Research_How_Social_Enterprises_Advocate.pdf
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A new study highlights the vital role of social enterprises in advocacy, challenging the perception that they are not political actors, and shows their impacts in shaping sociopolitical environments through both policy and sociocultural advocacy. The research indicates that 76% of social enterprises engage in advocacy work, with their participation often increasing in response to budget pressures in their focus areas. Additionally, the study of a US company transitioning to a decentralized management structure reveals that clear role definitions are crucial for successful decentralization and decision-making among employees.
![66 Stanford Social Innovation Review / Winter 2025
R
E
S
E
A
R
C
H
nonprofits and businesses.
“Essentially, the more they see
themselves as ‘business-like,’
the less they focus on struc-
tural social-change work,”
Mosley says. O
Johanna Mair and Nikolas Rathert,
“The Political Side of Social
Enterprises: A Phenomenon-Based
Study of Sociocultural and Policy
Advocacy,” Journal of Management
Studies, forthcoming.
O R G A N I Z A T I O N A L
D E V E L O P M E N T
Decentralized
Workplace
BY CHANA R. S CHOENBERGER
H
ow can organiza-
tions give workers
more decision-
making power and limit
managerial and executive
excess without falling back
into customary patterns
of hierarchy? A new paper
delves into one US company
to examine what happens
when it replaces a traditional
corporate management struc-
ture with a nonhierarchical
structure based on explicit job
roles—and what this dramatic
change means for employees,
former supervisors, and the
company as a whole.
The study starts from “the
perspective that authority is
not something that an orga-
nization or its members have
but is something that an orga-
nization and its members do,”
writes the author, Michael Y.
Lee, an assistant professor
of organizational behavior at
France’s INSEAD.
Lee formed the research
question behind the paper
from his early days as a Coro
Fellow in Public Affairs just
after he finished his under-
graduate degree at Harvard
University. Following the
democratic philosophy of
John Dewey, the program
focuses on experiential train-
ing for the dozen fellows,
including teaching them how
to reach consensus, facilitate
large-group meetings, and
perform tasks without resort-
ing to hierarchy, which Lee
described as “an incredibly
powerful experience with a lot
of creativity.”
When the program ended,
Lee worked for several non-
profit and for-profit organiza-
tions but felt their hierarchical
structures were impeding
their group performance. He
decided to pursue a doctorate
in management at Harvard
Business School focusing his
dissertation on the question
of how individuals can manage
performance across an entire
organization. To study this
issue, he went looking for a
company to research.
Few companies have truly
decentralized management set-
ups. Zappos, the shoe retailer
that Amazon bought, famously
used this principle, which it
called “holacracy,” but the
Las Vegas-based ecommerce
company turned down Lee’s
request to be featured in a case
study. Instead, he found an-
other company, CashCo, which
was making a formal change to
its organizational structure and
adopting holacracy.
The company, a producer
of hardware products that
manage physical and digital
currency that is based in the
eastern United States, allowed
Lee to spend 18 months doing
an ethnographic study of its
management practices, begin-
ning six weeks after CashCo
made the transition to the
new decentralized structure.
He spent a week on-site
every month for the first six
months, then visited every
other month for six months,
and conducted a final visit. In
between trips, he did virtual
interviews, observed meet-
ings remotely, and analyzed
archival data.
The most surprising find-
ing in his research, Lee says,
was how much structure and
collective work was required
for the decentralization
initiative to succeed by mak-
ing roles explicit and adding
guardrails around authority.
This work, which included a
documented and constantly
updated set of rules available
on an online platform, helped
both former line workers and
former managers to know
what they’re supposed to do
under the new system. Oth-
erwise, workers were often
unwilling to make decisions,
while those who used to be
managers weren’t ready to
give up control, he says.
Companies trying to de-
centralize often leave the rules
too ambiguous, encouraging
work groups to lead them-
selves collectively, without
clearly stripping former
managers of power over their
colleagues. This leads to dif-
ficulties. “I observe that after
this change [to decentraliza-
tion], people continued to at-
tribute authority to the people
who used to be in power, even
though they no longer had it,”
Lee says.
