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8,2

Beyond managerial rationality:

exploring social enterprise in
Germany

156

Stefanie Mauksch
Department of Strategy, Organization and Leadership, EBS University,
Wiesbaden, Germany
Abstract
Purpose This paper aims to contribute a qualitative analysis of practitioners accounts to
illuminate alternative approaches to social enterprise that tend to be neglected by predominant
academic representations.
Design/methodology/approach By analysing qualitative interviews, the paper examines the
ways social entrepreneurs in Germany coproduce and reproduce the prevailing theoretical notions of
social enterprise. The main themes of the interviews are elaborated upon to accentuate certain critical
aspects that until now have not been the focus of attention in research. Alternative perspectives of the
empirical data are developed which indicate patterns that are currently excluded from narrative
practices of academia.
Findings There are several insightful perspectives represented in the interview data: the
(conspicuous) absence of managerialism as a dominant motivational feature; the complexity of the
local political and social realm in which social entrepreneurs think and act in spontaneous, often
non-rational ways; and personal and biographical accounts of social entrepreneurs as an important
self-defining feature. The findings demonstrate the explanatory power of qualitative empirical
accounts as a starting point to veer away from reductionist drawing-board concepts of social
enterprise.
Originality/value These articulations of social entrepreneurs own realities are important as they
are sometimes at odds ideologically with managerial approaches to social enterprise which emphasize
cost-efficiency reasoning and financial independence.
Keywords Social enterprise, Social entrepreneurship, Qualitative interviews, Interpretivism, Narratives,
Society, Business enterprise, Germany
Paper type Research paper

1. Introduction
Organizations are made up of humans who perceive, interpret, contextualize with thought
and affect, choose, and then act. Those humans do so in social worlds of influence that they
influence in turn. [. . .] Whether the motive is practical or academic, any claim to understand
and explain such human worlds without an appreciation of the perspectives and social
relations in play is doomed to superficiality at best, severe error at worst (Agar, 2010, p. 286).

Social Enterprise Journal

Vol. 8 No. 2, 2012
pp. 156-170
q Emerald Group Publishing Limited
1750-8614
DOI 10.1108/17508611211252864

The author is grateful to the social entrepreneurs who shared their perspectives and thoughts
with her. She also acknowledges with appreciation the thoughtful suggestions of her supervisors
Max Urchs and Ursula Rao. Further thanks go to Simon Teasdale, the Editor of this special issue,
the two anonymous reviewers and the authors colleagues, especially Henning Engelke, for their
encouragement and support.

A predominant tendency in social enterprise research proclaims managerialism to be a

central guiding principle in social entrepreneurs endeavours (Dey and Steyaert, 2010).
Dart (2004) describes a dominant, rationalist mode of research that defines social
enterprise as a business model narrowly focused on market-based solutions for social
problems. This is perhaps reflected in the widely adopted UK government definition of
social enterprise as businesses with primarily social objectives whose surpluses are
principally reinvested for that purpose in the business or in the community (DTI, 2002
cited in Cornelius et al., 2008, p. 355). The managerialist perspective has received
criticism regarding the dominance of pro-market notions (Cook et al., 2003) and the
framing of social enterprise as a faddish response to socio-political change (Dart,
2004). As such transfer of ideas is not reflected in academic texts, Cho (2006) described
the bulk of social entrepreneurship approaches as monological attempts producing a
univocal and unidirectional discourse. In this way, research echoes and enforces the
spread of neoliberal forms by shifting familiar narratives from the world of commercial
entrepreneurship to the new academic stream (Nicholls, 2006; Dart, 2004). These
critical voices are however, largely drowned out by a political process of narration in
the emergent social enterprise research field which silences otherness by
constructing grand narratives (Dey and Steyaert, 2010). Thus the notion of a
single hegemonic social enterprise discourse plays down competing narratives that
exist in the field of social action (Teasdale, 2012). This trend is reinforced by a tendency
to concentrate on defining the concept and heavily focusing on conceptual debate
rather than empirical research (Dacin et al., 2010). But practitioners own situations are
important to consider since they are often at odds ideologically with social enterprise
policies in which the managerially defined rhetoric of enterprise is used to promote
efficiency, business discipline and financial independence (Parkinson and Howorth,
2008, p. 285; see also Dey and Steyaert, this volume).
Germany is one of a few countries where the concept of social enterprise remains
marginal when compared to its European neighbours (Bode et al., 2006; Kerlin, 2006).
Defourny and Nyssens suppose the reason for this is that the German socio-economic
model is based on a social partnership agreement around the concept of social market
economy, understood as a specific articulation between the market and the state to
foster socio-economic development (Defourny and Nyssens, 2008, p. 207). The German
social sector can be characterised by a relatively closed market structure, predominant
corporatist routines, as well as a close interconnection among administrative
departments and established, contracted providers (Heinze et al., 2011). There is broad
consensus that the government is responsible for supporting citizens in times of
hardship, protecting them from dangers, and providing socially disadvantaged
individuals assistance (Butterwegge, 2006). However there are countertendencies,
namely a shift from the paternalistic and reactive role to an active and moderating role
of the welfare state (Butterwegge, 2006). In recent years, some established
organisations were declared to be social enterprises by individual and institutional
proponents of the social enterprise movement. In 2005, Ashoka, a global organisation
that identifies and invests in leading social entrepreneurs, started to support the first
German social entrepreneurs. The number of conferences and workshops as well as
books, articles and speeches about social enterprise is increasing. Thus, although the
conditions for a large-scale development of social enterprise are less favourable, as an

