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Seminar series in social entrepreneurship – Summary (1); Helen HAUGH “Do Birds of a Feather Flock Together? Determinants of Social enterprise Sustainability and Location”

Seminar series in social entrepreneurship

In the context of the Inter‐University Attraction Pole (IAP) “If not for profit, for what? And how?” gathering four Belgian universities around social enterprise and social entrepreneurship (HEC-ULg, UCL, Solvay-ULB, VUB);

In the context of the Doctoral Seminar in Social Entrepreneurship (Prof. B. Huybrechts & S. Mertens) and in collaboration with the EMES network; a Seminar series in social entrepreneurship will be organized at HEC‐ULg from February to May 2014.

Download the program of the Seminar here

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Summary:

On Tuesday 11th March 2014, Dr. Helen Haugh (Judge Business School, University of Cambridge) was invited at the Doctoral Seminar in Social Entrepreneurship organized at HEC Management School, University of Liege. She delivered a presentation on “Social Enterprise and Population Ecology Theory” by presenting her article “Do Birds of a Feather Flock Together? Determinants of Social Enterprise Sustainability and Location”, co-written with H. P. Robson & K. Thirlaway.

She began by placing the emphasis on the motivation of her paper, insisting on the fact that motivation is a key aspect for PhD students, in order to be able to defend their thesis later. With regard to her paper, the motivation is threefold:

–      To address a gap in knowledge concerning the determinants of social enterprise location and sustainability
–      To generate knowledge beyond local issues typically addressed by case study research
–      To use quantitative analysis in a field dominated by qualitative studies

The subject of the paper are the CIC’s (Community Interest Companies), considered as a corporate form for social enterprises that could be set up quickly and easily and would “combine the flexibility and familiarity of the company form with strong social enterprise “brand values”” (DTI, 2005). The CIC is a new form of organization in the UK since 2005 and a database is available thanks to the requirement of registration.

In order to respond to their research question “What are the determinants of social enterprise sustainability and location?”, Dr. Haugh and her colleagues use the Population Ecology framework because it allows exploring the density of same sector enterprise founding and dissolution. It states that it is influenced by the environmental carrying capacity i.e., availability of resources and by the legitimizing influence of the presence of other similar organizations (Aldrich, 1990; Hannan & Freeman, 1997).

Concerning the private enterprise sustainability, the population ecology studies have found that the younger firms are less likely to survive than older firms (Hannan & Freeman, 1997) and that the low survival rate in the early years is associated with the liability of newness (Stinchcombe, 1965). The sustainability also fluctuates according to two strategic dimensions (Brittain & Freeman, 1980; Lambkin & Day, 1989): the specialist vs. the generalist strategic focus.

Following this theoretical framework, they generate several hypotheses:

–      H1a et b: At the national level and at local level, the higher the population density of social enterprises the higher the likelihood of social enterprise dissolution
–      H1c: The older the social enterprise the lower the likelihood that the social enterprise will dissolve
–      H1d: Social enterprises classified as specialist (with a high SIC code) will be less likely to be dissolved than those classified as generalist (with a low SIC code)

Regarding the co-location of other organizational forms, social enterprises share in common with private enterprise the need to achieve financial sustainability and with charities, the pursuit of social and environmental goals.

–      H2a et b: The population density of social enterprises is positively related to the population density of small businesses and of registered charities

Supply of businesses is influenced by availability of resources (grants, government’s contracts, etc.). Nevertheless, the mission of SE implies that they are geographically placed for providing services in areas of high deprivation and poverty (Evans, 2007).

–      H3: The population density of social enterprises will be higher in areas of high  deprivation than low deprivation

Several questions were asked about the influence of the type of industry on CICs’ location and about the possibility of using other analytical frameworks to conduct the research (such as geographical economics).

The results indicate that all hypotheses are supported except H1c (it shows the contrary) and H1d (partially supported), which led the audience to discuss some explanations of the results. An interesting debate took place.

Finally, the study makes three contributions to the literature on environmental influences on entrepreneurial activity:

–      Liability of activity: social enterprise sustainability is related to industry more than age
–      Hybrid advantage: social enterprise sustainability is related to co-location with small businesses and registered charities
–      Resource deprivation paradox: social enterprises are more likely to be located in resource poor areas than resource munificent areas

Dr Helen Haugh and her multidisciplinary team have already started the second step of the project. It consists in a survey during 2 years in order to go deeper in the explanations of the quantitative research and to look at productivity aspects and innovation.

After the presentation, the participants had the opportunity to exchange ideas with Dr. Haugh on several topics: the applicability of the population ecology framework on their own PhD thesis, the process that pushed her to use this framework and to move from qualitative to quantitative methods, the specificities of CICs as social enterprises in the UK, etc.

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Catherine_Dal_FiorCatherine Dal Fior is a PhD student at the Centre For Social Economy of the University of Liege and she is a teaching assistant at ICHEC Brussels Management School. She is currently undertaking a PhD in Management at HEC-ULg. Her research field is the strategy of organizations active in the waste management sector in Ouagadougou (Burkina Faso).

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.

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