Case A partnership implementation

The first partnership to be analysed is between Case A, an ADE, and their BP, a large business working within the environmental services industry. The relationship operates in the form of a contractual arrangement in which Case A undertakes paper sorting and shredding services for their BP. The partnership has been in operation for approximately 10-15 years. Data relating to each of the key themes within the partnership implementation, including the resources contributed by partner organisations and the power dynamics that exist in the relationship, will be presented below.

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5.4.1.1 Resource contributions

A number of resources were shared between Case A and their BP, and are outlined in Error! Reference source not found.. Examples of key resources are highlighted in bold text.

Table 10 - Resource contributions within Case A’s partnership

Resources contributed by BP

Resource contributions supporting positive commercial outcomes for social enterprise

Access to operational equipment and resources

They give us the compactors. We do some maintenance on them – any major jobs they’ll do it. If we’re talking about going to the new

premises for example we might ask them for the use of bigger compactors (A2)

Access to business expertise and knowledge

Intellectual – they do come and have a look and see what we’re doing as they can offer ways of improving what we do (A1)

Income from business exchanges

They will drop of bulk paper…they deposit it and we sort it all out and we’ll do things like sort out colour, cardboard etc. We’ll take off paperclips and other stuff that we find. We do all that sorting. Eventually it all gets back into the compactors at the other end – and then they come and pick it up (A1)

Resource contributions supporting both social and commercial objectives for social enterprise

Enhanced publicity regarding enterprise’s beneficiaries

There would be articles about it – from their (business partner’s) point of view and our point of view to demonstrate what people with

disabilities could do (A3)

Resources contributed by social enterprises

Resources supporting positive commercial outcomes for BP

Resources supporting revenue generation capabilities of

business

They’re tough business partners – they buy the paper back from us, as well as supply us with paper – and they then export it (I think) to China where it then gets made back into paper again and newsprint (A1)

As Error! Reference source not found. illustrates, resources contributed by Case A’s partner were directed towards supporting the activities undertaken by the enterprise as a result of their social benefit and commercial logics. The partnership supported the commercial objectives of the enterprise by providing access to expensive operational equipment and resources in the form of compacting machinery, as well as advice on how the social enterprise could improve its operational efficiencies. The contribution of the equipment was highly beneficial for the enterprise as it supported its ability to provide a service that earned the organisation income. This income was generated through the sale of

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processed paper to their BP, but also from paper recycling services provided to business clients and the community more generally. In addition to these operational resources, Case A’s partner also provided the opportunity for the enterprise to be promoted within the marketing strategies of their BP. This was important for the social enterprise as it created awareness of their commercial activities, whilst also supporting values associated with their social benefit logic by illustrating the capacity of their disabled workers. In return for the resources shared by their BP, Case A contributed products and services in the form of sorted, shredded and compacted paper, which their BP then sold to overseas markets.

5.4.1.3 Relationship dynamics

According to participants from Case A, the relationship studied was characterised by close relationships between partner organisations, frequent and positive communication, and a strategic focus that incorporated both entities within the development of future projects. Retaining the partnership was considered to be extremely important to the enterprise as not only was their BP their biggest partner, but the partnership generated substantial income for the enterprise. In addition, as the social enterprise was operating within Tasmania (a small island state), the potential to develop equivalent partnerships was considered highly unlikely:

‘Part of our commitment is the two compactors. They’re expensive pieces of equipment. And we’re pretty much locked in. In other words, if we said that we didn’t want to do any business with them anymore they’ll come and pick up the compactors and go. And then we’ve got a problem’ (A2)…‘Because there is no other choice in Tasmania we’ve got to maintain it’ (A1).

These above factors provide insight into aspects of the dependence of Case A upon the resources and income provided by their BP, which was recognised as placing the social enterprise in a position of diminished power within the relationship:

‘If we tried to screw these guys a bit in any way, they will start to look at alternative ways of doing it. We will no longer be useful to them. They’re big enough to go looking at other ways of doing it and go elsewhere. They have us right now, but that doesn’t mean they don’t have options’ (A2).

