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Stefanie Mauksch
Department of Strategy, Organization and Leadership, EBS University,
Wiesbaden, Germany
Abstract
Purpose This paper aims to contribute a qualitative analysis of practitioners accounts to
illuminate alternative approaches to social enterprise that tend to be neglected by predominant
academic representations.
Design/methodology/approach By analysing qualitative interviews, the paper examines the
ways social entrepreneurs in Germany coproduce and reproduce the prevailing theoretical notions of
social enterprise. The main themes of the interviews are elaborated upon to accentuate certain critical
aspects that until now have not been the focus of attention in research. Alternative perspectives of the
empirical data are developed which indicate patterns that are currently excluded from narrative
practices of academia.
Findings There are several insightful perspectives represented in the interview data: the
(conspicuous) absence of managerialism as a dominant motivational feature; the complexity of the
local political and social realm in which social entrepreneurs think and act in spontaneous, often
non-rational ways; and personal and biographical accounts of social entrepreneurs as an important
self-defining feature. The findings demonstrate the explanatory power of qualitative empirical
accounts as a starting point to veer away from reductionist drawing-board concepts of social
enterprise.
Originality/value These articulations of social entrepreneurs own realities are important as they
are sometimes at odds ideologically with managerial approaches to social enterprise which emphasize
cost-efficiency reasoning and financial independence.
Keywords Social enterprise, Social entrepreneurship, Qualitative interviews, Interpretivism, Narratives,
Society, Business enterprise, Germany
Paper type Research paper
1. Introduction
Organizations are made up of humans who perceive, interpret, contextualize with thought
and affect, choose, and then act. Those humans do so in social worlds of influence that they
influence in turn. [. . .] Whether the motive is practical or academic, any claim to understand
and explain such human worlds without an appreciation of the perspectives and social
relations in play is doomed to superficiality at best, severe error at worst (Agar, 2010, p. 286).
The author is grateful to the social entrepreneurs who shared their perspectives and thoughts
with her. She also acknowledges with appreciation the thoughtful suggestions of her supervisors
Max Urchs and Ursula Rao. Further thanks go to Simon Teasdale, the Editor of this special issue,
the two anonymous reviewers and the authors colleagues, especially Henning Engelke, for their
encouragement and support.
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ideational reference point the transnational social enterprise movement has permeated
Germany.
This article examines the ways in which social entrepreneurs in Germany
coproduce and reproduce the prevailing theoretical notions of social enterprise.
Following an interpretative research tradition, practitioners understandings and
sense-making efforts are at the forefront of this article (Yanow and Schwartz-Shea,
2006). Drawing upon an explorative study among social entrepreneurs in Germany,
in-depth interviews reveal how these actors make sense of, legitimise and justify their
activities. The methodology section presents the rationale behind interviewee selection
and the coding procedure. The findings show how, in line with the dominant social
enterprise research perspective, interviewees legitimise social enterprise as being a
novel, managerial, non-bureaucratic and rational approach to social problem solving.
But this is simultaneously challenged by other narratives emerging from a culturally
embedded and local perspective in the form of an ongoing redefinition of social
enterprises aims and scopes, as well as through legitimacy arguments derived from
personal experiences and in-depth knowledge about beneficiaries situations. The
discussion section aims to make sense of the complexity of these discourses and
highlights five situations in which grand ideas and local experiences are in conflict.
2. Methodology
The choice of interviewees was driven by the assumption that persons who have
established and operated their own social enterprise argue differently from the abstract
social entrepreneurial logic (Parkinson and Howorth, 2008). Practitioners add an
important perspective to interrogate the relevance and accuracy of theoretical
conceptualizations of social enterprise. In light of this premise, nine 30 to 70 minute
semi-structured interviews were held with German founders of social enterprises. They
are part of a series of 21 interviews with different players in the field of social
enterprise conducted from January to March 2011 by the author and a colleague. As the
article investigates predominantly social entrepreneurs perspectives, only the
contribution of those nine persons, who are personally involved in social enterprises,
were chosen for closer examination. All interviews were originally conducted and
recorded in German and then transcribed and translated into English for the purposes
of this paper.
