Johanna Mair explains her research on systemic power in fields in the Academy of Management Journal.
Why do some ideas take hold in fields and become standard practice while others are passed over and forgotten? What happened to these ideas that were “lost” along the way and may have pointed to an alternative path, one that was not necessarily wrong or bad? Hertie School Professor of Organization, Strategy and Leadership Johanna Mair and co-authors look at how forms of systemic power arise in a particular field, using the field of impact investing as a lens, in new research forthcoming in the Academy of Management Journal and available online as of September 2019.
Mair, together with Lisa Hehenberger of ESADE Business School at Universitat Ramon Llull and Ashley Metz of Tilburg University, who also worked on the project as a Hertie School PhD student, examined transcripts from meetings at three organisations, some going back more than a decade, to determine how certain choices were made. In their article, “The Assembly of a Field Ideology: An Idea-Centric Perspective on Systemic Power in Impact Investing”, the authors observe and analyse decision-making processes at the EVPA, the European Venture Philanthropy Association, GECES, the European Commission’s expert group on social entrepreneurship, and the UK-based Global Steering Group for Impact Investment (GSG) .
“We take these three convening platforms, and systematically analyse which ideas were discussed in public and closed meetings, which ones were suppressed, and which ones were assembled into this field ideology,” Mair explained. “What is special about our research is that we analyse the interactions at the level of ideas, not just thinking about who is in the room.”
This approach allowed the researchers to identify the coherent pattern or set of ideas that has shaped reasoning and acting for impact investing this particular field. In other words, it helped them to systematically unpack the assembly of a “field ideology”.
Understanding systemic power
Impact investing came about in the 2000s and is today a widely accepted practice in the social sector, Mair says. But when it was initially floated, the idea of using investments to make progress on a social problem was not universally accepted. “Previously, it was philanthropic foundations that put money into social purpose organisations. Now it was investors that saw a way to use their financial tools to finance social enterprises and thereby change the world,” she points out.
Tracing how this and what became common practice and which alternatives were passed up – ones that might even be useful today – contributes to a better understanding of systemic power, according to Mair. To achieve this, the researchers borrowed from another field – that of gender studies, which looks at the interaction between the ideas of the feminine and the masculine, rather than examining them in isolation.
Mair, Hehenberger and Metz examined the diverse ideas on impact investing based on how they relate to each other – for example: the choice between standardised and customised solutions, investments in making businesses self-sufficient vs. dependent, or scaling vs. localized investments. “We set this up in a dichotomous way that allowed us to understand how the ideas actually relate to each other.” They then looked at the evolution of choices that were made over time.
In the paper, they show how the suppression of ideas works. Mair explains. “Suppression is a mechanism that gives rise to and perpetuates systemic power because it restricts options and shapes what is valued. It is a mechanism that entails devaluation. So we show how certain ideas are positioned in such a way that they are considered more worthy.”
Another mode of suppression is prioritizing means over end, which “reorders hierarchies of priorities,” she says. And the third mode is simplification, which “refocuses attention on what is ‘in’ and what is ‘out’.” In this way, the authors go to the level of ideas to show how systemic forms of power can arise in a particular field.
Insights for the debate on financialisation
But, Mair points out, ideas that have been rejected can actually be reactivated. “So this research allows us to understand alternative paths or possible futures better. But it might also help us to break with what we perceive as dominant.”
“Our research can allow institutions or organizations in fields to be more reflective of how systemic power – some coherent ideas that are so dominant that they shape how we think, how we respond, how we act – actually often come about, and they come about by supressing others,” Mair explains. “So if you go back to these modes of suppression that we identified, evaluating prioritizing means over end, or simplifying, these can be points for decision makers to consider, or even a weapon for those who feel like they have been left out.”
The researchers noted that their work is informative for another area of recent debate: the financialisation of society – the increasing power of financial institutions, markets and financial interests at points where economic issues meet social issues. One example would be the trend to emphasise shareholder value, as opposed to considering a wide variety of stakeholders, in corporate decision-making.
“There is a danger today that we overemphasize finance aspects,” Mair says. “And we see a similar trend in this field of impact investing. Ultimately, it's about addressing societal challenges, social problems, in an effective way. And we risk talking just about financial tools, the financial side, which is an important part, but it's by far not the most important or the most relevant one.”
Read the full paper here.
