How fashion enterprises address the Big Four challenges of social enterprise

Fashion Ethics and Sustainability in Social Enterprise

The paper analyzes the research question: How does the fashion industry address the "Big 4" challenges presently confronting social enterprise? The question shall be answered by comparing a for-profit enterprise in the fashion industry with a social mission and a not-for-profit fashion enterprise which is socially adapted. We will discuss textile exchange (Not-for-profit) and Avani Clothing (For-profit). The Big Four Challenges of Social Enterprise that the Fashion Industry aims to address are (Assignment Instructions Document):

How effectively can for profit organizations serve two masters?

How can performance of non-financial goals be measured?

How do social enterprises "scale?"

How can a social enterprise do "good" without being condescending?

How Effectively Can For Profit Organizations Serve Two Masters

For-profit social ventures gauge their success on the impact they have. However, because of their structure, they must also consider creating economic value (Dees and Anderson, 2003). Thus, irrespective of their goals, these organizations have two needs to meet (Dees and Anderson, 2003). This kind of a goal is called the "double bottom line."

It is apparent that the for-profit structure has some inherent problems. Incentive problems and market forces can have even the best social entrepreneurs lead astray (Dees and Anderson). Therefore, social entrepreneurs ought to comprehend and understand the problems that come with combining social goals with the profit motive. They should bring to their awareness the complexities that arise due to such structures and the conflict of interests in balancing the two objectives (Dees and Anderson, 2003). It is possible for both to operate harmoniously, but it isn't easy. For instance, ventures like Grameen Bank and Shorebank that have been around for some time and praised widely, have faced several challenges. Shorebank hasn't matched the rates in the market for return on investments (Esty, 1995).

How can performance of non-financial goals be measured?

For Textile Exchange as we will discuss below in detail, performance measurement is founded on decision making and the impact of these decisions on organizational performance. External factors such as the economy also play a role of gauging Textile Exchange's performance (2012 Annual Report). Avani, however, has been under pressure to assess its operations. It is noteworthy that terms like data, evidence, return on investment, customer satisfaction and outcomes are central to how this firm measures its non-financial goals (Kloos and Papi, 2014).

How Can Social Enterprises Achieve Scale

Most foundations are built on a simplistic foundation that is often flawed. The focus is often on the symptom instead of the root problem. The system is not integrated and well thought out and therefore not sustainable (Shore, Hammond, and Celep, 2013). Consequently, the change realized is incremental instead of being big enough to register a transformative and lasting impact.

Several factors are involved in defining such a dynamic. Some of the factors are macro and external, like the inherent challenges in solving the problems of people that are voiceless politically as well as the bias towards the short-term in our culture. Some of the factors are internal like fear of failure, which makes people take the easy path instead of making bold moves that can have a lasting effect. Some other factors are the pressure of the public to keep expenses at a minimum and the internal considerations to cut costs in overheads (Shore, Hammond and Celep, 2013). What results is a situation like trying to fill a glass of water a drop at a time. The impact evaporates and the glass remains half empty or less. Solving problems requires strategies for filling the glass entirely. One such approach is collective impact. This can be applied in both small and large scale problems. If we really aspire to solve social problems then long-term strategies need to be set and bold goals set. This will lead us to an entirely new direction that will result in bigger and faster impact (Shore, Hammond and Celep, 2013)

How can a social enterprise do good without being condescending?

The fourth sector has been defined as those that aim at delivering particular social outcome which are measurable and scalable as well as profitable (Bulloch, 2014). Novel funding mechanisms and hybrid business models are likely to be the means through which the fourth sector makes use of in the future (Bulloch, 2014). The goals of the fourth sector are far much broadly spelled and so it needs a certain type of person: someone that does not find it uncomfortable moving between various languages, skill sets and other trade-offs of the not-for-profit and for-profit sectors (Bulloch, 2014).

Non-Profit Organization: Textile Exchange

Organic Exchange (OE) catalysts several of the economic, environmental and social issues linked with conventional cotton to be solved - issues of the environment and climate change, quality of water, human rights, food security and other social issues like poverty among communities growing cotton (Organic Exchange, 2008). Through the facilitation of the expansion of the organic fiber, the company together with other stakeholders has had significant measurable and visible impact (Organic Exchange, 2008).

In supporting such efforts, the company brings retailers and brands together with farmers, various business partners and other key stakeholders who are to be educated. This training and education is more about the environmental and social gains to be made through organic agriculture and so comes up with fresh business tools and models which support more usage of inputs that are organic (Organic Exchange, 2008). Further, consumer awareness is raised concerning the value attached to farming organically as well as the availability of organic cotton products.

