The Third Sector: Volume 1

Cover of The Third Sector

Table of contents

(32 chapters)

The chapters and commentaries within this volume were all originally presented at the Critical Management Studies Workshop in Montreal 2010. The workshops were specifically established to provide space for dialogue and discussion. Their format requires that papers are presented by a discussant chosen from amongst the other contributors and all papers are circulated in good time before the workshop. It was this prior dialogic structure that has inspired the structure of this volume, and all of the commentaries are written by those participants who were originally the discussant for that paper. The editors and contributors are all immensely grateful to the organizers of the Montreal CMS Workshop.

Purpose – This chapter introduces the contents of the volume and provides an editorial overview of the origins of the concept of the Third Sector, methodologies employed by contributors, how contributions address different organizational forms, issues of critique within the volume, and the benefits of the contributions for researchers and practitioners within the Third Sector, and within Critical Management Studies.

Methodology/approach – Editorial overview and synthesis.

Research implications – The contents of the volume significantly advance critical perspectives upon the Third Sector.

Social implications – The contents of the volume enable improved critical reflection for those working within the Third Sector.

Originality/value of chapter – This editorial introduction presents the first broad-ranging synthesis of (a) contemporary issues within the Third Sector, Social Economy and Civil Society and (b) Critical Management Studies.

This section provides a number of useful overviews to key elements of the Third Sector whilst presenting some quite distinct and contrasting angles of current studies of the sector. The chapter by Haugh and Peredo neatly builds upon previous analyses of UK government policies towards the sector (Haugh & Kitson, 2007), and here analyses the discourse associated with the development of a new legal form for social enterprises, Community Interest Company. The chapter by Myers and Cato focuses on a different and much older legal form, the co-operative, in their discussion of the current ‘mutual moment’ in Wales in the context of increasing government pressure to shift the provision of key basic services from the public sector to other organisations. In the chapter by Delalieux and Kourula, the focus is global rather than national as the authors critically analyse the literature examining the ability of non-governmental organisations (NGOs) to have positive, progressive impacts on multinational corporations, an ability which is often touted as one of their raison d'êtres.

Purpose – The aim of this chapter is to analyse the discourse associated with, and preceding the establishment of, the community interest company (CIC) legal format in the United Kingdom in 2005. The analysis identifies the political, ideological, social and economic meta-narratives that are embedded in five key texts from which the CIC emerges and is codified.

Design, methodology and approach – The approach consists of a discourse analysis of five principal texts produced between 2002 and 2005 in which the idea of a CIC is articulated and refined prior to the launch of the CIC format in 2005.

Findings – Analysis of five key texts elucidates four meta-narratives that contrast political, ideological, social and economic discourse and counter-discourse.

Research implications and limitations – The selection of five key texts excludes other texts that were produced during the articulation and refinement of the CIC format. Further research to examine the diffusion, adoption and translation of the CIC legal format is recommended.

Practical implications – We show how the crafting of policy is embedded in meta-narratives that shape the content and implementation of policy.

Social implications – The CIC protects, in perpetuity, collectively held property rights through an asset lock, and enables capital to be raised from investors and trustees to be paid. These characteristics are beneficial in that community asset ownership can contribute to local development, e.g. by creating new ventures, generating jobs and anchoring wealth in communities; raising capital from investors can facilitate the enterprise to grow and scale up; and the expertise of the board can be enhanced by rewarding trustees financially for their involvement in the governance of the CIC.

Originality – This chapter presents the first critical analysis of the discourse associated with the origins of the idea for, and articulation of, the need for a legal format for social enterprises in the United Kingdom.

