Objectives: In light of the faster than expected take up of the Community Interest
Company (CIC) in the UK, this paper revisits findings from a study undertaken in
2000 on the impact of asset-locks on the longevity, growth and management styles in
co-operative social enterprises.
Prior Work: The co-operative and employee-ownership movements played a leading
role in the establishment of Social Enterprise London and the Social Enterprise
Coalition. The heritage of the UK co-operative movement, however, differs from its
continental counterpart in placing a much stronger emphasis on common ownership
that inhibits the transfer of capital and assets to private interests.
Approach: This paper is both conceptual and empirical. It examines different worker
co-operative traditions and develops a meta-theory that explains underlying
assumptions in different forms of co-operative social enterprise. Using empirical data
from 5 common ownership co-operatives and 5 equity-based co-operatives, this
exploratory study found differences in management style, access to finance and
growth prospects both within and between the two groups.
Implications: Devolution of management responsibilities was more prevalent in
co-operatives permitting both individual and collective ownership, as opposed to
common ownership. Access to external finance was less problematic for
organisations where individuals had made investments. Despite this, it was not
established that organisations with external equity or loan finance grew quicker or
faired better over the longer term.
Value: The value of the paper lies both in the development of a meta-theoretical
framework for differentiating forms of worker co-operative, as well as empirical
evidence on the impact of asset-locks in the management and development of social
enterprises. The study suggests that the CLS version of the CIC, or abandonment of
the CIC in favour of an appropriately structured CLS or IPS model, may be
appropriate for social enterprises wishing to grow, but makes little difference in small
service oriented social enterprises.</p