife and the Centre for Alternative Technology at Machynlleth. What the future may hold is the opportunity for the construction technologies developed by these SEs to merge with the social, nancial and commercial innovations of the Housing Associations. This could create innovative approaches to sustainable housing and communities in response to the mounting pressures relating to climate change, social cohesion and quality of life. 4.3 The like a business vs business-like paradox Although SEs adopt the methods of business in pursuit of their social goals, they are often reluctant to adopt a business mindset. Phillips (2006) found that culturally SEs demonstrated a wariness bordering on antipathy towards mainstream business approaches and Adamson (2003) found that this wariness extended to a reluctance on the part of some SEs (particularly those primarily serving communities and the public sector), to actively develop trading relationships with private sector companies. Parkinson and Howorth (2007) also found that when social entrepreneurs used the lexicon of conventional entrepreneurship, it tended to be in a way that disparaged the mainstream and was used to distance the SE from it. Thinking of themselves as a breed apart may help SEs to be innovative and to think out of the box in management and process terms, but it may also create some challenges and inhibit growth and diversication. The existence of language differences between SEs and the business mainstream might seem like a trivial issue, but it can have profound implications. This was observed in practice by Howorth et al. (2006), when looking at the role of SE in community development, who found that an over-emphasis on the business case and use of business-speak in promoting SE could lead to some stakeholders feeling locked out by a world-view and vocabulary they did not share. This is very much in keeping with the observations of Paton (2003) that SEs operate in a different world of meaning to the conventional managerial discourse based on economics and enterprise. He warns that the unique roles and strengths of SEs could be undermined by the unquestioning use of the language and ideas of conventional business, pushing SEs away from the social and political issues tre. that form their raison de The tensions that SEs face in trying to maintain their primary social goals in the face of pressures to adopt increasingly entrepreneurial and business-like practices and language is a theme picked up by several authors (Seanor et al., 2007). These isomorphic forces in the SE environment include the requirements of lenders, the guidance provided by business support agencies, the demands of public procurement processes and the reliance in research on best practice case studies. These forces

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combine to promote certain types of SE models, and to push SEs towards conformity and away from their natural diversity. Nicholls and Cho (2006) comment on the irony of a sector that is celebrated for being creative, diverse, innovative and able to disrupt existing systems of service delivery, being forced towards the relative homogeneity of particular organisational forms. Low (2006) sees growing pressures to become more business-like as likely to push SEs towards the stewardship style of governance associated with corporations and an emphasis on shareholders. This is despite the emergence of CICs and their intention to promote the more democratic stakeholder style of governance more prevalent in the voluntary sector, and to promote community ownership of SE assets. 4.4 The competitiveness paradox A key implication of developing a SE and thereby adopting a business-based approach to the pursuit of social goals, is that it must be able to compete within a market-place and satisfy the needs of customers at least as well as the competition. This can provide a challenge to SEs who can be relatively under-resourced and inexperienced when it comes to marketing. SE marketing is usually based on intense personal promotion by the founding entrepreneur(s), but they may lack the time, skills and marketing orientation to develop a more formal approach to marketing strategies and activities. SEs also produce relatively unique challenges relating to a reluctance to market themselves at all, and a fear of marketing themselves as too successful for fear it might jeopardise future grant support for those with a mixed income stream (Shaw, 2004; Bird and Aplin, 2007). A key topic of discussion during the 2007 SE Seminar Series was the competitiveness of SEs when pursuing public sector procurement contracts. Ironically whilst many SEs believed their social added value would give them an advantage over purely commercial competitors, some of those managing the procurement contracts expressed a reluctance to purchase from SEs due to concerns about their professionalism, ability to scale up or long-term sustainability. It was clear that the current procurement processes do not allow the full social and commercial value of SEs to be measured, expressed or considered. 4.5 The people paradox The human dimensions of the business produce some of the most interesting contrasts between conventional businesses and SEs, and some paradoxical dimensions. While generating employment might be an important social contribution for a conventional tre of SEs with a focus on work integration. Conventional rm, it can be the raison de rms battle for talent by recruiting the most skilled and experienced staff they can nd and afford, they look for the people who will do the business most good. Many SEs by contrast actively seeking to generate employment opportunities, including salaried training for the long-term unemployed, people with learning difculties, ex-offenders, those lacking in qualications or other groups with relatively low-employment rates (which vary amongst countries but can include women or older workers; Defourny and Nyssens, 2006). They seek the employees the business can do the most good for. One paradox in relation to human resources is that such work integration SEs tend to be unusually inclusive, yet other forms of SE and other third sector organisations reported particular problems with recruitment because they struggled to nd candidates that combined the right skills with an appropriate cultural t with the organisations