Le premier qui, ayant enclos un terrain, s'avisa de dire: “Ceci est à moi” et trouva des gens assez simples pour le croire, fut le vrai fondateur de la société civile. Que de crimes, de guerres, de meurtres, que de misères et d'horreurs n'eût point épargnés au genre humain celui qui, arrachant les pieux et comblant le fossé, eût crié à ses semblables: “Gardez-vous d’écouter cet imposteur; vous êtes perdus et vous oubliez que les fruits sont à tous, et que la terre n'est à personne!– J.J. Rousseau (Discours sur l'origine et les fondements de l'inégalité parmi les hommes, 1755)The first man who, having enclosed a piece of ground, bethought himself of saying ‘This is mine’, and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this imposter; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.–J. J. Rousseau (Discours sur l'origine et les fondements de l'inégalité parmi les hommes, 1755, translated by G. D. H. Cole)

Purpose – The aim of this chapter is to explore the current trend for new ‘mutual’ models of public service delivery as part of a process of personalisation and commodification of health and social care design and service delivery.

Design/methodology/approach – The authors use the thesis of commodification and the concept of value to explore, with the aid of three examples from previous research, the complexity of transfer of large-scale services from local government and health bodies and the potential contribution of co-operatives and mutuals to this agenda.

Findings – Mutuals may provide an alternative to the supposedly inevitable progression to wholly commodified health and social care provision. However, a top-down push to encourage employee-owned enterprises may fail to take account of significant issues: high capital and labour costs; transfer of risk to consumers purchasing services; quality of care assurance; scope and scale of services; and enabling policies and structures to support democratic ownership and control of enterprises.

Research implications/limitations – Although the chapter focuses on Welsh experience, there are implications for the future provision of public services more generally.

Originality/value – This chapter contributes to a growing discourse and critical awareness of co-operatives and mutuals as potential public service providers. In particular, the nature of democratic engagement and involvement; models of co-ownership and co-construction of public services and the role of the State in promoting alternative non-marketised systems of design and delivery for the public good as well as maintaining accountability through local and national democratic processes.

Myers and Cato explore the cooperative sector in the areas of health and social services reforms, and in particular, the rediscovery of mutualism. The authors build on research of 17 case studies, which was undertaken on behalf of the Wales Co-operative Centre, to raise questions and provoke discussion about social enterprise and cooperatives operating as service providers. Myers and Cato call for taking the “mutual moment” as an opportunity to rethink the provision of public services without losing the ethos of public service and to build public value. More than this, their thought-provoking piece also gives us opportunity to critically reflect upon the changing relationship between state, private, and third sectors. The authors first analyze the progressive move from public to private provision and then look at the potential to move from private to mutual. Finally, they ask the question whether co-constructing mutualism and public services is the way forward to reconfiguring public services in a way that is both democratic and desirable.

Purpose – In management literature, the influence that nongovernmental organizations (NGOs) can have on reforming multinational corporations' practices is traditionally depicted as significant. Few studies have emphasized the limits that NGOs face. The aim of this chapter is to:1.Describe how the positive view of NGO influence is implicitly built on a neo-Tocquevillian understanding of civil society and an explicit utilization of Habermasian ideas of civil society and communication.2.Reveal the limitations of the ability of NGOs alone to affect the negative aspects related to corporate activity and capitalism in general, building on existing critical work on civil society.

Design/methodology/approach – We review the existing mainstream literature on NGO–business relationships and compare it to the less developed body of critical research on the subject.

Findings – We found that current mainstream research on NGO–business relationships are implicitly referring to a specific positive conception of civil society believing in the power of civil society to reform society (Neo-Tocquevillian Belief).

We then propose critical alternative conceptions of civil society, to allow the development of further research in a more critical perspective, insisting on the limits of the ability of NGOs to mitigate the worst effects of neoliberalism.

Originality/value – The value of this chapter lies in the presentation of the implicit assumptions on which mainstream research on NGO–business relationships are based today. The chapter identifies possible alternative theoretical orientations for future research for doctoral students or researchers.

