Responding to Marketization
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This document discusses marketization and its impact on non-governmental organizations (NGOs). It defines marketization as the penetration of market principles and values into arenas not previously part of the market. The growth of neoliberalism and reliance on non-governmental approaches has increased pressures on NGOs to adopt market-like strategies to gain funding. This includes social enterprise, cause-related marketing, and other commercial activities. While these strategies can help NGOs operate, they also de-politicize issues and prioritize economic outcomes over social goals. The document calls for more democratic and participatory approaches to decision-making within NGOs and society to counter the individualizing effects of marketization.
Responding to Marketization
- 1. Responding to Marketization: Reinforcing or Resisting? Angela M. Eikenberry School of Public Administration University of Nebraska at Omaha US-UK Fulbright Award Recipient, 2014-2015 University of Birmingham Third Sector Research Centre
- 2. “Doing something wonderful never tasted so good!” – Sweet Charity Cupcakes Sprinkles’ Cupcakes for Charity
- 3. Defining Marketization • A framework of market-oriented principles, values, practices, and vocabularies; • A process of penetration of essentially market-type relationships into arenas not previously deemed part of the market; • A universal discourse that permeates everyday discourses but goes largely unquestioned. (Simpson & Cheney, 2007, p. 191)
- 4. Growth of Marketization • Influence of global neoliberalism – Faith in the market & business-based approaches (Dart) – Deregulation & privatization to boost economic growth. – Growing reliance on non-governmental approaches. • Hollow state (Milward & Provan); shadow state (Wolch), contract state (Boston), submerged state (Mettler), voluntary state (Nickel & Eikenberry); third-party government (Salamon); government by proxy (Kettl); or network governance (Sorensen & Torfing).
- 5. Marketization of NGOs • Need for NGOs (and consumption) to “replace” government in the provision of public goods. • Pressures on NGOs to take on market-like approaches to gain funding. • Pervasive normative ideology surrounding market-based solutions and business-like models. • NGOs increasingly look to market-like strategies to operate. – Commercial activities/contracting – Social enterprise – Cause-related marketing
- 6. Problems with Marketization • The ideology of the market is essentially anti-social, based on self-interest rather than disinterest or the public good (Anderson, 1990; Hjorth, 2009). • The market erodes social ties other than purely economic ones and/or converts social relationships into instrumental ones (Bull et al., 2010). • Marketization de-politicizes the public realm through economic and managerial discourses (Clarke, 2004; Curtis, 2008; Nickel, 2012; Dey & Steyeart, 2012).
- 7. Social Enterprise • As an idea, discourse and practice has gained prominence in the past decade (or more) within the governance context. • Clearly been linked to government downsizing/third-way efforts in the UK, Australia, US and elsewhere.
- 8. Social Enterprise • No clear consensus on the definition and meaning has shifted over time (Teasdale, 2012) • Involves the use of market-based strategies to achieve social goals (Kerlin, 2009). • Innovative, social value creating activity that can occur within or across the nonprofit, business, or government sectors (Austin, Stevenson & Wei-Skillern, 2006) • Capacity for social innovation, particularly innovations that redistribute power and wealth to create a social economy (Alvord et al., 2004). • Combines economic, social and political/governance elements (Pestoff, 2013).
- 9. Social Enterprise Competing discourses between those who practice it and those who set policy and fund it. – Practitioners: preoccupation with local issues, collective action, geographical community and local power struggles – Policy makers/funders: to promote efficiency, business discipline and financial independence.
- 10. Social Enterprise • Claims of benefits are wide and varied—from the UK Cabinet Office of the Third Sector: – Tackle some of society’s most entrenched social and environmental challenges – Set new standards for ethical markets, raising the bar for corporate responsibility – Improve public services, shaping service design and pioneering new approaches – Increase levels of enterprise, attracting new people to business • Little research on actual impact or efficacy beyond such claims (Peattie & Morley, 2008; Bertotti et al., 2012; Teasdale, 2010). – Provide goods & services – Develop skills; create employment & experience – Use environmentally friendly practices – Develop new markets – Can build social capital, infrastructure, and engagement; but in tension with economic development outcomes
- 11. Social Enterprise Challenges/Problems •Generator of relatively low-skilled & low-wage jobs; creaming (Blackburn & Ram, 2006; Peattie & Morley, 2008; Teasdale, 2012). •Emphasize individual over collective—”messiah-like” figure of the social entrepreneur (Dey & Steyeart, 2010). •Can run counter to more positive social and economic outcomes (Dey & Steyaert, 2010). •Introduces a de-politicized image of social change (Curtis, 2008; Dey & Steyeart, 2010; Grenier, 2009; Nicholls, 2010). •Focus on symptoms rather than root causes (Edwards, 2008)
- 12. Cause-Related Marketing • Firms contribute to charity while also increasing their bottom line by tying contributions to sales. – Transactional model: for each unit sold, a business or corporation contributes a share of proceeds to a particular cause. • e.g. Susan G. Komen pink products or Product (RED) – In U.S., CRM expenditures almost zero in 1983; an estimated $1.78 billion in 2013. • Benefits – Corporations – Charities – Consumers
- 13. Cause-Related Marketing Problems/Challenges: •Individualizes solutions to collective problems. •Makes virtuous action easy, thoughtless & self-satisfying. •Consumers have little incentive to understand impetus for the problem being addressed through consumption. •Lulls people into a false sense of doing good, even as they are potentially doing more harm.