social mission (as highlighted in the 2005 CIPD Survey on Recruitment, Retention and Turnover). Another paradoxical element is that although the emphasis amongst many SEs on generating employment is beyond criticism, there has been research that has questioned the quality of the employment that they generate in terms of the quality of the jobs and the levels of pay provided, and particularly the stability of the employment offered by SEs (Amin et al., 2002). These sustainability concerns are particularly true of SEs that continue to rely on grants within their funding stream (Phillips, 2006). Managing job insecurity caused by the episodic nature of grant funding support for many SEs is one of the distinctive and challenging dimensions of human resources management for SEs highlighted by Royce (2007), along with balancing a workforce composed of both paid staff and volunteers; and managing volunteers alongside sometimes vulnerable staff. Similarly in the case of SEs employing a workforce that is in some way disadvantaged (and which may impair competitiveness in terms of productivity), whether and how to highlight this dimension in the marketing of the enterprise represents an unusual ethical conundrum which has received little research attention until very recently (Bird and Aplin, 2007). This provides another dimension to the competitiveness paradox outlined above. 4.6 The Who? paradox Although the research monograph largely explored the future research needs for SE in terms of what issues needed to be researched and why, the accompanying discussion paper also considered the Who? question of developing research capacity. Since SEs represent organisations that operate in business, albeit with primarily social aims, it would appear logical for business scholars to lead the way in SE research, particularly at a time when issues like corporate social responsibility and cause related marketing are moving social issues up the mainstream business agenda. In the USA for example, there is a concentration of SE expertise in one or two of the longest established and most prestigious business schools, particularly Harvard and Columbia. In the UK, although there is growing interest in SE amongst business schools, and particularly within some of the newer schools, it has often been the sociologists and the geographers taking the greatest interest. The curious lack of enthusiasm for SE research amongst many UK business schools may partly reect the strictures of the recently completed Research Assessment Exercise (RAE). This acts to reinforce traditional disciplinary boundaries and push scholars to concentrate on the longest standing management journals with a strong RAE rating and which, as Desa (2007) noted, have generally been slow to recognise and respond to the growing importance of SE (with certain honourable exceptions, such as the 2006 special issue of the Columbia Journal of World Business dedicated to SE). It may also reect the dominance of a particular management paradigm which is strongly based around the concept of delivering shareholder value, and which SEs neither share nor t comfortably within. Developing SE as a eld of scholarship will require more business and management scholars to take an interest. This may happen naturally as they become more aware of the scale, scope and economic and political importance of SE and of its distinctive characteristics and the opportunities they provide for novel, interesting and socially valuable research. It is also likely to require other structural changes such as the provision of research funding, the development of better links between social

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enterprises and their local business schools, and for a stake to be driven through the heart of the RAE in its current form. 4.7 The transatlantic paradox There is also a paradox for UK management scholars interested in SE in that, with the exception of a period in the 1980s when Japan was a key source of inspiration, the main drivers of the management discipline have been American-based business schools, journals and corporations. Within the business mainstream, this is not particularly problematic, since there is relatively little to differentiate UK from US-owned companies. The concept of an Anglo-Saxon business culture which is distinct from that of continental Europe is often referred to, and takeovers have led to regular ownership exchanges between the two countries. The SE eld is different, with the USA having a very distinct view of the role and nature of SE to that of most researchers, practitioners and policy makers in Europe. Kerlins (2006) comparison between the two revealed a relatively narrow American notion of the SE as a non-prot organisation existing for the social good in a way that complemented commercial enterprises, compared to a European notion of SEs as an engine for economic inclusion and reform that will compete with commercial enterprises and often disrupt the status quo (Borzaga and Defourny, 2001). SE in the UK has more in common with the European traditions of research and practice, which may provide another obstacle to more UK business scholars embracing SE research. It is a eld in which the usual sources of information, inspiration and answers are far less applicable, and it means that great care would need to be taken in seeking to apply lessons from American SEs to their counterparts in the UK. 5. Conclusions The hybrid and sometimes paradoxical nature of SEs make them particularly challenging businesses to manage, to research and to develop effective policies for. The emphasis on entrepreneurship has often focused attention on the roles of enterprising individuals and their characteristics, particularly in establishing SE ventures, rather than on the development of the management teams, competences and skills needed to develop and run them. SE managers face challenges in managing the identity of a hybrid organisation, integrating the typical mix of employees and volunteers, balancing different currents within the income stream and responding to market pressures from customers and competitors and to pressures from customers and sponsors to professionalise. All this has to be accomplished whilst keeping a diverse range of stakeholders happy and maintaining the SEs vision rmly on its original social mission and goals. The need for more and better research to support practitioners, policy makers and those seeking to learn more about SE is obvious. The current developments underway to address this need, including the establishment of the new UK Third Sector research centre and associated capacity building clusters during 2009 and the Social Enterprise Journals re-emergence as a refereed journal within the Emerald stable, make this a very exciting time for the eld. As well as more research, we also need more nuanced research to address a key theme that runs throughout the SE research literature concerning their diversity in terms of origins, aims, organisational characteristics, ways of operating and managing, development paths and market sectors. This diversity has several implications. It makes it important that SE scholars avoid presenting denitions of

