4.4.1 The extent of input used from different stakeholder groups in the decision-making processes of the Dutch social enterprises

The data revealed (Table 4.3) that input from different stakeholder groups is considered fairly in the decision-making processes of the participating Dutch social enterprises. The stakeholder input considered in the social enterprises’ decision-making processes originates from the following key stakeholder groups, namely employees, co-creators and strategic alliance partners, shareholders, and customers (Chart 4.1 and Table 4.3).

The consideration of input from employees in the decision-making processes of Dutch social enterprises appears to be highly regarded. However, this consideration may come as a result of the Dutch Works Council Act of 1971, which requires the establishment and involvement in decision-making of works councils and/or employee representative bodies. Works councils and/ or employee representative bodies are mandatorily established and their input is considered in organisations exceeding 50 employees. They are optionally established and considered in organisations employing 10-50 employees, whereas they are not applicable in organisations employing less than 10 employees.1 The latter organisations can establish and consider the input of staff meetings only on a voluntary basis. The latter organisations can also establish representative bodies – basically – on a voluntary basis.2 In absence of such a body, the employer has to meet twice a year with the employees for information and consultation on matters regarding the enterprise.3

The social enterprise population in the Survey comprised: (i) organisations employing 10-50 employees (46.2%); (ii) organisations employing less than 10 employees (42.3%); and (iii) organisations employing more than 50 employees (11.5%). It appears then that the majority of the examined social enterprises were not consequently obliged to comply with the requirements of the Dutch Works Council Act of 1971 concerning establishing and considering the input of works councils and/or employee representative bodies. As such, it seems that the highly regarded consideration of input from employees in the examined social enterprises may not be directly influenced largely by at least the mandatory provisions of the Dutch Works Council Act of 1971.

Additionally, social entrepreneurs in micro and small organisations often have overlapping roles as founders, directors and employees. Hypothetically, this should allow for a high rate of consideration of employee input in decision- making. However, this was not the case concerning the answers provided in this survey. Only 9% of the survey’s respondents were employed by the corresponding social enterprise, whereas the majority of respondents, i.e. 73% consisted of social entrepreneurs who were either founders and/or directors and who were not employed by the represented social enterprise organisation.

The survey’s findings acquired a clear meaning when considering international scholarship. It is noted in scholarship that employees and other human capital operating in social enterprises is attracted and motivated by the fulfilment of the social enterprises’ objectives. Employees are motivated to the extent that they are satisfied by contributing to society and to the pursuit of the social purpose rather by pecuniary incentives and rewards.4 From this perspective, scholarship notes that social entrepreneurs – while seeking to strike a balance in the pursuit of the social purpose through commercial activities – develop a social network that will provide them the most important (human) resources for their social enterprise’s growth.5 Consequently, employed staff and volunteers are regarded as one of the most important (human) resources for social enterprises. The staff’s expertise in combination with the staff’s alignment to the pursuit of a common social objective is what makes the employees of social enterprise indispensable parts of the social enterprises’ growth and decision-making.

Other than the employees’ input, the consideration of the input provided by co-creators and strategic partners in decision-making also has a rational explanation. Co-creation with strategic partners provides an advantage to social enterprises to acquire strategically access to scarce resources, while integrating target groups of, e.g. beneficiaries into the design, production and/or the distribution of a service or a product.6 Both aspects promote the legitimacy and the sustainability of the social enterprise.7 Furthermore, it is also possible to explain why the input provided by shareholders and investors is so highly regarded in decision-making processes. A justification rests on the legal form applied by the majority of the examined social enterprises. The examined social enterprises were organisations with a share capital and which employ – most predominantly – the legal form of the BV. As was noted earlier, social enterprises strive to acquire and maintain resources through relational ties with stakeholders and through relational ties with shareholders. That is referred as ‘upward accountability’ in contrast to ‘downward accountability’ of social enterprises to clients and beneficiaries.

The ‘customers’ stakeholder group is a key stakeholder group whose input is deemed important in the social enterprises’ decision-making processes. The customers who may be or may not be the social enterprises’ beneficiaries,8 constitute the mainstream commercial source of capital and legitimacy for social enterprises.9 The feedback of customers, where there is a strong relationship between the customers and the social enterprise, may leverage social enterprises to access more resources and capital.10

The data also revealed that the decision-making processes of social enterprises do not contain any use of input from adversary groups, such as competitors and opposing interest groups (Chart 4.3). Interestingly, this is not what scholarship notes, i.e. that social enterprises may ‘encourage or enable complementary or even competitor organisations to grow further the shared social mission, rather than to be primarily concerned about capturing greater market share for one’s own organization’.11 Such an effect is not reflected in the responses of the survey’s examined organisations.

For other types of stakeholder groups, such as suppliers, networks, the government and the community, the majority of the respondent social enterprises in the Survey had a neutral position regarding the input of these entities. That was also confirmed in the analysis of the responses that were received through open- ended answers, which revealed that the input considered in decision-making processes originates mainly from customers, employees, strategic partners, and shareholders (Table 4.4). The input of stakeholders is mainly collected in the form of oral consultation processes with stakeholders, meetings, complaint mechanisms, ratings, and feedback mechanisms (Table 4.4). The responding Dutch social enterprises ‘give a voice’ to various stakeholder groups, ‘listen a lot’ and pay ‘much attention’ to ‘solicited’ and ‘unsolicited feedback’ and ‘different input’ received by stakeholders to the extent that results in a ‘co-creation’ process in decision-making (Table 4.4).