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Democratising social enterprise

Following recent financial crises, the concept of social economy (economic activity through networks of democratically controlled co-operatives, associations and social enterprises) has become a strategy for public/private sector reform. Studies of governance by Readers Ridley-Duff and Coule have helped to develop the concept of communitarian pluralism, leading to changes in the management and teaching of social enterprise regionally, nationally and internationally.

The research

Dr Rory Ridley-Duff began his programme of research through a conceptual paper, which was then followed by a series of action research projects between 2008 – 2012. These have cumulatively developed knowledge on communitarian governance, a form of multi-stakeholder ownership, governance and management suitable for social enterprises. Dr Tracey Coule's research programme used focus groups, surveys and follow-up case studies to obtain findings on strategies for sustainability in the charity sector.

The underpinning concept of the research is that each person's individuality and agency is seen as a by-product of their community relationships. Where communitarian philosophy is combined with strategies to pluralise ownership, governance and management, the result is multi-stakeholder ownership, recognition of interests and systems to promote solidarity between stakeholders.

Ridley-Duff published evidence in 2012 that multi-stakeholder approaches to ownership, governance and management influence the design and development of co-operative social enterprises. He presented the argument that designing organisations to be socially inclusive increases resilience and social impact. This argument was supported by Coule’s finding that crises in charities were more likely to occur when a close Chair-CEO relationship excludes stakeholders from board-executive communication.

Ridley-Duff then developed insights on how communitarian pluralist design principles influence practice. His findings led to a concept of ‘socialised enterprise’ that can be distinguished from ‘social purpose enterprise’ that prefers executive control with restricted membership and ownership rights.

Coule’s initial research presents strategy making as a social, dynamic process. She considers the implications of prevailing unitary and pluralist approaches for such processes to provide insights into bridging the divide between internal stakeholder groupings in decision-making. She goes on to delineate the implications of agency, stewardship, democratic and stakeholder theory and their links to specific forms and processes of accountability. Coule's final paper links theories of governance to the cumulative findings of both authors' work on governance in co-operatives, charities and social enterprises.

The impact

Voluntary Action Rotherham (VAR), a lead voluntary organisation in Rotherham, Yorkshire was an organisation that participated in a University-funded knowledge exchange project. During this, VAR trustees used governance diagnostic tools created by Ridley-Duff and Coule to reach a view that their governance practices were pluralist with a stakeholder orientation. In contrast, VAR executives used the same tools to form a view that their organisation’s governance was unitary with a managerialist orientation. A dialogue was established between trustees and executives to review this.

Viewpoint Research CIC was one of five social firms who used the same governance diagnostics to establish a workforce participation project. In 2012, a case study of that project and its impact was presented to the UK Society for Co-op Studies.

These findings profoundly influenced the writing of the book Understanding Social Enterprise: Theory and Practice by Ridley-Duff and Bull (2011). By 2013, this book had sold over 2000 copies from publisher Sage’s UK and international offices. It has had become a core and recommended text for a number of UK and International graduate and post-graduate courses in this area.

The governance diagnostics and case studies also underpin a number of workshops on the Co-operative and Social Enterprise Summer School run annually since July 2010 by the University in collaboration with Social Enterprise Europe (SEE), Social Enterprise Yorkshire and Humber, Co-ops Yorkshire and Humber and Co-op Business Consultants. These have had a number of notable impacts. For example, after the 2011 summer school, SEE’s consultants redefined social enterprises as organisations that 'are governed, owned and managed as democratic socialised enterprises' prompting a change in a number of other international social enterprise organisations.

In another example, three summer school participants drew directly on case studies in Ridley-Duff’s work to create the FairShares Model including brand principles, new model and Articles of Association to embed these principles in social enterprise start-ups and conversions. In 2013, they formed the FairShares Association to advance this work.

Other activities have further extended the reach of the research. In August 2011, a blog on Social Enterprise Yorkshire and Humber’s website was reproduced on the Guardian Social Enterprise Network. This attracted the CEO of the Social Enterprise Mark Company to the International Social Innovation Research Conference in London. Her debate there with Ridley-Duff triggered further blogs and public debate. Reach also grew after Ridley-Duff’s visit to Indonesia in 2012. Following this, a British Council project worker used Ridley-Duff’s materials to explain ‘socialised enterprises’ to local entrepreneurs.

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