Entrepreneurial Activities

Textile exchange has piloted certain quantitative KPI's (Key Performance Indicators) in some West African countries for the last 4 years. These quantitative KPIs are aimed at giving the global community growing sustainable cotton with tools that can assist them evaluate environmental and economic impacts and so allowing them the chance to compare various options available to them every year (Building: 2011 Annual Report). In 2011 several steps were taken concerning the use of seeds. These included raising of awareness, holding meetings at the government-level, meeting various stakeholders and making a compilation of names of seed germplasm available as well as tracking initiatives of various producer groups or individuals and giving them support where necessary in areas like South America and India.

Seminars were held in Brussels, Belgium and in Izmir, Turkey and were crafted around the models of seminars that had been previously been a success. The discussions were about textile sustainability and the way to product sustainability (Building: 2011 Annual Report). Previous meetings like those that took place in Barcelona were called Sustainable Textiles in a Day. Another meeting took place in Benin with the help of CODIAM and the goal was training farmers to use organic techniques and to hold discussions on such issues like non-GM seed availability and water efficiency (Building:2011 Annual Report). Textile exchange through its instructions in various locations and universities has helped promote activities geared towards organic cotton diversity research.

How Performance Is Measured

Performance measurement in this firm is based on top and middle management's decisions along with external factors beyond the control of the organization. These factors vary from changes in the local economy all the way to sheer luck. Top and middle managers are fully aware of just how much success has been achieved due to the decisions they have made. This helps in maximizing their impact on firm performance. For instance, so as to meet the needs of the organizational members, most of whom have recently struggled to better comprehend chemistry as it relates to compliance, textile choices and zero discharge, plans have been made to induct a specialist in textile sustainability with a concentration on Chemistry and Processing. The new position became functional in February of 2013 (2012 Annual Report). Textile exchange turned this fresh in-house knowledge into useful tools. Further, the company continued supporting and marketing proprietary consulting geared at chemistry and processing (2012 Annual Report). This top management decision assisted in enhancing firm performance as knowledge acquired from this new specialist was utilized in their services spanning across Africa.

Adherence to Definition of Social Enterprise:

I believe that social enterprise is capable of transforming the world. I am an artist. Being an agent of change in social entrepreneurship, I have the belief that I am capable of producing significant positive results for any person creating garments in the fashion industry. Given the motivation to make profits, the business sector innovates constantly. If such innovations are translated properly, they can be of great use to nonprofits. This is my belief on social enterprise (For Aristotle Document). Why? I am of the opinion that 'the Wisdom of the Ages' (i.e.: whatever 'it' maybe, because of 'it', its how everyone has been doing 'it') is but a thought process that individuals resistant to change use. I believe that acting and thinking "collectively" is not productive and is not conducive for personal growth and individual achievement. I also hold the view that non-profits aren't optimally functioning since they do not comprehend the correct way to scale. For instance, if the budget of the non-profit is $100.00 and just part of it is invested (since that is the way it has always been done), the right return needed to grow the organization will not be achieved, irrespective of the nature of the organization. I believe also that 'good is never good enough', since such a mindset is good for better business principles and ethics. Finally, I am of the opinion that social enterprises ought to carry out experiments to see what is being proposed and see that they work and also the way the various facets of the experiments might gain from some improvements and so optimize services and products and also see if the consumer will accept the proposal. I am of the school of thought that investing funds, time as well as energy into broken systems and ventures that do not work is one of the definitions of being crazy (For Aristotle Document).

For-Profit and Social Enterprise

Having looked at a not-for-profit sector having social impact, we will now look at for-profit business with a social mission.

What social responsibilities does a social enterprise have? Discussions regarding this topic are always loose analytically and lack rigor. What exactly is meant by saying that "businesses" have responsibilities (Friedman, 1970). Responsibilities can only be owned by people. Corporations are artificial objects and so possess artificial responsibilities.

Businesses, however, can't be said to have certain responsibilities. To understand the concept of business social responsibility is asking exactly what it means to whom. Generally, the people responsible are the businessmen. These are individuals involved in the running of the business or the proprietors. Discussions regarding social responsibility always address corporations and so I will leave out the proprietors and talk of the executives (Friedman, 1970). This aspect of the doctrine of social responsibility is brought to the fore whenever corporations use the doctrine to ask unions to forgo some of their interests for the good of others in the community. Enforcing wage restraints often results in wildcat strikes, revolts in the rank-and-file and competition for the jobs.

An interesting situation thus arises where leaders of unions have opposed market interference by the government more than business leaders have done (Friedman, 1970). How hard it is to exercise "social responsibility" thus illustrates private competitive enterprise's virtue. The corporations are forced to be answerable for the actions they take and so it is less likely they will take advantage of people for selfish gains. Good can be done by these people but the cost incurred must be footed by them (Friedman, 1970).

