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SINK OR SWIM: SOCIAL ENTERPRISE AS A PANACEA FOR NON-PROFIT ORGANISATIONS?

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The institutional frameworks and contexts that support social enterprises and the growth of hybrid organisations in Sub-Saharan Africa require more concerted examination. Drawing upon a qualitative study, and examined through a framework of
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  SINK OR SWIM: SOCIAL ENTERPRISE AS APANACEAFORNON-PROFITORGANISATIONS? SARA CALVO 1 * and ANDRES MORALES 21  LOW, Middlesex University, London, UK  2 The Open University Business School, UK  Abstract:  The institutional frameworks and contexts that support social enterprises and the growth of hybrid organisations in Sub-Saharan Africa require more concerted examination. Drawing upon aqualitative study, and examined through a framework of Postcolonial theory, this paper contributes toemerging discussions in this area through an investigation of the transformation of non-pro fi t organisations (NPOs) towards the social enterprise model and exploring the impact of hybridity on themanagement of these organisations in Tanzania. The study suggests that NPOs mimic social enterprise ‘ best practices ’  to secure fi nancial resources and integratetheir traditional values into the social enterprisemodel creating tensions resulting from hybridity. Copyright © 2015 John Wiley & Sons, Ltd. Keywords:  social enterprise; non-pro fi t organisations; hybridisation; postcolonial theory; Tanzania 1 INTRODUCTION Social enterprise (SE) has attracted the attention of policy makers and practitioners aroundthe world and is today at the heart of numerous social and economic debates (Wilson &Post, 2013). It has been claimed that SE can provide a range of bene fi ts to organisationslooking to address social, cultural or environmental challenges (Kerlin, 2010). Althoughthere is controversy over the precise de fi nition of the term  ‘ SEs ’ , 1 most coalesce aroundthe idea that these are organisations that combine enterprise with an embedded social *Correspondence to: Sara Calvo, Leadership, Work and Organisations, Middlesex University Business School,The Burroughs, NW4 4BT, London, UK.E-mail: s.calvo@mdx.ac.uk 1 Dees and Anderson (2006) suggested two main schools of thought within social enterprises: the  Social  Innovation School   in which the focal point is the innovative process creating social change and emphasisingthe role of   ‘ social entrepreneurs ’  within their de fi nition and the  Social Enterprise School   according to which socialenterprises refer to those organisations that pursue a conventional business model but then invest their pro fi ts for the social good. European researchers added a third school of thought:  the European Social Enterprise Network  (  EMES  ), which understands social enterprises as having a democratic and participatory role and includescooperatives within their classi fi cation of social enterprise activities. See paper by Defourny and Nyssens (2010). Copyright © 2015 John Wiley & Sons, Ltd.  Journal of International Development  J. Int. Dev.  (2015) Published online in Wiley Online Library(wileyonlinelibrary.com) DOI: 10.1002/jid.3138  and/or environmental purpose (Doherty  et al  ., 2014). SEs pursue the dual mission of achieving both  fi nancial sustainability and social/environmental purposes and, as such,do not   fi t into the conventional categories of private, public or non-pro fi t organisations(NPOs). Therefore, SEs are a prime example of a hybrid organisational form (Pache &Santos, 2012). Much of the writing on SE has focused on the advantages of theseorganisations, ignoring the shortcomings, power and politics behind the SE model(Doherty  et al  ., 2014). Yet, recent studies have challenged the overly positive accountsof the SE  ‘ hybrid ’  model and explain how hybridity may lead to mission drift (Carrol &Stater, 2009; Pache & Santos, 2012).Whilst there is no accurate information concerning the scale of SEs in Sub-SaharanAfrica, it has been observed that the sector has experienced considerable growth in recent years (Kerlin, 2010; Littlewood & Holt, 2015; Mori & Fulgence, 2009; Rivera-Santos et al  ., 2014). These include cooperatives, micro- fi nance initiatives, community enterprisesand NPOs with trading activities, among others 2 (Befeki, 2011). Critical to anunderstanding of this is the current promotion of SE activity by foreign and nationaldevelopment bodies and policy makers who are pushing NPOs to become  ‘ morebusiness-like ’  (Claeyé & Jackson, 2012; Dart, 2004; Eikenberry, 2008; Eikenberry &Kluver, 2004; Liu & Ko, 2012; Maier, 2011; Mullins  et al  ., 2012). This is reinforced bythe emergence of the global discourse on  ‘ aid effectiveness ’  and  ‘ managing for development results ’ , which is underpinned by strategic managerialist modes of thinkingthat emphasise means over ends (Claeyé & Jackson, 2012; Gulrajani, 2011). As Fowler (2000) noted, SEs have come to be seen as a rational solution for NPOs to exit   ‘ aiddependency syndrome ’ . 