What Are the Benefits of Social Entrepreneurship - Assignment Example

CASE STUDY Name Course Instructor School Date Table of Contents Table of Contents 2 Executive Summary 3 Question 1: What are the benefits of social entrepreneurship? 4 Question 2: Who are the primary stakeholders in this case? Are the dynamics of dealing with localstakeholders different from those when dealing with international stakeholders? 5 Question3: What are the potential problems that face social entrepreneurs? 6 Question 4: Discuss fair trade 7 Question 5: Based on the challenges that Aarong has faced and the options available what do you recommend Aarong should do? 9 Question 6. How and where should Aaron leverage its brand knowing that the production base would always put it in a higher position as compared to its competitors? 9 Question 7: What do you see as the future of Aarong, how would it progress to the future? 10 Conclusion 11 Reference List 11 Executive Summary Social entrepreneurship is a form of business foundations that is majorly based on the improvement of lives of the destitute in the society through economic empowerment. In essence, it seeks to provide jobs for the impoverished in the society, especially women and young men living in the middle or low class in today’s world. Apart from providing job opportunities to the society, it also places particular emphasis on developing some of the social structures in the society particularly the health services, education and religious institutions. The ultimate goal achieved by social entrepreneurship is the improvement of the social lives of the poor people. An in-depth analysis provided concerning Aarong, a model house giant established to help women in Bangladesh by providing numerous economic empowerment activities. Established as a branch of Bangladesh Rehabilitation Association committee BRAC in 1978 by the Abed family, Aarong has surpassed major bounds to be recognized across the world. Starting with a small number of design shops made up by the local women, it today boasts of having numerous branches worldwide. Profits made from the sale of the designer fashion clothes proceed towards the BRAC while the other half continuously help in the empowerment of other women. However, the company has not had a smooth sailing from its beginning and has managed to overcome many challenges. Current challenges involve entry of other competitors from countries such as India, who are producing such products at a cheaper manufacturing rate. Furthermore, the entry of e-commerce in the market by stakeholders with deeper financial pockets has proved to be a tall order to climb for Aarong Company. Aarong established a one-stop shopping center, a facility easily affordable for deeper pockets. Fundamental concepts are discussed below, including the future prospects of the Aarong and key concepts involved in social entrepreneurship. Question 1: What are the benefits of social entrepreneurship? Social entrepreneurship is built on three economic pillars, including empowerment of the community, trade and reinvesting in business operations (Trivedi 2010). The benefits acquired from social entrepreneurship can be categorized as entrepreneur specific or society specific with the latter focusing more on the society while the former has more emphasis on an individual basis. Organizations involved in social entrepreneurship find it easier to raise capital, since they put more emphasis towards assisting the society. Huge incentives and support come to such organization, and they have an ability to raise capital even at below market rates. A perfect example is in the establishment of BRAC. It received enormous amounts of supports and funding from an international agency referred to as Oxfam limited in its initial stages of establishment. Promotion and marketing are much easier in social entrepreneurship compared to other modes of entrepreneurship. High advertising and marketing exist because such companies tackle problems associated with social justice such as empowerment. As seen in the Aarong model, the organization readily identifies with the needs of the people, and as a result, there is a high acceptance in the market. Both independent and dependent fashion designers come to Aarong to be assisted with the marketing of their goods. Additionally, since Aarongis widely accepted in Bangladesh, it readily establishes itself in the market getting more promotional advertising as compared to other companies (Wade n.d). Gathering support from other sectors is also much easier. BRAC strives to venture into other fields such as dairy products and the banking system in order to serve social goals of the society. More people also get on board and readily accept the salaries offered to make their lives better. Two significant aspects that relate to assistance in society is the ability of social entrepreneurship to be affordable as compared to other profit-making institutions and the customization of services to meet the demands of the people. The products normally suit the conditions of the people,and thecost of products is relatively cheaper as compared to those from profit-makingorganizations (Tan and Yoo 2014). A perfect example being the establishment of small microfinance sections that provided loans at much cheaper interests. Additionally, the institution assists the women in the marketing their products to obtain better prices in the market. The impact of social entrepreneurship in the market is to ensure that the destitute in the society have access to health,education and economic empowerment (Zhang & Swanson 2014.) Question 2: Who are the primary stakeholders in this case? Are the dynamics of dealing with localstakeholders different from those when