A pragmatic study of the valuation of social partnerships

As a quick recap of the research gaps identified in chapter 2, I first noted a call for more studies on how “value creation” – which is the preferred term in the social partnership literature – transpires in practice. Building on the process based perspectives of “value creation” in social partnerships, I pointed out that the hypothesis of such a study should be that the value of social partnerships is not pre-established, but created in partnership processes through partnership work.

Secondly, I found that there is a need to create a theoretical and analytical framework that calls the concepts of “value” and “value creation” into question instead of making assumptions about them. In my literature review, I found that the majority of studies that have examined value creation in social partnerships (and other themes within the social partnership field for that matter) have so far drawn on what in this chapter has been defined as structuralist approaches. More specifically, the majority of studies have drawn on (neo)institutional theory and have viewed value creation and the actors involved in it as being embedded in sector-based profit and not-for-profit value logics – though not completely restrained by such logics. At the same time, I found that these studies tended to take the cost-benefit lens for granted with “value” being established through the weighing of costs and benefits. Further, they tend to conceptualise value as the eventual and fairly stable benefit(s) that result from the processes of value creation

“pathways” (Austin & Seitanidi, 2012a). Finally, I noted – as sort of a paradox - that value, on the one hand, tends to be addressed as a given that motivates and sustains collaboration while, on the other hand, it is also emphasised that “value”

does not pre-exist at the beginning of partnerships. Critical management scholars question the idea that partners are motivated by interests other than their own, but they do not question the idea that gaining is a motivation or, assuming that it is, investigate or elaborate how “value” or gains motivate if they are not pre-defined.

Similar, but substantially different

There are two main arguments for why I propose to study “value creation” in social partnerships through a pragmatic lens. First, on a general level, I note similarities between the process perspective on “value creation” in the social partnership literature and the pragmatic approach to valuation which, I believe, allow a productive conversation between social partnership studies and valuation studies to

take place. Second, on a more specific level, I also note what I believe are quite substantial differences, not least in the understanding of actors and agency which, I hope, will contribute to a new and more nuanced understanding of “value creation”

in social partnerships, in particular, and potentially a new understanding of social partnerships in general.

Looking at the similarities first, the key connecting point is that “value creation”

and “valuation” are conceptualised as processes involving various types of activities. For example, Austin and Seitanidi (2012b) point out that “value creation”

is also a part of the partnership design process, which resonates with Heuts and Mol’s (2013) point that “valuing” is not a unique or separate activity. Furthermore, experimentation is a key word in the highlighted studies of value creation in the social partnership literature as well as in the contributions of Dewey, Heuts and Mol and Callon. As another example, when Austin and Seitanidi write about “value creation” as involving “iteration” and “adaptation,” this seems to bear some resemblance to the “trials” (Dewey, 1922), the “care” (Heuts & Mol, 2013) and the

“qualification” (Callon et al., 2002) described by pragmatic valuation scholars. In addition, both bodies of literature are based on the understanding that “value creation” and “valuation” are challenging and require ongoing coordination between different and sometimes conflicting “value frames” (Le Ber and Branzei, 2010b) or “valuing registers” (Heuts & Mol, 2013). Still, and this is where I turn to the differences, though “value creation” and “valuation” seem somewhat related, they rest on quite different understandings of social order, organising and agency and as such involve different research implications and potential.

The key difference lies in the understanding of agency. In the “value creation”

perspective, value is a social construction brought about by people and organisations. In the pragmatic valuation approach, the doing is done by networks of humans and non-humans, including the valuation equipment involved in valuation. In the “value creation” perspective, people and organisations are embedded in sector and organisation-based logics that influence what and how they value. In the pragmatic valuation approach, actor-networks value in multiple and continuously changing ways that differ from situation to situation. In this light, I believe that the proposition to replace “value creation” with the pragmatic

“valuation” approach has the potential to contribute to the understanding of “value”

and “value creation” in social partnerships in several respects.

First, it will enable an analysis that is freed of sector-based “for-profit/not-for-profit” thinking and the numerous assumptions that flow from this including the cost-benefit lens and the distinction between “business” and “business value” and

“society” and “social value”. A pragmatic valuation analysis, informed by ANT, does not distinguish between societal sectors, but treats the definition of the worlds of “business” and “society” as continuously changing network effects (Law, 2009).