3 Recently, development aid organisations have started to use SEs as  ‘ exit strategies ’ ,promoting these initiatives via programmes such as the World Bank Development Market Place, the Inter-American Development Bank Social Entrepreneurship Program and theUnited Nations Global Compact. However, these policies have been criticised as they pushNPOs to adopt commercial strategies that con fl ict with their social mission (McKay  et al  .,2011). Moreover, many NPOs have endorsed the concept of SE, particularly since theglobal  fi nancial crisis began in 2008, as they have faced increased competition for philanthropic donations and funding opportunities. Thus, when a programme is about tocome to an end, NPOs choose to set up SEs, particularly cooperatives, in the hope of providing continuity (sustainability) to projects/programmes that are no longer funded(Hanley, 2013; Khamis, 2009).Yet, the institutional frameworks and contexts that support the SE model and the growthof hybrid organisations in less developed countries require more concerted examination, asmuch of the current discussion around NPOs and SEs occurs with examples from Westerncountries. This is clearly exempli fi ed in several studies that suggest that charities inEngland have been encouraged to move towards the SE model with recent government strategies and policies to secure funding and contract opportunities with the public sector (Dey & Teasdale, 2015; Doherty  et al  ., 2014; Sepulveda  et al  ., 2013). The aim of this 2 It is important to highlight that the difference between an SE and an NPO largely depends on how they generatetheir money. In general, SEs generate pro fi t from their services, and although NPOs can also engage in tradingactivities, the majority of their income comes from grants and donations (Bridge  et al  ., 2009). 3 Over the past three decades, NPOs have increasingly been integrated into the international aid system as vehiclesfor the delivery of aid interventions, creating a dependency syndrome among Africans and the Governments(Lewis & Opoku-Mensah, 2006; Nelson, 2006; Gosh, 2009; Buczkiewicz & Carnegie, 2001). This has caused,according to Moyo (2009),  ‘ an unmitigated political, economic and humanitarian disaster  ’  in the continent. S. Calvo and A. Morales Copyright © 2015 John Wiley & Sons, Ltd.  J. Int. Dev.  (2015)DOI: 10.1002/jid  paper is therefore to address this knowledge gap and gain greater insights into thetransformation of small/Southern NPOs to the SE model and the impact of hybridity onthe management of local NPOs in Tanzania. The paper focuses its attention on localSouthern NPOs that are frequently overlooked by studies that cover large/Northern NPOswhose srcins lie in the industrialised countries (Holmen, 2010; Lewis & Kanji, 2009).We have selected Tanzania as it represents an interesting case study that epitomises thetypical aid-based structure of an Eastern Sub-Saharan African country. It encapsulates astrong collective societal mindset, in fl uenced by and inherited from its own history(Bromley  et al  ., 2004a). To achieve this, three related research questions are addressed.Firstly, how has the relationship between NPOs and SEs evolved historically in thiscountry? Secondly, to what extent has the transformation of small/Southern NPOs to theSE model been informed by institutional frameworks and contexts? Thirdly, what has beenthe impact of hybridity on the management of a NPO in Tanzania? In answering thesequestions, this paper presents srcinal empirical material based on qualitative research.This paper contributes to our knowledge of the phenomenon of SE in Sub-Saharan Africa,as well as to advancing the debate on the in fl uence of Western managerial discourse on thedevelopment of NPOs in the region.The paper is structured as follows. We  fi rst explain the theoretical framework used for the study. We then re fl ect on the research methodology and introduce the demographiccharacteristics of Tanzania. We move on to present the main research  fi ndings anddiscussion based upon the empirical analysis. We conclude with detailed discussion of the paper  ’ s contributions to knowledge and theory and re fl ect on potential areas for futureresearch. 