dealing with international stakeholders? Stakeholders refer to any individuals or group who directly or indirectly affect the performance of an institution (Newbert 2014). It can also be defined as an entity that holds money for another group. Primary stakeholders refer to internal stakeholders who continuously engage in economic transactions (Newbert 2014). In the case of the Aarong Company, it includes suppliers, customers and employees of the company. All the stakeholders, in this case, are locally based and involve more than one stakeholder in running the affairs of the institution. The employees of the company make up the majority of the stakeholders since the basis, or the basis of the entreprise is based on meeting their demands. At the top of the organizational structure are the leaders who initiated the initial idea but they still serve as employees of the company (Mari Robinson and Hockerts 2006). Diverse independent suppliers and creditors also make up part of the companies shareholding. As a result, the stakeholders being locally based have a significant impact on the organization. Each of the stakeholders has different concerns. For example, employees will be much concerned about job security, compensation and rates of pay while suppliers will be more concerned with product providers and equitable business opportunities (Kourilsky, Wasted and Osborne, 2003). It is much easier to deal with local stakeholders as compared to international stakeholders. Local stakeholders such as the employees and the suppliers are readily available and are in involved in the day-to-day running of the organization. Aarong was established to majorly base on the production of designs that are deeply rooted in the Bangladesh community products (Kaneko, 2013). The designs are more known to the common people living in Bangladesh as compared to those people living outside Bangladesh and that is why it quickly became a leading fashion icon in the Asian countries. The only aspect of international stakeholders comes in if investors are willing to come in the company. Otherwise, the company has experienced many issues in breaking into the international market (Archer n.d). Question3: What are the potential problems that face social entrepreneurs? Social entrepreneurs face a couple of problems in managing their organizations. The quality of the products poses a major problem. Since the company is more focused in empowering the destitute in the society, they end up providing them with more jobs (Barinaga 2013). The employed people, in this case, have had no professional experience in the production of such products. If quality assurance programs are not strict, many poor quality products end up in the market. Inferior products will not result in the profits required to pay up the employees as well as maintaining the social structures in place. As seen from Aarong, the two primary problems that affect the fashion production is the quality of products made as well as the production scale. Competitions from different markets with deeper financial pockets that aim at profit making is another challenge. Profit making organizations compete more effectively than social entrepreneurship products and can put more resources into the production of its product. In addition, social entrepreneurship has more problems in penetrating international markets since its main emphasis is based on the provision of social services as compared to most organizations that value profit maximization (Kaneko 2013). Since most social entrepreneurship structures are based locally and focus more on marketing products that will eventually assist the socially destitute in the society, they miss out on the use of certain forms of business such as e-commerce since it would result in going against the core principles of socialism by limiting production. Question 4: Discuss fair trade Fair trade incorporates several key aspects that are essential in ensuring that one zone in the market does not have a complete monopoly in the market as compared to others. In doing so, it helps to establish several important features that assist in creating opportunities for enterprises that fall in the social empowerment category (Barinaga 2013). The creation of fair trade has several key advantages, including the creation of opportunities for the disadvantage in the community. The effect of this is the active production of their goods and services to the market. Fair trade also enhances certain aspects of accountability and transparency in the market by ensuring there is no complete monopoly of products in the market. Additionally, fair trade advocates for better pay for the employees who are economically disadvantaged, and at the same time, ensure that employees who are socially disadvantaged get better trading services. Fair trade emphasis is on ensuring that the social destitute in the society are not exploited rather they are provided with an opportunity to increase and improve their livelihood. Fair trade advocates for the banning in child labor and forced labor, a key fight that social entrepreneurship does to improve the lives of the poor in the community. The poor resort to child labor to make ends meet (Editorial Board 2010). Much emphasis is also put on the provision of better-working conditions, gender equity and freedom of association. Capacity building is also done to ensure that the poor people get the necessary skills in life that not only assist them in life but also provide numerous opportunities for them to be more economically viable in the near future. Lastly, fair trade advocates for the respect of the market environment in achieving all the above goals (Idris and Hati 2013). Question 5: Based on the challenges that Aarong