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Why Social Enterprises Are Asking to Be Multi-stakeholder and Deliberative: An Explanation around the Costs of Exclusion

Author

Listed:
  • Carlo Borzaga
  • Silvia Sacchetti
Abstract
The study of multi-stakeholdership (and multi-stakeholder social enterprises in particular) is only at the start. Entrepreneurial choices which have emerged spontaneously, as well as the first legal frameworks approved in this direction, lack an adequate theoretical support. The debate itself is underdeveloped, as the existing understanding of organisations and their aims resist an inclusive, public interest view of enterprise. Our contribution aims at enriching the thin theoretical reflections on multi-stakeholdership, in a context where they are already established, i.e. that of social and personal services. The aim is to provide an economic justification on why the governance structure and decisionmaking praxis of the firm needs to account for multiple stakeholders. In particular with our analysis we want: a) to consider production and the role of firms in the context of the public interest which may or may not coincide with the non-profit objective; b) to ground the explanation of firm governance and processes upon the nature of production and the interconnections between demand and supply side; c) to explain that the costs associated with multi-stakeholder governance and deliberation in decision-making can increase internal efficiency and be productive since they lower internal costs and utilise resources that otherwise would go astray. The key insight of this work is that, differently from major interpretations, property costs should be compared with a more comprehensive range of costs, such as the social costs that emerge when the supply of social and personal services is insufficient or when the identification of aims and means is not shared amongst stakeholders. Our model highlights that when social costs derived from exclusion are high, even an enterprise with costly decisional processes, such as the multistakeholder, can be the most efficient solution amongst other possible alternatives.

Suggested Citation

  • Carlo Borzaga & Silvia Sacchetti, 2015. "Why Social Enterprises Are Asking to Be Multi-stakeholder and Deliberative: An Explanation around the Costs of Exclusion," Euricse Working Papers 1575, Euricse (European Research Institute on Cooperative and Social Enterprises).
    • Handle: RePEc:trn:utwpeu:1575
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    References listed on IDEAS

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    Cited by:

    1. Ermanno C. Tortia & Florence Degavre & Simone Poledrini, 2020. "Why are social enterprises good candidates for social innovation? Looking for personal and institutional drivers of innovation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(3), pages 459-477, September.
    2. Massimo Fornasari & Omar Mazzotti, 2023. "At the Origins of a Multi-Stakeholder Non-Profit Organisational Model: Comizi Agrari in Post-Unification Romagna," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(4), pages 1-80, February.
    3. Silvia Sacchetti & Johnston Birchall, 2018. "The Comparative Advantages of Single and Multi-Stakeholder Cooperatives: Reflections for a Research Agenda," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 7(2), pages 87-100.
    4. Ralph Richter, 2018. "The Janus face of participatory governance: How inclusive governance benefits and limits the social innovativeness of social enterprises," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 7(1), pages 61-87.
    5. Simone Poledrini & Florence Degavre & Ermanno Tortia, 2018. "Editorial: Background and Further Perspectives on Social Innovation in Social Enterprises," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 7(1), pages 1-13.
    6. Poledrini Simone & Tortia Ermanno C., 2020. "Social Enterprises: Evolution of the Organizational Model and Application to the Italian Case," Entrepreneurship Research Journal, De Gruyter, vol. 10(4), pages 1-26, October.
    7. Silvia Sacchetti & Marco Faillo, 2017. "The notion of social responsibility across different types of nonprofit and for profit organizations," Econometica Working Papers wp61, Econometica.
    8. Lopez Arceiz, Francisco & Solferino, Nazaria & Solferino, Viviana & Tortia, Ermanno C., 2016. "Corporate social responsibility is just a twist in a Möbius Strip: An empirical test on Italian cooperatives," MPRA Paper 74776, University Library of Munich, Germany.

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    More about this item

    Keywords

    Social Value Chain; Governance; Multistakeholdership; Deliberation; Externalities; Impacts; Social Enterprise; Social Innovation; Social Services;
    All these keywords.

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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