Management Practices at Work Integration Social Enterprises (WISEs): A Case Study of Croatia

Introduction

This paper investigates management practices at work integration social enterprises (WISEs) in Croatia. The introductory section presents a brief explanation of the WISE concept and the rationale for the study.

Work integration social enterprises are conceptualized as not-for-profit, social mission-oriented organizations whose social mission is to (better) integrate vulnerable groups into the labor market (e.g. long-term unemployed, disabled people, first time job seekers, immigrants) (Nyssens, 2008). An element that significantly differentiates WISEs from traditional social mission-oriented organizations (traditional third sector organizations such as associations) lies in the structure of income streams (Nicholls, 2006). While traditional social mission-oriented organizations financially primarily depend on public subsides, donations, grants etc. i.e. on the non-commercial income stream, WISEs (like social enterprises of all types) rely or strive towards relying predominantly on the commercial income stream i.e. on money made through continuous trading products in the free market (Nicholls, 2006; Nicholls & Cho, 2006). Furthermore, WISEs can operate in all business industries; their ventures can be accommodated within a wide range of legal forms (e.g. association, cooperative, sole proprietorship, limited lability company, legal forms tailor-made for social enterprises); and profit usually gets completely reinvested into the business/organization (Nicholls, 2006).

At the European soil, the WISE scene emerged in the late 1970s and early 1980s i.e. at the time when the social reality started shifting from the industrial, welfare-state based society to the postindustrial, neo-liberal society (Nyssens, 2008). Namely, the economic crisis itself, an increased automatization of manufacturing process, and new managerial styles made numerous people unemployed. Simultaneously, due to the lack of money and/or the ideological shift, the state(s) started reducing social transfers (direct transfers to people as well as indirect transfers via traditional social mission-oriented organizations) which made their ability to address the (existential) needs of those newly unemployed people and other vulnerable groups increasingly less realistic (Kerlin, 2006; Defourny & Nyssens, 2010). This socio-economic context encouraged traditional not-for-profits in the field of work integration to become more entrepreneurial i.e. to start competing in the free market to be able to: a) make money necessary to keep themselves viable and b) start actual work-integration process for their beneficiaries/members (e.g. to make shift from organizing workshops on how to write a proper CV to providing an actual job) (Kerlin, 2006). Within the Croatian scene, WISEs started their continuous development in the first decade of the 21^st century (Marković, Baturina, & Babić, 2017). Again, the challenging socio-economic reality consisted of relatively low-wages, high-unemployment rate, numerous social needs unaddressed by the state, and overall modest social transfer policy pushed a part of traditional third sector organizations (associations and cooperatives in the first place) towards commercial activities (Šimleša, Puđak, Majetić, & Bušljeta Tonković, 2015; Marković, Baturina, & Babić, 2017). Nowadays, WISEs were reported to be the most represented type of social enterprises in Europe (Nyssens, 2008) and in the world (Battiliana, 2015).