Making the Business to Make a Difference - Case Study Example

Social Entrepreneurship Introduction A social enterprise is an establishment or an organization that puts into practice commercial strategies so as to maximize the improvements in environmental and human well being, other than maximizing the value of the shareholders. It is generally structured as non-profit or for-profit or it might take the form of a mutual organization, co-operative, a charitable organization or a social business (Bull, 2007; Bull and Compton, 2006). Although a number of commercial organizations might consider having social objectives but their commitment to these objectives would act as the deciding factor. In general, the level of commitment is greater in a social organization than a commercial organization. A number of scholars and experts define a social enterprise as a business whose principal business purpose is the well being of the society (Chapman, Forbes and Brown, 2007; Darby and Jenkins, 2006). These establishments use various types of methods and disciplines of business coupled with the power of the marketplace for the purpose of advancing the environmental, social and human justice agendas (Black, 2002; Vega and Kidwell, 2007). This essay seeks to throw light on the nature of entrepreneurship in StreetShine case. Furthermore, the essay will also discuss different types of factors related to a social enterprise. However, prior to getting deeper into the analysis portion, the study will at first carry out an in-depth analysis of the case. The case begins with the introduction of StreetShine, a social enterprise operating in the UK. The venture was initiated by Nick Grant in the year 2004 and operates from London. The organization is operating in association with the homeless charity, Thames Reach Bondway. StreetShine specializes in employment and training opportunities for the individuals who are in the process of rebuilding their lives or have experienced homelessness. Furthermore, the organization also runs a professional shoeshine service in hotels and city offices of London. The aim of the organization is to offer the shoe shiners to earn guaranteed income opportunity and along with that gain transferable and valuable skills. Discussion The notion of social enterprises came into existence in the mid of the 20th century for the prime purpose of addressing the needs of those segments of the society that has not been dealt properly by the government or the corporate sector (Chapman, Forbes and Brown, 2007; Vega and Kidwell, 2007). Despite the presence of non-profit organizations, since the mid of 1800s in various forms, social enterprises received a major boost when social enterprises from USA experimentally started to create job opportunities for the unprivileged and poor people (Stonehouse and Pemberton, 2002). Several cases exemplify how a social enterprise from being a small sized enterprise turned into a billion dollar company. In the similar way, almost every decade witnessed revolutionizing social enterprises that played pivotal roles in changing the life of a human being. By the late 1980s social enterprises have gained substantial importance from the government as well as people for its holistic approach and intentions to develop the society. As a result of that social entrepreneurs also started to gain significant amount of attention from the society (Rotheroe and Richards, 2007). The social enterprise institute defined social enterprise as “an organization or a venture that advances its social mission through entrepreneurial earned income strategies” (Madhogaria, 2006, p.1). According to the Prof. Gregory Dees, “a social entrepreneur combines the passion of a social mission with an image of business like discipline, innovation and determination commonly associated with, for instance the high tech pioneers of the Silicon Valley” (Madhogaria, 2006, p.1). Thus, it is evident that the role played by social enterprises in promoting the society and developing the society is indispensable (Royce, 2007). StreetShine Business Model and Operation The business model of Streetshine is very much simple. The only intention was to satisfy the social needs and at the same time satisfy the own needs of the company. Providing job opportunities were also another major task for the company. Knowing the popularity of the shoe shining business in the US, StreetShine also decided to launch the same kind business in the UK. StreetShine was set up as a non-profit making subsidiary of the TRB (Thames Reach Bondway). The initial capital for startup was invested an amount of £100,000 by the charitable trust, known as ‘A Glimmer of Hope’. Furthermore, another charitable trust known as Esmee Fairbairn invested £75,000. The responsibility of recruitment and providing employment opportunities to the homeless was the responsibility of TRB. Another £36,000 was invested by Mr. Grant to set up the business and run various kinds of projects. The idea of the business was to make the society look cleaner. As a result of that the company decided to set up kiosks at the airports and railway stations. In addition, the enterprise also wanted to become self sufficient and hence for earning more revenue, it started to sell advertisement space at the kiosk. Hence, the business model was based on providing social support as well as earning revenue for the firm. The social services emerge in the form of employment opportunities being provided by the company. However, to maintain transparency