This discussion will cover community-based business, overview of sustained community- based business, social enterprise, weaknesses of community-based business and success and failures of social enterprises.
A sustainable business can be referred to as a business that is operating within a friendly environment or take part in green activities in ensuring that every products, processes as well as manufacturing activities address the current environmental concerns adequately in as much as the profit margin is maintained. The description can be narrowed to; business that meets the needs of the current world while having no compromise on the future generation's ability so that they meet their own needs; or a process of assessing ways of designing products that are going to take advantage of the recent situations of the environment as well as the degree at which products of the company perform with renewable resources.
Some reports emphasize sustainability to be a three-legged stool of -people, planet and profit. Sustainable business having supply chain incorporated attempts to balance these three in application of triple-bottom-line concept and uses sustainable distribution and sustainable development in creating impact to the environment, growth of business as well as the society. When there is sustainable development in a business, value will be created for investors, the environment and the customers themselves.
Within a community, the aspect of business venture as well as job creation, financial obstacles do exist. This challenge applies to the traditional ventures; however, the features of community-based business make such challenges to be particularly prominent. For example, making profit is not always the goals of community-based business and this makes the operation of such business hard in the market. Moreover, the sector of activity in which these community-based businesses operate as well as their size are among the major factors that cause them financial problems, (Organization for Economic Co-operation and Development,1984).
The strategy of these community-based business tend to be a situation where a company decides to create a community where their customers are capable of expressing themselves. Community-based business always facilitates tremendous brand value to the company through word of mouth. There is much likelihood of business prospects spreading at a faster rate when the community is engaged within a business. Some of the ideas that given by the community are capable of helping revolutionize the business's services and products,(David Kam, 2008).
For these community-based businesses to be described as sustainable or green business, it should not have negative effect on the local or global community, environment, economy or society. It should strive in meeting the triple bottom line. They tend to have progressive environmental and human rights policies. Therefore its description is suppose to match the following: Has an enduring commitment to the principles of the environments in its business operation; Has to be greener as compared to traditional competition; Has to be supplying products or services which are environment friendly that replace the demand for non-green product plus the services; or it has to incorporate principle of sustainability in every business decision it makes, (Seth Henry, 2012).
On the other sector of social enterprise there are factors that are critical to success or failure of such community-based business and social enterprise. Through these we are able to have the concept of 'critical success factors' as driving force or failure of the business making the difference between success and failure. Even though we have evidences as to why a social enterprise or community-based business becomes successful, it is not always derived from strong empirical research. However, every organization do tend to change adapt and evolve over time, and this applies to these factors that do underpin success.The failures of a social enterprises or a community business can be seen when the activities of a business stop in an unplanned or involuntary way. Some of the analysts describe that a business exits its operation when it stops trading in it, whether on a voluntary basis (merger, planned closure or sales,) or otherwise. On the other hand it can be through involuntary cessation (i.e bankruptcy). Failures of business within social enterprises has been facilitated by a number of difficulties which are related to finance and funding issues, lack of resources or size. Some of the contributors to failures can be inadequate premises, lack of qualified staffs and cash flow difficulties. Cultural ImplicationWhere there is existence of socio-cultural resistance from either within, for example, employees resist changes from the above authorities or managers undermining strategy, activities of the community-based business may be hindered. Resistance can also come from outside like from the public or other stakeholders who are resisting the changes or any idea. For this situation to be prevented, social enterprises and community-based business leaders are supposed to adopt different and appropriate strategies. This can be done through involvement or consultation with majority of the stakeholders at most stages. This will just be possible and easier when the leaders of community-based business or social enterprise possess diversity of knowledge as well as skills for them to handle these complex management decisions that are supposed to be made. This knowledge can be acquired from training that the leaders undergo to learn ways of handling such situations. Through these skills leaders will be able to identify which is the correct way of bringing in new ideas without interfering with the culture of the stakeholders and the community at large. The correct protocol to introduce a new knowledge will be followed by the leader without struggle and forcing it to the community who are the advisors and participants in the business activities.
Lack of resources and Personnel
Communities where community-based businesses are established always tend to be limited in natural resources that are to be used by these businesses. This makes even the profit and services to be limited as capital depends on the availability of resources. On the other hand, the community-based business is supposed to be for the community, therefore skills and professional knowledge is to be provided by them but in many cases the community might not be able to provide such personnel and skills due to lack of education and capacity. This might be a hindrance to the maximum performance of the community-based business as noted by Lionais, D. (2002).
Governance and passing on Governance can be a potential challenge for emerging social enterprises or community-based business. This can arise due to conflict of interest between community members and the objective of the entity. When there is no effective governance then it might interfere with the performance of the community-based business or social enterprise. In a situation where those who were governing the community-based business are to leave the office for the incoming managers and leaders, the previous objectives and strategies might be not well followed and adopted because of new objective and strategies which may be brought in by the new managers. This interferes with already established goals and projects of the community-based businesses.
Strategy and training
Lack of or failure of strategy is always a major challenge. It ranges from failure to identify significant changes in the operational and financial climate to failure of strategies for securing funding that is to be used to run the entrepreneurial project. Poor strategy may be a challenge to raising funds. Other social enterprises go to the extent of collapsing because of the poor strategy. Failure to identify threats and changes to the operational environment can act as a major cause of social enterprise or community-based business.
In some cases finance might be a great challenge to the community-based business and social enterprises since the source of their capital depends on the unspecified stakeholders and government. There could be shortage of finance which can be used to hire more personnel. However, such can be prevented later after the community-based business or social enterprise has stabilized.
Another weakness could be mistrust of social entrepreneurship by many of the grant givers in the social sector. This can be through change of attitude since many of the traditional grant givers may change to be interested in the way the social enterprise will fund their future programs without further commitment to the enterprise,( Berkes, F., and I.J. Davidson-Hunt. 2007).
Community-based business depends on the government policy in its operations. Government through its policy determines the policies that should be used by these community-based businesses. When there is a change in the political arena, new policies are brought in which have to be adopted by community-based business hence interference with the business operation and can even leads to closure.
Some of the key factors that contributes to failure and success of a community-based and social enterprise are:
When there are effective sustainability leaders and mangers, they will have the ability of keeping their business or enterprises focused on attaining its higher mission, inspiring and mobilizing the community and the stakeholders in embracing changes as an exciting opportunity of learning. Social enterprises and community-based businesses which have ineffective governance system, or leadership will find it hard…