2 POSTCOLONIALISM: MIMICRY AND HYBRIDITY Two main perspectives have emerged from the debate on how environment affectsorganisational behaviour across cultures, which are the  ‘ culturalist  ’  (Haire  et al  ., 1966;Hofstede, 2001) and  ‘ institutionalist  ’  perspectives 4 (DiMaggio, 1991; DiMaggio &Powell, 1983). A way of conceptualising a bridge between these two perspectives is toincorporate insights from postcolonial theory (Fanon, 2008; Said, 2003; Spivak, 1988)and more speci fi cally, Bhabha ’ s (1984, 1994) notions of mimicry and hybridity. Wepropose that this theoretical framework may explain, in part, the transformation of NPOstowards the SE model (mimicry) as well as help us to examine the impact of hybridityon the management of small/Southern NPOs.Postcolonial theory has become enormously in fl uential as a framework for understanding the Global South. Postcolonial theory can be best described as the academicdiscipline that analyses the relationship between centre (coloniser) and periphery(colonised), by building on the concept of hegemony, or domination by consent (Mishra& Hodge, 1991). Bhabha (1984) introduces the concept of mimicry as an analytical toolto expand on the (ambivalent) effects of domination and hegemony. As Bhabha suggested, ‘ mimicry emerges as one of the most elusive and effective strategies of colonial power and 4 Whilst the culturalist perspective assumes that differences in management practices are located in the values andbeliefs of individuals, the institutionalist perspective emphasises the in fl uence of institutionalised beliefs andprocesses in organisations that are sharing the same environment (Child, 2002; Dickson  et al  ., 2004; DiMaggio& Powell, 1983). Sink or Swim: Social Enterprise as a Panacea for NPOs in Tanzania? Copyright © 2015 John Wiley & Sons, Ltd.  J. Int. Dev.  (2015)DOI: 10.1002/jid  knowledge ’  (Bhabha, 1984, p. 126). The colonial subject is encouraged to mimic thecoloniser by adopting the coloniser  ’ s cultural habits, assumptions, institutions and values(Ashcroft   et al  ., 2007; Huddart, 2006). Taking the cue from the organisational  fi eld of NPOs, mimicry can be seen to be re fl ective in the spread of managerialist ideas andpractices to many NPOs in recent years (Claeyé & Jackson, 2012; Dey & Teasdale,2015). We suggest that NPOs in Tanzania are currently being in fl uenced by institutionalpressure that is imposing changes on their managerial modes of thinking, pushing themto adopt the SE  ‘ business-like ’  model, re fl ecting Western managerial global discourse that may be inappropriate to local contexts (Claeyé & Jackson, 2012; Eikenberry & Kluver,2004; Liu & Ko, 2012; Mullins  et al  ., 2012).The process of hybridity, however, goes further than simply adopting and adapting tocoloniser culture. As Bhabha (1984) stated, mimicry constructs a subject   ‘ that is almost the same, but not quite ’  (p. 126). Whilst mimicry denotes the ways in which the coloniser tries to make the colonised into his own image, the outcome remains a mere re fl ection of the srcinal. This opens up a space for resisting the managerial discourse, by allowingroom for creative resistance, leaving room for hybridity to emerge. As such, hybriditycaptures the integration (or mingling) of cultural signs and practices from the coloniser and the colonised cultures. This creates the construction of an object that is new, neither the one nor the other. Therefore, we argue that small/Southern NPOs in Tanzania areturning themselves into hybrids, as they incorporate the  ‘ business-like ’  managerialist discourse of the SE model within their traditional ethos (Figure 1).Yet, hybridity can both help and hinder the development of NPOs (Doherty  et al  .,2014). Whilst several studies have suggested that the hybrid model confers  fl exibility for NPOs, as it legitimises the acquisition of   fi nance (Chertok  et al  ., 2008; Teasdale, 2010),it is also a source of confusion, contradiction and con fl ict (Bridgstock  et al  ., 2010). Pacheand Santos (2012) identi fi ed two types of con fl ict that affect hybrid organisations:  fi rstly,when stakeholders disagree over the goals themselves and secondly, when they agree tothe objectives but disagree over the goals. Thus, managing governance tensions is a keymanagement challenge faced by managers of hybrid organisations. Moreover, hybriditycan create situations that demand staff with other skills sets (Doherty  et al  ., 2014). Wewant to explore this further in our study by exploring how NPOs in Tanzania respond tothe opportunities and tensions emerging from this hybridity. Figure 1. Bhabha ’ s framework adapted for this research S. Calvo and A. Morales Copyright © 2015 John Wiley & Sons, Ltd.  