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Management

Social Enterprises as knowledge-based organisations

The idea of researching a type of organisation that has the potential for alleviating the current social and environmental problems in our societies was more than enough to get my interest and attention. With an engineering background, a complete positivist approached to research, and a significant experience in human resources and knowledge management in the private sector, my first attempt in understanding Social Enterprises (SEs) was from the organisational theory perspective, exploring the unique organisational characteristics that make this type of organisation different from their counterparts in the private, public and non-profit sector. What makes Social Enterprises different?

What makes them different is that SEs occupy a unique space within the economy where, as businesses, they are driven by the need to be financially sustainable but, compared with a normal, for-profit organisation, they use economic surpluses to drive social and environmental growth. Additionally, SEs are distinguishable from other non-profit or charity organisations because they trade in the competitive marketplace. All these characteristics have a major implication in the organisational behaviour of Social Enterprises. Analysing these behaviours would have been a massive PhD task, thus, I decided to explore this behaviour more specifically under the knowledge-based theory of the firm, and identify how Social Enterprises can obtain tangible benefits by managing their most intangible resource: knowledge.

Under the growing pressures of complexity and globalisation, enterprises that can efficiently capture the knowledge embedded in their organisations and distribute it to their operations, productions and services, will have a competitive, cost and performance advantage over their competitors (Drucker, 1991; Kogut and Zander, 1992).  However, there is still a lack of empirical evidence from small businesses and social economy organisations that have organic structures and cultures that may foster knowledge capabilities and innovation.

Having started my PhD research in 2010, I have already identified a significant body of literature that suggest that Social Enterprises play an important role in developing the social economy sector by their strong knowledge and experience-sharing philosophy (Horst, 2008). This can be explained by their closer relationship with customers and their needs, their utilisation of local resources (physical and social) and the creation of synergies between social and environmental objectives within the limits of the economic objectives. However, it is these synergies that might result in a growing tension within Social Enterprises that restrain the development of knowledge capabilities.

For instance, an important element when developing knowledge capabilities within an organisation is their people and their motivations to share knowledge. Literature has suggested that the tension between social and economic orientation of the SE can cause employees to feel they are losing their initial motivations, resulting in decreasing performance, loss of interest or, at worst, actually leaving the SE.

Another component of knowledge capabilities is technology. Although there is limited research on the state of technology capabilities in SEs, it can be inferred that SEs use technology in a general way to manage their information, but that these systems are not integrated or sufficiently developed to support decision-making, and operation and production management. Possible reasons for this can be associated with financial restrictions and a limited number of skilled staff.

A third component is organisational structure. In this, SEs have the potential for developing knowledge capabilities because of their participatory and democratic structures that might facilitate collaboration and sharing of knowledge across the organisation.

A last component, and probably the one that attracts my attention, is organisational culture.  The most important culture characteristic of Social Enterprises is associated with its social mission and ethical practices, which stimulate employees, both paid and volunteers, to work harder and unite with the organisational mission. Nevertheless, there are other aspects of a SE that could affect its organisational culture. For instance, the scarcity of resources might restrict the SE options to invest in organisational learning, transferring the responsibility of supplying knowledge to external authors, such as government, partnerships or social networks.

All these initial conclusions are drawn from the literature and expert consultation. It is during the exercise of my research that each separate element of knowledge capabilities will be assessed within the UK context of Social Enterprises. The research follows a mixed methods approach with a first quantitative phase that has already collected 250 responses from senior members of Social Enterprises in UK to a survey about their current KM activities. The results obtained by analysing these data will shape the second phase, which is a qualitative study based on interviews and case studies. Optimistically this research will support my initial hypothesis that Social Enterprises are knowledge-based organisations and, demonstrate that, by developing their knowledge capabilities, they can help to alleviate the social and environmental problems in our societies.

References

Drucker, P. F., (1991). The New Productivity Challenge. Harvard Business Review. 69, 6, 69-79.

Horst, D. V. D., (2008). Social enterprise and renewable energy: emerging initiatives and communities of practice. Social Enterprise Journal. 4, 3, 171-185.

Kogut, B. and Zander, U., (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science. 383-397.

María Granados is a Colombian PhD student at University of Westminster (UK) researching how Social Enterprises can enhance their performance and achieve their economic, social and environmental objectives, by managing effectively their knowledge. Maria has an Undergraduate and Master’s degrees in Industrial Engineering in Colombia. Professional expertise carried out for five years in Human Resources Management, specifically in Developing and Training Management. Third sector expertise in organisational development for Non-profit Institutions in Colombia and youth and civic programs with the European Commission URBAL. Recently, research expertise on Knowledge Management and socio-technical evaluations.

Email contact: m.granados_ortiz@my.westminster.ac.uk

About emesphdnetwork

EMES is a research network of established university research centres and individual researchers whose goal is to gradually build up a European corpus of theoretical and empirical knowledge, pluralistic in disciplines and methodology, around “Third Sector” issues.

Discussion

3 thoughts on “Social Enterprises as knowledge-based organisations

  1. A very interesting research project. In my opinion you have to consider another variable: the nature of goods and services produced by social enterprises. I think that a social enterprise have a lot of specific knowledge embedded in his products. It’s not sufficient to define this kind of enterprise considering only the way in wich it distribute the economic surplus. Finally if you need a “control’s group” for you survey consider the possibilty to involve a sample of italian social enterprise.

    Posted by Flaviano | February 17, 2012, 13:54
  2. Dear María: First and foremost, congratulations for deciding to pursue a PhD in this field. Research on SE’s continues to be a rather weak link in the process of agreeing to a definition. We find you article to be very interesting and successful at defining the key elements that make SE’s different and your definition is very similar to the conclusions we have reached. Our experience developing SE’s in Eastern Europe and Latin America confirms many of the aspects that you outlined as being key to differentiate a SE from a regular for-profit enterprise. We would be glad to connect and stay informed about your research. Please let us know about where you go with it. We have developed hundreds of SE’s and developed a few publications that you might be interested in. Best of luck with your research!

    Posted by NESsT | February 22, 2012, 19:00
  3. María, we shared this article in NESsT’s Facebook page and a fellow researcher in the field has some really interesting questions that you might want to take a look at. Please, we would love for you to be a part of the conversation there as well. You can see his comments here: http://www.facebook.com/nesstorg
    Thank you again!

    Posted by NESsT | February 22, 2012, 21:09

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