For-Profit With a Social Mission: Avani

Mission Background:

Avani is involved in the production of eco friendly textiles, colors and natural dyes. Avani is an artisan's collective buying raw materials from various local growers to make natural contemporary colors and textiles for the global market (GSBI Alumni: Avani). The decentralized model of production avails work to the artisan at his/her doorstep thereby doing away with the need to migrate. The production process of Avani is sustainable and non-polluting thereby meeting the trends set by environmental laws and regulations. This contrasts starkly to the current pollution rates in the industry (GSBI: Alumni: Avani). The area impacted is India. The mission is developing livelihood programs that are based on the right technology, local resources, education services health services, traditional craft and renewable energy through the provision of training and community-based management systems (Mission and Vision).

Social Good Activities:

The past few years have seen several players in the fashion industry embrace social media. On any particular day you can learn about what fashion show is taking place, which interview with a designer is upcoming or what game changing strategies are being adopted in the field. By these players in the industry interacting with their fans on social media, the industry is making great strides that may have never been achieved through traditional marketing (Prabhakar, 2010).

Avani has not been left behind and is taking advantage of social media to advance its cause. The use of social media allows the company to know the pain points of the people it is working with and so address their problems effectively. Social media, especially Twitter, has the capability to make things go viral and give a level of exposure not attainable by any advertising budget. Vonhas Furstenberg, for instance, has cashed in on the phenomenon and greatly increased the online traffic and as a result their sales (Prabhakar, 2010). Also, Burberry's "Art of the Trench" campaign that involved photographer Scott Schuman achieved great success as fans marveled and commented on the photographs.

Schuman, having jumped into the industry by blogging about it at "The Sartorialist" enjoys a huge following on Twitter (Prabhakar, 2010). Even as services with location fused services like Gowalla and Foursquare; they are making great progress in social media. However, their counterparts in the fashion industry, particularly Avani, are just beginning to comprehend the potential of social media (Wright, 2010). Nonetheless, some brands and stores have embraced social media.

How Performance Is Measured: Social Impact

There are shifts in the evaluation of non-profits and this has brought with it some alterations in vocabulary. Terms such as "randomized controlled trials" as well as " social return on investment," for example, have gained popular usage (Kloos and Papi, 2014). A moment is taken to explore the people driving the conversation and the way the evaluation of the non-profits might advance expectations, values and ideas which may not be in line with the prevailing circumstances of the non-profit sector.

Just like other companies of this nature, Avani is under more pressure to evaluate and monitor their operations and most of the proposals are grounded on scientific findings and the logic of "data," "evidence" and "measurement" (Kloos and Papi, 2014). Also, the logic of "returns" and "investment" as well as other business principles have resulted in preference in certain forms of assessment. Scientific notions such as "statistically significant results" or business language like "outcomes" might seem insignificant but disusing social impact using such terms might result in unintended mental pictures (Kloos and Papi, 2014).

Non-profits ought to play a leading role in the setting of the evaluation agenda. To assist non-profit teams in retaking their place in directing the evaluation conversation, the following guidelines have been offered and Avani should borrow a leaf:

Talk about purpose - First, Avani should define what they consider to be success and possess clear reasoning on how they will attain it. They must know their projects and strategies. Each one should have a clear idea of how change will be created (Kloos and Papi, 2014)

Talk about people - The founders of social enterprises often need assessment reports that have quantitative insights: the number of clients that have been served, the number of individuals the organization has had an effect on indirectly, etc. (Kloos and Papi, 2014).

Such a focus, however, can hamper the impact of the company. It is better to focus on qualitative aspects. Conversations and continued interaction with the beneficiaries is also a measurement that can be considered (Kloos and Papi, 2014).

Talk about the big picture - Avani ought to articulate the way the efforts it is making helps in ensuring social change. In supporting systemic progress, social enterprise evaluation must include the extent to which organizations are making their contributions to collective transformations (Kloos and Papi, 2014).

Adherence to Definition of Social Enterprise:

For what reasons does Avani adhere to the definition?

Avani is committed to social change and is working tirelessly to ensure that it makes its mark through the fashion industry. It has taken measures to ensure that its production process is not only non-polluting but also sustainable. Sustainability is important if we are to see other companies jump on board.

This will encourage other companies in the same niche as Avani to follow their lead.

Avani's contribution to the communities providing its raw materials is also noteworthy. It ensures that the farmers are instructed appropriately and adequately. Its work in countries like India is notable. The company makes use of locally available resources in most of its operations and this has helped lift the livelihoods of the locals.