J. Int. Dev.  (2015)DOI: 10.1002/jid  3 RESEARCH CONTEXT: TANZANIA Tanzania is located on the east coast of Africa and came into existence in 1964 whenmainland Tanganyika (administered as a German colony and a British protectorate) andthe Indian Ocean Islands of Zanzibar (a British protectorate) claimed independence andformed the United Republic of Tanzania (Bromley  et al  ., 2004a; Thompson, 2011). Thetwo countries, Zanzibar and Tanganyika, came together as Tanzania under the socialist presidency of Julius Nyerere. He promoted unity between the 120 plus ethnic groupsrepresented in the Tanzanian population (including Chagga, Arab, Asian and Shirazi,among others) and urged his people to regard themselves  fi rst as Tanzanians. There hasbeen relatively little ethnic con fl ict in the years since independence in comparison withneighbouring countries such as Kenya, Uganda and Rwanda (Thompson, 2011).With a population of 49.2 million people, Tanzania has one of the most rapidly growingpopulations in Africa (World Bank, 2015). Tanzania has a gross domestic product per capita of $948, where the proportion of the national population living below the povertyline is 36% (World Bank, 2015). There is a signi fi cant disparity between urban and ruralpoverty, as about 87% of the poor population live in rural areas (IMF, 2006, 2013;National Strategy for Growth and Reduction of Poverty, 2005). AIDS affects 1.4 millionpeople and another 2 million are infected with the HIV (UNAIDS, 2014). Malaria is amajor public health problem in Tanzania, accounting for 60000 deaths each year, 80%of which are among children under 5years of age (PMI, 2012). Given the country ’ snumerous and severe problems, which include inequality, corruption, famine and disease,Tanzania provides the ideal setting in which to investigate the role played by NPOs andSEs in one country. 4 FIELDWORK This paper draws upon data from a study investigating the transformation of NPOs to theSE model in Tanzania. The  fi eldwork took place in two phases during August andSeptember 2012. The  fi rst phase of   fi eldwork comprised a series of interviews withstakeholders of   fi ve organisations out of the 12 NPOs that attended a 3-day SE intensivetraining course we delivered in Dar Es Salaam in August 2012, entitled  NPOs in Tanzania :  Moving towards the SE model  ? Table 1 provides a more detailed description of the  fi vecases, which includes their age, location, social/environmental missions,  fi nancialresources, bene fi ciaries and the primary data collection undertaken with each case for thisresearch. All the cases are small; as they had at the time the study was conducted less than10 employees, and Southern, as the population from that particular country (for example,Tanzania) had established them. The cases were selected on the basis that they represent avariety of ages, have different activities, bene fi ciaries and cover different regions in thecountry. In total, ten interviews were conducted with organisations ’  stakeholders.The second phase of   fi eldwork was in-depth case study research. Case Study 3 wasselected as the case example that could exemplify better among the other case studiesthe impact of hybridity on the management of an organisation, as it was already involvedsubstantially in commercial activities (more than 30% of their income came fromcommercial activities). This case study draws on information gathered during a 1-monthvisit in September, and the methods employed were interviews, observations and  fi eldnotes. Repeated interviews were conducted with the chairman, the national administrator  Sink or Swim: Social Enterprise as a Panacea for NPOs in Tanzania? Copyright © 2015 John Wiley & Sons, Ltd.  J. Int. Dev.  (2015)DOI: 10.1002/jid
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