196 Business Ethics Quarterly

Social Enterprise: A Global Comparison, ed. Janelle A. Kerlin. Medford,

Mass.: Tufts University Press, 2009.

Gregory Wolcott

S ocial enterprises can be identified roughly as social purpose-oriented busi-

ness ventures and associations. Ranging anywhere from worker cooperatives
to mutual aid societies, these enterprises often fill the gaps left by governmental
and commercial ventures in providing for certain sectors of society, including the
perennially unemployed, the disabled, and those without job skills. Though social
enterprises often adopt market mechanisms in their organizational structures, their
emphasis on particular social outcomes means that they intentionally pursue double-
and triple-bottom lines, thus distinguishing them from many traditional for-profit
businesses. However, despite these common features, Janette A. Kerlin, editor of
Social Enterprise: A Global Comparison, advises us that in order to understand
social enterprises more fully, it is necessary to take a broader perspective. She asks
us to examine the uniqueness and particularity of social enterprises as they are
understood around the world. In doing this, she believes, we will see how the local
circumstances, histories, and pressures of any given place will shape the various
concepts of social enterprise.
In place of a detailed examination and refinement of the concept of social enter-
prise, Kerlin offers us an anthology comprising essays written by social scientists,
public policy scholars, and management experts from countries and regions around
the world on the various understandings, models, and needs of social enterprises.
Included in this volume are chapters on Western Europe, East-Central Europe,
Southeast Asia, the United States, Zimbabwe and Zambia, Argentina, and Japan.
Each of these chapters contains some combination of the following discussions: the
definition and/or concept of social enterprise (as it is understood in the particular
place), the history and/or recent experience of social enterprise, supportive institu-
tions and/or legal frameworks, an analysis and assessment of the social enterprise
movement, and case studies and/or detailed examples of social enterprises. A
foreword by Jacques Defourny emphasizes the truly multifaceted aspects of social
enterprises, and the final chapter concludes with a comparison of social enterprise
models and contexts.
Kerlin’s approach makes for an interesting and informative read, especially
for business ethicists seeking to understand the ways in which business endeavors
may target particular and pressing needs. Indeed, the success of one sort of social
enterprise—microfinance lending institutions—in aiding the development and the
livelihood of the poor, women, and the disenfranchised (and the recent Nobel Peace
Prize for the Grameen Bank’s founder, Muhummad Yunus) makes this volume all
the more timely. Social enterprises also should be of interest for those who find
traditional, shareholder-owned business models too stifling in the pursuit of direct
and particular social outcomes. For example, in the chapter on Argentina, authors
Mario M. Roitter and Alejandra Vivas discuss the rise of worker-run “recuperated
companies” following the Argentine economy’s collapse. These social enterprises
are companies “which were abandoned by their owners due to either bankruptcy
or administrative embezzlement and whose workers, organized predominantly into

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 Book Reviews 197

cooperatives, decided to continue production under a system of self-management”

(151). Nevertheless, despite the gaps filled by these companies in providing employ-
ment and steady streams of goods and services, the authors also highlight both the
occasionally violent and politically dubious means by which workers wrested control
of these companies and the difficulties faced by cooperatives due to inexperienced
managers, horizontal decision-making, and the lack of capital while being alienated
from markets (152–54). These are good, informative lessons, especially because
they highlight both the positive and negative aspects of social enterprises, as well
as the challenges faced by those seeking to implement them.
The lessons that can be learned from this book are not exactly identical. Each
region presents its own sets of challenges and models, and that’s what makes Ker-
lin’s book especially provocative and important. For instance, one may ask if social
enterprises thrive in more capitalistic or more socialistic economies. In the chapter
on East-Central Europe, authors Ewa Leś and Marija Kolin take a somewhat dim
view toward capitalism, chiding “the prevalence of the neoliberal concept of market
economy based on investor-owned enterprises” as responsible for inhibiting “the
further growth of social enterprise as a poverty-reduction mechanism, as a model
of employment generation, and as an instrument of local socioeconomic develop-
ment” (55). A few chapters later, however, the authors on Zimbabwe and Zambia,
Absolom Masendeke and Alex Mugova, discuss how social enterprises built on
socialistic principles lacked long-term viability and collapsed (121), explaining
that those very same cooperatives often served simply as fronts for political parties
and as generators of revenue to bribe public officials (126–27). One overarching
lesson, then, seems to be that any economic system will pose challenges for social
enterprises and thus there is no way to impose a blueprint of a social enterprise into
any given milieu. Top-down solutions could prove to be no solutions at all. Rather,
should social enterprises serve as viable solutions to problems unanswered by
governments or traditional commercial ventures, prospective social entrepreneurs
must be especially responsive to local and regional circumstances and, obviously, to
economic systems. In other words, in a world of complex mixed economies, there
is no universal “how to” manual for starting a social enterprise.
Another overarching lesson may be that legal and economic systems need to be
responsive to the adapting needs of social enterprises, and social enterprises, in turn,
must be able to adapt themselves to changes in the legal and economic environment.
The authors of the chapter on Japan make this point well. Ichiro Tskuamonto and
Mariko Nishimura write that in order for social enterprises to remain as resilient
as possible to “institutional and market pressures” (179), it is essential that social
enterprises be as diversified as possible in terms of organizational flexibility, inde-
pendence from government, and resource pools. The benefits of such diversity are
illustrated well in a Philippine experience of social enterprises. In the chapter on
Southeast Asia, authors Joel Santos, Leah Macatangay, Mary Ann Capistrano, and
Caroline Burns describe the evolution of the Philippine Business for Social Prog-
ress (PBSP) from its initial limited programs to help the poor “to help themselves”
to more advanced programs, such as the provision of “social credit,” the meeting
of “basic needs of housing,” and business training aimed at employment and the
creation of a more “humane society” (68). Again, this is helpful data, and one can
imagine, for example, its usefulness for informing Corporate Social Responsibility
(CSR) discussions.

