II. Hybrid Social Business Model/ Case study Samasource Flashcards
1
Q
Impact Investing
A
- Investment into companies/ organizations/ funds
- Intention to generate positive social/environmental impact and financial return
- Investments are often project specific
- Different levels of philanthropy (Wohltätigkeit) since investor retains ownership over asset/ expects positive financial return
- Beneficiaries = Social Enterprises and Social Entrepreneurial Initiatives (Also customers but actors are different)
2
Q
Who invests in B-Corps and Social Enterprises?
A
- Socially Responsible Investing
- Social Impact Investing
- Venture Philanthropy
3
Q
Socially Responsible Investing
A
- Social return is expected but social and environmental variables are considered
- Negative screening
- Risk management
- Shareholder activism
4
Q
Social Impact Investing
A
- Investment into companies/ organizations/ funds
- Intention to generate positive social/environmental impact and financial return
5
Q
Venture Philanthropy
A
- Grant-making model (Zuschussmodel) with no return expected
- Ventures investing funds and strategic assistance into Start-Ups
6
Q
Types of Investors
A
- Impact first = Ananda
- Financial first = Khosla Impact (Criteria: 1. Targets crucial issues/ 2. Improve ROI of low-income segments/ 3. Destroy monopoly/ 4. Product or Technology based on ethnographic insights)
7
Q
Mission Statement
A
- Defines organizational goals
- Sets the boundaries of organizational strategies
- Sets guidelines to measure organizational success
- Defines beneficiaries and customers
- Characterizes the “theory of change” of the organization
- E.g. Nikes Mission = “If you have a body, you are an athlete”
8
Q
Social enterprises vs. traditional enterprises- How they regard value
A
- TE -> Value capture = Maximizing value captured by organization/ Success measured at organizational level
- SE -> Value creation = Maximizing value created for society/ Value captured just what needed for activities/ Success measured at society level
9
Q
Social enterprises vs. traditional enterprises- Strategic focus:
A
- TE -> Sustainable Advantage = Become essential in market/ Insulate from competition/ Identifying lack of services and costs opportunities
- SE -> Sustainable Solutions = Become essential to address a social problem/ Correct perceived market and government failure/ Identifying unaddressed social issues
10
Q
Social enterprises vs. traditional enterprises- Managerial Approach
A
- TE -> Control = Control value chain & critical transactions & resources/ Making stakeholders dependent on company
- SE -> Empowerment = Raise effectiveness of the overall social system/ Release underutilized skills and resources in novel BM/ Empowering stakeholders
11
Q
Social & Commercial Logics
A
- Goals = Generate economic surplus by selling goods/ services (com) vs. Address local social needs by making products/services available (soc)
- Strategies = Production efficiency/ Customer satisfaction/ Sustainable profitability (com) vs. “Social effectiveness”/ Beneficiaries satisfaction/ Sustainable impact (soc)
- Key stakeholders = Customers/ Suppliers/ Commercial partners (com) vs. Beneficiaries/ NGOs/ Public services (soc)
12
Q
Tensions faced by social entrepreneurial initiatives
A
- Performing
- Belonging tensions
- Time orientation tensions
- Organizing tensions
13
Q
Performing tensions
A
- What is success?
- Lack of clarity/ disagreement about the definition of success
- Max 3 KPIs (Not too many)
- Difficulties to support/ create metrics for social and commercial performance at the same time
- Capacity to address needs of target beneficiaries (soc) vs. Capacity to address needs of target customers (com)
- Customers vs. Beneficiaries
14
Q
Belonging tensions
A
- Who are we?
- Identity change due to sub-groups dominance
- Difficult to communicate identity-changes to external stakeholders
- Different logics of employees imply different identities that might clash
- Important to develop clear common identity/ Formalize goals and objectives/ Trustworthiness of the mission
- Employees identify with social mission (soc) vs. Employees identify with business objectives (com)
15
Q
Time orientation tensions
A
- Short term or long term?
- Business success comes from short term gains
- Social expansion requires a long-term perspective
- Social impact might constrain (beeinträchtigen) economic growth
- Social impact requires long-term orientation/ Growth can increase but also threaten social impact (soc) vs. Business success come from short-term gain/ Social mission can constrain growth
16
Q
Organizing tensions
A
- Which kind of skills, processes and structures?
- Should you hire individuals with commercial or with social competencies?
- Should you prioritize activities to create value for beneficiaries or customers?