This very interesting chapter written by Delalieux and Kourula raises two important questions: (1) Why do the categories of civil society, so co-opted by neoliberal ideology, attract the aspiration of radical democracy and anticapitalist movements? (2) How can partnerships between nongovernmental organizations (civil society) and multinational corporations (market) mitigate the worst effects of economic liberalism? The authors argue that (a) the concept of civil society in Enlightenment thought is sometimes significantly different from its use in contemporary civil society theorizing – even though the latter speaks in the name of the former; (b) the results of civil society actions in correcting the market are limited in time, space, and resources; and that (c) the contemporary critics of the state are forming a powerful coalition that is demonizing the state in a way that is preventing public regulation from developing. Those powerful conclusions should make everyone rethink critically the importance of each sector as well as the relationship between sectors.

One challenge to understanding identity within third-sector organizations is that of definition. Third sector is a broad covering term that enables inclusion of all organizations working within this arena; yet it does not capture the exact essence of or identity of the third sector. This dilemma raises the idea that there is a possibility of an identifiable characterization of the sector that can be attributed to a particular third-sector rationality and purpose. A commonly held view is that third-sector organizations are essentially caring and provide services or goods that support this object. The aim of working toward an improved society through the provision of these goods and services is also generally inspired by the common good and underpinned by values such as solidarity, responsibility, dignity, justice, cooperation, subsidiarity, democracy, inclusivity, sustainability, and accountability. Whilst superimposed onto issues of agreed definitions and understandings of third-sector actors identity, the space within which they operate is an additional layer. Civil society is often used as a cover-all term to define the blurred space where the complex and negotiated boundaries between state, civil society, family, and markets are played out. All the chapters within this section cover issues of identity from differing perspectives giving a broader view of the particular characteristics whether technological or cultural, which determine how and why there is no one specific third-sector identity that fits all organizations working within different institutional spaces and international contexts.

Purpose – To analyze the emergence of new organizational forms in the Danish welfare sector.

Design/methodology/approach – Drawing on Niklas Luhmann and Gunther Teubner, the research analyzes governmental documents, policy programs, action plans, and strategic documents.

Findings – A partnering structure has emerged with a new politics of voluntarism, complex forms of integration and new imaginary distinctions between voluntariness and public care. This can usefully be conceptualized as aspects of the stabilization of a “third-order system.” The research identified a number of different managerial strategies for involvement in the system.

Practical and social implications – Social welfare has become a mix of public and civil society values and norms, and extensive resources have been invested from both governmental and nongovernmental sides to build up shared competences for the new forms of partnering-based organization. However, to act according to the new principles of partnering, at the strategic and managerial level, the voluntary organizations have to behave in a schizophrenic manner – as both individual organizations and cooperational partners within the system.

Research implications – The concept of “third-order system” is especially useful in analyzing mixed forms of management in the welfare sector.

Originality – Different forms of radical organizational analysis are combined to develop a notion of “third-order system” in the welfare sector.

This chapter provides a useful background to the development of voluntary social work in Denmark that echoes the experience of other European countries over the last 20 years. It documents the shift from periphery to centre stage of voluntary and community organisations in the provision of social care and welfare services. This has meant new roles for volunteer-led social work organisations and social enterprises in providing services directly and in supplementing existing public sector services. The appreciation and centrality of the sector was marked with the Charter of Co-operation between the voluntary sector and government (similar to the Accord in Canada and the Compact in the United Kingdom) followed by the development of infrastructure organisations, joint committees and policy forums and calls for what la Cour and Hø´jlund describe as ‘more integrated forms of cooperation between the voluntary sector and the public sector’ (pp. 87–111, final paragraph).

Purpose – The aim of this chapter is to deconstruct the idea of a ‘Big Society’. We do so by underlining the left libertarian tradition in which civil society led economic activity such as the solidarity economy is embedded.

Methodology – By analysing the thought of Pierre-Joseph Proudhon, a key thinker and activist in the 19th libertarian socialist movement, we identify the principles guiding the solidarity economy. We illustrate our argument by drawing on qualitative research conducted on solidarity economy organisations in France.

Findings – The solidarity economy illustrates an alternative to both capitalism and state socialism: libertarian socialism. This chapter demonstrates that this left libertarianism is not a new utopia. It is rooted in the long (but marginal) history of libertarian socialism, which was born in the 19th century.

