Social and Solidarity Economy: Our common road towards Decent ...

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SOCIAL AND SOLIDARITY ECONOMY ACADEMY 16 READER
SOCIAL AND SOLIDARITY ECONOMY ACADEMY Chapter 2: Governance and management of SSEOs 2.1 Introduction Though SSEOs are heterogeneous, they operate on similar principles. To a large extent, the governance and management of these organizations has been influenced significantly by their collective membership and ownership. Driven primarily by social benefit motives as opposed to capital accumulation, these organizations are largely “people-centred”. Consequently, every member has the same right to participate in the enterprise and despite the different organizational structures, all of these organizations endeavour to give members the opportunity to participate in their governance and management. The purpose of this chapter is to explain how SSEOs are governed and managed, paying attention to the nature of ownership and membership and the implications for member participation. This should give us insights into the strengths and weaknesses in the management of SSEOs and the possibilities for improving efficiency in their operations. Considering that SSEOs use a business approach to satisfy social needs and expectations, the chapter begins by comparing their governance and management with conventional capitalist enterprises. 2.2 Governance and management of SSEOs 2.2.1 Defining governance and management Though the concepts of governance and management are sometimes used interchangeably, they carry slightly different meanings. Governance has often been defined in the context of exercising state power (see Hyden and Court, 2002: 13-33; Olowu, 2002: 4; Hyden, 1992: 7), yet in reality the concept applies to a much broader context of human society. Rather than politicize the concept, we define governance here as the exercise of institutional authority to determine the use of resources in the conduct of a society’s affairs (World Bank, 1991). This definition implies that governance occurs in societal organizations of all forms and sizes and in private, public, for-profit and non-profit organizations. The rationale behind governance is normally to ensure that an organization produces worthwhile results while avoiding undesirable outcomes for the people concerned. The concept of management has also attracted many definitions in the literature. For instance, a popular definition in the microfinance literature is that management is the process of getting things done efficiently and effectively with and through people (Churchill and Frankiewicz, 2006: 2). For our purposes, we define management as the organization and coordination of the activities and efforts of people in accordance with prescribed policies to achieve desired goals (Business Dictionary, http://www.businessdictionary.com/definition/mana gement.html). As a process, managing involves planning, organizing, leading and supervising people to perform the necessary tasks for achieving prescribed goals (Churchill and Frankiewicz, 2006: 2-8). Clearly, management occurs in organizations of all forms and sizes. The basic distinction between these two concepts is that whereas governance sets the framework for carrying out organizational activities, management deals with the day-to-day implementation of organizational activities as provided for in the framework. Thus, governance is broader than management because it provides the policies that form the basis for the work of management. In the context of SSEOs, governance has to do with formulating policies that identify activities and mobilize resources to achieve the aspirations or READER 17
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