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ideational reference point the transnational social enterprise movement has permeated
Germany.
This article examines the ways in which social entrepreneurs in Germany
coproduce and reproduce the prevailing theoretical notions of social enterprise.
Following an interpretative research tradition, practitioners understandings and
sense-making efforts are at the forefront of this article (Yanow and Schwartz-Shea,
2006). Drawing upon an explorative study among social entrepreneurs in Germany,
in-depth interviews reveal how these actors make sense of, legitimise and justify their
activities. The methodology section presents the rationale behind interviewee selection
and the coding procedure. The findings show how, in line with the dominant social
enterprise research perspective, interviewees legitimise social enterprise as being a
novel, managerial, non-bureaucratic and rational approach to social problem solving.
But this is simultaneously challenged by other narratives emerging from a culturally
embedded and local perspective in the form of an ongoing redefinition of social
enterprises aims and scopes, as well as through legitimacy arguments derived from
personal experiences and in-depth knowledge about beneficiaries situations. The
discussion section aims to make sense of the complexity of these discourses and
highlights five situations in which grand ideas and local experiences are in conflict.
2. Methodology
The choice of interviewees was driven by the assumption that persons who have
established and operated their own social enterprise argue differently from the abstract
social entrepreneurial logic (Parkinson and Howorth, 2008). Practitioners add an
important perspective to interrogate the relevance and accuracy of theoretical
conceptualizations of social enterprise. In light of this premise, nine 30 to 70 minute
semi-structured interviews were held with German founders of social enterprises. They
are part of a series of 21 interviews with different players in the field of social
enterprise conducted from January to March 2011 by the author and a colleague. As the
article investigates predominantly social entrepreneurs perspectives, only the
contribution of those nine persons, who are personally involved in social enterprises,
were chosen for closer examination. All interviews were originally conducted and
recorded in German and then transcribed and translated into English for the purposes
of this paper.
Six social entrepreneurs, three of, which are Ashoka fellows, were interviewed. The
three remaining interviewees also label their organisations as social enterprises, but
can be better defined as networking organisations lobbying for and supporting the
concept of social enterprise in Germany. Since they work as intermediaries between
high level discourses and social entrepreneurs to increase awareness of and secure
financial support for social entrepreneurs and contribute towards recognising,
labelling and accrediting social entrepreneurs (Seanor and Meaton, 2008), it was
deemed vital to receive their views. Furthermore, these agencies contribute to
articulating the boundaries and priorities of the field. Table I provides relevant details
about all nine interviewees[1].
Explorative, interpretative investigation is a flexible approach that does not
necessarily imply preliminary commitment to any particular theoretical approach
(Patton, 2002; Denzin and Lincoln, 2005). By following this qualitative research
tradition, the aim was on downplaying theory as a crucial point of departure for the

