Business Models and Social Enterprises - Case Study Example

Business Models (Social enterprises) Student’s Name: Instructor’s Name: Course Code: Date of Submission: 1.0 Organizational overview Outlook Environmental Services is a non-profit organization that seeks to address the community challenges especially for the disadvantaged through a trading perspective. The enterprise’s mission, vision and values, have been structured in such away that they ensure that the organization is able to remain focused across its diverse areas which include commercial social and environmental. Outlook Environmental Services is one of Outlook (Vic) Inc and is a non-profit community based entity that is dedicated to creating different opportunities for the disadvantaged people in the society in terms of employment creation, training in diverse areas and social integration. The Outlook social enterprise was established in 1975 even though its first trading activities started in 1992. Outlook started to gain its social enterprise status recognition in 2007. This is after the organization decided that surplus revenue from trading activities could go to funding and supporting community programs and services that are aimed at helping the disadvantaged people in the society under the company umbrella. 2.0 Organizational structure The organization is structured into four main key areas namely finance headed by Arian Evans, community services headed by Julie Walton, commercial services headed by Ross Cheesewright and outlook employment headed by Michael Upston. Further, the organization is structured into four management areas which include finance, community services, commercial services and employment at Outlook. This has made easy for the organization to effectively deal with managerial issues since teamwork is always possible. With the current position of the finance manager, it is possible for the organization to manage its financial resources and those that could be offered by the Social Enterprise Development and Investment Fund (SEDIF). 3.0 Business environment 3.1 Internal First and foremost, the organization is being led by long experienced and dedicated staff under the leadership of Tony Fitzgerald who has been at the helm of the organization for very many years. This gives the organization an upper hand in management and operations given the deeper understanding of the business by Fitzgerald who is the current company CEO. The small organizational structure on the other hand, is advantageous to the organization is eliminates a lot of bureaucracies that may interrupt the operations of the enterprise (Stacey 2001). Second, change in public perception, has also continued to play a significant role in the performance of Outlook. With the integrated model approach by the CEO Fitzgerald and his able deputy CEO Ann McCormick, has helped greatly in removing the public perception that Outlook was promoting stigmatization in relation to the disabled and disadvantaged persons in the community (Chell 2007). In the past, the enterprise has experienced very serious problem with the way both the community and government viewed Outlook’s traditional Disability Day Service. However, with the integration approach where the community is integrated into the enterprise activities and programs has helped wipe away the perception as it is now easy to sustain the program. Culture in the organization is also very positive. This is can be noted from the shifting working relationships between the internal and the various stakeholders. Anne who is the company CEO notes that the process of staffing is well institutionalized in the recent organization model whereby responsiveness and flexibility is at the core of the organization. This is clear from the establishment of the managerial role in charge of recruiting at the centre. This is especially important in ensuring that the community is involved in all matters that affect them (Mason et al 2007). Third, Outlook is very productive and very expansive in waste recovery management programs. Currently there are 5 waste recovery and managing sites and recycled goods as well as the nursery. These sites have continued to contribute immensely to the performance of the business through revenue generation (Dorado 2006). During the financial year 2008/09, the sites managed to deliver $638 000 as the trading profit with a $10 million turnover while employing over 170 staff. Further, the company has been on the top on honoring its social responsibilities. Since 1995, the organization has managed to pay its entire wages including those of low performing workers something that organizations in the industry cannot match. 3.2 External 3.2.1 Industry life cycle First and most important, the waste management and transfer industry is still growing and yet many entrepreneurs are yet to join. This gives room for expansion of the organization to various parts of the country in order to increase its market base and double its revenue base. 3.2.2 Competitors The Outlook Environmental Services is also experiencing stiff competition from other organizations such as s Eaglehawk Recycle Shop, Outlook Environmental Services, Penny Farthings Pushbike Parking, Reverse Garbage Cooperative and Soft Landing. Many of these organizations also use the integrated approach to community services. This means change in strategy will be the best way to deal with the competition. However, the competition is known to bring creativity and innovation into the industry (Coleman 1990). 3.2.3 Technology Technology is also shaping the way in which the organization is carrying out its operations both from internal and external. This has greatly helped in lowering the cost of enterprising and transacting as well as the process of recycling and managing waste. The existence and enhanced use of the internet could also help create an online directory to promote its services, benefits, goods and services both to the public and private sector (Frederick and Kuratko 2010). 