Title of Dissertation:
Mission drift and the challenges for the market based provision of welfare services
Supervisor: Prof. Dr. Philipp Schreck
University: Martin-Luther-Universität Halle-Wittenberg
Scholarship: KSG Scholarship
Cohort: 5. Cohort, 2018-2021
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Short Abstract
The introduction of market mechanisms in the provision of healthcare and education have triggered the concern about whether it is possible to balance the achievement of social objectives with the pursuit of profit goals. In the face of that dilemma, many have raised the argument that welfare organizations and their workers should remain true to the moral values that have traditionally inspired them, such as selflessness or disinterestedness. Contrary to this argument, the economic approach to business ethics suggests that we should look for the conditions where moral obligations and profit-seeking become compatible. This would imply examining the constraints that surround the market-based provision of welfare services, including those that emerge from individual and group attitudes towards them. The latter viewpoint is the starting point of my research.
Mission drift and the legitimacy of introducing markets in welfare services
The introduction of profit-seeking and competition in the provision of education and healthcare has triggered concerns about markets and social goals producing stark trade-offs that may harm organizations and their beneficiaries. The notion of mission drift captures such concerns and challenges the ability of markets to support governments and nonprofits in the provision of welfare services. Nevertheless, the wide array of definitions and multiple empirical approaches to mission drift hinders its potential. This paper addresses this gap by reviewing the literature on mission drift, analyzing the core attributes of the concept, and examining the empirical approaches used to study the phenomenon. Building upon the insights of legitimacy theory, I suggest understanding mission drift as a type of individual moral legitimacy judgment. As such, mission drift accounts for a perceived inverse relationship between markets and the achievement of a social goal. Perceptions of mission drift emerge from a discrepancy between what individuals deem as morally appropriate for the provision of welfare services versus profit-seeking and competition. Therefore, mission drift constitutes a challenge to the legitimacy of markets in the provision of healthcare or education.
How individuals interpret the introduction of markets in welfare services
Scholars advocate for returning to the socio-psychological roots of organizational phenomena and overcome an essentialist view of it. Echoing this call, I address the problem of mission drift from the perspective of the perceptions that individuals hold towards the introduction of markets in the provision of welfare services. Using the case of school and higher education in a developing country, I explored the content of individuals' perceptions expressed through the public debate, the media, and the voices of participants in the industry. The evidence shows that the acceptance of markets in welfare services relies on consequentialist or instrumental criteria, whereas its rejection has its grounds on a perceived incongruence between the extrinsic motives that dominate markets and the values that subjects deem as morally appropriate in the provision of education. Altogether, the evidence shows that the case for corporations and businesses engaging in the provision of welfare services gets starkly challenged even in situations where governments have failed in the provision of basic social services.
Managerial responses to perceptions of mission drift
Researchers on institutional theory, hybrid organizations, and legitimacy have explored the organizational responses to legitimacy challenges. The literature on the matter points to the strategies that organizations employ to respond to internal and external demands, particularly when the business goals collide with the social expectation of their constituents. Nevertheless, the research has not yet explored the cognitive and emotional aspects of managers' responses to legitimacy challenges. Using the case of a for-profit school education provider in a developing country, I explored how managers respond to key events in the history of the organization wherein its legitimacy was particularly challenged by one or more of its audiences. The evidence shows that managers react as intuiters themselves, that is, their responses depend on individual cognitive and emotional judgments which, as predicted in the literature on legitimacy, depend on instrumental, relational, and normative contents. The evidence shows that rather than rational agents, managers rely on cognitive and emotional process shape organizational responses to legitimacy challenges.
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PhD Related Publications
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