Power Relations between Government and the Civil Society Affects the Startup of a Social Enterprise - Essay Example

Report To CEO – Power relations between government and the civil society affects the startup of a social enterprise Name Class Unit Executive summary The report and the essay have been developed to look at how the power relations between government and the civil society affects the startup of a social enterprise. The issue has been looked in reference to Australia and Vietnam. This has been approached based on a small firm intention to expand their interests and start a social enterprise. Social enterprise has been proved to thrive in countries which have support for fair market economy and have entrepreneurship culture. When starting up a social entrepreneurship, the issues to consider are; the government society reform agenda support given to the voluntary and community sector, the social need, financial arrangements and expansion. For expansion, the firm can consider between starting electronic recycling in Australia or venture in poverty alleviation social organisation in Vietnam. The best choice would be Vietnam due to the low startup required, high chances of success and reduced need of expertise. Though the issue of social entrepreneurship is known in Vietnam, the government has been working to establish a framework which can help social enterprises to operate more easily. The government open door policy has been able to allow a lot of foreign direct investments which have enabled the country to change their social structures and empower the society. Despite the initial challenges, the power relation in Vietnam with civil societies creates a good platform to start social entrepreneurship. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Issues for consideration 4 Government society reform agenda 4 Support given to the voluntary and community sector 5 Special needs 6 Financial arrangements 6 Expansion 6 Options for expansion 6 Option 1 7 Recycling electronic waste in Australia 7 Option 2 7 Poverty eradication enterprise in a developing country 7 Recommendation 8 Analytical Essay 8 Introduction 8 References 13 Introduction When expanding into social entrepreneurship, it is important to know that power relations between the government and civil society have an effect on the startup up of the enterprise. It has been proved that social entrepreneurship is able to thrive in countries where the government is committed to a fair market economy and supports a culture towards entrepreneurship. This should also be supported by an environment where incentives are offered for the profitable businesses. It has also been proved that in developing countries, it is possible to start social entrepreneurship provided there is support from the communities which is based on mutual commitment and state of interdependence (Douglas & Mandinyenya, 2014). The report will analyze the issue based on Australia and Vietnam. For a small firm to venture into social entrepreneurship, there are several issues to consider. The issues to consider are; the government society reform agenda support given to the voluntary and community sector, the social need, financial arrangements and expansion. Issues for consideration Government society reform agenda The way in which the government handles the agenda for the society have an impact on the existing opportunities for the charities and social enterprises (Partzsch, 2012). The community empowerment will impact the level of activity in the social enterprises. For example, the community can be given the power to run the community assets or buy them. In governments where the power has been devolved to the community, there is great access to funding (Douglas & Mandinyenya, 2014). The society reform agenda involves the ability to have transparency in all operations. The social enterprise is thus able to have access to important information if transparency is advocated. It is the role of the governments to ensure that the social enterprises have access to the public services. Public reforms have the capability to give social entrepreneurs the capability to provide quality services in health care, employee owned cooperatives and social action. Support given to the voluntary and community sector This is a very important issue that has to be looked at before the startup. The government has the power to make the running of voluntary or community based organisation easy. The ease of doing business with the state is determined by the existing relationship between the government and civil societies. For example, some of the countries have bureaucracies that make it hard to start an organisation (Partzsch, 2012). The government can use their support to the civil societies to enable the local population to conduct business through social enterprises (Douglas & Mandinyenya, 2014). This is through the creation of environment where people feel appreciated and supported in their efforts. This has been the case in Vietnam where the government has pledged support for the civil societies (Nguyen et al. 2012). Special needs Before embarking into a social enterprise, it is important to identify a need first. Most of the social enterprises have been started with an aim of addressing certain need such as a disadvantaged group (Douglas & Mandinyenya, 2014). This can be seen in the case of Vietnam. For example, in a developing country, poverty and diseases such as AIDS is a major problem. Financial arrangements There is need to know where the startup capital will come from. The social enterprise can use their own savings or take loan and donations. In developing countries such as Vietnam, the startup capital is low (Nguyen et al. 2012). The social enterprise can decide to start with little investment and build it as they progress. Source of the startup capital is very vital (Douglas & Mandinyenya, 2014). Expansion The decision for