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Chapter 3. Research approach
Innovation—the heart of the knowledge economy—is fundamentally social. (Gladwell, 2000, p. 60)
This chapter presents the research approach and methods selected, acknowledging that not-for-profits are an important part of the growth of the social enterprise sector, but that relatively little is known about the development of these hybrid organisations within this context. First, the research question is reiterated, and then explains why a contextualist ontology and social constructionist epistemology with a qualitative method have been selected to describe these phenomena is explained. the purpose and influence of complexity theory on the research foundations and methods is then outlined. Reasons for selecting illustrative case studies and interviews as a method, together with the use of the business model as a mediating artefact are given and the selection process for cases is identified. Clarification is then provided on the level of analysis and how integrity in the findings can be relied upon. Finally, the process of data analysis and the limitations of the research are described.
Research question
The aim of this thesis is to explore the development of social enterprises within not-for-profits, as the academic literature on social enterprises has not explicitly researched this area to date. While there is some academic and practitioner knowledge already published on the various challenges and success factors for social enterprise, the academic literature is largely silent on how the successful development of a social enterprise might be achieved by not-for-profits. This is a puzzle that requires solving if not-for-profits are to successfully develop social enterprises.
Not-for-profits typically have strong social goals, networks and desire financial sustainability, and might therefore be expected to dominate the social enterprise sector. Yet there is some evidence that not-for-profits are challenged to develop social enterprises internationally (Allinson et al., 2011; Bull et al., 2008; Foster & Bradach, 2005; Teasdale et al, 2013). By using a complexity lens, supported by institutional logics and business model frameworks, to investigate the not-for-profit’s development of a social enterprise within real life contexts, this research aims to contribute to greater understanding of the phenomena relating to their accommodation of a commercial business model with commercial logics, and thereby also provide practical learning for not-for-profits wishing to develop a social enterprise (Thomas, 2004; ).
The following questions aim to increase understanding of how the development unfolds, generating insight about the phenomena in which not-for-profits must learn to hold both social and commercial aims simultaneously (Edmondson & McManus, 2007). Seeking participant and organisational understanding of the issues relating to the development of the social enterprise and the decisions made, the research sought to better understand how not-for-profit organisations develop social enterprises and asked:
How do not-for-profits introduce and accommodate a commercial business model with commercial logics within a social organisation?
oWhat are the most significant changes made in accommodating a business model with commercial logics?
oHow might not-for-profits configure themselves when accommodating a commercial business model with commercial logics?
These questions are based on five fundamental assumptions that are drawn from relevant research. Firstly, social and commercial logics are fundamentally different (Billis, 2010; Thornton & Ocasio, 1999). Secondly, these logics can co-exist even if they do not commonly do so or are potentially in conflict (Battilana et al., 2012; Davis, 1971). Thirdly, the accommodation of commercial logics is a difficult and complex process (Dees & Elias, 1998; Foster & Bradach, 2005). Fourthly, business models can assist in describing the key elements of the social enterprise’s business logic over time, and can help to focus participant stories on the journey towards commercial activity (McGrath, 2010). Finally, social enterprise can be a good fit for some not-for-profits or in some contexts (Unzueta, 2004). This indicates that more can be learned how social good might be provided by not-for-profits through these hybrid organisations, and the approach of this research is now discussed.
Research foundation
The research design, and in particular the ontology and epistemology, need to be compatible with complexity as the primary theoretical lens. The reasons for selecting contextualism and social constructionism as an ontology and epistemology respectively, are explained. This section then outlines the philosophical underpinning of complexity and the ability to represent knowledge from a complexity perspective, and discusses the different levels of organisational complexity. This section then addresses representation within a complexity lens, the use of mediating artefacts, and why the business model was selected to act as one. The rationale for selecting an abductive strategy and the researcher’s values and stance in relation to this study is then examined, including the need to be both involved and detached in the organisational environments.
Ontology and epistemology
Contextualism views everyday life as involving interconnection and constant change, resulting in unique contexts (Pepper, 1942). This research employs the contextualist view that each case organisation is a whole system that cannot be easily analysed by looking at their individual elements (Pepper, 1942). Rather, contextualism focuses on patterns of activity rather than a set of discrete facts, which tend to be seen as loosely structured and not necessarily governed by systemic or consistent relationships (Tsoukas, 1994). This ontology acknowledges the disorder (including order), change and novelty as key parts of reality. The historic event is the root metaphor for contextualism, understood by its unique quality or wholeness, and the texture or details of that quality, which is impacted by both past and future time.
The quality of a system can be detected through our perception or might be inferred through artefacts such as maps or symbolic systems (Pepper, 1942). Business models are formed through co-constructed narratives and therefore are considered valid artefacts. Contextualism acknowledges that there is some arbitrariness in the co-construction of features of importance. The perception of truth and knowledge depends upon people’s context and perspective that forms and is formed through social interaction. Contextualism therefore tends to be anti-foundational; that is, it does not subscribe to any permanent beliefs about the nature of truth or reality.
Social constructionism can similarly be supported by complexity theory because inquiry relies heavily on narrative and sense-making to understand changes occurring, particularly for more complex and highly connected situations (Snowden & Boone, 2007). It maintains that local people are experts in their own domains and are therefore deemed to be the best and primary source of information on the nature of transitions. Not-for-profits that are starting social enterprises can be expected to be in a state of disequilibrium, and this research considers the insights and constructions of participants as key to understanding the accommodation of a commercial business model and logics, even if they do not generate large-scale generalisations of truth.
As an epistemology, social constructionism argues that all knowledge, even common-sense knowledge is collectively constructed within social interactions (Berger & Luckmann, 1967). Human beings imagine constructs that may take the form of ideologies, which in turn create whole realities (Stacey & Griffin, 2005).