Marianne
Schneider

Teresa Meinel

Thomas
Schmidt

Organisation: networking agency in the

field of social enterprise
Stated aim: implement and spread the
social business concept, create a social
enterprise service sector
Position: founder and owner
Organisation: networking and consulting
agency in the field of social enterprise
Stated aim: create awareness for social
enterprise, provide access to corporate
knowledge and funding for social
enterprises
Position: founder and owner
Organisation: charitable initiative, mentor
programme for socially disadvantaged
families
Stated aim: provide a national network of
mentors who support school students
Position: founder and owner, Ashoka
entrepreneur
SE

NO

NO

Harald Foerster Organisation: social enterprise working in SE

different fields, major activity: virtual
donation site
Stated aim: development of products and
business models to generate social assets
Position: founder and owner

Organisation: development cooperation for NO

social enterprise
Stated aim: build international funds to
cover the capital requirements of social
enterprises
Position: founder and owner

Karsten Meyer

Respond to suffering welfare system

Do things better (more efficiently)
than before

Respond to suffering welfare system

Apply the tools at hand

Do something meaningful
Put social problems on the business
agenda

Motivation

(continued)

One refers to social entrepreneurship as a Do things better (more efficiently)

means to solve social problems in an
than before
entrepreneurial and, more importantly,
efficient manner. I would not say social
enterprises need to be financially
independent. It is more a way of thinking.

The business world is as responsible for Put social problems on the business
the worlds social problems as governments agenda
and everybody else. This is where the
approach comes from we want to bring
the topic into the world of business

I am a businessman. That is my
background. I consider myself to be an
entrepreneur. Therefore, I do business in an
area I am good at. [. . .] Entrepreneurs
conducting social business emotionally
benefit from it. Ultimately, they can do
something meaningful
I believe that the social welfare system, as
we define it in Germany, is declining
simply because we cannot afford it
anymore. Every third euro goes into the
welfare system. I think the government has
to be careful no to spend more than it can
afford
The opportunities available to the
government have decreased due to
demographic changes. Social tasks have to
be solved innovatively, using methods that
are different to those used presently

Class Legitimacy of social enterprise

Activity

Intervieweea

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Table I.
Overview of interviewees

Organisation: provide poor people in

different countries with educational
services and material
Stated aim: balanced access to education
Position: founder and owner, Ashoka
entrepreneur

Organisation: initiative which supports

parents
Stated aim: support parents in difficult
social circumstances
Position: founder and owner, Ashoka
entrepreneur

Organisation: non-profit private

organisation for work integration
Stated aim: help poorly qualified
unemployed people who are at risk of
permanent exclusion from the labour
market to return to work
Position: founder and owner
Organisation: parental support
organisation
Stated aim: support young families
Position: founder and owner

Arne
Zimmermann

Peter Wolff

Stefan
Hofmeister

Respond to suffering welfare system

Close the gap

Close the gap

Do things better (more efficiently)

than before

Motivation

It makes more sense than ever to solve

Do things better (more efficiently)
social problems in entrepreneurial ways. It than before
doesnt necessarily have to be a social
Respond to suffering welfare system
enterprise, but an entrepreneurial approach
should be included. It is obvious that
government and third sector organisations
are struggling

In Germany, we have a great deal of

social, but very little entrepreneurship.
Many would say: Nice initiative, but can
you cover your own costs? Will you survive
financially? Most would answer: No.
When somebody asks me, I always say:
Im looking for customers. Our model does
not ignore the financial aspect. Thats
essential for investors. [. . .] It is important
to consider and measure the real output
First you have to analyse where social
innovation is needed. Which social problem
have not yet been solved, be it by private
business or government organisations? One
should opt for social business if they want
to pursue social aims and public interests
rather than personal financial interests
What we see is that the government is
struggling to cover all social topics. We
realize that the low public budget cannot
foster social welfare, the system is
declining. We consider this an opportunity
to fill the gaps via business

Notes: aAll names are pseudonyms; SE Social enterprise; NO Networking organisation

SE

SE

SE

SE

Class Legitimacy of social enterprise

160

Hanna Kirsch

Activity

Table I.