When a company in a pragmatic valuation analysis is viewed as an “actor” and not

CHAPTER 3. VALUATION

as “an organisation embedded in a market logic”, the idea that profit counts and that this particular actor defines value as benefits minus costs is not ruled out, but it is not taken for granted either. More importantly, the pragmatic approach calls on the researcher to unpack how “profit”, “costs” and “benefits” (if relevant) are defined and to be aware that this may change from situation to situation. Furthermore, it questions the idea that profit and economic value is the only thing that counts in a way that I believe encourages more nuanced descriptions of what a corporate actor values than the distinction between “tangible” and “intangible” value made by for example Austin and Seitanidi (2012a).

Second, a pragmatic study of the valuation of social partnerships will draw attention to the performativity of valuation tools (Callon, 1998) involved in social partnerships and study these not as tools developed and used by social partnership managers, but as equal and independent actors in valuation. In my review of the social partnership literature, I found several studies of “mission statements” (for example, Lewis et al., 2010), “collective identities” (for example Maguire & Hardy, 2005) and other types of partnership narratives analysed as “tools” used by social partnership managers. However, I have not been able to identify other studies that address the performativity of valuation tools in the particular context of social partnerships.

Third, while the “valuation” and “value creation” perspectives share the focus on process, the take on process dynamics found in pragmatic valuation studies is, I argue, quite different from the conceptualisation of process dynamics found in

“value creation” perspectives. As described above, Austin and Seitanidi (2012b) emphasise the emergent and experimental nature of value creation processes, but the value creation process model that they present is still conceptualised as progressing through stages and ending with, if successful, the “institutionalisation”

and “fusion” of value frames. In other words, though value creation is approached as a difficult process involving numerous iterations and adaptations, on an overall level, value creation is described as a process that moves towards a more or less stable end point where the reconciliation and peaceful alignment of different value frames is achieved – if the process is successful. The pragmatic take on process dynamics, on the other hand, is generally less focused on stabilisation and emphasises the “constant” combination, tinkering and reinvention in valuation (Caliskan & Callon, 2009) and the situational character of valuation (Dewey, 1922;

Heuts & Mol, 2013). However, there are also differences within the pragmatic approaches. To exemplify, the calculation process (Callon & Muniesa, 2005) and the process of qualifying products in markets (Callon et al., 2002) are, in fact, described as having and “end point” where the qualities of a product or the sum of a calculation are “stabilized at least for a while” (p. 199) though the description of the actors involved and the ways they achieve stabilisation is significantly different from the description found in Austin and Seitanidi’s work. In Heuts and Mol’s analysis, the valuing activities and the situational character of “valuing” are in focus

and not end points or stability (though “in the end” tomatoes are eaten, but this is considered a case of devaluation and not stabilisation (Heuts & Mol, 2013, p. 142)).

With the ranges of goods and bads within them, “valuing registers” are conceptualised as far less stable constructs than “value frames” (Le Ber & Branzei, 2010b) indicating that the coordination of tensions in valuing is complex and dynamic, if not to a different degree, then certainly in a different way than the fusing of “value frames” is a complex and dynamic activity. Finally, the fact that valuation equipment is recognised as powerful actors by Callon as well as Mol adds one more type of actor to the analysis of power dynamics in the “valuation”

perspective compared to the “value creation” perspective which only focuses on conflicts between individuals and organisations.

Finally, as noted above, it could be that a pragmatic study of the valuation of social partnerships will also shed new light on the notion of social partnerships in general.

As Heuts and Mol (2013) point out valuing is performative³ as it involves an ongoing effort to make tomatoes better rather than worse (p. 129). In other words, when you study how something is valued, you not only get insight into the making of that something, but also into what it becomes - though what it is is not a stable definition. Whether this and the above research propositions are realised – and whether the “value creation” and the pragmatic “valuation” perspectives are as different as I have argued here – is answered in chapter 8 where I discuss the results of the analysis that is to come. How I approach this analysis is described below and in the following chapter.