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It is in 1986 when real interdisciplinary researcheson the social innovation were born thanks to the creation of the CRISES in Quebec (Centre de Recherchesurl’InnovationSociale).
Composed of anthropologists, geographers, historians, mathematicians, philosophers, administrators, economists, politicians, sociologists, etc., the members of CRISES study and analyse innovation and social transformations from three axes: the development of the territory, the conditions of living andlabour and employment. So, Tardif (2005), quotesNailmaker (2003, pp. 41-42) who considers that social innovation is a new answer aiming at the greater well-being of individuals and/or the communities. Its objective is to plan positive social consequences. Several researchers define social innovation by its process. In other words, social innovation has to meet certain requirements as regards its process of creation and implementation. Social innovation is then the result of the cooperation between a diversity of actors. Under this angle, social innovation can be envisaged as a process of collective apprenticeship and creation of knowledge. It also requires the participation of all actorson different levels during the progress of the process of creation and implementation of social innovation. Fontan (2004) declares that social innovation appears as a multi-form and multidimensional process of production and renovation of the existing, with the aim of producing some social change on different levels. The socially innovative actionrepresents a mediation which allows bringing an answer to a need or to a desire formulated by social actors to find a solution to a social problem. The socially innovative action means a bigger structuring of social factors in different ways, 1) by redefining the cultural orientations on backward innovation, 2) during its implementation, by the new methods of management of social relationships, the dialogue and the partnership for example, and 3) by the pressures exercised to change the individual and collective habits of consumption. This is the way we can build circles where the invention and the novelty emerge more easily and where the cycle leading to the recognition of its social useand to its institutionalization. This is the way to set up systems of innovation. Thus, the social innovation includes at the same time the fact of innovating, and the institutional process of social recognition.
Several authors were interested in the concept of social innovation simply by leading a reflection on the innovation by giving it a social dimension (Fontan, 2004) which joins recently in the sphere of influence of the new economic sociology (Lévesque, Bourque, Forgues, 2001) and of the socioeconomic geography (Benko, Lipietz, 2000). Rather than to see how the innovation acts, it is necessary to see how we can move in the new productive practices inferred by innovation, or by specializing in the types of production who have a revitalizing potential, or by improving social conditions which return the community capable of innovating (Fontan, Klein, Lévesque, 2003). Moreover, Bacchiega and Borzaga (2001) used tools offered by the institutional theory of organizations to bring the light on the innovative nature of social enterprises. Phills, Deiglemeier, Miller (2008, p. 36) Consider the social innovation as a solution to a social problem, more actual, effective and bearable than existing solutions, and thanks to which the created social value returns mainly to the company rather than to the private agents.
Other authors extended the field of the analysis to consider the individual within the environment where he evolves. Supported by Nailmaker (2003), Djellal and Gallouj(2012) declare that social innovation can aim at three targets: the individual, his territory and the company question of increasing the performance. The second characteristic of social innovation is the fact that it is an immaterial innovation, and not technical one. Djellal and Gallouj (2012) consider on this subject that social innovation does not lean on the technical artefacts, but on its characteristics. The third characteristic would be the process and the stakeholders. Indeed, it is important to identify the various actors concerned by the social innovation, as well as the mode of production of these actors. The processes of production in question are often local and grant an important place for the informal and for the diversity of actors. The last characteristic to be considered would be the purposes of the social innovation. The main purpose of the social innovation is the resolution of social problems. Djellal and Gallouj (2012) quote Kubr (1988) who distinguishes various forms of social problems: the
curative, preventive, and creative ones. In the case of social innovation, social problems are the problems which were not resolved by "traditional" innovation, because of the failure or of the indifference of the market or the government towards these problems. But the company cannot disregard its environment, because it constitutes an integral part of a network of social relationships it maintains with other companies (customers or suppliers), public institutions, associations (for example of consumer protection and/or the environment), labour unions, etc.
