Remarks - Analysis and Results - 社會企業之商業模式分析: 以東南亞個案為例

Chapter 4 Analysis and Results

4.4 Remarks

After interviewing these 9 cases, addressed content can be inducted from 6 dimensions which the business model theory proposed by Yang (2009). These 6 dimensions will be elaborated in the following section.

1) Value Claim: Like many prior researches emphasized, social enterprise have both social

and economic goal as main feature of social enterprise. Besides, based on the business model theory from Yang (2009), the value claim of social enterprise shall comprise social mission, value transmit. But this description only mentioned social enterprise presents two different values to beneficiary, but it or other prior studies did not elaborate if these two values of social enterprise always appear at the same time? In this study, the answer is no, it is noticed that these values may not be claimed at the same time. This is because the relevant regulations for social enterprise in these countries are relatively rare. There is no obligation or definition for social enterprise to claim their social mission. Therefore, according to the conditions of which values will be presented interior or exterior, value claim in this area can be classified four conditions.

1-1.

Conceal interiorly, Conceal exteriorly: Because of different consideration, like social responsibility, some operators may choose not to claim their social mission actively. In the case of AngkorWall, Hank Hsu mentioned that the effectiveness of

social enterprise needed to be observed continually for him, because it is an emerging idea. Moreover, he preferred no interference on his business, especially from government.

1-2.

Conceal interiorly, appear exteriorly: This is a common type to social enterprise in this area. The social enterprise does not emphasize or present its social mission to his interior beneficiary, only present exterior for economic goal. In this type social enterprise consider social mission as an added value, and it not only can attract some certain customer group, but also can sell their products or service at higher price. As for interior beneficiary, they will not mentioned actively unless it necessary. The example for this type in this study includes Ma Té Sai, Angkor Butterfly Centre, and so on.

1-3.

Appear interiorly, Appear exteriorly: For this type, social enterprise claim their social mission actively both in interior and exterior. For Zo paper in Vietnam, they have known their positioning is a social enterprise since beginning, and their products are associated with their social mission closely by marketing way. So their social mission is quite be understood for both interior and exterior. As for the other case, Lao Disabled Women’s Development Centre, it is a non-profit organization originally. So despite it is transforming itself to social enterprise, both interior and exterior are aware of their social mission.

1-4.

Appear interiorly, Conceal exteriorly: Tea Talk Café is an obvious example in this study that social enterprise do not present their social mission exteriorly. They prefer to appear as a coffee shop, rather than a place for mental health. This is because the social mission they concern is about mental health. If social enterprise are afraid of being labeling or worried about strength weakened they may tend to not present their social mission.

2) Business Strategy: Because the business scale in this study is small, and each of them

have unique social mission. This kind of positioning make them cannot seek for mass production on their service or product, they have to move toward to niche market as their business strategy. The most obvious benefit of adapting this way is to convince the consumer easily to accept higher price in market.

3) Revenue Organism: Because of the economic environment these cases located are

relatively poor and similar compared with most developing or developed countries, all the cases choose foreign tourist as their main customer segment except Tea Talk Café. Tea Talk Café generates revenue from local people who enjoy their food or drinks. The reason why foreign tourist becomes main customer segment is people in this area are more focusing on working harder for better living, rather than to support on social change. In addition to value priority, foreign tourists not only can understand this appeal, but also have willing and able to purchase service and product from social enterprise.

4) Deploy Resource: Due to the regulation, social enterprise in this area is still insufficient,

these social enterprises do not need to face the review intensity as countries like U.S or U.K. It means they have much more flexibility to locate resources, despite it is very few.

As mentioned before, the scale of business here is pretty small, so some operators need to spare some of their resource to build relationship for earning exterior assistance.

5) Value Chain: Because of lacking resource and idea issue, it is not only difficult to find

supplier, but also hard to find customer and partner. Therefore, social enterprises here tend to find partners in their circle. Like Lao Disabled Women’s Development Centre, they get many orders from other social enterprises like Ma Té Sai or AgroAsie. For solving idea issue, FairTrade Laos also would hold festival for seeking opportunity.

6) Sustainability: There is an interesting question needed to explore about sustainability for

the social enterprises, what if all social enterprise seek sustainability in practice? The

answer is clear no. Because different orientation makes organizations only looking for achieving short-term objectives. The most important thing for most cases is to achieve the goal they have been focusing. Like Fruitfriends said, if there is any organization could be better on what they are doing than us, so be it. This is the essential difference between social enterprise and common enterprise. Generally speaking, common enterprise is looking for not abstract profit, but idea. The desire for survival for these social enterprises seems not as strong as common enterprise, because sustainability actually rely on the belief which operator’s hold.

