A Conceptual and Empirical Analysis of Social Entrepreneurship Business Models for Developing Countries: The Case of Bangladesh

Abstract

Social entrepreneurship is an emerging field in the business arena. The concept of social entrepreneurship have been developed in recent time in policy paper and academic research (Munoz, 2010). The principal objective of social entrepreneurship is not to gain profit or maximizing of wealth like conventional entrepreneurship. The outcome is more focused on 3P’s- profit, people and planet (Papadopoulos, 2016). This research is a combination of both exploratory and descriptive research. The analysis using business model canvas is mainly descriptive which is based on case studies, survey findings and secondary data. The research considered only large and notable social entrepreneurship business models across different continents, as well as few millennial social enterprises. The field study is based on social enterprises in Bangladesh. The sample group of the survey respondent is heterogeneous, based on judgmental sampling. The respondent includes employees, beneficiaries, owners, suppliers, distributors, resellers associated with large eight social enterprises in BangladeshAarong, Grameen Danone, TMSS Handicrafts, Grameen Telecom, BRAC Dairy, Kumudini Handicrafts, TMSS Uttpadon Food and ASA Microfinance. Interview of industry experts and organization’s personnel have provided primary information that facilitated to analyze the business model of social entrepreneurship. The research addresses the social entrepreneurship concepts, thoughts, critical factors, focusing on the issue of concern business models of developing countries. The broad research objective is to understand, assess and analyze the selected social entrepreneurship business models in selected developing countries, focusing on the case of Bangladesh. The specific objectives are: a) To understand the concept of social entrepreneurship and social enterprises; b) To assess the existing models of social entrepreneurship; c) To analyze and compare the business models from selected typical cases of social enterprises from developing countries, developed countries and Bangladesh; d) To identify the key constraints of growth for social enterprises; e) To analyze the gaps of particularly selected social entrepreneurship business models; and f) To develop a business model for social enterprises focusing on sustainability. A conceptual framework have been developed based on literature review focusing on entrepreneurship and social entrepreneurship concepts, theories, evolutions, entrepreneurial traits and characteristics. Subsequently, the business model canvas, the concept of social entrepreneurship business models have been discussed based on the growing number of recent entrepreneurship and social entrepreneurship literature. Hypotheses have been tested and analyzed using different statistical techniques. From literature review, the research revealed classification of social entrepreneurship business models that include- leveraged nonprofit, social business venture (trade off financial return with social activities), cooperative/ community development enterprise, cross compensation/ subsidization, hybrid for nonprofit (social enterprises engaged in trading that generates financial returns), fee for service, market intermediary, independent support. From the hypotheses testing, the results indicates that social entrepreneurship is focused on triple bottom line to succeed –social, environmental and economic value creation as per the respondent’s perception as per questionnaire survey. In case of social entrepreneurship, customer is not only the beneficiary, here producers or artisans or employees associated with it can be beneficiary too. Customers are more aware on social enterprises in developed countries, whereas the awareness is low or moderate in developing countries. It was also found from the case studies that the key activities varied. Focused solution on any environment or social issues are missing in a commercial enterprise. Findings shows that social enterprises in Bangladesh are more focused on human resources than capital or financial resources. The social enterprises discussed in this research are mostly women empowering social enterprises. They have connected underprivileged female population in their business model. Unfortunately, these organizations are less focused on financial or capital resources. The survey revealed that more than 50% of respondents are below HSC level education. This also represent the skill level of resources. From the case studies we can see that the social enterprises in Bangladesh and developing countries may perhaps failed to attract talents. If the low skilled resources with lower level of education are more engaged in social enterprises then eventually the performance level will have serious negative impact. The questionnaire survey revealed the top 5 problems addressed by social all enterprises in Bangladesh are: a) Reduction of poverty; b) Women empowerment; c) Job creation; d) Education; and e) Skill development. The case studies identified that organizations like Aarong, Kumudini, GTC, and ASA arev doing better than Grameen Danone or TMSS enterprises because of surplus and good growth. Aarong can attract domestic as well as foreign customers due to their intervention on design and trendy style. They have set a benchmark on Business Development Services (BDS) through intervention and linkage artisans from remote locations. Aarong can be a reference for other women empowering social enterprises like TMSS Handicrafts, Utpadon foods or Kumudini handicrafts. The finding from case studies revealed that the organizations like TOM Shoes, Einhorn, Wise, Ecoalf, Thankyou, and Divine Chocolate performed moderately well in terms of utilization of resources, reduction of poverty, empowering people, solving environmental hazards. These social enterprises have utilized internal resources like human resources, financial resources and capital resources very efficiently as per comparisons from case studies. The questionnaire survey exposed that due to less focus on awareness building, proper marketing & branding by social enterprises in developing countries and Bangladesh like Kumudini, TMSS and Grameen failed to attract external stakeholders and customers. From the survey findings, we can see that there are some major challenges for social entrepreneurship in Bangladesh like shortage of skilled resources, access to finance, access to technology, innovation, regulatory framework, leadership and corporate culture, availability of infrastructure, social & family structure, environmental issues and quality education & training. Solution or approaches are different due to the availability of multiple resources or tools in the ecosystem. A revised conceptual framework have been proposed based on survey findings, interviews and case studies. This hybrid business model is to ensure the sustainability of the social entrepreneurship which considers profit, purpose and productivity. Findings shows that majority of the social enterp