- 14. Creating Spaces for Democratic Discourse • “We must imagine, foster, and publicize democratic movements that reject the dominant” market discourse, “and pursue more just, more humane, and more social cooperative” futures (Purcell, 2008). – More people of diverse backgrounds participate in organizational and societal governance; – Make participation meaningful by emphasizing relationships and engaging individuals “routinely in civic relationships over time” and that build social capacity; – Provide equal opportunities for individuals to participate in agenda setting, deliberation and decision-making.
- 15. Is Democratizing NGOs Enough?
Editor's Notes
- #8: Social enterprise is a sensible outcome of an individualized, risk society. It has also clearly been linked to government downsizing and governance efforts in the UK and elsewhere. As Teasdale, Lyon, and Baldock (2013) note: ‘the concept was eagerly taken on board by a Labour government, ideologically committed to a third way beyond state socialism and free market capitalism’ (p. 117; see also: Parkinson and Howorth, 2008). The UK is seen today as having the most developed institutional support for social enterprise in the world (Nicholls, 2010), with the UK government claiming an exponential growth in the number of social enterprises, although it is not clear this number represents real growth or merely a loosening of the definition of social enterprise (Teasdale et. al, 2013). Cook, Dodds, and Mitchell (2003) make a similar argument in the case of Australia and I (2009b) suggest cutbacks and changes in the nature of government support in the US, especially for basic services to the poor, have put pressure on nonprofit organizations to take on market-like approaches such as social enterprise. Thus, social entrepreneurship as an idea, discourse, and practice has gained prominence in the past decade or more. Business schools in particular have embraced SE (O’Connor, 2006) and there has been in general an acceptance of its legitimacy and perceived ability to do what business, government or traditional nonprofit or nongovernmental organizations on their own have not been able to do (Dey & Steyaert, 2010; Hervieux et al., 2010).
- #9: Despite these claims, there is no clear consensus on the definition of social entrepreneurship and its meaning and practice appear to vary by place and perspective. In its broadest sense, many suggest social enterprise involves the use of market-based strategies to achieve social goals (Kerlin, 2009; Peattie & Morley, 2008). Austin, Stevenson and Wei-Skillern (2006) define social entrepreneurship ‘as innovative, social value creating activity that can occur within or across the nonprofit, business, or government sectors’ (p. 2). Alvord et al. (2004) contend, perhaps normatively, ‘that social entrepreneurship can be regarded as a capacity for social innovation, particularly innovations that redistribute power and wealth to create a social economy’ (in Ridley-Duff and Bull, 2013, p. 6). Pestoff (2013) proposes a definition of social enterprise that combines economic, social and political/ governance elements.
- #10: There are also competing discourses within social enterprise and entrepreneurship between those who practice it and those who set policy and fund it (Dey, 2007; Dey and Teasdale, 2013; Froggett and Chamberlayn, 2004; Hervieux et al., 2010; Parkinson and Howorth, 2008; Teasdale, 2012b; Williams, 2013). Parkinson and Howorth (2008), for example, found among the discourses of practicing social entrepreneurs in the UK a preoccupation with local issues, collective action, geographical community and local power struggles. As Parkinson and Howorth note, “these findings are at odds ideologically with the discursive shifts of UK social enterprise policy over the last decade, in which a managerially defined rhetoric of enterprise is used to promote efficiency, business discipline and financial independence” (p. 285). [Idea of financial independence something of a myth.] Others have also found that the people and organizations with the most influence on the paradigmatic development of the field (funders, policymakers and so on) have a particular discourse that promotes market-based initiatives as a legitimate means of funding a social mission (Hervieux et al., 2010, p. 37) and business model ideal-types led by the ‘hero’ social entrepreneur (Dey and Steyeart, 2010; Nicholls, 2010; Nicholls and Cho, 2006). As Dey and Steyeart (2010) write, this dominant discourse is chiefly buttressed by what Lyotard has come to call performativity (rationalism, utility, progress, and individualism).
- #11: Claims about the impact of social enterprise is wide and varied. Grenier (2009) writes that there have been four main arenas within which claims have been made for social entrepreneurship to make a potentially critical impact: Community renewal, voluntary sector professionalization, welfare reform, and democratic renewal. The UK Cabinet Office of the Third Sector’s summary assessment of the contribution to society of social enterprises are that: They tackle some of society’s most entrenched social and environmental challenges They set new standards for ethical markets, raising the bar for corporate responsibility They improve public services, shaping service design and pioneering new approaches They increase levels of enterprise, attracting new people to business.”117 (in Peattie & Morley, 2008, p. 48). In addition, Teasdale (2010) notes that there are claims that social enterprises are effective at delivering services in areas characterized by market failure, providing employment opportunities for excluded groups, and creating more enterprising communities. It is also claimed that these impacts are linked by social enterprises’ ability to mobilize and reproduce social capital.