Intervieweea

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benefit of the careful and nuanced empirical study of local phenomena (Alvesson and
Deetz, 2000, p. 2). Data was analysed by first reviewing the quotes to develop
middle-order categories which draw some broad preliminary distinctions within the
data (Dey, 1993). To be more precise, broad categories (e.g. finance, politics, and
personal accounts) were identified before concentrating on passages in which
entrepreneurs legitimised their own actions for sub-categorisation. The subcategory
approach is considered to be most feasible when having a fair idea of what to look for
(Dey, 1993, p. 110). This enabled the derivation of the categories shown in column five
of Table I (motivation). The most prominent codes and respective categories were
structured along the different dimensions presented in the following section. The data
was further explored to determine how certain comments fit together as parts of a more
meaningful whole (Parkinson and Howorth, 2008). For example, the tacit assumption of
social enterprise as a more rational approach (Section 3) emerged in very different
ways, among others in:
.
formulations such as reasonable, an intelligent solution, black and white
evidence; or
.
indirectly, by explaining that other approaches are not very rational; or
.
by arguing with examples of social enterprises and observable results that it is a
reasonable approach.
In the following discussion, the dominant patterns in the interview quotes are
elaborated upon.
3. Dominant narratives about social enterprise
Especially in the intermediaries statements, a dominant argument for the
legitimisation of social enterprise is the differentiation from, as interviewees
describe it, old and outmoded approaches (Thomas Schmidt), of governmental
agencies (heavy steamboats, Hanna Kirsch) and non-profit organisations (NPOs).
They describe the process of change needed as a revolution, which should be
accompanied by fresh ideas, an entrepreneurial spirit, and creative, ultra-modern
thinking (Thomas Schmidt). Within that logic, the upheaval is unavoidable for two
reasons: limited governmental budgets and potentials (Is it still a welfare state system
or is it stultification?, Harald Foerster) and the limited opportunities of NPOs:
I believe social enterprise will be unavoidable: the simple reason being that these companies
operate efficiently. [. . .] That is different than companies, which always depend on donations.
They just dont survive on social or ecological problems (Karsten Meyer).

This process of change should be driven by management, which is presented as being

a better and more rational solution than other approaches, such as government welfare
or philanthropy, labelled here as do-goodishness:
To be perfectly clear, the socially-motivated entrepreneurs will definitely be more successful
than the do-gooders, who have a different perspective, unless the do-gooders acquire
outstanding entrepreneurial skills (Karsten Meyer).
Yunus fascinated me, despite the idealisations. I believe he would attract more sympathisers
if he avoided the do-gooder mentality (Harald Foerster).

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Moreover, it is suggested that the concept of social enterprise needs to be differentiated

as a new way of thinking. Traditional (governmental, charitable) institutions can and
should learn from this novel approach. According to the interviewees, people have to
open their minds; they have to relearn and wake up (Thomas Schmidt).
[. . .] so that these outmoded organisations go through the appropriate learning processes. In
fact, they are closer to the people and have many advantages, if they acknowledge it. [. . .]
However, they have to learn quickly (Thomas Schmidt).

Justified by the premise that social enterprise is first and foremost a business model,
business-related issues, such as corporate lifecycles, performance measurement, or
concepts of competition and contention, naturally apply to it. One of these natural
elements of the business world is failure.
For several reasons, 30 per cent to 40 per cent of the projects we were in charge of arent
pursued anymore. One could say that they failed. However, that is an ordinary
entrepreneurial occurrence. There are many entrepreneurial activities that are started, but
will never be successful, social enterprise isnt any different (Karsten Meyer).

As exemplified by the unconditional acceptance of failure, social enterprise is

self-evidently understood as a new specification of business, or as business adapted to
social topics. Accordingly, interviewed entrepreneurs stated the capability to
successfully operate a social enterprise by specialising in the social field in
addition to management education.
Basically, one can acquire the know-how required, similar to the way one learns the ropes of a
new business field. In the beginning, one hasnt got a clue, but it develops over time (Teresa
Meinel).
People often say that they had the idea but werent sure how to implement it. [. . .] Social
enterprise particularly stimulates entrepreneurs because they understand it immediately;
they grasp it, and are already practicing it in their daily business endeavours except in a
completely different manner. [. . .] For me, it was difficult to transfer my own business into a
social enterprise. It took me two years to understand that I just operate the same way as I
would in a normal, conventional company (Karsten Meyer).