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 198 Business Ethics Quarterly

Despite these informative lessons, there remain some pitfalls to Kerlin’s editorial
approach. Though I appreciate her claim that the concept of social enterprise within
each region is the product of historical, cultural, legal, and economic factors particular
to each region, and though the chapters gave ample evidence of this, some more
work on the concept of social enterprise itself would be most helpful. The title of the
book claims that this anthology is a “global comparison” of social enterprises, but
without any common rule by which to make a comparison, the only “comparison”
possible is actually just a piecing together of nominally-related ventures. Kerlin
did offer a defense of her approach in the introduction, but even Defourny, in his
foreword, notes the problems some will have with her tack. He writes, “Kerlin has
chosen the most honest research strategy to grasp what a social enterprise may mean
around the world. . . . It meant not imposing any specific conceptual framework that
would have probably distorted the understanding of grassroots conditions in which
social enterprises emerge and develop. . . . From an analytical point of view, such a
research strategy is certainly neither the most comfortable nor the most elegant for
theory building” (xiii). I agree that Kerlin has been most forthright and open about
her pluralistic approach, but an obvious question arises: how were the chapters and
selections chosen? Could it be that some of the claimed examples of social enterprises
are not actually social enterprises? Unfortunately, Kerlin’s methodology makes it
impossible to answer this question.
For this reason, Kerlin’s final chapter, which claims to offer a “comparison” of
social enterprise models and contexts, will be thin soup for those who, like myself,
are seeking a more robust understanding of social enterprises. In fact, it is a very
confusing concluding chapter. The chapter proposes to test “whether differences
in social enterprise in various regions in the world are, at least in part, reflections
of the regional socioeconomic contexts in which the term has come to rest” (184).
To this end, Kerlin places her data into various categories, which are then used to
build consecutive charts and graphs (accompanied by discussions) that lead up to
a global comparison of social enterprises against socioeconomic contexts. If this
chapter was intended to reinforce and refine the lessons derived from the previous
chapters on particular regions, then it was successful. If, however, this chapter was
intended to deepen one’s understanding of social enterprises, then it was less than
successful. Furthermore, I found Kerlin’s use of aggregate data on socioeconomic
variables (derived from the World Bank’s World Development Indicators, Transpar-
ency International, Freedom House, and the Johns Hopkins Nonprofit Sector Project
(192–93)), used to make the comparisons of the ratings of socioeconomic environ-
ments in various world regions, potentially misleading. Aggregate data, however
intriguing it is, glosses over disparities and differences that exist within and not
just between various regions and countries, especially in such geographically and
economically diverse places such as Southeast Asia and the United States.
Yet, despite these minor concerns, I still recommend this anthology. It is a book
rich with discussion and data from which business school students and ethicists
can glean important lessons regarding the scope of their social ambitions and the
frameworks in which such ambitions can take hold. In other words, this book should
be read as a valuable resource for those seeking to understand the various ways in
which people around the world attempt to pursue direct social ends by employing
many of the practices of the business world.

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