future expansion will be based on the enterprise performance and its ability to meet the needs. There is need for the enterprise to ensure that they develop their resources which can enhance their growth. Options for expansion The options for expansion can be carried out in a developing or a developed country. In a developing country, the firm can engage in activities to address issues such as poverty, diseases and education (Douglas & Mandinyenya, 2014). For a developed nation such as Australia, the organisation can engage in community initiative such as environmental awareness and clean up. For example, a social enterprise can be formed with an aim of recycling electronic waste in Australia. While in Vietnam, a social enterprise to address poverty eradication would be appropriate (Nguyen et al. 2012). Option 1 Recycling electronic waste in Australia The option is viable due to fact that Australia being a developed nation, there is a lot of electronic waste that can be recycled into good use and protect the environment. Benefits Help the environment by keeping it clean. Act as a source of income. There is government support in Australia. Risks Might need high startup capital. Requires expertise hence hiring of experienced staff. Option 2 Poverty eradication enterprise in a developing country Benefits Easy to gain local support. There is ease of gaining donations and support from several concerned bodies. The startup capital is less hence easy to set up. High chances of success and the need for expertise is not high. Risks Poor support if the host government lacks appropriate framework. Lack of proper understanding for the local community can lead to failure due to cultural barriers. Recommendation I would recommend the organisation to venture into a developing country and start poverty eradication based social enterprise. This would aim at addressing issues such as unemployment through encouraging self employment. Analytical Essay Introduction Vietnam government adopted an open door policy which enabled ease of conducting business and establishment of social organisation. The current economic growth in the country has been supported by the business and social enterprises which have been aimed at reducing poverty, diseases and enhancing social justice. Most of the social organizations in the country have been based on business models in order to achieve their objectives. The government has been very committed in ensuring that the country has strong social enterprises to enable a sustainable country. The fact that the government has supported use of social enterprises and acknowledging their participation in business to meet social objectives makes it a good country to venture with a social enterprise (Douglas & Mandinyenya, 2014). For a small firm that wants to venture in social enterprise in the country, poverty eradication based enterprise would be appropriate. This essay will look at the firm interest in venturing to Vietnam as a social enterprise with an aim of poverty eradication through lending to the poor households with an aim of helping them start small businesses (Nguyen et al. 2012). Vietnam is a country that has been faced by several needs such as poverty, AIDS, unemployment and poor infrastructure. Addressing household poverty through funding projects using small loans is an idea that can help the population eradicate poverty (Douglas & Mandinyenya, 2014). The organisation can focus in giving small loans to village groups which have a profitable project. This may involve funding projects such as starting a furniture shop, recycling of waste, community self help groups and fund for small business. The organisation is supposed to charge lower interest to the groups than the local banks. To enable the success of the system, the organisation can engage in training the locals how to succeed in their startups. These are projects that can help the country eradicate poverty and reduce unemployment while at the same time generating revenue for the organisation. For a firm to start a social enterprise in Vietnam, they are supposed to register. The main problem lies on the fact that there is poor public awareness and poor framework on social organizations by the government. This means that ability to get funding from the government is limited. The country has a lot of needs being a developing country with low average income status (Nguyen et al. 2012). The recent efforts by the government to support civil societies and social enterprises pose a major development which encourages the social enterprises (Douglas & Mandinyenya, 2014). The diversity of the civil society in Vietnam offers the social enterprises with different modes of legal operations. Being a microfinance based organisation the ability to operate in Vietnam is well defined. The organisation will be expected to go further than the existing charity funds. This is through provision of quality services which are competitive according to the market value. The business model that the firm will adopt should encourage social innovation. This means that the social objectives should be brought to the population through a business approach. The social mission should always be held as the top priority despite the business objective (McDonald & Warburton, 2003). This means that though the enterprise will gain revenue from their microfinance business, poverty eradication should be the priority. The plan for the social enterprise is to identify the social issue, come up with a business plan and use it to solve the issue (Nguyen et al. 2012). The fact that Vietnam became a middle income country in 2010, there was a significant reduction in foreign aid. This means that social enterprises can help in bridging the gap of the reduced foreign aid (McDonald & Warburton, 2003). The government would be more willing to support the social enterprises as they can help in ensuring they are able to help