Academic journal article The Journal of New Business Ideas & Trends

The Role of the Intermediary in Social Enterprise Sustainability: An International Comparative Study

Academic journal article The Journal of New Business Ideas & Trends

The Role of the Intermediary in Social Enterprise Sustainability: An International Comparative Study

Article excerpt


As hybrid organisations that operate for a social purpose utilising traditional business practices (Dees1998; Doherty et al. 2014 ) social enterprise is increasingly viewed as an alternative model for service delivery by policy-makers (Blundel & Lyon, 2015; Defourny & Nyssens, 2010). The UK Governments consistent development of the sector over recent years reflects this (Blundel & Lyon, 2015; Mawson, 2010; Teasdale, 2012). Similarly in its recent "Review of Australia s Welfare System" the Australian government identifies the valuable role that social enterprise can play in enhancing capacity and innovation in the sector (Department of Social Services, 2015). The report goes so far as to state that "Australia would benefit from a long term strategy to support social enterprise development" with the recommendation that a strategy should seek to not only "increase supply of investment to enterprises"...but also importantly "improve the enabling environment for social enterprises" (Department of Social Services, 173-4).

However policy makers have increasingly looked to reduce governmental funding of the sector (Blundel & Lyons, 2015; Defourny & Nyssens, 2010; Peattie & Morley, 2008). This is problematic for most social enterprises as they often need to be multi resource organisations (Doherty et al. 2009; Ridley-Duff & Bull, 2011) looking to attract resources from a range of sources including but not limited to earned income and extending to philanthropic donation, government grants and inputs from the social entrepreneurs themselves (Hynes 2009). Meaning that social ventures must increasingly seek organisational longevity by considering business models that move beyond grant income, turning to commercial activity to sustain themselves (Chell, 2007; Mair & Marti, 2006; Jenner, 2016).

Yet these enterprises often lack commercial and managerial capabilities (Doherty et al. 2014; Peattie & Morley, 2008; Sunley & Pinch, 2012) with this important area remaining under researched despite such capabilities being recognised as playing a key role in social enterprise success (Hynes, 2009; Peattie & Morley, 2008; Sharir et al. 2009). Including the critical area of marketing (Powell & Osborne, 2015; Sunley & Pinch, 2012).A challenge made more difficult for social ventures given their dual social and economic goals (Doherty et al. 2014; Florin & Schmidt, 2011). Hence, the importance of training and the development of management capabilities for social enterprise has been widely promoted (Doherty et al, 2014; Hines, 2005; Lyon & Fernandez, 2012).

Thus the facilitation of business support for social enterprise is an important area of governmental focus (Lyon & Ramsden, 2006; Villeneuve, 2011; Shanmugalingam et al. 2011). Moreover such support needs to be specifically tailored to the needs of social enterprise and delivered by specialist intermediaries (Burkett, 2013; Hines, 2005; Hynes, 2009). However despite widespread international recognition of the potential that intermediaries offer (Burkett, 2013; Kneidling & Tracey, 2008; Lyons et al. 2007) to date in Australia "the role of intermediaries ...has not been well understood" (Burkett, 2013, 7). Scotland on the other hand, drawing upon a rich history of social and community enterprise, possesses arguably the most supportive environment for social enterprise with an infrastructure of support based on "a highly developed array of support organisations to encourage the growth of social enterprises" (Roy et al 2015, 788).

Given this backdrop and the apparent potential role intermediaries can play in supporting the development of social enterprises this paper examines and compares the nature of intermediary support for the sector in Australia and Scotland. To do so the paper considers prior research relating to social enterprise sustainability before examining the literature on the role of intermediaries and government in this process. …

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