Table 4-2 Business Model of Selected Cases

Country Name of social

enterprise Value claim Business strategy Revenue organism Deploy resource Value chain Sustainability

Laos

2. Advocate for the rights, recognition and equal concept of Fair Trade in Laos and empower small scale

52 FruitFriends

1. Fair price for local farmers 2. Creating growth and jobs made by people all over Laos and offering a higher and

53 Banteay Srey

Butterfly Centre

The social mission of centre is to contribute to building a promising future for children to help children in rural area to get better education

Physical store organize event with store existed.

Arranged by Author

CHAPTER FIVE

CONCLUSION AND SUGGESTIONS

5.1. Results and Findings

After interviewing these cases, the reasons why these entrepreneurs initiated social enterprise is associated with the harsh reality – poverty directly or indirectly. Despite there are some cases try to protect tradition like paper making or conventional clothing. This is because the background which these cases have. Most of them had experienced trauma from war, especially Cambodia, and ruled by autocratic regime for a long period. These history make countries poor. Many initiators for these social enterprises are foreigner or well-educated, which means they saw the different world and they are more capable to make social change than local people. There is one thing needed to mentioned, most foreign initiators they are retired or have a full time job in their hometown. For them these social enterprise projects is more like an idea trial than major income for living.

For business model, based on the harsh reality, there is an important thing that the business model these initiators adopted is always try to make their staff or supplier can generate more revenue. Because of this social goal, the customer segment they choose is usually foreign tourist due to affordability. Besides, they tend to select their partners in the social enterprise circle, it is also because of the social value hold. These situations is the major difference between business model of social enterprise and common enterprise. In the other world, they have played more public benefit than a business man when running a business. They not only

want to run an enterprise, but also want to let people get vocational training and convincing local people that the possibility of doing things in a different way. When local people learn these skills they can start to afford the expense for education or better living at the same time.

According to the data analyzed from the business model of social enterprises previously, the below are the obstacles these social enterprise dealing with and suggestion for them:

1) Funding: In this survey, the funding that all of these cases used in the beginning phase

are come from personal or other organizational donation, or funds in the hands of the localities. This is because the lending rate is relatively high in this 3 countries compare with others. Besides, people there do not understand the meaning of social enterprise and tend to give loan to profit-oriented enterprise. However, the issue about of funding in the beginning is actually not a major concern to the founder. Most funders have the character of well-educated and possess the skill of integration. Some of them can obtain the resource from the country they come from. But in the development phases, sustainable funding become matter due to they want to expand their social impact or sustainability, especially to the original non-profit organization. For example, when Lao Disabled Women’s Development Centre set up, because the founder’s family has well connection with government, they can receive the land transferred from government.

But when they try to expanse for making more revenue, funding become a problem, because they don’t have enough money to buy more material to produce, and that also make them easy to try different way to make revenue even they are not familiar with that, like mushroom plant. But the same problem occurred again, they cannot afford the necessary expense for expanding. In the other case in Cambodia, Angkor Wall put their profit as more as possible to their social mission, but it caused the quality of the service they offered to customer getting worse. Because they cannot afford to hire the experienced employee and they need to cut some services, but it influence service quality either.

In this case, we may refer to the case FruitFriend and AngkorWall. Angkorwall adjusted its long term goal after the manager received some complaint from customers.

The manager decided to expense slowly, because they can focus on their goals and maximize the influence of money. The same situation happens on FruitFriends either. One of the missions that FruitFriends focus on is eco-agriculture, but it needs to take a long period to let their farmer understand this way. So Fruitfriends knew they need to expense slowly for more time. Based on the reason, it is suggested that the initiator of social enterprise might need to consider the scope of the social mission when they have problem on funding. And be careful on choosing other ways for income generation.

2) Human Resource: This issue is the major concern for all social enterprise interviewed.

There are many researches have uncovered the similar issues, but it represents in different way in Southeast Asia. Basically, the customer that all these social enterprises focus on is foreign tourist, to understand their needs and habit become matter. In this research most funders experienced some kind of operation of modern business, so they can understand how the modern business can work well. But the social enterprise here for some funders is like a part time job. Because they usually stay in the countries they come from and authorize the local staff to handle daily operation. That’s become the major concern for funders because it is hard to find the qualified employee both have language and profession skill. It is needed to expense higher cost for this kind of people, or spent more time for training. For example, the Fair Trade Laos have been trying to transform themselves to a social enterprise that can generate more income, not an organization just receiving donation. So they not only offer certification now, but also start to offer the member tailored marketing service. But the current obstacle is just come from human resource. Because the people they hired possess the skill which is very popular in a developing country especially like Laos, Cambodia. Some people see the opportunity of

working in these places as a chance for better career. This situation limits the development of Fairtrade Laos, they are not capable to provide service beyond current manpower. For other enterprises the local staff only play the role as order executor and responsible for daily operation, not a decision maker. Another issue regarding human resource is the personal context of employees. The founder of AngkorWall, Hank Hsu, has mentioned there was a case can represent this gap. Some of his employees are come from rural areas where electricity is not available and there is no refrigerator in their house. So when they have blackout the staff does not know it would be better to not open the door of refrigerator and it should keep the door closed all the time. Such example indicates that people who willing to run social enterprise there not only need to integrate human resource, but also need to notice the cultural gap either. In addition, for the people who would like to initiate a social enterprise there may consider solve this issue by integrating resource. For example, it could be send the staff to abroad like Thailand or Taiwan for training Or discuss with skilled person in Taiwan (like people from NGO in Taiwan ) if they are willing to train these staff there.

