Wednesday 13 March 2013 – 11:00 am to 1:00 pm at the QUT Gardens Point Campus
Presented by Anna Krzeminska, Post-Doc Scholar and Lecturer at the Institute of Corporate Development at the Leuphana University Lüneburg, Germany,. and an adjunct Professor of Entrepreneurship at HULT International Business School in London, UK.
WHY SOCIAL BUSINESS FRANCHISING (SOMETIMES) WORKS – A STEWARDSHIP THEORY PERSPECTIVE
While recent research on social business franchising focused on its challenges (Kistruck, Webb, Sutter, & Ireland, 2011; Tracey & Jarvis, 2007), successful examples exist. For example, world-wide operating, German-based Dialogue Social Enterprises (DSE) employs blind people as guides, who escort seeing people through everyday situations in completely dark exhibitions (Volery & Hackl, 2010). Another example is the Danish organization Specialisterne that offers IT services such as software testing performed by people with Asperger Syndrome, a form of autism, to for-profit companies (Heinecke & Sonne, 2012).
Building on insights from these successful social business franchise cases and social business governance principles of non-dividend, market wages, and profit reinvestment, we identify non-financial incentives as important for successful goal alignment in franchisee selection and management. To understand goal alignment in social business franchises, we use stewardship theory because it allows explaining goal alignment based on psychological and situational variables that do not rely on economic logic (Davis, Schoorman, & Donaldson, 1997). Using stewardship theory we develop four propositions explaining goal alignment in selection and management in social business franchising. Moreover, we extend stewardship theory by identifying stewardship costs resulting from strong goal alignment and reinterpret existing failures of social business franchises. Our framework also contributes to understanding non-financial incentives in for-profit franchising and businesses.
COMPETITION AMONG SOCIAL BUSINESSES – THE TRADE-OFF BETWEEN INSTITUTIONALIZATION AND COMPETITIVE ADVANTAGE OF SOCIAL BUSINESSES – A CASE STUDY ANALYSIS
Social businesses combine the social value generation of charity and non-profit-organizations (NPOs) with financial self-sustainability of traditional profit-oriented businesses (Yunus, 2007; Yunus and Weber, 2010). However, the demands of achieving both social mission and profitability are often competing (Tracey and Jarvis, 2007) and thus social businesses face a dilemma: On the one hand, to ensure their own survival social businesses have to build a distinctive competitive advantage, which usually requires (social) businesses to keep potential competitors from imitating their resources or business models. On the other hand, to ensure the fulfilment of their social change efforts, social businesses strive for institutionalization of their solutions (Lumpkin, Moss, Gras, Kato, and Amezcua, 2011), actually encouraging imitation by competitors such as in the example of micro-credits.
The aim of this study is to explore and develop theory about the trade-off between legitimization and institutionalization on the one hand and profitability and competitive advantage on the other hand in the social business context using the theory perspectives of the resource-based view (RBV) and new institutional theory (NIT).
We use a qualitative case study approach to investigate this trade-off in-depth. Our empirical case study setting represents a rare opportunity to study this trade-off: We study a growing market of companies that provide services such as software testing, quality control and data conversion for for-profit companies mainly in the IT industry by employing people with autism. The social objective of those companies is to bring autistic people into meaningful jobs. While the first mover in the market was founded in 2004 and has since grown globally using a franchising model, followers with the same objectives and similar business models have emerged in target countries of the first mover. Thus, while the social solution seems to become legitimized and institutionalized, competition between the first mover and followers exists.
Anna Krzeminska is a Post-Doc Scholar and Lecturer at the Institute of Corporate Development at the Leuphana University Lüneburg, Germany and an adjunct Professor of Entrepreneurship at HULT International Business School in London, UK. She is currently a visiting scholar at the University of Technology, Sydney where she was a lecturer in 2008 and 2009. Anna earned her PhD in Business Administration and Economics with first class honours (summa cum laude) from the Free University of Berlin in 2008. Her major research focus is on social business & entrepreneurship. The questions that fascinate her in this area relate mainly to strategic management issues of social businesses and explore business models, growth strategies (such as franchising or licensing), competitive advantage but also volunteerism and investments in social businesses and enterprises. Anna’s research has been published or is forthcoming in books, book chapters and journals such as the Strategic Management Journal. For further information please visit http://leuphana.academia.edu/AnnaKrzeminska.