The Role of Cooperative and Social Enterprises: A Multifaceted Approach for an Economic Pluralism

20 Pages Posted: 8 Jun 2010

See all articles by Carlo Borzaga

Carlo Borzaga

University of Trento; European Research Institute on Cooperative & Social Enterprises (EURICSE)

Sara Depedri

European Research Institute on Cooperative & Social Enterprises (EURICSE); University of Trento

Ermanno C. Tortia

University of Trento - Department of Economics and Management; Euricse

Date Written: November 2009

Abstract

To date, the dominant economic approaches have downplayed and marginalised the role of cooperative and social enterprises in contemporary market economies. This insufficient attention derives from the limited applicability to the case of cooperative and social enterprises of two of the main assumptions of orthodox microeconomic theory: the presence of only self-interested individuals and profit-maximisation as the only possible firm objective. The mismatch between theoretical assumptions and empirical evidence has led to the underestimation of the growth potential, weight and role of cooperative and social enterprises. An explanation for the persistence and growth of these organisational types has not been provided by institutional theory either. We thus maintain that the assumptions of the main theoretical models must be enlarged and deepened in order to improve the scientific understanding of cooperatives and social enterprises. Individuals as well as institutions can no longer be characterised as purely self-interested and profit maximizers. Instead, the importance of motivational complexity and the diverse nature of preferences needs to be introduced in the model as suggested by the behavioural approach. Diverse motivations must be assumed to drive both individual and organisational decisions. Furthermore, firms can also be conceived as coordination mechanisms of economic activities, as suggested by the evolutionary approach. To this end, they develop specific organisational routines and their objectives can be diverse, ranging from purely private appropriation, to public benefit aims supported by altruistic preferences.

Keywords: Cooperatives, social enterprises, organizational pluralism, economic theories

JEL Classification: J81, L31, P50

Suggested Citation

Borzaga, Carlo and Depedri, Sara and Tortia, Ermanno C., The Role of Cooperative and Social Enterprises: A Multifaceted Approach for an Economic Pluralism (November 2009). Euricse Working Papers N. 000/09. Available at SSRN: https://ssrn.com/abstract=1622143 or http://dx.doi.org/10.2139/ssrn.1622143

Carlo Borzaga

University of Trento ( email )

Via Giuseppe Verdi 26
Trento, Trento 38152
Italy

European Research Institute on Cooperative & Social Enterprises (EURICSE) ( email )

Via S. Giovanni 36
38122 Trento (TN)
Italy

Sara Depedri (Contact Author)

European Research Institute on Cooperative & Social Enterprises (EURICSE) ( email )

Via S. Giovanni 36
38122 Trento (TN)
Italy

University of Trento

Via Giuseppe Verdi 26
Trento, Trento 38152
Italy

Ermanno C. Tortia

University of Trento - Department of Economics and Management ( email )

Via Inama, 5
Trento, TN Trento 38122
Italy
00390461882383 (Phone)
00390461882222 (Fax)

HOME PAGE: http://www.unitn.it

Euricse ( email )

Via Torre Verde, 5
38122 Trento (TN), TN 38122
Italy

HOME PAGE: http://www.europee.eu

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