Social Entrepreneurship In South Africa Case Study

Summary/
Abstract

The case discusses the social entrepreneurship initiatives by Alicia Polak in South Africa. Alicia Polak, was an Investment Banker with Merrill Lynch and Company in New York, who started a small business venture in the slums of South Africa. The venture was not started as a charity but as a profit generating business. With very little initial investment, Alicia employed women from the neighbourhood and taught them how to make high-end cookies, and that was the beginning of Khayelitsha Cookie Company (KCC). She marketed the cookies in hotels and to the tourists who visited South Africa. The cookies soon gained popularity, and she planned to replicate this model in other developing and underdeveloped countries. KCC was expected to break even by the beginning of the year 2007, and the cookies were being marketed in the US and European countries. The case is structured to enable students to: (1) understand the concept of social entrepreneurship; (2) analyse how small business ventures can make a significant difference in the lives of the poor; (3) critically evaluate the KCC business model and its potential for scalability; (4) study how commercially profitable ventures can be started in underdeveloped countries; and (5) critically examine the sustainability and replicability potential of KCC's business model. The case is aimed at MBA / PGDBA students and is intended to be part of the entrepreneurship curriculum. The teaching note includes the abstract, teaching objectives and target audience, teaching approach, assignment questions, feedback of case discussion, references and suggested readings. It does not include an analysis of the case

 

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Keywords: Social Entrepreneurship, Failure, South Africa

Social entrepreneurs are often viewed as catalyst for the development of a more equal society in terms of employment, innovation and sustainable growth. Within the American approach to social entrepreneurship the role of the individual with entrepreneurial motivation, the so-called change-maker, is viewed as important to promote and achieve this transformation in society. The core of change makers’ activity is to address societal problems and needs through innovative processes, as he aims at creating social value.
During the process of establishment and consolidation of a social business, the social entrepreneur faces a set of different opportunities but also barriers that influence their success or failure. In social entrepreneurship failure can be seen as inability to build a sustainable venture and, consequently, failure in achieving predefined social objectives. For example, the mobilization of different resources, such as financial and human resources can be a potential block for the engagement of social entrepreneurs in bringing about social change. Besides resource dependency, some authors explain the lack of success of social ventures, using insights from different domains such as institutional, human and social capital theories.
The South African environment has specific characteristics namely a poor governance related with post-independence dynamics, high rates of unemployment and poverty, and deep-rooted racial segregation resulting in significant inequality. South Africa is also characterized by the social trap where individuals, organizations are incapable to collaborate due to the lack of trust and social capital, being consequently an inhibitor factor for the sustainable growth.
Failure is often simply understood as the opposite of success rather than an important part of the learning process. Normally scholars’ discussions are associated with best practices and their transposition to different projects, giving a special attention to whom is making success. Nevertheless, learning and bringing more value to the field through an analysis of unsuccessful ventures is also essential to understand the barriers that lead to the ultimate failure of the social venture, being those related to external constraints or internal factors. Failures have thus not to be stigmatized, but thoroughly analysed and discussed as sources of experiential value.
Our case study will constitute a gateway to a deeper analysis of the issues leading to failure and their restitution to the field under the form of acknowledgements. The main aim of the paper is, in fact, investigating and analyzing the roots of failure of a social venture, in the particular context of South Africa. We will examine the case from two perspectives. In first instance we will focus on the individual dimension of the social entrepreneur, shifting attention towards the main stakeholders (key-actors of the network) involved in the creation and development of the social initiative in a second time. To collect the data will be used semi-structured interviews, both for the social entrepreneurs as for the key-actors. Our main expected contribution is engaging academics and social entrepreneurs in a debate around failure that would challenge the predominant negative view of the concept and rehabilitate it as fruitful learning opportunity.

Authors

  1. Sandra Ramos (Université Catholique de Lille)

Topic Area

Critical perspectives in social enterprises

Session

E7 » Sustainability of social enterprise (17:30 - Thursday, 2nd July)

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