September 2023

Mohammad Anas Wahaj | 09 sep 2023

Social enterprises aim to overcome socio-economic issues, but face myriad challenges themselves due to lack of resources and limited funding. In recent times many social enterprises got started around the world but as the sustainability issues remain their failure rate is also high. The recent research, 'Social Enterprise Performance in South Africa: The Role of Strategic Planning and Networking Capability' (Authors: Willie Tafadzwa Chinyamurindi of University of Fort Hare, Motshedisi Mathibe of University of Fort Hare, Progress Hove-Sibanda of Nelson Mandela University), published in Taylor & Francis Online on 15 May 2023, finds that for social enterprises to enhance their performance, network capability and strategic planning are key. Addressing these challenges can help their owners and managers respond to the challenges such enterprises face. At the core of this is addressing the challenge of funding and sustainability. This research provides new insights into the management for performance of social enterprises, especially in a developing country context. The research included 147 social enterprises in Eastern Cape province of South Africa, one of the poorest regions. Social enterprises were divided into three groups - (1) Focus on poverty alleviation through empowerment projects. (2) Focus on improving livelihoods of communities through agricultural support mechanisms. (3) Focus on assisting communities to respond to health challenges such as HIV/AIDS, the COVID-19 pandemic and tuberculosis. The survey questions focused on asking about how each social enterprise made strategic decisions; the relationship between the social enterprise and its networks; and the enterprise’s continued value creation amid challenges. A model was developed to see how these three issues related to performance. The results showed that three important capabilities were needed to enhance social enterprise performance - (1) The need for strategic planning that involves clearly defining the direction in short and long term, what are goals and tactics, and how to achieve them. (2) The need was for strong networks. Building networks involves continued interaction between the social enterprise and its stakeholders. Networking capabilities allow the social enterprise to remain relevant to other important role players in the community. (3) The need for the social enterprise to keep a focus on its main business, the social aspect mandate of value co-creation. Resarchers recommend - Be proactive in improving their internal processes and structures; Channel financial and non-financial resources such as tangible assets and intangible assets to support strategic planning, networking capabilities and value co-creation; Need clear channels for sharing essential information with stakeholders, including communities, towards achieving the social goal of the enterprise. Read on...

The Conversation: Businesses that address social or environmental problems often struggle to survive: 3 things that can help them
Authors: Willie Tafadzwa Chinyamurindi, Motshedisi Mathibe, Progress Hove-Sibanda

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