the society in need (Dart, 2004). According to the study on Vietnam, social enterprises are divided into three main stages. The stages are; prior innovation, social enterprises associated with NGOs and foreign organizations and social enterprises operating based on market principles. Vietnam open door policy has led to the country having increase in their foreign direct investment. This has led to Vietnam being able to gain knowledge on social development. Despite this, the issue of social entrepreneurship is still new. The country have been used to NGOs and for profit enterprises .the country have embarked on coming up with a framework that enhances the development of social organizations (Nguyen et al. 2012). This has enabled the country to have empowered civil society. Political and civil organizations in the country are able to cooperate which creates a good environment for social enterprise (Partzsch, 2012). The change in policies in the country has led to an increase in social organizations and NGOs. When the government enables an innovative environment, civil society is able to flourish (Mintrom & Norman, 2009). The Vietnam government has led to the country enjoying innovation which has led to rise of social enterprises. When there is a lot of external funding, most of the social enterprises tend to operate as NGOs. Despite this, there are organizations which tend to continue operating as social enterprises. The reduction in foreign funding in Vietnam creates a chance where social enterprises will increase. The firm can take this opportunity to venture into Vietnam as a social enterprise. The government has been stressing the importance of social enterprises as the key to address existing social problems. The mode used for registering social enterprise determines the advantages it is able to get (Dart, 2004). According to the Vietnam registration, the organization can be registered as; centre, company, club and cooperative. Being registered as centre provides the organisation with most benefits. The benefits are in forms of legal procedures, taxes and the ability to access funding. This shows how important the government framework is important in social enterprises (Nguyen et al. 2012). The geo-economic and social the ability of the country to connect with the world social enterprise movement helps in establishing civil societies. For example, there has been lot of efforts in Southeast Asia to develop social enterprises. This has led to the Vietnam government adopting the models that are being used by those countries in their social development. The enterprise law in Vietnam has a great impact on the operations of the social enterprises. The social enterprises are required to follow the law during their operation in the country (Bornstein, 2004). It is also important to note that the government support for the social enterprises is required (Nguyen et al. 2012). For example, some of the countries have established specific offices aimed at helping the social entrepreneurs (Mintrom & Norman, 2009). There are also funds in some countries that are aimed at helping the social entrepreneurs. The Vietnam government has been keen in ensuring they work in enhancing their framework for the social organizations. In some countries the government has the capability to regulate the profit sharing of the social enterprises. For example the Thailand government has laws which ensure that the sharing of the divided among the shareholders in a social enterprise does not exceed 20% of their total net earnings. This has been the case in most countries (Douglas & Mandinyenya, 2014). In conclusion, the power of the government to social enterprises has an effect on their establishment. While entering the Vietnam market, the level of government control will be vital to the social enterprise. At the moment, the available government control in Vietnam has allowed the sector to flourish in NGOs and for profit enterprise. The main issue lies to the fact that social enterprises in Vietnam are new sector. There is limited awareness on social entrepreneurship. The society have been more familiar with for profit and nonprofit organizations for a long time which makes it hard for them to view the two types coexisting as social entrepreneurship. The poor awareness may lead to the local authorities misinterpreting the social enterprises leading to fear. There is also poor legal framework on social enterprises. This leads to several obstacles during the establishment of the social enterprise Vietnam. For a young social enterprise, it may face these challenges but the opportunities are many once established. The firm should thus consider venturing into Vietnam and offer microcredit with an aim of helping alleviate poverty. References Bornstein, D. (2004). How to change the world: Social entrepreneurs and the power of new ideas. Oxford: Oxford University Press. Dart, R. (2004). The legitimacy of social enterprise. Nonprofit Management and Leadership. 14 (4): 411-424. Davis, I. (2005). What is the business of business, The Mckinsey Quartely, No.3. 106-113. Douglas,H. & Mandinyenya, I . E. Pragmatic altruism: The gentle process of co-creating social enterprise in a developing country, in Douglas, H., and Grant, S. (Eds). 2014. ‘Social entrepreneurship and enterprise: Concepts in context’. Tilde University Press: Melbourne. Mintrom, M., & Norman, P. (2009). Policy entrepreneurship and policy change. The Policy Studies Journal, 37(4), 649–667. McDonald, C. & Warburton, J. (2003). Stability and Change in Nonprofit Organizations: The Volunteer Contribution. Voluntas: International Journal of Voluntary and Nonprofit Organizations.14 (4): 381-399. Nguyen, D. C. Durc, L.M, Oanh, P.K, & Gam, T.H, (2012). Social Enterprise In Vietnam Concept, Context And Policies, Hanoi. Partzsch, L. (2012). The Power Of Social Entrepreneurs. Journal of Political Power, 5(3), 359- 376. Read More