in the process, the organization had used certain guidelines for recruiting people. For example, for becoming eligible a candidate needs to have the following: - Experienced homelessness Suffered various kinds of disadvantages in the job market Currently is in the process of rebuilding their lives In addition, some of the other criteria that candidate needs to fulfil are that the candidate is free from any kind of alcohol or drug abuse. The company has also ensured a streamlined process of recruitment and training of the employees so that the outcome is as per the expectations of the management. Once the recruitment activity is accomplished, the shiners are provided with intensive training and the training session included a number of activities. Some of the training activities included customer care skills, practice session on the salesmanship to increase the capability of selling and money handling skills. Besides, on-site trainings are also provided at the corporate office. The employees are also supplied with the required toolkit and uniforms. The aim of providing training to the employees is to make sure they achieve enough experience and gain confidence to implement their learning. Initially a new shiner gets assistance from a mentor or from an experienced shiner. The enterprises principally follow three stages to develop employee skills and called it as “three-step pathway starting out part-time and developing skills and access to full–time employment” (Madhogaria, 2006, p.3). Business Strategy of StreetShine The business strategy of the organization is to rely on the existing customers and it attempts to develop a long term relationship with the existing customers. The shiners are responsible for providing desk to desk services to the customers. ‘On the foot’ services are also provided by the client in order to ensure the consumers do not need to stop their work while the shoe shining process in continuing. The company also focuses on using premium quality and non toxic products so as to ensure the original quality of the shoes is preserved. Another rational behind the usage of premium quality substances is to ensure that shiners do not suffer any kind of injuries or abrasion due to the chemicals and materials. The organization believes that customer loyalty increases only when a company successfully delivers its core services and along with that offer additional services. As a result of that the company offers repairing services of shoes and its accessories. It also started to offer shoe shining services at the conference houses and corporate events on the basis of an hourly rate. In order to maximize revenue and take the venture to the next level the company decided to commence franchisee business where the experienced shiners can set up their own franchise. StreetShine & its Philanthropic activity The venture started by Grant, at times looked like a philanthropic activity because the business had hardly any commercial value. Moreover, the employees were mostly homeless that further reflects the philanthropic attitude of the company. The company wanted that these employees could earn as well as learn and develop new skills which will help them in taking up regular employment opportunities in other browsers. According to an employee of the company, they were extremely interested in doing the shoe shining work and were highly satisfied with what they are getting out yet. However, the employees were curious to know what Mr. Grant was getting out of it. Regarding this aspect, Mr. Grant clearly mentions that what is more important to him is that he does not get any kind of financial benefits out of this venture. Hence, it is evident that although, the nature of business is philanthropic and non-profitable in nature but there are certain differences. The concept of philanthropy can be described as the effort or inclination that enhances the well being of the mankind and the society through the process of donation and charitable aid. Hence, philanthropic activities can be dubbed as the activities undertaken for promoting the welfare of human being. A number of companies nowadays are engaged in philanthropic activates, ironically most of them are not associated directly with it, rather they makes use of different mediums in the form of non profit organizations so as to contribute to the society. One benefit enjoyed by the corporate is the good image for being a sensible citizen. Hence, it is evident that non-profit organizations are mostly funded by others. Now in the context of the case, i.e. to underpin what StreetShine has achieved that could not have achieved by philanthropic activities. A number of studies have shown that social enterprises would not have been able to fulfil its objectives with philanthropic activities. For example, through philanthropic activities the profit earned is generally redistributed in the society for development. On the other hand, social enterprises are responsible for the social value creation and act as the change agent through innovative techniques. Another major limitation is that a charity works within a given infrastructure, but social enterprises create opportunities to develop condition of the society. Another major difference in the outcome of StreetShine is the way of aiding the society. Through charitable activities, an organization mostly attempts to make societal development in the forms such as environmental protection, financially benefitting victims or even helping fight natural