Both contextualism and social constructionism see reality as local and emergent, and accept that universal truth or uncontested knowledge is impossible (Lincoln & Guba, 1986). People, including the researcher, can only see the external world through the lens of their experience and knowledge, a mere sliver of the many prismatic views possible (Ellingson, 2011). Collaboration and trust are required between the researcher and participants to process and make sense of such subjective realities and thereby develop confidence in the emerging knowledge.
Consequently, academics seek multiple rich detailed descriptions (Creswell & Miller, 2000) that describe the behaviour and context so that it can be understood by an outsider, and seeks sufficient consistency or agreement to mount a limited but credible view of reality. Some consensus on some issues, approaches or experiences can be achievable at least in a local place limited in time and space (Cilliers, 2002; Dacin, et al., 2011). Where such consensus is feasible, robust reconstructions and conclusions are more likely to be generally considered truthful by participants. A broadly coherent and comprehensive view therefore could conceivably be developed among internal actors of how their not-for-profit developed a social enterprise (Deetz, 2009).
The contextualist and social constructionist research process proposed is comprised of setting a clear research question that asks how the phenomenon occurs, analysing the relevant existing literature and capturing the phenomenon in the natural world in many forms and stories. Then the phenomenon is bracketed through analysis and reconstructed in the order of process or experience. Finally, the findings are contextualised back into the social world as the research participants make comment on the findings.
In summary, contextualism and social constructionism acknowledge that events are real but rely heavily on the views of participants and the researcher to provide or construct the most credible representation of what it takes to develop a social enterprise by a not-for-profit. This research has sought to faithfully clarify, richly describe and astutely distil people’s context and perspective on the development of social enterprises over time in a way that is useful for understanding but is not necessarily universally true.
The complexity influence
Complexity theory is the primary theoretical lens used in this research and is congruent with the researcher’s philosophical approach. Blaikie (2010) describes complexity theory as a contemporary research paradigm that presents itself as an ontology, and, while this is accepted by some academics (Chiles et al., 2004; Fuller & Moran, 2000; Malaina, 2015; Schindehutte & Morris, 2009; Snowden, 2009), not all agree. For example, leading academic methodologists such as Denzin and Lincoln (2011) and Huff (2009) do not include complexity in their classifications of ontology or epistemology. Nevertheless, it is useful to explore the basic tenets of this theory and its approach to the nature of existence and knowledge in order to ensure, at least, ontological and epistemological compatibility in this research.
Blaikie (2010) argues that complexity rejects many of the essential tenets of positivism, including universal knowledge, determinism or a linear logic of causal explanation, but also rejects some essential beliefs of modernism (e.g., the world is orderly and can be reduced to its components and rules governing them), and post modernism (e.g., relativism that argues that independent explanation is not possible). Complex reality may be able to be explained but is inevitably based on limited and contextual knowledge.
Complex and non-linear interaction between system components that can impact on each other in multiple directions and at different times and small feedback iterations may initiate significant spontaneous changes to the whole system (Plowman et al., 2007). From this perspective, complexity may place greater pressure on a researcher’s epistemology. For example, how can we be sure that emergent events, attractors or systems are deterministic, random or even a combination of the two, and, therefore, what can we reliably learn from them (Goldstein, 2004)?
Some complexity writers (cf. Boisot Esade & McKelvey, 2010; Mark & Snowden, 2006) acknowledge that the level of complexity within organisations varies. Depending on the degree of tension, connectivity and ability to determine cause and effect in the existing system, different research approaches are recommended to elicit knowledge. While positivist approaches might be more useful in simpler and less interconnected environments, narrative-focused approaches are useful for more complex and highly interconnected situations. Not-for-profits establishing social enterprises that adopt dual social and commercial processes in some way are likely to exist in complex, highly interconnected and uncertain environments, both internal and external, with possibly incompatible prescriptions from multiple institutional logics (Goldstein et al.,2008; Greenwood et al., 2011). Such contexts therefore are best understood through the sense-making and experiences of those that work in them (Maguire, 2011; Snowden, 2010).
Some complexity theorists (Lorino, Tricard, & Clot, 2011; Stacey, 2003) see all organisations not as structures with impermeable boundaries, but rather as constituted of often paradoxical patterns of interaction, which make it difficult to see the whole system in its entirety. Continuity and transformation in the organisation occur at the same time as individuals are changing. Complexity therefore sees obtaining an accurate representation of complex reality as problematic.
Chapter 1. Introduction
1.1. Context
1.2. Research purpose and questions
1.3. Theoretical framework
1.4. Research approach and method
1.5. Thesis structure
Chapter 2. Literature review
2.1. Social enterprise
2.2. Not-for-profit development
2.3. Research theoretical framework
2.4. Chapter summary
Chapter 3. Research approach
3.1. Research question
3.2. Research foundation
3.3. Qualitative approach
3.4. Chapter Summary
Chapter 4. Findings: Within-case analysis
4.1. Lifewise hub and Merge café
4.2. Ako Books
4.3. Changeability
4.4. Chapter summary
Chapter 5. Findings: Cross-case comparisons
5.1. Initial conditions
5.2. Adaptive tensions
5.3. Developing the business model
5.4. Not-for-profit and social enterprise logics in this research
5.5. Configuring the social enterprise and the not-for-profit
5.6. Chapter summary
Chapter 6. Discussion
6.1. Summary of commercial and social logics
6.2. Accommodating a commercial business model with commercial logics
6.3. Chapter summary
Chapter 7. Conclusion
7.1. Research context
7.2. Contributions to theory and practice
7.3. Policy implications
7.4. Research limitations
7.5. Recommendations for future research
7.6. Chapter summary
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THE EMERGENCE OF SOCIAL ENTERPRISE IN NOT-FOR-PROFITS