By capturing the social aspect as a branch of business, these interviewees place

overcoming social issues at the same level as tackling traditional business challenges
in other industries and understand purchasing and selling operations as major
elements of social enterprise. Accordingly, entrepreneurs often refer to the potential
beneficiaries of social enterprise as customers, people whose interests are well
defined and products are designed in innovative and efficient ways to suit their
interests.
People who make use of social services should have a choice and the market mechanism will
regulate that the best supplier will have the most customers (Teresa Meinel).
I think measuring the success of a social enterprise by evaluating customer satisfaction is a
good idea (Hanna Kirsch).

In line with the assumption that conducting business is a reasonable solution to current
challenges, market mechanisms are claimed to be optimal social problem solving
instruments. In other words, based on premises derived from cost-efficiency reasoning,

it is asserted that social enterprise, as a distinct business model, is the (only) rational
response to social problems.
I perceive two camps of social enterprise in Germany [. . .] we developed a wonderful
formulation to differentiate between the two camps: fundis (fundamentalists) and realos
(realists). We called them realos because these people are realistic, have their feet on the
ground, and maintain neutral, normal relationship to business, even capitalism, yet believe
things have to change without turning everything upside down. And then there are the
fundis, or fundamentalists, who want to improve the world no matter what it takes and
identify with early forms of socialism. Thats a typical German characteristic (Harald
Foerster).

Some of the interviewees not only strive to be different from do-gooders supposed
chaotic operations, which rely on donations or governmental-financing, they also
differentiate themselves from bureaucracy.
[. . .] especially because the government has many stodgy and bureaucratic institutions,
which do not approve of many things (Marianne Schneider).
And if the government granted you half a million euros, you wouldnt concentrate on making
a profit: you would concentrate on writing a 580-page report on how you spent the money
(Arne Zimmermann).

To conclude, dominant patterns in the interviewee comments are that social enterprise,
as an innovative, rational and non-bureaucratic approach, is revolutionising the social
sector and becoming is a special branch of business that follows the same principles.
However some patterns of social entrepreneurs narrations do not that easily fit into the
grand narrative and challenge the assumptions presented above. These are presented
in the following section.

4. Little narratives
An aspect neglected in the work about, but very present in the talk of, social
entrepreneurs is the flexibility and adaptability with which they react to political
power claims of players already positioned in the addressed field. Power struggles are
prevalent in social entrepreneurs accounts of personal stories permeated by
continuous ups and downs, processes of reshaping, and moments of self-doubt and
struggle. Here, an entrepreneur explains his success with spontaneous reactions to the
socio-political environment and the way in which he adapted his model to it. He gives
an account of how he survived through hard times and pursued different strategies in
order to become accepted:
We have a great deal of experience with charity organisations. When we were a very small
enterprise [. . .] they smiled at us because they considered it to be impossible to work with the
clientele with whom we work. As we became more successful in our region, they immediately
exerted their power [. . .]. They sat on the board for youth aid, for example, or the city council,
and suddenly our financial support was stopped. It was very obvious that they considered us
to be a threat and the usual argumentation was: We already offer such programmes
ourselves, your social enterprise isnt necessary. So we responded by designing our
programme in such a way that charity organisations can educate their employees in our
programme (Peter Wolff).

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Flexibility is an issue not only with regards to the struggle to survive in the political
landscape, but also to the design of the social-entrepreneurial approach itself. For
example, in contrast to the perspectives presented before, philanthropy here is viewed
and practiced as a positive and meaningful approach that can be combined with others:
As you see, we arent that dogmatical about the definition. Our experience proves that the
borders arent that clear. There are organisations that are charitable by nature and depend on
donations but start to introduce business elements. They might not achieve 100 per cent cost
recovery, but they might become a sustainable business one day (Stefan Hofmeister).
[T]he quality control of a company carried out by volunteers has to be in the interest of the
federal government which proclaims every form of civil involvement. We also want a piece of
the pie, not just the charity organisations. If funds are distributed, we also make claims. [. . .]
We are also experiencing the willingness of private persons to donate small amounts of
money to support a cause of their liking also a form of.citizens involvement. Some give
money, some give time [. . .]. Thats our mixed approach (Hanna Kirsch).