disasters. However, through the social entrepreneurship venture, StreetShine has been able to provide employment opportunity to mass and also trained them for better prospect. However, the major difference is visible in the way of acquiring funds for operation. A charitable trust is generally funded through government assistance and donations from the individuals. On the contrary, social enterprises are funded through their own business model and thus they are self sustaining. The company would have not been able to achieve or fulfil certain objectives if it needs to operate through government funds or other social aids. One such example is the decision making part. The company would have been answerable or had to consult with the funding organization before making any decision, however StreetShine does not have to depend on others to make business decisions. Commercial Business and Social Enterprise A venture which is associated with charitable activities are generally non profitable in nature. Such organizations generally invest in the activities that promote social welfare. Some of the other authors defined philanthropic activity as a trust created for the purpose of advancement of society (Bull and Compton, 2006; Darby and Jenkins, 2006). It takes into account development of the educational infrastructure, promotion of the public health, to look after the comfort and well being of the society, reducing poverty and religious welfare among others. However, such activities are not always fully philanthropic because at times these activities are also undertaken for the motive of gaining profit (Seanor and Meaton, 2007). Hence, until and unless, these establishments are undertaking the activities for the sole purpose of public benefit or benefit to a certain section of people (Georgellis and Joyce, 2000; Kent and Stone, 2007). On the other hand, the concept of social enterprises is somewhat different from that of charitable trusts or organizations involved in only philanthropic activities (Kraus, Harms and Schwarz, 2006; Low, 2006). A social enterprise is defined as a business venture with the primary objective of developing and supporting the growth of a society. The surpluses of the venture are reinvested in the business or in the community, rather than aiming to maximize the profit of the shareholders and owners. Likewise any other business, these business houses also competes in the marketplace to deliver goods and services and satisfy customer needs. The only difference with commercial organization is that environmental and social purposes are at the heart of their activities and profits are reinvested. Social enterprises are popular in the UK and can be found in almost every industry such as health care, retailing, sports as well as education. Whatever the activities undertaken by the social enterprises do not match exactly with the typical commercial ventures, because a social enterprise is driven by environmental and social mission and moreover they remain highly focused on the community they are serving (McBrearty, 2007; Naffziger and Kuratko, 1991). Hall (2012) stated that social enterprise and philanthropy are highly elastic terms and both have different meanings to different people. The difference in meaning of these terms also becomes visible with the change in time. A social enterprise is distinguished from the other commercial businesses by three different characteristics. The distinguishing features are discussed below: - A social enterprise addresses the social needs that are intractable and serves for the common good. This is done either through their service and product offerings or by the way they employ a number of disadvantaged people. The commercial activities undertaken by the social enterprises acts as a strong driver of the revenue (Chapman, Forbes and Brown, 2007; Vega and Kidwell, 2007). Another distinguishing factor appears in the form of common development of the society is the key objective and purpose of such kind of firms (Evans and Syrett, 2007). Hence, from the argument presented above clearly demonstrates the difference between a commercial enterprise and a social enterprise. Furthermore, the above discussions, clearly enlightens the fact that there are significant differences between a typical commercial business, a charitable trust and a social enterprise (McBrearty, 2007). In the context of the StreetShine, it is obvious that the company falls into the category of social enterprise. This is because the motive of the owner is not to make profits, but to work towards the welfare of the society. Conclusion The study was meant for analyzing the nature or type of entrepreneurship in StreetShine case discussed above. The analysis has made it evident that it is a case of social entrepreneurship. In the case of StreetShine, the company offers shoe shining services to the clients and along with that offer employment opportunities to the needy people. The company is self sustaining and has several differences with the commercial businesses or charitable trusts. It is obvious that through philanthropic activities a number of objectives might be fulfilled, but social entrepreneurship has allowed the firm to remain self sustaining and offer direct benefits to the society. Reference List Black, L., 2002. The underpinning: essential elements that make social enterprise work, in C. Walsh. The Observer, 2 November. Bull, M. and Compton, H., 2006. Business practices in social enterprises. 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