Six social entrepreneurs, three of, which are Ashoka fellows, were interviewed. The
three remaining interviewees also label their organisations as social enterprises, but
can be better defined as networking organisations lobbying for and supporting the
concept of social enterprise in Germany. Since they work as intermediaries between
high level discourses and social entrepreneurs to increase awareness of and secure
financial support for social entrepreneurs and contribute towards recognising,
labelling and accrediting social entrepreneurs (Seanor and Meaton, 2008), it was
deemed vital to receive their views. Furthermore, these agencies contribute to
articulating the boundaries and priorities of the field. Table I provides relevant details
about all nine interviewees[1].
Explorative, interpretative investigation is a flexible approach that does not
necessarily imply preliminary commitment to any particular theoretical approach
(Patton, 2002; Denzin and Lincoln, 2005). By following this qualitative research
tradition, the aim was on downplaying theory as a crucial point of departure for the
Marianne
Schneider
Teresa Meinel
Thomas
Schmidt
NO
NO
Karsten Meyer
Motivation
(continued)
The business world is as responsible for Put social problems on the business
the worlds social problems as governments agenda
and everybody else. This is where the
approach comes from we want to bring
the topic into the world of business
I am a businessman. That is my
background. I consider myself to be an
entrepreneur. Therefore, I do business in an
area I am good at. [. . .] Entrepreneurs
conducting social business emotionally
benefit from it. Ultimately, they can do
something meaningful
I believe that the social welfare system, as
we define it in Germany, is declining
simply because we cannot afford it
anymore. Every third euro goes into the
welfare system. I think the government has
to be careful no to spend more than it can
afford
The opportunities available to the
government have decreased due to
demographic changes. Social tasks have to
be solved innovatively, using methods that
are different to those used presently
Activity
Intervieweea
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Table I.
Overview of interviewees
Arne
Zimmermann
Peter Wolff
Stefan
Hofmeister
Motivation
SE
SE
SE
SE
160
Hanna Kirsch
Activity
Table I.
Intervieweea
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benefit of the careful and nuanced empirical study of local phenomena (Alvesson and
Deetz, 2000, p. 2). Data was analysed by first reviewing the quotes to develop
middle-order categories which draw some broad preliminary distinctions within the
data (Dey, 1993). To be more precise, broad categories (e.g. finance, politics, and
personal accounts) were identified before concentrating on passages in which
entrepreneurs legitimised their own actions for sub-categorisation. The subcategory
approach is considered to be most feasible when having a fair idea of what to look for
(Dey, 1993, p. 110). This enabled the derivation of the categories shown in column five
of Table I (motivation). The most prominent codes and respective categories were
structured along the different dimensions presented in the following section. The data
was further explored to determine how certain comments fit together as parts of a more
meaningful whole (Parkinson and Howorth, 2008). For example, the tacit assumption of
social enterprise as a more rational approach (Section 3) emerged in very different
ways, among others in:
.
formulations such as reasonable, an intelligent solution, black and white
evidence; or
.
indirectly, by explaining that other approaches are not very rational; or
.
by arguing with examples of social enterprises and observable results that it is a
reasonable approach.
In the following discussion, the dominant patterns in the interview quotes are
elaborated upon.
3. Dominant narratives about social enterprise
Especially in the intermediaries statements, a dominant argument for the
legitimisation of social enterprise is the differentiation from, as interviewees
describe it, old and outmoded approaches (Thomas Schmidt), of governmental
agencies (heavy steamboats, Hanna Kirsch) and non-profit organisations (NPOs).
They describe the process of change needed as a revolution, which should be
accompanied by fresh ideas, an entrepreneurial spirit, and creative, ultra-modern
thinking (Thomas Schmidt). Within that logic, the upheaval is unavoidable for two
reasons: limited governmental budgets and potentials (Is it still a welfare state system
or is it stultification?, Harald Foerster) and the limited opportunities of NPOs:
I believe social enterprise will be unavoidable: the simple reason being that these companies
operate efficiently. [. . .] That is different than companies, which always depend on donations.