Thereby, government welfare is not primarily perceived as an obsolete structure that

needs to be overhauled, but as an important co-existing and complex entity with which
social entrepreneurs negotiate and collaborate. Moreover, founders of social enterprises
often develop their approaches via intense interaction with individuals of the particular
field and dissatisfaction with the established methods of addressing these problems.
We recognise that the problems are much more complex: the unemployed often have health
problems and are also affected by impoverishment, which then can cause mental-health
problems (Hanna Kirsch).

This social entrepreneur refers to complex, multi-dimensional and very individual

challenges faced by people at a local level, who they try to support with their
entrepreneurial endeavours. More precisely, the uniqueness or particular suitability of
the approach for a specific set of social issues becomes apparent in the following
example:
The government is an organisation that, as I understand it, follows a top-down approach.
That means we have to deal with elected representatives. Government action, or
administrative action, is characterised by first conducting an analysis of certain problems
that need to be solved. [. . .] The social entrepreneurs approach works the opposite way: they
follow a bottom-up approach. They identify local needs and try to involve the persons
concerned and to develop solutions that match the requirements of the people. In contrast to
government endeavours, where people are often deprived of their rights, social enterprise
endeavours actually emancipate citizens to help themselves. Thereby, there is not a large
discrepancy among government aims, institutional aims, and wishes of the people. Social
entrepreneurship strives for a broader decision-making empowerment of citizens. Social
entrepreneurship aims to move deprived people, who are in danger of exclusion, into the
centre of society, but at the same time respect their differences and special needs. In this way,
I believe social enterprises make an outstanding contribution they are often pioneers and
work closely with their clients, but dont qualify the person as being a mere object. Rather,
social enterprises improve the quality of life by empowering people to direct their own lives
instead of being an object of arrangements (Peter Wolff).

The person talking here does not focus on the design of financially sustainable social
enterprise models but views social enterprise as an opportunity to achieve
empowerment and participation of disadvantaged groups, such as disabled people,

permanently unemployed persons, or immigrants. Often, personal experiences and

backgrounds were a source of motivation to become active in this field:
I had the idea because I noticed that there was a real gap in supplies and people needed them.
It was a case of self-concernment (Hanna Kirsch).
My personal motivation to found this social enterprise was to pass on what I learned in my
education. That was a very personal motivation, but it was also an opportunity for me to link
what I had done in the social sector with the boy scouts and what I had learned in my studies
and at work, namely business (Arne Zimmermann).
What I personally get out of this project you could never pay back in gold and money (Arne
Zimmermann).
I am physically disabled myself, Im missing a few fingers. And I have a disabled son; I am
very familiar with the topic (Harald Foerster).

Insightful are also the anecdotes interviewees told when asked how they became a
social entrepreneur. Some explained how the occurrence was coincidental rather than
being purposeful. Some even benefited financially from being labelled as a social
entrepreneur (e.g. by receiving a scholarship).
Well, I didnt want to establish a social enterprise. I didnt even know what it was. I wanted to
start an initiative, in the beginning it was only supposed to be an internet portal. And I would
have never thought that it would become this big [. . .] I had no clue that Id be a social
entrepreneur and that others would perceive me as one. It wasnt a conscious effort (Marianne
Schneider).

The social entrepreneurs cited describe the sometimes chaotic circumstances that
made them a designated rather than self-designated social entrepreneur and how
entrepreneurship was one of many tools used to achieve their aims. As opposed to the
grand narrative presented previously, these social entrepreneurs do not suggest
business as the better or more adequate approach per se, but even refer to potential
dangers (e.g. utilisation of the label by persons only interested in financial profits). The
director of a social enterprise that aids young families formulates this aspect as
follows:
Well that depends on the target group [. . .] We work with families right after the birth, when
they have lots of costs and when the salary of at least one parent is missing. Youll never earn
big bucks with that (Hanna Kirsch).

This last citation implies a prioritisation of the needs of the people as opposed to the
financial sustainability of the social enterprise and acceptance of the limits of business
approaches. To conclude, the interview data presents many insights beyond the grand
narrative:
.
the (conspicuous) absence of managerialism as a dominant motivational feature;
.
the complexity of the local political and social realm in which social
entrepreneurs think and act in spontaneous, often non-rational ways; and
.
personal and biographical accounts of social entrepreneurs as an important
self-defining feature.

