Leading And Managing Social Enterprises

Leading And Managing Social Enterprises

Social enterprises play an important role in society. Their distinguishing feature is that they trade to support their social objectives rather than for personal gain. In so doing, they provide much-needed goods and services, often where the private sector has chosen not to. Social enterprises provide health and care services, recycling services, new and recycled goods, transport, community facilities, renewable energy, construction services, housing and access to broadband telecommunications. This is often combined with providing on-the-job training in a supportive environment for disadvantaged people, including people who have a disability or are long-term unemployed. Despite this, or perhaps because they eschew a "get rich quick" mentality, social enterprises tend to suffer from low prestige. Yet working in them is not easy; it demands flexibility and multiple skills. Incentives and career paths are sometimes limited, or perceived as such. Social and financial aims may clash, as may volunteer and paid employee mentalities. There may be fears that pay and conditions in the public or private sectors might be undermined by "unfair competition" from more result-oriented social economy working methods. As if this was not enough, they predominantly offer employment to people who have not gained formal qualifications.

Fiedler's theory posits two classifications of leaders: (1) those motivated by the need to accomplish assigned tasks (task-orientated); (2) those motivated by close and supportive relations with members of the group (people-orientated). The effectiveness of the leader is contingent upon both the leader's personality and the characteristics of the leadership situation. This leadership model has generated considerable controversy and led to the development of more than 120 published tests, many of which are in commercial use. These run counter to the optimizing notions of many rational theorists. Scott adds that in contingency theory "the best way to organize depends on the nature of the environment to which the organization relates"

"Contingency theory is guided by the general orienting hypothesis that organizations whose internal features best match the demands of their environments will acheive the best adaptation" (Scott p. 89). The termed was coined by Lawrence and Lorsch in 1967 who argued that the amount of uncertainty and rate of change in an environment impacts the development of internal features in organizations.

Different subunits within an organization may confront different external demands. "To cope with these various environments, organization create specialized subunits with differing structural features" (Scott p. 89) -- for example, differing levels of formalization, centralized vs decentralized, planning time horizon. "The more varied the types of enviroments confronted by an organization, the more differentiated its structure needs to be" (p. 89).

Furthermore, the more differentiated the more difficult it will be to coordinate the activities of the subunits and more resources need to be applied for coordination.

Lawrence and Lorsch's classic 1967 study, especially the six companies in the plastics industry, highlight their argument that in complex environments the organization developed separate departments to confront these differing environmental segments. But these separate departments created coordination ...