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Recognising the potential negative impact upon the enterprise if their BP was to end the relationship, the enterprise had adapted a number of their commercial processes to better align with the needs of their BP (see Table 11). One adaptation undertaken was to review paper sorting processes to meet the quality standards required by their BP, as the delivery of poor quality products/services impacted upon the price that the BP could charge when selling the shredded and compacted paper into international markets.

Table 11 - Partnership adaptations (Case A)

Social enterprise partnership adaptations

Alignment with quality requirements

Once or twice there were quality control issues that we corrected. The paper wasn’t sorted correctly into pure white versus printed. I can’t think of any major issues (A3)

Alignment with efficiency requirements

We have to mechanise things a bit more…We’re looking at mechanisation to improve our product (A1)

So, if you weren’t prepared to do that (mechanise to increase product quantity), there would be real tensions. If you weren’t able to meet the demands of the business then the pressure from the partner when they need more, could be quite difficult (A1)

Adapting to relationship uncertainty

We’re all in bed with this company and we’ve got nowhere else to go and they’ve got us. Are they ripping us off? That was part of the question I was asked – is the price is right? Are they doing the wrong thing by us? (A2)

BP adaptations

Incorporation of social enterprise within business facility

The really nice facility that they’re going to do, they’re going to have to incorporate their shredding business in that. They don’t necessarily have to do that…And when we move into the new operation we’re going to have a really neat facility – something that is really cool (A2)

Furthermore, the enterprise was also considering introducing greater levels of

mechanisation within the business, which would then enable the enterprise to meet the growing needs of their BP. Increased mechanisation had been a strategy that the enterprise had avoided in the past, due to the fact that manual labour maximised the number of employees they could employ, aligning with the values underpinning a social benefit logic. However, within the current stage of the partnership, it was perceived that mechanisation was necessary to avoid the development of tension in the relationship stemming from the inability of the enterprise to match the volume outputs required.

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‘But if they ask us to do something we’ll bend over backwards to do it...We see that as an opportunity, it’s not a challenge’ (A1).

Recognising their dependence upon the resources provided by their BP, participants A1 and A2 undertook a review of the relationship after fearing that the social enterprise, in a position of lesser power within the relationship, was being exploited by their BP as a result of their resource strength associated with a dominant commercial logic. The review

determined that the BP was treating the enterprise with integrity, and the relationship overall was generating value for both partners. In order to further solidify the relationship and reduce the risk of the BP leaving the partnership, participant A2 worked hard to develop joint projects designed to embed the enterprise within the commercial operations of their BP.

‘It’s up to us to make it into something more than a contractual relationship’ (A1).

This above quote further illustrates the dynamics that exist within Case A’s relationship, whereby the social enterprise invested greater time and energy into developing the relationship, as doing so reduced the risks associated with their dependence upon the commercial resources of their BP. These above examples illustrate how the commercial strengths of Case A’s partner led the enterprise to prioritise a commercial logic within partnership dealings, as doing so increased their security within the relationship. The findings also indicate that Case A was not alone in undertaking adaptations. Participant A2 described conversations that had arisen between the organisations about potential future partnership opportunities, whereby it was anticipated that the social enterprise would become incorporated into the operations of their BP in the north of Tasmania. This would involve being provided with a new facility in which to undertake their shredding and sorting activities, thus reflecting a willingness of their BP to align their infrastructure with the needs of the social enterprise within the partnership.

In summary, Case A’s partnership involved the exchange of resources predominantly associated with the commercial activities undertaken by partners within their transactional relationship. The exchange value of Case A was associated with their commercial

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capabilities and logic, and the ability to support the revenue generation capabilities of their BP. The exchange value of the enterprise’s BP was also associated with their contribution of business resources, however also included the ability to enhance the publicity of the enterprise. Whilst the findings illustrate the dependence of the enterprise on their BP, the enterprise’s exchange value supported the development of more balanced power dynamics between partners.