Overcoming the Paradox of Social Enterprise: Social Movement Governance of a Market Leading Value Chain

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 03. The Construction and History of Markets

Abstract

Scholarship has recognized ways in which social movements can foster entrepreneurship and drive the emergence of new industries. Paradoxically, as such industries mature, they often grow independent of the social movements that initiated them and the ideals that originally guided them. The organic agri-food sector in the U.S. has followed such a trajectory, from its small scale beginnings by social and environmental activists to its current state as a $30 billion market that is largely supplied by corporate brands. Relying on a political economic analysis of the agri-food industry, this paper offers an explanation to the shift of control in the organic industry from the social movement to large investor owned firms. The paper also presents the case of Organic Valley, the largest organic cooperative in the U.S. and the great exception to this pattern. The case suggests that a social movement can overcome the paradox of social enterprise and maintain control in a maturing industry by governing a leading mass market value chain. Organic Valley, a hybrid between a business and a social movement organization, is a leader in organic dairy that is driven by a social and environmental mission rather than profit. The cooperative’s success has depended on its ability to establish effective mission-driven, participatory governance of a large-scale, decentralized value chain, and develop a business model that reconciles the potential conflict between mission and business success. The paper points to the importance of incorporating a political economic perspective into the study of social movements and the economy.

Author

• Tal Yifat, University of Chicago