- How should departments be organized?
- Social impact requires investments/ Deep knowledge of societal issues (soc) vs. Business success requires customer orientation/ Effective cost management (com)
17
Q
How to address tensions?
A
- Performing -> Clear Value propositions for Customers & Beneficiaries/ Clear KPIs
- Belonging -> Common and overarching (übergreifende) Identity/ Trustworthiness to mission/ Formalization and Collaboration
- Time orientation -> Dialogue with stakeholders to understand short- and long-term expectations and priorities
18
Q
Managerial challenges
A
- Strategic challenges
- Managing trade-offs
- Social innovation in the technology sector
19
Q
Business Process Outsourcing
A
- Subset of outsourcing
- Contracting operations and responsibilities of a specific business process to a third-party service provider
- Most common areas Customer care (52%)/ Finance & Accounting (23%)/ HR (16%(
20
Q
Reasons for outsourcing
A
- Economic = Cost reduction/ Transforming fixed costs into variable costs
- Strategic = Flexible service/ Better focus on core competencies
- Technological = Access to new technology
21
Q
From Business Process Outsourcing to Impact Sourcing
A
- Impact Sourcing = Employing people at the base of the pyramid with limited opportunity for sustainable employment (Annual income <3000$)
- Implement them as principal workers in business process outsourcing centers to provide information-based services to domestic and international clients
22
Q
Samasources’s Mission and Approach
A
- Vision = Address poverty
- Mission = Access to work and train employees through digital work -> Empowerment
- Target group of workers in the middle of pyramid instead of bottom (cheaper because of training efforts)
- Process Innovation = Performing something efficient and effective
- In between people who need work and customers who require low-cost labor
23
Q
Samasource’s stakeholders and expectations
A
- Customers = quality of service, cost savings, flexibility, reliability, social impact
- Beneficiaries = training, wage, career development, better life conditions, emp.
- Employees = meaningful work, financial income
- Donors = maximizing social impact (job creation, living wages, training workers, impact on poverty, transparency, consistency with mission)
- For-profit investor = ROI
- Delivery Centres (Local Entrepreneurs) = Know-how, Stable revenues, Stable work, Financial resources (support to grow)
- Community
- Media = raises awareness about what Samasource is trying to address
- Competitors
24
Q
Samasources’s Tensions
A
- Performance tension = Customers (Low-price/Flexibility) vs. Beneficiaries (Training))/ Investors (Economic benefit) vs. Donors (Social impact)
- Time-orientation tension = Delivery Centers & Beneficiaries benefit (Long-term) vs. Customers & Investors profitability (Short-term)
- Organizing tension = Customers (Economic employees) vs. Beneficiaries (Social employees)/ Social impact (Training) vs. Quality of outcome (Customers)/ Donors (scale up impact) vs. Delivery centers (Scale deep)
25
Q
Samasources strategy to manage tensions – People
A
- CEO = cares about the social mission of Samasource;
- Marketing manager = customer orientation -> closing contracts with them
- Pluralist Manager = Specialized engineer (managing delivery centers)
- Project manager = Quality control
- Trainers and recruiters = Mainly interact with beneficiaries
26
Q
Samasources strategy to manage tensions- Structure
A
- Sama-Hub = Technology they are using to combine the needs of customers (flexibility, efficiency and quality) and of beneficiaries
- Sama-Lab = Standardize processes
- Sales department = Specifically focused on customers
- Delivery Centre = Works with trainers and recruiters
27
Q
Samasources strategy to manage tensions- Processes
A
- Quality assurance
- Screening of partners
- Long-term contracts with customers
- Start every job with a trial
- Highly standardized processes
- Tracking performance (very rigorous)
- Pull model -> entrepreneurs go to them
28
Q
Samasource Scaling Strategy
A
- Samahope -> provides financial resources to access medical treatments in underdeveloped countries
- Samaschool -> digital skills training in developed countries)
- Both founded to leverage technology to scale social impact
29
Q
Does it make sense for Samasource to differentiate their businesses?
A
- Yes = 1. Different Targets/ 2. Support all chain/ 3. Efficiency/ 4. Sope Economies
- No = 1. Needs to be established firstly (No trust in efficiency)/ 2. Confusing for donors (Complex, No clear social orientation)/ 3. Too much differentiation could lead to value loss for customers/ 4. Goals coordination difficult across organizations
- Answer = No -> Really struggled to keep it sustainable due to missing synergies between companies
