Social Enterprise: Case Studies in Governance and HRM
Rory Ridley-Duff & Tracey Chadwick-Coule, 2010Creative Commons 3.0, Attribution No Derivatives
Values and behaviours “agreed” by the wo
rkforce are included in Appendix A of
contract of employment (see Figure 1). A failure to observe these values and behaviours results inmeetings with HRM staff to coach the employee in the desired behaviours, and point out their
. Even though practic
es conform to CIPD „best practice‟, and the HR department
employs CIPD qualified staff, turnover is high at approximately 20% per annum (2
4 times higherthan would be expected in a comparable company).Publicly, staff claim commitment to the company and its values. Privately, a number of employeessay
that most staff are “playing the game”
and get frustrated at the hypocrisy of executives whoexclude themselves from scrutiny and accountability
. The company‟s
informal management styleincludes
Action Group Meetings
to communicate „up and down‟ the management structures.Despite a requirement to be „open and honest‟, e
vidence was uncovered to illustrate how staff avoidraising issues that managers would consider controversial
. When people doraise difficult issues, they fear being referred to the HR Director who - if the employee does not see
will be encouraged them to
leave the company.The framework for managing employees includes six
each of which espouse a key value(see Figure 1) and the rights and responsibilities expected of staff. Despite espousing
,this normative framework coincided with a doubling of the number of conflicts between 1999 and2004 that led to employees leaving the company. The communitarian framework is presented byexecutives at management training events, is included in leaflets sent to new recruits, and is wellknown by many (but not all) staff.
Managers and staff expressed different views on conflict. The CEO felt that:
My experience within Custom Products is that conflict is most likely to occur where individuals are strugglingto live with the responsibilities conferred as part of their membership within the community. When this occursextensive dialogue takes place between the individual, their line manager and HR with a view to seeking aresolution that all parties buy into willingly.
A long-serving member of staff, however, expressed the view that:
Even if you are trying to uphold the philosophy by speaking openly and honestly through the right channels,they make out that you are not. They take you into an office, get you to explain things and then attack you.They attempt to disprove you
tell you that your way of thinking and feeling is wrong. How can anybody think
or feel in a ‘wrong’ way?
From the perspective of the
senior managers, misbehaving employees are “not on board” or “justdon‟t get it”.
Analysis of employee
s points of view, however, suggest that
staff do “get it”,
but donot always like it. At times, key staff - even senior staff - expressed reservations about the HRMpractices of the company. In the latter stages of the research, the MD admitted that a boardmember has resigned when psychological techniques were introduced into HRM practice.Despite these disagreements, HR staff followed CIPD
„best practice‟ in the handling of employee
grievances and complaints. From 2003, they ended the use of formal disciplinary proceedingsagainst staff and began providing support for unhappy staff to leave the company if they could notmeet the CEO's aim of finding
“a resolution that all parties buy into willingly”.
In 2003, Custom Products submitted a proposal jointly with Sheffield Hallam University to the UK Government
sCommunity Interest Company (CIC) consultations for a generic management, governance and ownership model that could act as a template for social enterprises (see Figures 1, 2 and 3).
Based on findings from: Ridley-Duff, R. J. (2005)
Communitarian Perspectives on Corporate Governance,