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5. Discussion
It is no surprise that in this study, social entrepreneurs present unique anecdotes about
their endeavours, whereas networking organisations spread general, grand ideas of
social enterprise. These organisations are linked with the transnational social
entrepreneurship movement based on North American or Western European
philosophical ideals (Teasdale, 2012; Kerlin, 2006). However, at a national and
regional level, these ideas are challenged by established cultural and social norms. As
knowledgeable actors working in both spheres, social entrepreneurs embody the
tensions caused by a mix of transnational and local processes, experiences, and events.
As indicated in the results section, they sometimes join in on the transnational,
managerialist accounts of networking organisations and popular global players, such
as Muhammad Yunus or Bill Drayton. Social entrepreneurs benefit from such
discourse if they are labelled as well as encouraged and financially supported by
powerful transnational organisations. However, the transfer of management
knowledge and practices to the social field by means of social enterprise bears
critical issues.
First, grand discourse gains legitimacy by declaring other (philanthropic or state
welfare) approaches to be invalid or ineffective from an economic-rational perspective
(Dey and Steyaert, 2010). The exclusivist tendency of the social enterprise discourse is
problematic since it neglects forms of rationality different from the managerial
paradigm[2]. That means they argumentatively do not allow for alternative
approaches, including those that are traditional elements of democratic systems,
most notably the role of the state as redistributor of social wealth (Ullrich, 2005).
Second, practitioners often argue that social entrepreneurial approaches present a
way of detouring red tape and excessive regulation and bureaucracy. This strict
differentiation of social enterprise regarding administration and bureaucracy is not
only prevalent here, but also in the understanding of the entrepreneur in general, as
shown by Paul Du Gay (2004). This author expounds the problems of creating an
alternative to either bureaucracy or enterprise, which is more likely to be a
self-styled entrepreneurial approach to organisational reform, referring to it as
epochal bureaucracy/enterprise dualism (Du Gay, 2004, p. 37). In this light, social
enterprise approaches present themselves as being unbureaucratic although they
might often apply forms of bureaucracy which are different, but not necessarily less
exhaustive or time-consuming than those of the government. Moreover, the rhetoric of
bureaucracy decouples it from the principles beyond: the (should-be) ambition to
distribute democratically and to prevent misuse of authority.
Third, although the concept of social enterprise accompanies empowerment and
emancipation, the classification of people solely as customers may also entail negative
aspects on a broader societal level. Mintzberg (1996, p. 77) notes:
Business is in the business of selling us as much as it possibly can. [. . .] But caveat emptor is a
dangerous philosophy for health care and other complex professional services. Sellers
inevitably know a great deal more than buyers, who can find out what they need to know
only with great difficulty.

The author argues that as customers we receive direct services at arms length,
whereas by assuming roles of citizens, clients, and subjects, we benefit more indirectly
from the public infrastructure. The reduction of these complex roles to that of a mere
customer disentitles individuals from receiving professional public services and from

