Mario Aquino Alves, Professor of Public Policy and Corporate Social Responsibly at FGV-EAESP, puts the spotlight on business from the bottom up and how it benefits the common good in an alternative and sometimes ephemeral way
By Tom Gamble
Humanity is not just the bright side of the world, it’s also the dark side – and humanity is essentially two sides of the same coin when it comes to progress. Moving away from the shadow, one form of light comes in the shape of social innovation.
Social innovation can be considered in terms of being part of a business or as a process, with alternative organisations being an outcome of this. Moreover, on a political level, social innovation isn’t necessarily a left-leaning notion – look at micro-financing or micro-credit. The Peruvian organisation Laboratoria is another example. Its aim is to provide employment opportunities to minorities – woman, the gay and black communities – and even if there is a notion of inclusion in its purpose, it still deals with business and with business models.
Generally, social innovation is not something you cannot completely control, an interesting point being that we need to treat it differently than industrial-era business and management models that relied on plans, cycles and processes. In comparison, social innovation is more a question of trial and error, experimentation, learning and engaging. In different contexts, social innovation emerges in different forms – sometimes more society-driven, sometime more business-driven, sometimes government-driven. However, most of the time, social innovation is a question of a being a mixed model, an interaction between society and business, business and government. Moreover, sometimes business ventures turn out to be social innovations despite having not starting out in this way – banking services, for example. But there can also be both positive and sometimes negative externalities. Just think of Uber-type services whose by-product might be the creation of even greater traffic congestion, noise pollution, CO2 emissions and even industrial disputes as witnessed in several countries this year.
As mentioned, alternative organisations often result from social enterprise. Firstly, an alternative organisation exists because there is an already existing traditional organisation to differ from – one characterised by vertical organisation, hierarchy, well-defined tasks, rationality (or at least the myth of rationality that runs through it) and processes. Alternative organisations are those that do not follow the ordinary path – that is, not a profit-driven argument for existing or organised with a structured hierarchy. The alternative organisation may be horizontal, virtual, networks, or even ephemeral organisations.
In another sense, alternative organisations are alternatives to capitalist-type organisations. This doesn’t mean they are against capitalism, but they find their leitmotiv in creating new forms of organising capital. Coops are a good example. Here, mutual gain is highlighted. Building on Darwin’s theory that the evolution of the species is through competition, the cooperative model can be said to advance the idea that survival of the fittest may also occur through cooperation. Moreover, they are not a new phenomenon, and their roots go back to Mediaeval times with, for example, hospices financed by the wine growers of Burgundy. However, the interesting point is that after the 1980s-90s, cooperatives have moved to a more alternative model. This can be seen, for example, at grassroots level in Argentina where workers occupied their closed factories and started to manufacture the goods themselves, or garbage pickers who started to organise themselves into cooperatives, as well as middle-class initiatives working on alternative schooling models and housing systems and then again, in Quebec, Canada, the emergence of the cooperative housing system 30 years ago. All in all, in various parts of the world there is a renaissance of the cooperative model.
At another level of alternatives is the emergence of the social impact model with a social goal in addition to a profit goal. Social fintechs in Brazil and Grameen in Bangladesh, for example, are new forms of delivering banking services – with a social customer base but also combining issues from the local social context and purpose. Laboratoria, the Peruvian alternative organisation that now has branches in several Latin American countries, is another example, the organisation having shareholders but whose main purpose is the inclusion of women. And then there is the movement that includes BCorps – where companies, putting the social goal before profit goal, gain benefit through a commitment to tackling social issues.
Alternative capitalist organisations constitute a final dimension to the notion with Portugal (social currency), The Netherlands (energy) or Japan (care of the elderly) catering for the wider community in exchange for a currency which can be used on the market. The other side of the coin, so to speak, is electronic currencies that use the block chain, such as the bitcoin, but they also include social electronic money. The difference must be made, then, between alternative forms of organising as opposed to alternative forms of organisation.
Here, the dimension of mobilisation and type of social capital that is generated is the most important aim – because the simple gesture of putting people together might give rise to other forms of business or organisation. The traditional imperative of organising people and resources through processes – with a view to long-term activities and growth – may in fact generate a whole host of problems that include mission drift and complexity. A new generation of entrepreneurs has come to light that contends that an organisation isn’t necessarily meant to last in time. They come together with an idea in order to achieve a particular mission, be it political, artistic or even cultural – and then subsequently disappear once the objective is attained.
Once again, the phenomenon isn’t brand new. Thirty years ago ephemeral organisations made the news, then disappeared. They are now re-emerging, mainly due to the fact that this form of organisation is very much adapted to the environment in which we are currently living – virtual offices, agile teams, uncertainty, rapid change, AI and social media. Why need a static building in downtown Sao Paulo when needs change and space needs to be occupied by something new? It’s all part of the evolution of things. The shift is there – vertical organisations are disappearing as we know it. And who knows, perhaps even the vestiges of our Mediaeval past – the universities – may also one day follow suit.
Capitalism is interesting in the sense that it is omnipresent, albeit in different forms, all around us. But what we need to do today is to raise awareness about capitalism and its sense. We need to be aware of what we are doing – to nature and to human beings – in the pursuit of capitalism and consumerism. It means talking about the impact we are making, not just for the shareholders but for the stakeholders as well – employees, suppliers, the local community, the country and even the planet. For this reason, we sometimes need to think backward instead of forward. We have come a long way over the past 1,000 years in terms of standards of living and openness to tackle issues such as equality. On the other hand, we are in a much worse state in terms of our relation with nature. We need to raise awareness on this issue. As an industrialist, for example, you may focus your activities on mining. But are you willing to be an accomplice to the genocide of a nation in Africa or in South America? These are some of the questions we need to ask. For the long-term good of both people, planet and also profit, the short-term must give way to a wider perspective and vision in the ways in which we do business – for the common good.
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