Abstract
How can a critical analysis of entrepreneurial intention inform an appreciation of ethics in social enterprise business models? In answering this question, we consider the ethical commitments that inform entrepreneurial action (inputs) and the hybrid organisations that emerge out of these commitments and actions (outputs). Ethical theory can be a useful way to reorient the field of social enterprise so that it is more critical of bureaucratic (charitable) and market-driven (business) enterprises connected to neoliberal doctrine. Social enterprise hybrid business models are therefore reframed as outcomes of both ethical and entrepreneurial intentions. We challenge the dominant conceptualisation of social enterprise as a hybrid blend of mission and market (purpose-versus-resource) by reframing hybridity in terms of the moral choice of economic system (redistribution, reciprocity and market) and social value orientation (personal, mutual or public benefit). We deconstruct the political foundations of charitable trading activities, co-operative and mutual enterprises and socially responsible businesses by examining the rationalities (formal, social and substantive) and ethical commitments (utilitarian, communitarian, pragmatic) that underpin them. Whilst conceptual modelling of social enterprise is not new, this paper contributes to knowledge by developing a theory of social enterprise ethics based on the moral/political choices that are made by entrepreneurs (knowingly and unknowingly) when choosing between systems of economic exchange and social value orientation, then expressing it through a legal form.
Highlights
Whilst there appears to be broad support for integrating ethical decision-making into social enterprise (SE) governance systems (Ridley-Duff and Bull 2016; Spear et al 2009) and developing ethical production and consumption practices through ‘fair trade’ business models such as Fairtrade, there is a void in the SE literature on the connection between its alleged hybridity and resulting business ethics
We present social enterprise ethics as the rule systems that emerge from social entrepreneurial choices to hybridise redistribution, reciprocity and market exchange in pursuit of pro-social, mutualised and individualised outcomes
This challenges the dominant conceptualisation of SE as a hybrid blend of mission and market dichotomy by reframing hybridity in terms of the moral choice of economic system and social value orientation
Summary
Whilst there appears to be broad support for integrating ethical decision-making into social enterprise (SE) governance systems (Ridley-Duff and Bull 2016; Spear et al 2009) and developing ethical production and consumption practices through ‘fair trade’ business models such as Fairtrade (see Davies and Crane 2010; Davies et al 2010; Doherty and Davies 2013; Mason and Doherty 2015), there is a void in the SE literature on the connection between its alleged hybridity and resulting business ethics. We will argue that three core approaches to SE have an associated rationality and legal foundation that produces different ethical outcomes: hybrid (i) charitable trading activities (CTAs) that are influenced by the formal rationality of fixed charitable or social objects; hybrid (ii) co-operatives and mutual enterprises (CME) are guided by social rationality in mutual associations and cooperative action, and; hybrid (iii) socially responsible businesses (SRBs) that are outcomes of social entrepreneurs’ substantive rationality (Ridley-Duff and Bull 2016) This approach enables us to tackle the final disconnection (3) to frame a response to the special issue of the Journal of Business Ethics on outstanding ethical issues in SEs (see Chell et al 2016). We highlight our contribution by arguing that the diversity of SE itself is linked to moral and political choices regarding economic exchange and social value creation (compare Bull et al 2010)
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