Originality – An economy managed from the left based on libertarian political principles seems to be a novel experiment. We seek to illustrate what this may look like using the example of the present solidarity economy. However, we also emphasise that this would imply a reversal of the political programme of the ‘Big Society’. It would imply the redistribution of economic and political power not only from the state to local communities, but also from company directors and their shareholders in order to realise not a charitable but an economically empowered civil society.

This intriguing and valuable chapter by Frère and Reinecke raises many memories for me of my involvement in various social movement and political groups in the 1970s, and especially the vigorous debates over the precise meanings of terms like ‘libertarian’ and over the correct interpretation of iconic writers like Marx – there was little discussion, in those days, of Proudhon. Indeed, one of the significant contributions of this chapter is to present Proudhon's ideas to a wider audience of readers and researchers with interests in the Third Sector or Critical Management Studies.

Purpose – this chapter contrasts the ethical climates in government and nonprofit organizations (npos) in japan, a setting where the relationship between these two sectors has been recognized as close and long-lasting (estevez-abe, 2003; hirata, 2002; ritu, 2008). Yet, there has been little comparison of the value difference (or congruence) or discussion of how this may influence their interaction over time. This chapter explains why nonprofit partners may be more attractive partners for governmental contracts, notwithstanding the dangers of “mission drift” (young & denize, 2008) and/or high monitoring costs (malloy & agarwal, 2008).

Design/methodology/approach – Using survey data from matched samples of nonprofits (441, 86% response rate) and governmental organizations (321, 64%), the factor structure equivalence and measurement invariance of ethical climates in these two sectors were rigorously tested.

Findings – The findings extend prior typologies of ethical climate from for-profit and nonprofit organizations to governmental organizations. The chapter revisits the notion of opportunism, which continues to be pervasive and problematic in third-sector studies (Hawkins, Gravier, & Powley, 2011) to suggest that significant overlap in ethical climates between nonprofit and governmental organizations rules out value differences as a possible source of opportunism.

Originality/value – This study contributes a deeper awareness of the similarities and differences in ethical perceptions between nonprofit and governmental organizations that can inform policy makers in government to better understand the implications of using nonprofit partners to deliver services.

Organizations, whether for-profit, nonprofit or governmental, value – and sometimes devalue – social benefit. Values, defined as “that which people hold dear, esteem or cherish,” (Harvie & Milburn, 2010, p. 632), also organize. Organizational practices (actions and relationships) are (re)framed and (re)structured around values. The ethical frameworks that emerge around our values (De Angelis, 2007, pp. 24–28) (re)create social memories that structure how we interact with one another. For example, we habituate to treating one another with (or without) compassion, with (or without) respect or with (or without) dignity (Harvie & Milburn, 2010, p. 633).

This section offers a critical exploration of how third-sector institutions progressively fill the ‘missing middle’ between the state and the market. Each of the two chapters provides a rich, multi-level and longitudinal account of the practices by which third-sector institutions find their footing in a complex landscape of multiple and often contradictory stakeholder interests – while seeking an often tenuous and at best temporary balance between self-interest and the common good. This core tension, foundational to research and practice in the third sector, features centrally in both chapters but leads to radically different endings and complementary insights.

Purpose – This chapter describes how radical aims for community-owned broadband became compromised by the consequences of clientelism and elite patronage as some campaigners engaged in lobbying government.

Design/methodology/approach – Five years of participant observation and an auto-ethnographic methodology richly describe the author's involvement in a community broadband co-operative, various regional and national support groups and finally with a national group conducting campaigning, research and co-ordination activities for community ownership of Next Generation Access broadband.

Findings – This illustrates the difficulties faced by Third Sector and Civil Society organisations attempting to engage in lobbying activities in the same manner as conventional commercial lobbyists. In particular, it describes how lobbying necessitates a complex interlocking of activities, such as research, consultancy, conference organisation and other such forms of networking; and it describes how all of these activities can become subordinated to the interests of political patrons. It also suggests that the uncertainty around the meanings and relevance of the Third Sector/Civil Society has allowed the entry of older forms of exerting power such as clientelism and patronage.

