Bauwens, Vaskelainen, and Frenken develop this idea of multiple logics using practical examples from the world of community enterprises (energy cooperatives and car-sharing initiatives). They link these logics to development phases, which are not necessarily meant to be evolutionary.
Internal organisation
In the first phase of founding and development, the logic of the community is central. Characteristics include voluntary participation, strong social networks, unwritten rules, informal organization, and deep embedding in the local community. Many collectives have no desire to grow or scale. Community gardens, for example, primarily serve as a means to engage people in the community.
A next phase arises when there is a desire to grow while maintaining community embedding. In practice, this often means welcoming new members who may be less willing to invest time, but who want to benefit from the products and services and receive returns (dividends) on any investments. Here, the logic of the market comes into play. If the citizen collective wants to maintain the community logic as well, it will, for example, need to ensure strict governance according to the cooperative principle of “one person, one vote.”
The logic of mainstream business comes into play when paid staff and external financiers are introduced, division of labor and hierarchy emerge, and quality must be officially safeguarded and monitored. Internal tensions arising from this can be mitigated by strengthening democratic participation and decision-making - measures that address both efficiency demands and the logic of the community.
Expansion
So far, this has concerned internal organizational development. Expansion can also be a factor, either through extending into other communities or via mergers. When expanding into other communities, competition may arise, potentially harming the higher-level mission. Solutions often lie in the creation of an umbrella organization that establishes and enforces principles and rules and shares knowledge.
In the case of consolidation and growth through mergers, the challenge is to ensure that the community logic retains a central place within the larger whole. One possible solution is a type of franchise structure: the central organization provides various services and serves as a platform where member organizations jointly make strategic decisions, while the local organizations remain autonomous in their daily operations.
Reference
- Th. Bauwens, T. Vaskelainen & K. Frenken, 2022. Conceptualizing Institutional Complexity in the upscaling of Community Enterprises: lessons from renewable energy and carsharing. In: Environmental Innovations and Societal Transitions 42, p 138 -151. https://rivisteweb.it/doi/10.1423/114123