CashCo dealt with this
problem by defining roles
more clearly and continuously,
which made workplace inter-
actions more equal and less
about the individuals involved.
The company tried to ensure
that it was a worker’s role that
conferred decision-making
power, not the person’s for-
mer hierarchical status within
the corporate structure.
In a world where hierar-
chy is inculcated from the
earliest parent-child and
teacher-student relationships,
it’s important that we keep
experimenting with different
organizational structures as
the workplace evolves, says
Julia DiBenigno, a professor
of organizational behavior at
Yale University, who re-
cently assigned this paper to
students in her organizational
behavior PhD course.
Although one might
expect an organization with
no bosses to be more of an
ad-hocracy, the study finds
that decentralization requires
deliberate planning and rein-
forcement over time, disprov-
ing the conventional wisdom,
she says.
“Professor Lee shows that
working autonomously—with-
out managerial approval on
every action and independent-
ly negotiating responsibilities
with peers—necessitates sus-
tained, intentional collective
effort,” she says. “His research
illuminates the micro-level
behavioral practices essential
for success in such a system,
including how individuals can
effectively ‘work from roles’
rather than ‘work from rank.’”
This study will inform
Lee’s next research project,
an examination of how a
decentralized organization
fared when it suddenly had to
impose a more hierarchical
structure to survive during
the COVID-19 pandemic. The
change caused some workers
to distrust the organization’s
commitment to an equal
workplace. “Some felt it was a
betrayal,” Lee says. O
Michael Lee, “Enacting Decentralized
Authority: The Practices and
Limits of Moving Beyond Hierarchy,”
Administrative Science Quarterly,
vol. 69, no. 3, 2024.
063-066_research_winter25_DA.indd 66
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Research_How_Social_Enterprises_Advocate.pdf
- 1. Research How Social Enterprises Advocate By Chana R. Schoenberger Stanford Social Innovation Review Winter 2025 Copyright Ó 2024 by Leland Stanford Jr. University All Rights Reserved Please do not share this PDF online or on social media (e.g. LinkedIn). You can purchase copyright permission to make paper or digital reprints at ssir.org/reprint_permissions. Stanford Social Innovation Review www.ssir.org Email: [email protected]
- 2. 65 Stanford Social Innovation Review / Winter 2025 difficulties boosted percep- tions of trustworthiness and even the competence of the speaker. The more personal the revelations, the greater the speaker’s perceived vulner- ability and the higher the measures of their trustwor- thiness. The researchers also found that adding data-driven rational arguments to self- revealing personal narratives did not diminish trust. The researchers’ findings indicate that overcoming interpersonal mistrust is critical to building collabora- tion across ideological divides. Data should be embedded in a personal story about why the speaker holds a particular view, and that story should divulge their vulnerability or experience of hardship. Ideological differences in- creasingly appear in personal and professional contexts, affecting collaborations of all kinds. Working to build trust can help individuals see one another in a new light. For Hagmann, the findings also suggest that small shifts in research questions can yield big answers. “There must be hundreds of papers written about stories and persuasion, and about political disagree- ments and persuasion,” Hagmann says. “But thinking about dimensions beyond per- suasion—we can count those papers with our fingers. It’s just so natural to think about changing minds when we be- lieve others are wrong that we forget other outcomes may be just as or even more impor- tant. Sometimes insights are hiding in plain sight.” O David Hagmann, Julia A. Minson, and Catherine H. Tinsley, “Personal Narratives Build Trust Across Ideological Divides,” Journal of Applied Psychology, forthcoming. A D V O C A C Y HowSocial Enterprises Advocate BY CHANA R. S CHOENBERGER AjournalistbasedinNewYorkCity. Shewritesaboutbusiness,finance,and academicresearch.Youcanfindher onX(formerlyTwitter):@cschoenberger. S ocial enterprises—or- ganizations that use business activities to pursue social good—aren’t usually recognized as political actors. But a new research study aims to change that by looking at how and why they get involved in advocacy. “This research underscores the importance of recognizing the political activities of social enterprises and offers new insights for studying hybrid organizing and organizations that address complex societal challenges,” the researchers write. “By highlighting the integral role of advocacy, our study contributes to a more comprehensive understanding of how social enterprises drive social change, not only through direct service provision but also by shaping the