Creating a Sustainable Social Impact: An Inside Out Perspective on Entrepreneurship
Social entrepreneurship is slowly evolving in small pockets in different parts of India. While most such ventures generally start with a lot of promise, only a few of them are able to survive and prosper. Many of them opt for funding to build the scale of operations, and sometimes even to keep the enterprise afloat. However, this approach does not always help them sustain or make the intended social impact in the long term. Why this might happen?
A possible reason can be the business model of these organizations. Many of them build and deliver products and services that are intended to improve the lives of the underprivileged sections of society. They face usual business challenges like poorly developed markets, an unconducive work environment, unviable products or services, difficulty in accessing prospective customers, troubles in recruiting, training and retaining employees, and financial and operational roadblocks. However, these challenges are more pronounced for them because of the presence of several external factors that affect the venture. Some examples are the need for government support, relationships with public bodies, corporate tie-ups, volunteers, large-scale promotions, and receptivity of the target customers. These factors are not in their control. Thus, organizations may take years to establish themselves and show visible results. They may be unable to sustain, and in the worst case, survive over time.
Now let’s consider social enterprises that have a slightly different business model. These organizations have the objective to improve the lives of people in the process of building and delivering products and services. The focus is on creating a social impact on employees within the organization, rather than on individuals or communities outside the organization. Their dependence on external factors is comparatively limited. Although market and customers are still important for revenue and profits, they can survive and sustain to a large extent, based on the influence they have on their workforce. Such influence is in their control and may show visible results in a much shorter time. Let’s see how.
These organizations directly affect the lives of the workforce by investing in their long-term future. The employees are generally from socially and economically underprivileged backgrounds. They have no specialized skills or opportunities for gaining employment. Organizations provide a secure and consistent source of income that generates livelihood for the workforce. They enable the employees to learn and use new skills, making them employable. They provide a work environment based on congeniality, mutual respect and trust. Over time, this enhances the standard of living and quality of life and creates promise for a better future for the workforce and their family. They enhance their sense of well-being, add meaning to their life, provide emotional security, provide them with a sense of ownership and belongingness, and most importantly, nurture, care and support them and their family. They empower them by holding financial literacy programs and making them aware of government policies and benefits and avenues for healthcare and education support. The employees develop commitment and loyalty towards their organization, engagement in work and motivation to add value, which drives them to give their best despite obstacles like slow growth in demand, inaccessibility of target markets and uncertain profits. These factors enable a self-sustaining model where the profound impact of the organization on employees energizes them to contribute to the performance and growth of their organization. The association between the organization and workforce can strengthen across generations forming a virtuous spiral of a mutually rewarding relationship that leads to steady advancement in individual lives.
Let’s take the example of Aftertaste, a 9-year-old Mumbai-based organization that designs and develops hand-made items related to home décor, stationary, sports and utilities, for individuals and corporates. All the employees of the organizations are women from very humble backgrounds who have never worked outside the home earlier. They have had no prior experience or training in making the required products. Most of them have not had the basic skills in stitching, drawing and crafting, before they joined the organization. Many of them did not know how to read or write.
After starting to work with Aftertaste, the women have become increasingly financially independent. Their income has increased by up to 100%. They can now access good healthcare facilities. All of the women have a gas connection now. They use an ATM card to access their bank account. They can use a smartphone to avail schemes and subsidies and make digital payments. 90% of the families have repaid their debt. 87% of the children in these families now go to schools or colleges. 65% of women have rebuilt their homes. They are also able to satisfy their own small needs and wants. Most importantly, they have become empowered to control their monetary resources and take many decisions in their personal life.
Many women who have been with Aftertaste have started shouldering administrative and managerial responsibilities, instilling a climate of ownership and commitment amongst all employees. They are now directly involved in designing products, sourcing material, planning the execution, delivering goods, and interacting with customers. Some of the children of the workforce have got recruited into the organization after their schooling and graduation, and are holding positions of responsibility and visibility. The transformation in their socio-economic conditions and the prospects of a more desirable life has led to, not only a 100% retention of the workforce but also consistent improvement in the quality and range of the products offerings of Aftertaste for their customers.
To conclude, it would not be wrong to say that social entrepreneurship can make a sustainable social impact if it improves the lives of people in a holistic manner, as well as gives them an opportunity to contribute to the enterprise. Although the final products and services of such entrepreneurial ventures are important for the upliftment of individuals, communities and societies, the role of goals, initiatives and practices of the organization, with regard to its workforce, cannot be overlooked.
Views of the author are personal and do not necessarily represent the website’s views.
Prof. Smita Chaudhry is a faculty in the Department of Human Resources. She teaches in the undergraduate and postgraduate business management programmes. She takes courses in the areas of Leadership, Change Management, Strategic and Global HRM, HR Analytics, Team Management and Organizational Development. Smita is a doctorate in Organizational Behavior from the Indian Institute of Management Calcutta. Her thesis explores cognitive, emotional and behavioural responses to partner opportunism in client-vendor relationships. She has published papers in research journals and presented in various international conferences.