Research limitations/implications – Further research is needed into a much larger group of organisations to examine the processes by which Third Sector and Civil Society groups engage with government.

Originality/value – The chapter uniquely applies Critical Management Studies and a political studies perspective on clientelism and patronage to the analysis of Third Sector and Civil Society organisations.

The chapter provides a rich illustration of elite patronage being played out within a UK third sector/civil society (TS/CS) context. Elite patronage being played out by persons, or patrons, in control of or having access to resources and markets giving others, or clients, access in return for their help or support. The asymmetries within the relationships between a patron and a client whilst being of mutual benefit are based upon power and exchange inequality. Clientelism is the enactment of these unequal relationships. The issues are contextualised within the development of new technologies (broadband, television and radio) at a local, regional and national level in the United Kingdom within a community cooperative, regional and national support groups and national campaigning groups lobbying government. The central issue within the chapter is the improvement and accessibility of communications and broadband for those without fair access to new technology, especially within rural and remote areas. The detailed story unfolds over a five-year period.

Purpose – The chapter is concerned with the practice of social accounting as enabling understanding and development of accountability relationships within a global values-based organisation operating with those in emerging and less developed countries.

Design/methodology/approach – The research takes a case-based approach to the experience of social accounting and reporting from 2005 to 2009 with Shared Interest Society, an international fair trade finance organisation.

Findings – The findings are better understandings of how accountability relationships within the case organisation are developed over time through social accounts. Shared Interest's social accounts suggest a way to move towards understandings of accountability that acknowledge organisational values and the needs and expectations of different stakeholder groupings.

Research limitations/implications – The research examines a single organisation with a particular focus on their social accounts. Nevertheless, this offers considerable insight into how accountability is developed within a single organisational setting.

Social implications – Through social accounting, awareness of issues concerning fair trade can be raised at an organisational, local and national level. The case organisation is underpinned by the fundamental value of working for the common good to benefit humanity and/or the planet rather than working for individual gain using financial assets held for the benefit of society, in this case through the financing of international fair trade within developing nations where fair trade is seen as part of a solution to bring benefit to the world's poorest people.

Originality/value – The research responds to a lack of empirical studies within social accounting addressing fieldwork exploration in ‘values-based’ organisations and specifically co-operative-based organisations where social accounts are used to communicate with stakeholders, in this case at the level of fair trade producers.

The accountability of third-sector organisations is a contentious issue for donors, NGO managers and academics. While in the corporate sector accountability has traditionally been limited to maximising shareholder profits (Friedman, 2007), critical perspectives on accounting have extended to non-financial information for a much wider group of stakeholders (Mook, 2010). The main driver for broadening our understanding of who is a stakeholder and what type of engagement matters is an emancipatory agenda, which reclaims the democratic ideals of voice representation and influence (O’Dwyer, 2005), and in so doing provides an opportunity to marry social accounting (SA) with critical management studies (CMS). Gibbon and Angier work at this under-studied intersection to build grounded theory on the dynamic processes by which accountability takes place in third-sector organisations (Mook, 2010).

The fourth section adopts a critical perspective to explore the notion of hybridity in third-sector management systems and processes. Although the theme of hybridity runs through most of the previous chapters, it is in this section that empirical data is gathered on how it is enacted by organizations. Both chapters provide accounts of the tensions and conflicts that emerge between actors that endeavour to generate social change.

Purpose – This chapter contributes to the growing debate on the diffusion of managerialist modes of thinking across third-sector organisations. It offers an analysis into the power dynamics at play in the emergence of hybrid management systems (HMSs) by looking at the management practices in non-profit organisations (NPOs) active in combating HIV/AIDS in South Africa.

Design/methodology/approach – In-depth semi-structured interviews were conducted with donor organisations and big non-governmental organisations (NGOs) based in the Northern hemisphere, and with managers and team leaders in South African NGOs. Taking a postcolonial perspective, the HMSs resulting from the encounter at the ‘glocal’ interface are investigated.