They just dont survive on social or ecological problems (Karsten Meyer).
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Justified by the premise that social enterprise is first and foremost a business model,
business-related issues, such as corporate lifecycles, performance measurement, or
concepts of competition and contention, naturally apply to it. One of these natural
elements of the business world is failure.
For several reasons, 30 per cent to 40 per cent of the projects we were in charge of arent
pursued anymore. One could say that they failed. However, that is an ordinary
entrepreneurial occurrence. There are many entrepreneurial activities that are started, but
will never be successful, social enterprise isnt any different (Karsten Meyer).
In line with the assumption that conducting business is a reasonable solution to current
challenges, market mechanisms are claimed to be optimal social problem solving
instruments. In other words, based on premises derived from cost-efficiency reasoning,
it is asserted that social enterprise, as a distinct business model, is the (only) rational
response to social problems.
I perceive two camps of social enterprise in Germany [. . .] we developed a wonderful
formulation to differentiate between the two camps: fundis (fundamentalists) and realos
(realists). We called them realos because these people are realistic, have their feet on the
ground, and maintain neutral, normal relationship to business, even capitalism, yet believe
things have to change without turning everything upside down. And then there are the
fundis, or fundamentalists, who want to improve the world no matter what it takes and
identify with early forms of socialism. Thats a typical German characteristic (Harald
Foerster).
Some of the interviewees not only strive to be different from do-gooders supposed
chaotic operations, which rely on donations or governmental-financing, they also
differentiate themselves from bureaucracy.
[. . .] especially because the government has many stodgy and bureaucratic institutions,
which do not approve of many things (Marianne Schneider).
And if the government granted you half a million euros, you wouldnt concentrate on making
a profit: you would concentrate on writing a 580-page report on how you spent the money
(Arne Zimmermann).
To conclude, dominant patterns in the interviewee comments are that social enterprise,
as an innovative, rational and non-bureaucratic approach, is revolutionising the social
sector and becoming is a special branch of business that follows the same principles.
However some patterns of social entrepreneurs narrations do not that easily fit into the
grand narrative and challenge the assumptions presented above. These are presented
in the following section.
4. Little narratives
An aspect neglected in the work about, but very present in the talk of, social
entrepreneurs is the flexibility and adaptability with which they react to political
power claims of players already positioned in the addressed field. Power struggles are
prevalent in social entrepreneurs accounts of personal stories permeated by
continuous ups and downs, processes of reshaping, and moments of self-doubt and
struggle. Here, an entrepreneur explains his success with spontaneous reactions to the
socio-political environment and the way in which he adapted his model to it. He gives
an account of how he survived through hard times and pursued different strategies in
order to become accepted:
We have a great deal of experience with charity organisations. When we were a very small
enterprise [. . .] they smiled at us because they considered it to be impossible to work with the
clientele with whom we work. As we became more successful in our region, they immediately
exerted their power [. . .]. They sat on the board for youth aid, for example, or the city council,
and suddenly our financial support was stopped. It was very obvious that they considered us
to be a threat and the usual argumentation was: We already offer such programmes
ourselves, your social enterprise isnt necessary. So we responded by designing our
programme in such a way that charity organisations can educate their employees in our
programme (Peter Wolff).
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Flexibility is an issue not only with regards to the struggle to survive in the political
landscape, but also to the design of the social-entrepreneurial approach itself. For
example, in contrast to the perspectives presented before, philanthropy here is viewed
and practiced as a positive and meaningful approach that can be combined with others:
As you see, we arent that dogmatical about the definition. Our experience proves that the
borders arent that clear. There are organisations that are charitable by nature and depend on
donations but start to introduce business elements. They might not achieve 100 per cent cost
recovery, but they might become a sustainable business one day (Stefan Hofmeister).
