The Management of Social Enterprises Sybille Mertens Cera Chair, Centre for Social Economy Montreal, October 2, 2009

Introduction Personal story PhD in Economics The Satelllite Account of Nonprofit Institutions NPO as producers NPS as a relevant different sector From Macro to Micro The management of social enterprises - january 2010 S. Mertens (editor), in collaboration with M. Boving, C. Davister, A. Henry, M.Marée and J. Rijpens Master Students + Practionners

Introduction The current state of knowledge on the management of associations Delimitation of the field Specificities Litterature review + focus groups + case studies The management of social enterprises Questions and first lessons

Plan Definitions : What are social enterprises ? Roles : Why do they exist ? Management : How different is it ?

Definitions Social Enterprises Private (control) Enterprises (risk, economic activity) Non-capitalist (not-for-profit, democracy) Other concepts : Nonprofit, OBNL, Associations, Social Economy Organisations, Coop, Third Sector Institutions Corporate Social Responsibility Other conceptions of Social Enterprises Commercial activities of NPOs (financial autonomy) Social innovation / Social Entrepreneurship

Roles Source : The three-failures theory (Weisbrod 1975, Hansmann 1980 and 1996, Salamon 1987, James 1990, Ben Ner & Van Hoomissen 1992, Steinberg 2006, Young 2003) Main idea from Institutional Economics : Institutional forms are optimal under certain circumstances. Social Enterprises can be the optimal form when For-profit or Government forms fail.

Roles ProblemFPOGov Market power Higher prices Quantity &Quality reduced Inefficiency Information asymetry Opportunism risk Limits of regulation Public goods Free rider problem Opportunism risk Bureaucracy Median Voter problem Global public goods Budget limitations

Roles Social Enterprises competitive advantages Property rights limited (trust, other resources) Local base (social needs knowledge, trust) Social Entreprises limits Property rights limited (inefficiency, lack of access to K) Local base (limited resources, limited action)

Roles Production of public goods Complementary to public provision Delegation with public financing Production of trust goods Production as a solution to market power

Roles Field Market power solutionPublic goodsTrust goods Work integration XX Microfinance XXX Fair trade XXX Social services XX Green energy XXX NGOs XX Cooperatives X

Management Marketing (Sybille Mertens) Financing (Arnaud Henry) Governance (Julie Rijpens) Human Resources Management (Catherine Davister)

Management A different model of management Based on a system of values Solidarity Fairness Freedom Moral responsibility Facing complexity Social aim versus economic efficiency Multi-stakeholdership Evaluation

Marketing Cultural obstacles Mission as indicator Multi-stakeholdership : Necessity to be market-oriented (>< product- oriented) Differenciation : Untangible aspects, trust, loyalty, values, relationship marketing Ideas, values : social marketing Competition and cooperation Do not neglect traditional marketing

Financing Public goods : non exclusion, public and private benefits Financing-mix : benefits related to different resources (sales, public subsidies, fees, gifts, sponsoring, volunteering) Multi-stakeholdership : Reporting, Social Return on Investment Property rights Difficult access to K Dvlp of Social and Responsible Investment

Governance Property rights : Members, democracy Traditional mechanisms : owners’control, market pressure, laws Central role for the Board (agency theory, stewardship theory and resources dependance theory) : dynamic vision Managerial Hegemony and Ratification Role Multi-stakeholdership : CSR

Human Resources Management Informal HRM Diversity : gender, age, status, qualifications Motivations mechanisms : values, participation Professionalisation : managerial profiles, paid staff, executuve education Volunteering : specific questions

Plan Definitions : What are social enterprises ? Roles : Why do they exist ? Management : How different is it ? + Bonus : Canada’s Competitive Advantage

Bonus In a world of Globalisation Growing inequalities Limited link between economic growth and happiness Loss of meaning, fear The Competitive Advantages of a Nation is in its capacity To deal with complexity To be aware of collective needs and solution s To restore hope and trust To act in concordance with values, even in the economic life

For more information Sybille Mertens