broader sociopolitical environment.” Academic researchers who study social enterprises typi- cally look at how the organiza- tions serve the community and operate as businesses. The authors of the paper—Johanna Mair, a professor of organiza- tion, strategy, and leadership at the Hertie School in Berlin and academic editor of Stan- ford Social Innovation Review; and Nikolas Rathert, an assis- tant professor of organization studies at Tilburg University in the Netherlands—took a different approach. “I’ve been doing research on social enterprise and entrepreneurship for 25 years,” Mair says. “A linger- ing question is: Why don’t we explicitly look at the political side?” Since the most effective way to solve social problems is to influence those with official power, it makes sense that social enterprises would engage in politicking, so it was important for research to look at this pathway to activism. “Social enterprises don’t oper- ate in a vacuum,” she says. To find out whether, how, and to what extent social en- terprises engage in advocacy, the researchers turned to survey data taken in 2015 from 718 social enterprises across seven European countries— Germany, Hungary, Portugal, Romania, Spain, Sweden, and the United Kingdom. These organizations each had a stated social mission, one or more full-time workers, and business activities generating at least 5 percent of revenues. Local-language analysts interviewed each enterprise, with extra online questions as well. The entities were spread across the countries and ad- dressed problems in one of six domains: culture, educa- tion, health, social services, environment, and human development. The researchers specifically asked the enter- prises about whether they engaged in either of two forms of advocacy: policy advocacy directed at government and legislators, and sociocultural advocacy directed at society at large to influence beliefs, attitudes, and norms. Although data from each country revealed different distributions between socio- cultural and policy advocacy, the results showed that most social enterprises interviewed were active in advocacy work: 76 percent said they advocated on sociocultural issues, and 62 percent said they worked on policy, while a mere 8 percent said they didn’t engage in any advocacy. The study also showed that their activism was correlated with governmental budget pressure. If public spend- ing declined in a particular problem domain covered by a social enterprise, the orga- nization was more likely to engage in advocacy, stepping in to draw more attention to the issue. The study also showed that organizational form matters: Social enterprises that compete with businesses, as well as those that have for-profit legal status, are less likely to engage in advocacy. If so, “social enterprises step away from this lever of social change,” Mair says. One particularly interest- ing finding in the paper is “the idea that social enterprises can help ‘fill in’ for nonprofits that lack capacity to advocate, because the social enterprises can use funds from their com- mercial activities to advocate, whereas more traditional nonprofits face more restric- tive funding,” says Jennifer Mosley, a professor at the University of Chicago’s Crown Family School of Social Work, Policy, and Practice. Mosley praises the way Mair and Rathert use the idea of “markets for public pur- pose” to design new variables that predict social enterprises’ involvement in politics, show- ing how they are different from either regular companies or nonprofits: “This is a very tailored and smart approach that gives us more confidence in their model.” The study also high- lights how social enterprises view their place in between 063_066_research_winter25_FINALindd.indd 65 063_066_research_winter25_FINALindd.indd 65 10/22/24 Oct 22 3:26 PM 10/22/24 Oct 22 3:26 PM
- 3. 66 Stanford Social Innovation Review / Winter 2025 R E S E A R C H nonprofits and businesses. “Essentially, the more they see themselves as ‘business-like,’ the less they focus on struc- tural social-change work,” Mosley says. O Johanna Mair and Nikolas Rathert, “The Political Side of Social Enterprises: A Phenomenon-Based Study of Sociocultural and Policy Advocacy,” Journal of Management Studies, forthcoming. O R G A N I Z A T I O N A L D E V E L O P M E N T Decentralized Workplace BY CHANA R. S CHOENBERGER H ow can organiza- tions give workers more decision- making power and limit managerial and executive excess without falling back into customary patterns of hierarchy? A new paper delves into one US company to examine what happens when it replaces a traditional corporate management struc- ture with a nonhierarchical structure based on explicit job roles—and what this dramatic change means for employees, former supervisors, and the company as a whole. The study starts from “the perspective that authority is not something that an orga- nization or its members have but is something that an orga- nization and its members