citizen rights going far beyond the rights of customers. Moreover, a push towards a
market-driven agenda within social enterprise can be a source of great energy and
creativity, but may also be a turbulent, disruptive, and disintegrative force (Bull et al.,
2010; Maitland, 1997).
Fourth, according to the dominant narrative, the main attempt and legitimising
basis of social enterprises is to solve existing social problems. Thereby, as Nickel and
Eikenberry (2009) argue, the approach runs the risk of depoliticising the root causes of
the identified problems. The authors point out that philanthropy, in contrast to social
enterprise, though criticised for being economically unsustainable, often assumes a
role, which is critical of the system and questions gaps or deficiencies of governmental
provision. This critical potential dwindles away, if gaps in the market are taken for
granted as starting points for the development of entrepreneurial solutions.
Fifth, the potential failure of social enterprises is not considered to be a critical issue.
Here again, practitioners make use of business rationales: failure is a common and even
necessary element of business cycles, markets and competition. But if a social
enterprise has a higher probability of failure than traditional modes of governmental
welfare, is the approach still the more efficient one in terms of supporting the poor, the
neglected, and the ill? Considering these questions, failure is a serious challenge to
social enterprises. It has a different impact on social enterprise customers and
considerably different emotional consequences than failures in the private,
profit-oriented business sector.
As denoted in the little narratives section, social entrepreneurs are quite aware of
the specificities of the German social sector and implicitly question or ignore some of
the suggestions made by grand narratives. For example, social entrepreneurs
sometimes reject or circumvent dichotomisations between old and new, between
bureaucratic and unbureaucratic, and between professional and
unprofessional. Instead, compromises, spontaneity, and the denunciation of
dogmatism, which are implicit in their presentations about their endeavours,
challenge the overemphasis of rationalism and management. Negotiations with
institutions and other powerful organisations are an important component of social
entrepreneurs daily work. Considering the German context, this strategy is the only
one with prospects for success since legal regulations discriminate against new
providers in the social sector (Heinze et al., 2011). This is another reason for the
flexibility and creativity with which German social entrepreneurs adapt their
businesses and form strategic alliances.
As previously indicated, social entrepreneurs call for consideration of the
complexity involved in social issues thereby challenging the monological view on
social enterprise as a modern, innovative, more cost-efficient mode of addressing social
problems. Entrepreneurialism is just one of the strategies social entrepreneurs use to
pursue their objectives, in combination and occasionally in tension with local claims to
power, or strategic partnerships with government agencies. Hence, local level social
entrepreneurs act less dogmatically than the macro discourse proposes and are willing
to cooperate, bargain, adapt and re-adapt their model to pursue their overall objectives.
The goal here is not to manage things more cost-efficiently or to manage them better
than others do, but to find an approach, which from their perspective, more adequately
resembles the clients wishes and aims.

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A final aspect concerns the conceptualisation of the social entrepreneur. Existing

literature promotes pictures of social entrepreneurs as outstanding personalities (see
Dacin et al. 2010 for an overview). Others develop a perspective of social enterprise as a
scalable, replicable approach of transferring business logics to the social field, thereby
highlighting its simplicity: As for defining the needs of the poor. [. . .] Keep it simple.
[. . .] If you can deliver anything related to these even in a small way, go ahead and do
it (Yunus and Weber, 2010, p. 60). Practitioners stories in this study suggest that both
views are misleading. By referring to complex reality, social entrepreneurs rejected the
notion of simplicity. Rather than characterising a particular type of person suitable to
start a social enterprise, another feature was very prominent in the interviews: the
socio-cultural embeddedness of social entrepreneurs. That means that on a local level,
these actors are not primarily driven by the aim to become a social entrepreneur in
terms of a technical combination or cause-effect relation of entrepreneurial means and
social aims. Rather, they try to develop methods of resolution from their specific
perspective, their social influence, and cultural understanding. Social entrepreneurs
describe how they developed their approaches after years of experience in a certain
field and how personal exposure to the struggles of people shaped their way of
thinking. The value of experience, more subtle observations and forms of knowledge
derived from everyday work within the corresponding social field are apparent in the
rhetoric of social entrepreneurs working in local settings. Very often, the motives for
becoming engaged in these activities are very personal, if not biographical. The
dominant narrative tends to distract these personal experiences and emotions by
assuming rational cause-effect considerations and managerial reasoning on behalf of
the social entrepreneur rather than examining motivations empirically.
Conceptualising social entrepreneurs only as risk-takers and number crunchers fails
to attach sufficient importance to the sensitiveness and even humbleness of successful
social entrepreneurs who attempt to fulfil disadvantaged individuals or groups needs.
Notes
1. All names are pseudonyms.
2. Yehouda A. Shenhav (2002) understands managerial rationality as a contested ideology and
practice instead of a natural and inevitable outcome of modernization as suggested by
mainstream management history. The term managerial paradigm in the text above refers
to this later, mainstream notion of managerial rationality.
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About the author
Stefanie Mauksch is affiliated with the EBS University in Wiesbaden. She graduated from the
Martin Luther University in Halle (Germany) and holds a Magister Artium degree in Social
Anthropology and Media Studies. After having worked for nonprofit organizations, she is
currently writing her doctoral thesis on social enterprise in the context of political philosophy.
Stefanie Mauksch can be contacted at: stefanie.mauksch@ebs.edu

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