UK-Belgium Scientific Workshop Performance and legitimacy in social enterprises Liege, 3-4 March 2011

Goals of the workshop As from September 2008, the British Council and WBI/FNRS jointly run and finance the Partnership Programme in Science, United Kingdom (UK) & Communauté Française de Belgique Wallonie Bruxelles (CFB-WB). The aim of this Partnership Programme in Science (PPS) is to enable early-stage and talented postdoctoral researchers from higher education institutions in the two countries to meet, exchange ideas and engage in scientific and academic research collaboration.

Goals of the workshop  Share extant research – learn together  Identify possible synergies across countries/disciplines/approaches  Explore trails for future collaborations  Learn to know each other

Social enterprise  UK – “A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or the community, rather than being driven by the need to maximise profit for shareholders and owners” (DTI, 2002)  EMES – Definition: “not-for-profit private organizations providing goods and services directly related to their explicit aim to benefit the community. They rely on a collective dynamics involving various types of stakeholders in their governing bodies, they place a high value on their autonomy and they bear economic risks linked to their activity” (Defourny & Nyssens 2008b:5) – Ideal type (economic activity, social dimension and governance)

Performance “Numerous works have been published which directly address the area of performance but do not explicitly define performance” (O’Donnell & Duffy, 2005) Multiple definitions, including: “A task or operation seen in terms of how successfully it is performed” (OED) “Accomplishment of a given task measured against preset standards of accuracy, completeness, cost, and speed” (Business Dictionary)

Performance measurement “A performance measurement system can be defined as the set of metrics used to quantify both the efficiency and effectiveness of actions” (Neely et al., 1995) “The measurement problem arises because the performance of the firm is not entirely measurable” (Meyer, 2002) “Social Entrepreneurs and their funders seem untroubled by the inability to measure fully and precisely all aspects of their social impact” (Kramer, 2005)

Legitimacy  Definitions:  Meyer & Rowan, 1977; Meyer & Scott, 1983: “the adequacy of an organization as theory”  Knoke, 1985: “right to exist and to pursue its affairs in its chosen manner”  Scott, 1995: “condition reflecting cultural alignment, normative support, or consonance with relevant rules or laws “  Suchman, 1995: “generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions”  Nicholls, 2010: “the congruence, in multiple stakeholder judgements, of an organization’s perceived actions with their expectations of its performance”

Legitimacy  Three types of legitimacy (Suchman, 1995; Dart, 2004):  Pragmatic legitimacy: stakeholders support the SE because it brings them advantages  Moral legitimacy: stakeholders support the SE because it is “the right thing to do”  Cognitive legitimacy: stakeholders support the SE because any other organizational model would be unthinkable  Legitimacy as a source of power (Clegg & Hardy, 1996)

Performance Observer Organizational behaviour (strategy, action, method, etc.) Standards Is this SE successful?

Performance Organizational behaviour (strategy, action, method, etc.) Standards Is this SE successful? = Objectification Observer

Legitimacy Observer Organizational behaviour (strategy, action, method, etc.) Is this SE adequate? Prior experience Education Vision of the world Influential opinions Relationship with SE

Legitimacy Observer Is this SE adequate? = Subjective reasoning Prior experience Education Vision of the world Influential opinions Relationship with SE Organizational behaviour (strategy, action, method, etc.) Signals

Comparison Performance -Ambition of objectivity: it « is » there and needs to be discovered/described - Epistemology driven by economics and finance - Focus on indicators Mainly quantitative - rather continuous - Most ‘legitimate’ approach to apprehend SE behaviour Legitimacy - Subjectivity: it only exists in terms of stakeholder perceptions - Epistemology driven by sociology - Focus on discourse and narratives Mainly qualitative - rather dichotomous - Pervades discourses on ‘performance’

Performance viewPerformance SE behaviour Comparison with Standards Level of legitimacy Resources Is this appropriate?

Legitimacy view Stakeholder perception of SE behaviour Judgements Is this appropriate? Resources Statement on performance ‘Best practices’ and indicators

Integration? No because of different epistemologies, but bridges: - Behind SE discourse on performance is a quest for legitimacy; performance is at least partly subjective - The construction and measurement of performance indicators is a crucial legitimating tool - Multiple congruent stakeholder judgements on an SE may lead to a certain objectification of SE behaviour (coherence, efficiency, etc.) Connect study of SE to main paradigms and debates in organization theory – use SE as a case that brings in new insights

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