Value Devolution in Social Enterprises

• Author: Vladislav Valentinov
• Published date: 01 November 2015
• Date: 01 November 2015
• DOI: http://doi.org/10.1177/0095399715593316
• Subject Matter: Disputatio Sine Fine

Administration & Society

2015, Vol. 47(9) 1126 –1133

© The Author(s) 2015

DOI: 10.1177/0095399715593316

aas.sagepub.com

Disputatio Sine Fine

Value Devolution in Social

Enterprises: Institutional

Economics and Systems

Theory Perspectives

Vladislav Valentinov1

Abstract

Agafonow’s article locates the role of social enterprises in devolving value

through output maximizing behavior. This short paper embeds Agafonow’s

argument in the societal and institutional context by building upon Luhmann’s

social systems theory. According to Luhmann, the functional system of the

economy exhibits “imperatives” that cause social ills. The institutional form

of social enterprises is shown to weaken these imperatives in several ways.

One of these ways, discussed by Agafonow, is the substitution of profit

maximization by output maximization. Other ways are the substitution of

high-powered incentives by low-powered ones as elaborated in the work of

Williamson and Hansmann.

Keywords

value devolution, social enterprises, Niklas Luhmann, Oliver Williamson,

Henry Hansmann

Introduction

Alejandro Agafonow’s (2014) article breaks new ground in the economic

understanding of social enterprises. He correctly attests to the literature on

1Leibniz Institute of Agricultural Development in Transition Economies, Halle (Saale),

Germany

Corresponding Author:

Vladislav Valentinov, Leibniz Institute of Agricultural Development in Transition Economies,

Theodor-Lieser-Str.2, D-06120 Halle (Saale), Germany.

Email: valentinov@iamo.de

593316AASXXX10.1177/0095399715593316Administration & SocietyValentinov

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