UK- Belgium Scientific Workshop Performance and legitimacy in social enterprises

1. UK-BelgiumScientific WorkshopPerformance and legitimacyin social enterprises Liege, 3-4 March 2011

2. Goals of the workshop As from September 2008, the British Council and WBI/FNRS jointly run and finance the Partnership Programme in Science, United Kingdom (UK) & CommunautéFrançaise de BelgiqueWallonieBruxelles (CFB-WB). The aim of this Partnership Programme in Science (PPS) is to enable early-stage and talented postdoctoral researchers from higher education institutions in the two countries to meet, exchange ideas and engage in scientific and academic research collaboration.

3. Goals of the workshop • Share extant research – learn together • Identify possible synergies across countries/disciplines/approaches • Explore trails for future collaborations • Learn to know each other

4. Social enterprise • UK • “A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or the community, rather than being driven by the need to maximise profit for shareholders and owners” (DTI, 2002) • EMES • Definition: “not-for-profit private organizations providing goods and services directly related to their explicit aim to benefit the community. They rely on a collective dynamics involving various types of stakeholders in their governing bodies, they place a high value on their autonomy and they bear economic risks linked to their activity” (Defourny & Nyssens 2008b:5) • Ideal type (economic activity, social dimension and governance)

5. Performance • “Numerous works have been published which directly address the area of performance but do not explicitly define performance” (O’Donnell & Duffy, 2005) • Multiple definitions, including: • “A task or operation seen in terms of how successfully it is performed” (OED) • “Accomplishment of a given task measured against preset standards of accuracy, completeness, cost, and speed” • (Business Dictionary)

6. Performance measurement • “A performance measurement system can be defined as the set of metrics used to quantify both the efficiency and effectiveness of actions” (Neely et al., 1995) • “The measurement problem arises because the performance of the firm is not entirely measurable” (Meyer, 2002) • “Social Entrepreneurs and their funders seem untroubled by the inability to measure fully and precisely all aspects of their social impact” (Kramer, 2005)

7. Legitimacy • Definitions: • Meyer & Rowan, 1977; Meyer & Scott, 1983: “the adequacy of an organization as theory” • Knoke, 1985: “right to exist and to pursue its affairs in its chosen manner” • Scott, 1995: “condition reflecting cultural alignment, normative support, or consonance with relevant rules or laws “ • Suchman, 1995: “generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions” • Nicholls, 2010: “the congruence, in multiple stakeholder judgements, of an organization’s perceived actions with their expectations of its performance”

8. Legitimacy • Three types of legitimacy (Suchman, 1995; Dart, 2004): • Pragmatic legitimacy: stakeholders support the SE because it brings them advantages • Moral legitimacy: stakeholders support the SE because it is “the right thing to do” • Cognitive legitimacy: stakeholders support the SE because any other organizational model would be unthinkable • Legitimacy as a source of power (Clegg & Hardy, 1996)

9. Performance Organizationalbehaviour (strategy, action, method, etc.) Observer Is this SE successful? Standards

10. Performance Organizationalbehaviour (strategy, action, method, etc.) Observer Is this SE successful? Standards = Objectification

11. Legitimacy Prior experience Education Vision of the world Influential opinions Relationship with SE Organizationalbehaviour (strategy, action, method, etc.) Observer Is this SE adequate?

12. Legitimacy Prior experience Education Vision of the world Influential opinions Relationship with SE Organizationalbehaviour (strategy, action, method, etc.) Observer Is this SE adequate? Signals = Subjective reasoning

13. Comparison • Performance • Ambition of objectivity: it « is » there and needs to bediscovered/described • Epistemologydriven by economics and finance • Focus on indicators • Mainly quantitative - rathercontinuous • Most ‘legitimate’ approach to apprehend SE behaviour • Legitimacy • Subjectivity: itonlyexists in terms of stakeholder perceptions • Epistemologydriven by sociology • Focus on discourse and narratives Mainly qualitative - ratherdichotomous • Pervadesdiscourses on ‘performance’

14. Performance view Performance Is thisappropriate? SE behaviour Comparisonwith Standards Resources Level of legitimacy

15. Legitimacyview Is thisappropriate? Statement on performance ‘Best practices’ and indicators Stakeholder perception of SE behaviour Judgements Resources

16. Integration? • No because of differentepistemologies, but bridges: • - Behind SE discourse on performance is a quest for legitimacy; performance isat least partly subjective • - The construction and measurement of performance indicatorsis a crucial legitimatingtool • - Multiple congruent stakeholderjudgements on an SE maylead to a certain objectification of SE behaviour (coherence, efficiency, etc.) • Connectstudy of SE to main paradigms and debates in organizationtheory – use SE as a case thatbrings in new insights

17. Thank you!