Abstract
Third sector organizations, like the rest of the economic system, have been heavily affected by the pandemic. The aim of this work is to study resilience and adaptability to crisis in terms of economic results and innovative outcomes of the cooperative business model in the Italian third sector during the COVID pandemic. It uses new evidence from a recent survey on the Italian third sector and consists of two main parts. In the first, the institutionalist literature on contractual failures is assumed as an interpretative key in the comparison between the business model, governance, and routines in social cooperatives versus other non-profit organizations (NPOs) interpreted as third sector entities. In the second, we use the new data from a third sector survey in the Marche region, collected in the late spring of 2021 at the end of the pandemic outbreak. Empirical assumptions concern organizational resilience and adaptation to unexpected negative shocks in cooperatives and other NPOs. The results show that, in the management of the crisis, cooperatives are better able to preserve their human capital and resort to layoffs less often than other NPOs. Shared decision-making, employee involvement, and the adaptability of the work process emerge as dominant organizational characteristics that support resilience and service innovation in cooperatives. The main policy implication concerns the ability of cooperatives to play a stabilizing and a-cyclical role during the crisis and to fill the supply gaps left open by other organizational forms (private, non-profit and the public sector). The originality of the paper lies in its new approach to cooperative organization and in the analysis of the reaction of cooperatives to the pandemic.
Highlights
The specialized literature reports that cooperatives behave differently from other organizational forms in relation to at least two fundamental organizational dimensions [Perotin, 2013; Borzaga et al, 2021]
The results of the OLS regressions show that the number of employees is significant and positively related to the variation of the cost-revenue balance in other non-profit organizations (NPOs) (Model 2, 1.050, p
Decreasing the number of employees improves economic results during the pandemic, but this effect is much weaker in cooperatives than other NPOs (-4.657, p
Summary
The specialized literature reports that cooperatives behave differently from other organizational forms in relation to at least two fundamental organizational dimensions [Perotin, 2013; Borzaga et al, 2021]. The first refers to the adaptability of the business model, i.e., the economic strategies and market responses, in the face of a crisis [Jensen, 2013; Burdín, 2014]. As regards the first notion, cooperatives show a stable development pattern that tends to not be very reactive to the economic cycle, that is, they grow less than average during expansionary periods and contract less during recessions and crisis. The economic literature has shown that this stable pattern corresponds to a more rigid supply curve than other economic organizations, since cooperatives tend to plan their growth in the medium to long term to meet their members’ needs [Borzaga et al, 2021]. Wide literature reviews can be found in [Bonin et al, 1993; Pérotin, 2013]
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