[T]he quality control of a company carried out by volunteers has to be in the interest of the
federal government which proclaims every form of civil involvement. We also want a piece of
the pie, not just the charity organisations. If funds are distributed, we also make claims. [. . .]
We are also experiencing the willingness of private persons to donate small amounts of
money to support a cause of their liking also a form of.citizens involvement. Some give
money, some give time [. . .]. Thats our mixed approach (Hanna Kirsch).
The person talking here does not focus on the design of financially sustainable social
enterprise models but views social enterprise as an opportunity to achieve
empowerment and participation of disadvantaged groups, such as disabled people,
Insightful are also the anecdotes interviewees told when asked how they became a
social entrepreneur. Some explained how the occurrence was coincidental rather than
being purposeful. Some even benefited financially from being labelled as a social
entrepreneur (e.g. by receiving a scholarship).
Well, I didnt want to establish a social enterprise. I didnt even know what it was. I wanted to
start an initiative, in the beginning it was only supposed to be an internet portal. And I would
have never thought that it would become this big [. . .] I had no clue that Id be a social
entrepreneur and that others would perceive me as one. It wasnt a conscious effort (Marianne
Schneider).
The social entrepreneurs cited describe the sometimes chaotic circumstances that
made them a designated rather than self-designated social entrepreneur and how
entrepreneurship was one of many tools used to achieve their aims. As opposed to the
grand narrative presented previously, these social entrepreneurs do not suggest
business as the better or more adequate approach per se, but even refer to potential
dangers (e.g. utilisation of the label by persons only interested in financial profits). The
director of a social enterprise that aids young families formulates this aspect as
follows:
Well that depends on the target group [. . .] We work with families right after the birth, when
they have lots of costs and when the salary of at least one parent is missing. Youll never earn
big bucks with that (Hanna Kirsch).
This last citation implies a prioritisation of the needs of the people as opposed to the
financial sustainability of the social enterprise and acceptance of the limits of business
approaches. To conclude, the interview data presents many insights beyond the grand
narrative:
.
the (conspicuous) absence of managerialism as a dominant motivational feature;
.
the complexity of the local political and social realm in which social
entrepreneurs think and act in spontaneous, often non-rational ways; and
.
personal and biographical accounts of social entrepreneurs as an important
self-defining feature.
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5. Discussion
It is no surprise that in this study, social entrepreneurs present unique anecdotes about
their endeavours, whereas networking organisations spread general, grand ideas of
social enterprise. These organisations are linked with the transnational social
entrepreneurship movement based on North American or Western European
philosophical ideals (Teasdale, 2012; Kerlin, 2006). However, at a national and
regional level, these ideas are challenged by established cultural and social norms. As
knowledgeable actors working in both spheres, social entrepreneurs embody the
tensions caused by a mix of transnational and local processes, experiences, and events.
As indicated in the results section, they sometimes join in on the transnational,
managerialist accounts of networking organisations and popular global players, such
as Muhammad Yunus or Bill Drayton. Social entrepreneurs benefit from such
discourse if they are labelled as well as encouraged and financially supported by
powerful transnational organisations. However, the transfer of management
knowledge and practices to the social field by means of social enterprise bears
critical issues.
First, grand discourse gains legitimacy by declaring other (philanthropic or state
welfare) approaches to be invalid or ineffective from an economic-rational perspective
(Dey and Steyaert, 2010). The exclusivist tendency of the social enterprise discourse is
problematic since it neglects forms of rationality different from the managerial
paradigm[2]. That means they argumentatively do not allow for alternative
approaches, including those that are traditional elements of democratic systems,
most notably the role of the state as redistributor of social wealth (Ullrich, 2005).