Findings – The data indicate that the power dynamics shaping the process of hybridisation work through three intertwined circuits of power: the managerialist discourse, the ‘rules of practice’ emanating from that discourse and episodic power relations at the level of interactions.

Research limitations/implications – As is the case with most qualitative research, care must be taken in generalising the findings of this research beyond the organisations participating in this study. At a theoretical level, the implications of this chapter are its contributions to three sets of literature that rarely interact: NPO management, international and cross-cultural management (ICCM) and critical management studies (CMS). At the level of organisational praxis, the findings have potential impact in terms of developing innovative ways of managing NPOs.

Originality/value – The originality and value of this chapter lies in its application of postcolonial theory to understanding hybridisation processes shaping management ideas and practices in South African NPOs.

How do you steer an organization that is not able to steer itself? How do you influence an organization's ability for self-organization? How do you empower a nonprofit organization (NPO) in South Africa in order to help them to organize themselves in ways that make it possible for donors in the West to collaborate with them in different international aid projects? And how do NPOs react in response to the West's attempts to empower them? These are the questions that Frederik Claeyé addresses in his chapter about how Western donors shape the governance structures and management practices of South African NPOs. To begin, Claeyé shows how the Western ideological discourse of managerialism that emphasizes accountability, organizational definition, and capacity building is enacted as a means to achieve the political aims of effective funding. He then shows how a sample of South African NPOs reacted to these external attempts to organize their own self-organization. Here, Claeyé isolates three ideal types of reactions: conformism, resistance, and hybridity. In conclusion, Claeyé critiques the global ideology of management discourse for being weighted in favor of Western techniques of management at the expense of the South African culture of Ubuntu, here understood as reciprocity and solidarity. The ideology of Western management practices has a limited understanding of, and limited room for, Ubuntu. The effect of this ideology, functioning as a “regime of truth” in the Foucauldian sense of the term, is hybridization, which Claeyé identifies as the individual translation by South African NPOs of the Western requirement for structure.

Purpose – This chapter introduces, problematizes, and extends research on business model innovation in the third sector from a feminist perspective. We examine how the issues of marginalization, subordination, and cooptation are revealed in dominant business models. These issues form a “dark triangle” that third-sector organizations strive to overcome.

Design/methodology/approach – We draw on a historical case study of Goodwill Industries International, Inc. (GII) to illustrate how business model innovations can counterbalance this dark triangle through three types of hybridization practices that can (re)engage the marginalized, the subordinated, and the coopted in more socially positive and economically viable opportunities.

Findings – This chapter uses a methodology of problematization to rebalance the overproblematization of critical management studies and the underproblematization of the mainstream literature on business models.

Originality/value – By recasting business model innovations as devices for reflection-in-action, this study extends the discussion on business models from the mainstream business literature to critical management studies; we underscore the versatility of business model in the third sector by first unpacking the social issues they are trying to solve and then decomposing them into specific sets of hybrid practices that explain how the desired social change can be effectively implemented.

Third-sector organizations have been described as intermediate organizations (Evers, 1995) in mixed economies (Ben-Ner & van Hoomissen, 1991) that are situated in the interstices between the private and the public sector. This curious mode of defining a group of organizations in terms of something they are not has created a rich field of opportunities to explore the interfaces between them and other organizations in the private, public or third sectors. Research has emerged from this juxtaposition that explores the maintenance of organizational differences and the processes of organizational convergence. Interest in hybridization as a process to explain the management of the conflicting pressures to maintain difference and foster convergence has led to advances in institutional theory (Battilana & Dorado, 2010), institutional entrepreneurship (Tracey, Phillips, & Jarvis, 2011) and our understanding of bricolage (DiDomenico, Haugh, & Tracey, 2010). In their chapter, Le Ber and Branzei add to this area of critical analysis by adopting feminist theory to extend our understanding of hybridization practices in the third sector.

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Dialogues in Critical Management Studies
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Emerald Publishing Limited
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