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SEs that only reect one particular type (or sub-set). SEs are often not-for-prot, community based, employment focussed, small, entrepreneurial, innovative, collaborative or democratically run. Such characteristics may be typical and even desirable, but they do not make an organisation a SE and the absence of any one of them does not preclude other forms of organisation from being considered a SE. Acknowledging the diversity within SEs, moving beyond the denitional debates and recognising particular sub-types of SE for what they are, will allow for a better understanding of different types of SE, and an appreciation of their differences and similarities. This in turn will help in identifying more clearly areas of commonality with different types of conventional/commercial enterprises, and in identifying opportunities for the effective transfer of knowledge from the mainstream business literature. This could help to address the systematic weakness that Jones et al. (2007) note in the current SE literature, of a failure to transfer applicable knowledge from the literature on the private sector. Understanding how much knowledge SE can draw from conventional business wisdom requires an understanding of another theme running through the SE literature concerning their distinctiveness. There are many ways in which SEs tend to differ both from their conventional, commercial counterparts, and from other types of third sector organisations. The key dening difference from commercial sector organisations reects the contrast in their primary objectives (towards the satisfaction of the needs of direct stakeholders, i.e. shareholders, customers and managers through the generation of customer satisfaction, prot and growth as ends, versus the furthering of social or environmental aims which may or may not be served through the generation of prot). This makes comparative research involving commercial, primarily-for-prot enterprises and social, primarily-for-social benet enterprises crucial to determine where the differences and similarities lie. A clear understanding of these issues will answer the questions of: . How much conventional business school wisdom can be translated and applied directly to SEs? . Where the unique features of SE lie and where future dedicated research efforts need to concentrate? The comparative studies by Austin et al. (2005), Brown and Murphy (2003) and Shaw and Carter (2007) all provide important contributions to this understanding, but further comparative research is needed. Developing appropriate comparisons may also require a more nuanced understanding of conventional businesses amongst SE researchers. There tends to be a simplistic assumption that commercial businesses are prot maximising, and an emphasis on lessons drawn from the largest and most successful companies that may have little resonance with the broader business population which is dominated by smaller companies. It may be that SEs will have the most to learn, not from the usual suspects in the commercial sector, but from small rms and family businesses in particular, and from commercial businesses which also try to balance non-commercial dimensions or values (e.g. many commercial rms in craft, creative or highly traditional industries). Ultimately, one aspect of the future development of the SE research agenda may include new opportunities for commercial businesses to learn more from innovative and successful SEs. The great management challenge for the twenty-rst century is to create

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more environmentally and socially sustainable economies, communities and enterprises. It is perhaps telling that emerging efforts to explore what a more sustainable society might look like (for example WWFs One Planet Economy initiative) have an explicit and central role for SEs. We know that the old models of production, consumption and business have contributed to major increases in material wealth but also to a paradoxical failure to improve our perceived happiness and quality of life (Layard, 2005). Future SE research may hold the key to resolving that particular paradox, and in generating new concepts of business that we can all learn and benet from.
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Further reading GHK (2007), Review of the Social Enterprise Strategy, GHK/Small Business Service, London. Hare, P., Jones, D. and Blackledge, G. (2006), Understanding social enterprise and its nancing: a case study of the child-care sector in Scotland, Social Enterprise Journal, Vol. 3 No. 1, pp. 113-25. Corresponding author Ken Peattie can be contacted at: peattie@cf.ac.uk

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