Second, practitioners often argue that social entrepreneurial approaches present a
way of detouring red tape and excessive regulation and bureaucracy. This strict
differentiation of social enterprise regarding administration and bureaucracy is not
only prevalent here, but also in the understanding of the entrepreneur in general, as
shown by Paul Du Gay (2004). This author expounds the problems of creating an
alternative to either bureaucracy or enterprise, which is more likely to be a
self-styled entrepreneurial approach to organisational reform, referring to it as
epochal bureaucracy/enterprise dualism (Du Gay, 2004, p. 37). In this light, social
enterprise approaches present themselves as being unbureaucratic although they
might often apply forms of bureaucracy which are different, but not necessarily less
exhaustive or time-consuming than those of the government. Moreover, the rhetoric of
bureaucracy decouples it from the principles beyond: the (should-be) ambition to
distribute democratically and to prevent misuse of authority.
Third, although the concept of social enterprise accompanies empowerment and
emancipation, the classification of people solely as customers may also entail negative
aspects on a broader societal level. Mintzberg (1996, p. 77) notes:
Business is in the business of selling us as much as it possibly can. [. . .] But caveat emptor is a
dangerous philosophy for health care and other complex professional services. Sellers
inevitably know a great deal more than buyers, who can find out what they need to know
only with great difficulty.
The author argues that as customers we receive direct services at arms length,
whereas by assuming roles of citizens, clients, and subjects, we benefit more indirectly
from the public infrastructure. The reduction of these complex roles to that of a mere
customer disentitles individuals from receiving professional public services and from
citizen rights going far beyond the rights of customers. Moreover, a push towards a
market-driven agenda within social enterprise can be a source of great energy and
creativity, but may also be a turbulent, disruptive, and disintegrative force (Bull et al.,
2010; Maitland, 1997).
Fourth, according to the dominant narrative, the main attempt and legitimising
basis of social enterprises is to solve existing social problems. Thereby, as Nickel and
Eikenberry (2009) argue, the approach runs the risk of depoliticising the root causes of
the identified problems. The authors point out that philanthropy, in contrast to social
enterprise, though criticised for being economically unsustainable, often assumes a
role, which is critical of the system and questions gaps or deficiencies of governmental
provision. This critical potential dwindles away, if gaps in the market are taken for
granted as starting points for the development of entrepreneurial solutions.
Fifth, the potential failure of social enterprises is not considered to be a critical issue.
Here again, practitioners make use of business rationales: failure is a common and even
necessary element of business cycles, markets and competition. But if a social
enterprise has a higher probability of failure than traditional modes of governmental
welfare, is the approach still the more efficient one in terms of supporting the poor, the
neglected, and the ill? Considering these questions, failure is a serious challenge to
social enterprises. It has a different impact on social enterprise customers and
considerably different emotional consequences than failures in the private,
profit-oriented business sector.
As denoted in the little narratives section, social entrepreneurs are quite aware of
the specificities of the German social sector and implicitly question or ignore some of
the suggestions made by grand narratives. For example, social entrepreneurs
sometimes reject or circumvent dichotomisations between old and new, between
bureaucratic and unbureaucratic, and between professional and
unprofessional. Instead, compromises, spontaneity, and the denunciation of
dogmatism, which are implicit in their presentations about their endeavours,
challenge the overemphasis of rationalism and management. Negotiations with
institutions and other powerful organisations are an important component of social
entrepreneurs daily work. Considering the German context, this strategy is the only
one with prospects for success since legal regulations discriminate against new
providers in the social sector (Heinze et al., 2011). This is another reason for the
flexibility and creativity with which German social entrepreneurs adapt their
businesses and form strategic alliances.
As previously indicated, social entrepreneurs call for consideration of the
complexity involved in social issues thereby challenging the monological view on
social enterprise as a modern, innovative, more cost-efficient mode of addressing social
problems. Entrepreneurialism is just one of the strategies social entrepreneurs use to
pursue their objectives, in combination and occasionally in tension with local claims to
power, or strategic partnerships with government agencies. Hence, local level social
entrepreneurs act less dogmatically than the macro discourse proposes and are willing
to cooperate, bargain, adapt and re-adapt their model to pursue their overall objectives.
The goal here is not to manage things more cost-efficiently or to manage them better
than others do, but to find an approach, which from their perspective, more adequately
resembles the clients wishes and aims.
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