has faced and the options available what do you recommend Aarong should do? Aarong was aimed at enhancing the living conditions of the people of Bangladesh. However, for the company to be able to compete effectivelyin the market, it requires expansion in more markets. It is known that there are many risks involved when exploring options such as the entry into new markets (Bornstein and Davis 2010). Since the graphical fashion designs have already been established to the Bangladesh market, the most suitable secondary location would be in the Asian markets. In the Asian countries, there is a ready market for its goods and services as compared to the United Kingdom market that they are trying to explore. A higher population of people in the Asian countries is bound to be associated with the graphical designs in the Asian countries as compared to areas in Europe (Caponigro n.d). Additionally, opening up of new branches in Asian countries should aim at fulfilling their social goal in the society (Caponigro n.d). Question 6. How and where should Aaron leverage its brand knowing that the production base would always put it in a higher position as compared to its competitors? Aarong should leverage its brand in Bangladesh since the original idea and founders came from that country. Additionally, it has an already established market that is synonymous with the Bangladesh people and culture. Furthermore, Aarong is known to be asub-branch of BRAC improving lives in Bangladesh. A competitive advantage has already been established against its major competitors in Bangladesh,and it has already been accepted more by the people of Bangladesh. Throughout the world, the brand is associated with Bangladesh (Newth and Woods 2014). Aarong should take advantage of the established brand to diverse in other economic areas of the trade such as farming. A perfect example is provided where Aarong dairy products are being widely sold in the market for a given price. Utilizing the brand name that is already established gives a competitive edge in the Bangladesh market (Nicholls 2006). Question 7: What do you see as the future of Aarong, how would it progress to the future? The future of Aarong is brighter than before. Its ability to hit high-profit margins in times of financial crisis shows its resilience in the market. Slowly, it should diversify its portfolio and venture in other areas such as agriculture and education, since the core service is to help the people. More and more people from Bangladesh will have adequateservices that will improve their lives and social well-being. More children will be educated. As a result, families will be economically uplifted, and therefore, the main goal of the organization (Nicholls 2013) Eventually, Aarong will venture into newer markets in the United States and other developed countries. Its traditional designs will be incorporated throughout the world and as a result, it will become an essential household fashion name or mogul. In addition, it may be listed in the stock markets as one of the social entrepreneur groups that improves lives of numerous women throughout the world. More and more branches will be established throughout Asia,and the company will become a model for future types of businesses that want to engage in such business (Sampson 2011) Conclusion In conclusion, social entrepreneurship is majorly based on three fundamental features, including enhancing the living conditioins of the destitute in society, business, and innovation (Sanders, n.d). Giving the poor accessibility to more services such as schools and health services makes them more empowered and ensures social equity. Although social entrepreneurship is faced with many challenges in meeting its goals, it has enormous potential for changing the lives of many people (Sanders, n.d). It can spread its wings past boundaries in establishing better market zones that will earn more profit in the end. Therefore, it becomes necessary to put more emphasis on social entrepreneurship by advocating for free trade principles. Overall, companies do not need to be more focused on being profit-making entities alone but rather focus on empowering communities (Sanders, n.d). Reference List Archer, G. n.d. “Microfinance: Social Entrepreneurship? Commercial Entrepreneurship? Or Both?”. SSRN Electronic Journal. Barinaga, E. 2013. “Politicizing Social Entrepreneurship – Three Social Entrepreneurial Rationalities Toward Social Change”. Journal of Social Entrepreneurship, Vol 4, No3, pp.347-372. Bornstein, D. and Davis, S. 2010. Social entrepreneurship. New York: Oxford University Press. Caponigro, J. n.d.. Social Entrepreneurship. SSRN Electronic Journal. Editorial Board. 2010. Journal of Social Entrepreneurship, Vol 1, No 2, Idris, A. and Hijrah Hati, R. 2013. “Social Entrepreneurship in Indonesia: Lessons from the Past.”Journal of Social Entrepreneurship,Vol 4No 3, pp.277-301. Kaneko, I. 2013. “Social Entrepreneurship in Japan: A Historical Perspective on Current Trends”.Journal of Social Entrepreneurship, Vol 4, No 3, pp.256-276. Kourilsky, M., Walstad, W. and Osborne, A. 2003. Social entrepreneurship. Dublin, Ireland: Senate Hall Academic Pub. Mair H Hockerts K and Robinson, J. 2006. Social entrepreneurship. Basingstoke [England]: Palgrave Macmillan. Newbert, S. 2014. “Building Theory in Social Entrepreneurship.”Journal of Social Entrepreneurship, Vol 5, No 3, pp.239-242. Newth, J., and Woods, C. 2014. “Resistance to Social Entrepreneurship: How Context Shapes Innovation.”Journal of Social Entrepreneurship, Vol 5, No 2, pp.192-213. Nicholls, A. 2006. Social entrepreneurship. Oxford: Oxford University Press. Nicholls, A. 2013. Editorial Board. 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