3) Quality of Service or Product: According to the experience in these organizations, and

discussion with Emi, the founder of Ma Té Sai, most operators realize sustainable business rely on good service and products. Social mission as an incentive may influence clients consume for supporting for few times, but for long-term business they still need core competitive advantage on what they give to client. Moreover, the interviewee of Zo paper in Vietnam expressed that they does not want that people who purchase their traditional Vietnam paper is just because they feel pity for them. They hope customer choose them because it is good to them. It is clearer that compare the cases of Ma Té Sai with Lao Disabled Women’s Development Centre. Both of these two enterprises generate income by selling handicraft in Laos and some of their suppliers (artisan) are same. But according

to the observation and discussion with Emi (she is a volunteer, client and rival for LDWDC). The quality does matters, and it affects if customers are willing to purchase her products than Centre’s. Although the artisans (suppliers) are the same, but people still can tell the quality design is different easily by the details.

The initiator needs to stay closer with customer and figure out what do their client really want, it is supposed not to give them what you think is good.

4) Role of government: In fact, in these cases the role of government is very trivial in the

procedure of development. One of reasons is officials in these countries do not understand the meaning of social enterprise, so they don’t know how to assist them. Even in Vietnam they just amended the enterprise law and social enterprise endowed with new legal status, there are still many people cannot understand that. There are some similar characters in these 3 countries, which include one-party system, less freedom of speech, not transparency in governor and most important thing is countries there are ranked relatively high in Corruption Perceptions Index 2014. Moreover, government has great authority to determine if the permission can be issued or not. For instance, when interviewing with Fair Trade Laos and Lao Disabled Women’s Development Centre, connections and bribe had been mentioned couple times while they have relationship with government. This is a risk people need to understand if they would like to run a social enterprise there. Do not think the regulation there is same as Taiwan, it is dangerous.

5) Accountability: For consumers, the most important things that social enterprise need to

do is to make social impact promised. But in the cases interviewed. That become a problem because some of them only claim that they have some kind of social missions or what they want to achieve when they do marketing. But nobody knows how much resource they actually put in and let the people knew if they do help or help efficiently.

And that cause some questions below. All the cases interviewed in Laos are certified by

Fair Trade Laos as a member of Fair Trade except Fruitfriends, but that is not because they do not want to be certified, they just cannot afford it. Therefore, they are the only social enterprise who public their financial report clearly in this research. As mentioned above, some organizations try to build accountability by certified from external organization, as for others they do that by making their finance transparent or running social networking sites. By running social networking sites they try to keep people following their news for letting people knew what they have done. That is a possible way for maintaining accountability for social enterprise in an environment without any related regulation.

6) Mindset: If explore the background of these operators in the social enterprises that had

been interviewed. It is interesting to find that some interviewees expressed that they do not mind compete from rival. They usually have a kind of mindset which is they are more like doing a good thing rather than run a business. That makes them think if other organizations can benefit clients better, and that also make them have less motivation to transcend for sustainability. Compare them with the social enterprises whose funder have business background or the people who do not consider to profit is not a bad thing, the profited-oriented enterprise seem more possible to be sustainable in this research.

Basically, the domestic researches usually put focus on the development of single social enterprise in Taiwan. But due to the country context is different, the execution of business model is different too. As we can see the cases like Concert in Cambodia or Fairtrade Laos in Lao People’s Democratic Republic is unprecedented in Taiwan. They not only provide credibility to other social enterprises, but also provide the marketing ability they owned to others. This information has not been discussed in the prior research. Besides, the obstacles like management of human resource, accountability, relationship with government and so on is quite different from cases in Taiwan.

5.2. Managerial Implication

Based on Yang’s (2009) business model theory, the value claim of social enterprise shall comprise social mission, value transmit and this description usually means social enterprise presents two different values to beneficiary. However, after concluding the information from this research, it is found the prior studies did not elaborate the timing when these two values show. In this study, it was noticed that these values may not be claimed at the same time. This situation has not been discussed in the prior study because the relevant regulations for social enterprise in these countries are relatively rare or even none. Also same is Taiwan, there is no obligation or definition for social enterprise to claim their social mission. Before relevant acts was passed in the legislative Yuan in Taiwan. People who would like to initiate a social enterprise need to think if the social value proposition needs to be added when doing marketing.

在文檔中社會企業之商業模式分析: 以東南亞個案為例 (頁 55-0)