Consequently, innovation leads companies to evolve within a territorial or national innovation system (Alexandre-Leclair, 2013).
Cooperatives are transaction governance structures, as are non-cooperative firms (Ling, 2012). Most of researches about governance present it within the frame of the transaction cost approach, when governance refers to regulative institutions with the main goal to keep transaction costs low and exchanges more efficient (Lang and Roessel 2011). Thus, transaction cost theory cannot exhaustively explain the existence of cooperative governance (Valentinov 2004) quoted by Lang and Roessel (2011).Indeed, the Cost transaction Theory of Coase (1937) defines the relationship of a firm with the market. But in the 1960s different authors considered managerial and behavioural theories. So, Baumol (1959 and 1962), Marris (1964) and Williamson (1966), suggest that managers would seek to maximize their own utility and consider the implications of this for firm behaviour in contrast to the profit-maximizing case. Traditional managerial models typically assume that managers, instead of maximizing profit, they maximize a simple objective utility function (this may include salary, security, power, prestige) subject to an arbitrarily given profit constraint. More recently, other authors have highlighted the social environment of the governance. For instance, the community economies theory of Gibson-Graham (2006) is a project to re-politicize and re-socialize the practice of economies. Gibson-Graham (2006) argues that it is when the distribution of surplus is negotiated democratically that opportunities for ethical decisions around consumption and commons are created.
Moreover, Cameron (2010) declares that the transparent and democratic structure of governance that is reflective of the diversity of interests of both cooperative members and the wider community is a cooperative’s key strength in allowing it to take into consideration environmental and social concern. Phelan L. and al. (2012) consider cooperativism as a form of bottom-up governance which means that the managerial model is more oriented to participative one than hierarchical one. On the other hand the theory of commitment of Etzioni is more oriented toward sociological organization than cost and trust relationship between partners. Etzioni (1961, 1975) distinguishes three kind of commitment in a firm: remunerative power and calculative commitment, coercive power and alienative commitment, and normative or symbolic power and moral commitment (Hornung, 2010). So, the governance has been studied under different angles but we already know that SCOPs’ governance cannot be studied under the angle of cost transaction theory.
So, in our research, we will focus on the social aspect of the SCOP’s governance because as we saw before, the main purposes of a SCOP are economic and social ones. So, we wanted to know how far could we consider governance in SCOPs as a social innovation and what is the role of managers and employees in the promotion of this kind of cooperatives?In other words what are their motivations to manage or work within the frame of a participative governance and limited profit organization?.
When most of researches consider governance only within the Transaction Cost Theory, we wanted to study the social and innovative aspect of governance in SCOPs within the frame of social innovation.To answer our questions, we deeply studied a case of SCOPin order to have a first view on the real functioning of a SCOP’s.
According to Yin (2009), “a case study is an empirical inquiry that investigates a contemporary phenomenon in depth and within its real-life context,especially whenthe boundaries between phenomenon and context are not clearly evident”. Theoretical propositions are a startingpoint (and not the result) of case study analysis. Yin (2009) considers that single case studies are relevant for critical cases in order to test theory, or to analyse cases that may be extreme, typical, revelatory or longitudinal. When we consider our topic as typical and revelatory, consequently, a single case study could be considered as appropriate especially that we don’t have a large theoretical background on governance and social innovation in the case of cooperatives “SCOP”.
On the other hand, Case studies differ from other qualitative approaches in that they are most often rooted within existing theory, they make use of quantitative data associated with the phenomenon, and they are undertaken with a goal of developing propositions that can be empirically tested in the future (Langley, 1999). In contrast to ethnographies, case studies do not necessarily require long periods of participant observation but rely much more on a triangulation of data sources including archival documents and interviews (Yin, 2003). Case studies have been termed “synthetic strategies” because of their combination of quantitative with qualitative data as well as their more positivist epistemology (Langley, 1999). Rather than producing “process theories,” as is common with many qualitative methodologies, the synthetic approach of case studies often leads to “variance theories,” which involve relationships between independent and dependent variables (Mohr, 1982) (Kistruck et Beamish, 2010).