do,” writes the author, Michael Y. Lee, an assistant professor of organizational behavior at France’s INSEAD. Lee formed the research question behind the paper from his early days as a Coro Fellow in Public Affairs just after he finished his under- graduate degree at Harvard University. Following the democratic philosophy of John Dewey, the program focuses on experiential train- ing for the dozen fellows, including teaching them how to reach consensus, facilitate large-group meetings, and perform tasks without resort- ing to hierarchy, which Lee described as “an incredibly powerful experience with a lot of creativity.” When the program ended, Lee worked for several non- profit and for-profit organiza- tions but felt their hierarchical structures were impeding their group performance. He decided to pursue a doctorate in management at Harvard Business School focusing his dissertation on the question of how individuals can manage performance across an entire organization. To study this issue, he went looking for a company to research. Few companies have truly decentralized management set- ups. Zappos, the shoe retailer that Amazon bought, famously used this principle, which it called “holacracy,” but the Las Vegas-based ecommerce company turned down Lee’s request to be featured in a case study. Instead, he found an- other company, CashCo, which was making a formal change to its organizational structure and adopting holacracy. The company, a producer of hardware products that manage physical and digital currency that is based in the eastern United States, allowed Lee to spend 18 months doing an ethnographic study of its management practices, begin- ning six weeks after CashCo made the transition to the new decentralized structure. He spent a week on-site every month for the first six months, then visited every other month for six months, and conducted a final visit. In between trips, he did virtual interviews, observed meet- ings remotely, and analyzed archival data. The most surprising find- ing in his research, Lee says, was how much structure and collective work was required for the decentralization initiative to succeed by mak- ing roles explicit and adding guardrails around authority. This work, which included a documented and constantly updated set of rules available on an online platform, helped both former line workers and former managers to know what they’re supposed to do under the new system. Oth- erwise, workers were often unwilling to make decisions, while those who used to be managers weren’t ready to give up control, he says. Companies trying to de- centralize often leave the rules too ambiguous, encouraging work groups to lead them- selves collectively, without clearly stripping former managers of power over their colleagues. This leads to dif- ficulties. “I observe that after this change [to decentraliza- tion], people continued to at- tribute authority to the people who used to be in power, even though they no longer had it,” Lee says. CashCo dealt with this problem by defining roles more clearly and continuously, which made workplace inter- actions more equal and less about the individuals involved. The company tried to ensure that it was a worker’s role that conferred decision-making power, not the person’s for- mer hierarchical status within the corporate structure. In a world where hierar- chy is inculcated from the earliest parent-child and teacher-student relationships, it’s important that we keep experimenting with different organizational structures as the workplace evolves, says Julia DiBenigno, a professor of organizational behavior at Yale University, who re- cently assigned this paper to students in her organizational behavior PhD course. Although one might expect an organization with no bosses to be more of an ad-hocracy, the study finds that decentralization requires deliberate planning and rein- forcement over time, disprov- ing the conventional wisdom, she says. “Professor Lee shows that working autonomously—with- out managerial approval on every action and independent- ly negotiating responsibilities with peers—necessitates sus- tained, intentional collective effort,” she says. “His research illuminates the micro-level behavioral practices essential for success in such a system, including how individuals can effectively ‘work from roles’ rather than ‘work from rank.’” This study will inform Lee’s next research project, an examination of how a decentralized organization fared when it suddenly had to impose a more hierarchical structure to survive during the COVID-19 pandemic. The change caused some workers to distrust the organization’s commitment to an equal workplace. “Some felt it was a betrayal,” Lee says. O Michael Lee, “Enacting Decentralized Authority: The Practices and Limits of Moving Beyond Hierarchy,” Administrative Science Quarterly, vol. 69, no. 3, 2024. 063-066_research_winter25_DA.indd 66 063-066_research_winter25_DA.indd 66 10/17/24 Oct 17 12:44 PM 10/17/24 Oct 17 12:44 PM