4.0 Organizational model The business model for Outlook is an integrated one. Under the leadership of Tony Fitzgerald, this model once introduced to the business as a strategic approach to putting together everything that was being done into one single brand. The diagram below is a simple illustration of the business model that is being applied at Outlook. The primary objective of having an integrated business model is to ensure that the community and clients are made part of the organization process and operations so as to eliminate the element of stigmatization of those that are disadvantaged and disabled within the community (Goldstein et al 2010). Source: ADempiere, 2011. The integrated business models is especially important at Outlook since it has helped to change the perception of the public and the general public on how it handles its operations and social activities which many people show as stigmatizing. However, with the integration approach, the business is now able to attain a stable relationship with the clients and the community where it operates for long-term and sustainable relationship. Further, this model is important in breaking the barriers that may exist between the community and the business. This is because all stakeholders are allowed to become part of the business and decision making processes (Burt et al 2000). Organizational culture is an important aspect of the business that has influenced the choice of this business model. This is because the business mission, vision and values was to create a vibrant and dynamic organization with a very unique blend within the society and social enterprise that can bring change in the social lives of the people and real outcomes among the community. This approach therefore has continued to involve the whole community by welcoming people in the spirit of co-operation and partnering to create a better community. This approach to management has therefore continued to play a very significant role in the involving key stakeholders to the affairs of the organization (Frederick and Kuratko 2010). Unlike in the other business management models where the organization operates in isolation or parallel with the stakeholders and where the staff is working under highly institutionalized systems the integrated model is preferable in having the staff that is responsible and flexible. This is because the staff is given the opportunity to interact and adapt to the external environment and more especially the clients and the general community members. Further, this approach is important in encouraging those people in the society that are disadvantaged and disabled to feel appreciated and have positive attitudes on what they can do (Ibarra et al 2005). However, unlike other traditional methods, this business model is very involving and requires high strategic planning to deliver on the business goals. This is because enormous resources in terms of labor, time and finances will be required to implement any business plan under the integrated business model. Further, the integrated business model more intensive supervision since the external environment will not be easy to control and will always impact on the business processes (John et al 2006). Another, technical part of this model is when it becomes to involving the disadvantaged and the disabled people at work. Since many attempts may be made to involve the community in various works, it will always not be easy to satisfy to the public officers that they are actually involved since they will be located at different points. Finally, despite the important strides that are being made the organization towards bettering the community and government, still very little support has been given by the government thus making it very difficult for the organization to do the integrative process alone (Hargadon and Bechky 2006). However, with high level supervision, the goals of the organization can be achieved with the integrated model. This can be demonstrated from the 2009 financial results when the organizations involved 170 staff and yet managed to deliver a trading profit of $238, 000. In addition, since 2005, the organization has continued to report positive Returns on Investment despite the approach they use and has managed to repay funds given by the Social Firms Australia alongside meeting its business obligations. 5.0 Recommended strategies The primary objective of using the integrated approach by Outlook was aimed at increasing the participation of the community and more especially the disadvantaged and the disabled in waste management and transfer related programs. As a matter of fact, these groups of people despite the invaluable role that they can play in bettering the society we live in, they pose a big challenging in the process of incorporating them into organizational operations. For example some of the people have mental challenges or physically challenged even though they will be allowed to contribute through working and be paid like the rest of the staff. This in terms of operational costs is very expensive. However, for Outlook to improve on the performance and sustainability of this business model there are different strategies that can be used by the management and they include: 1. Diversification Diversification of business operations from the industry of waste management and transfer to other sectors, will help the business attract more businesses which some of them may not require extensive training or involvement. This will ensure those activities as cleaning and litter collection, are contracted and that may favor the disabled and the disadvantaged (Birch and Whittam 2008). 2. Quoting for infrastructure development Currently in Australia, it is allowed that contractors can quote their prices during tendering to indicate on the risks and responsibilities involved in certain projects. In such cases, it is there recommended that Outlook while trying to win public contracts from different council governments take into account the risks involved and what the project will entail and how it support infrastructure in order to get adequate funding (Balkundi and Harrison 2006). 3. Reduction in capital equipment investment In many projects, a lot of cost goes into purchasing facilities and equipment that cannot translate directly to the productivity of the business and the same time those that easily wore out. With such equipment, depreciation is very common and therefore it’s recommendable that investment on certain equipment and infrastructure be reduced significantly (Castells 2000). 4. Positive level targeting This involves ascertaining the required number of the disabled people that can be incorporated into the workforce without affecting the performance of the organization. While applying, this strategy the recruitment practices will be used to promote positive discriminative recruitment based on the exact number of people that will be required in the workforce. Right employee balance will work in sustaining productivity (Fonseca 2002). References Balkundi, P and Harrison, D 2006, Ties, Leaders, and Time in Teams: Strong Inference About Network Structure’s Effects on Team Viability and Performance, Academy of Management Journal, vol. 49, no. 1, p. 49-68 Birch, K and Whittam, G 2008, The Third Sector and the Regional Development of Social Capital, Regional Studies, vol. 42, no. 3, p. 437-450. Burt, R., Hogarth, R and Michaud, C 2000, The social capital of French and American mangers, Organizational Science, vol. 11, no. 2, p. 123-147. 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