So, in order to understand the motivations and the specificities of participative governance, we studied the case of ATARAXIA, a Consulting firm in Management and Organization composed of 4 shareholders (general manager included) and two employees. We met and discussed 3 times with the general manager in order to better understand the functioning of a SCOP and their specifities. Afterwards, we wanted to meet with the other associates but they were very busy and couldn’t receive us, so we sent them a short questionnaire by e-mail in order to know their point of view on the participative governance and especially on their motivations to join a SCOP; the different questions were mostly open questions or multiple choice ones. These questions were: the motivations to create or to work for a SCOP (with multiple choice), advantages and inconveniences of participative governance, and the advantages and limits of a SCOP. The analysis of data was processed by subject. So, altogether we gathered 5 questionnaires and had 3 interviews (1h30 each) with the general manager.
Results and discussion:
In order to discuss our research questions, we organized the analysis of data according to three main subjects: democracy and participative management, motivations, salaries and profit sharing.
Democracy and participative management
The manager of ATARAXIA declares that based on the principle of the cooperation, a SCOP cannot be created by a single individual. At least, two partners are necessary to be able to create a company with this status. In their case, they are four shareholders (including the manager) and two new employees (not associated). The manager was elected by the other partners. The principle of the democracy is thus confirmed, "the fact of being elected, gives me all the legitimacy and all the trust on behalf of my employees and associates" he declares. But it does not mean that the other partners do not participate in the taken decisions. This is a way to encourage them to become associates in the company and the manager has the responsibility of urgent matters. Moreover, the important decisions concerning the cooperative, are taken during an annual general assembly. Nevertheless, the employees not shareholders cannot participate in the decisions taken as long as they did not become associated. The principle of one person, one vote is applied, it "involves us in our daily work, as far as we feel responsible for our own company". The figure 2 summarizes the decision making process.
Figure 2. Decision making process
According to our case study, the main motivation to create a SCOP is unanimously dueto an individual disappointment of their past experiences in a capitalist economic model. Besides, we have noticed a particular sensibility for the social issues which largely explains his choice for the SCOP status. Indeed, individualsmanaging this kind of cooperativesare not attracted by the personal enrichment. They accept voluntary the limited profit even though they have to make profits in order to develop and recruit more people. Moreover, the employees recruited within the company have to join the corporate policy "it is the first selection criterion, we shall estimate the skills in the second place" declared the manager. So, after their recruitment
in the company, employees must sign a contract that includes a clause obliging them "to ask to be associated" after two years spent within the company. It does not mean that the request will be accepted, it must be discussed by the different stakeholders who will decide to accept their request or not.The second motivation is the participative management. Unanimously, employees and associates declared their interest for SCOP status because of their participation in the decision making and the principle of one person one voice whatever is the number of your shares in the company.
Salaries and profit-sharing
Given the specific sector of the company (consulting in Management), the new employee has to participate in the equity of the company by advancing three or four months of his salary. Indeed,consulting assignmentsare unpredictable and the income of the company depends on it. So, the employee has to manage his own remuneration so that the company does not go bankrupt.
As regards the amount of salaries, they are estimated within the low scale of the national collective agreement of the sector (consulting).But, every shareholder could award himself with a variable part on the missions achieved thanks to his efforts, and he has the free use of it, either he decides to be paid of the amount due, either he invests it in the equity of the company and participates in its growth. We highlight the fact that all the profits of the company are not distributed to the associated and employees; a part of benefits are automatically dedicated to the reserves (approximately 16 %) and the rest is blocked on an account for 5 years according to the principles of "the profit-sharing agreement". In the case of ATARAXIA, all the partners decided to invest the profits which remain after paying their salaries in the reserves of the company,in order to increase the capital and assure the sustainability of the company.
Figure 1.Profit sharing process
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