Social enterprises have long existed in human history and were first defined by Freer Spreckley in the United Kingdom in 1978 (Social enterprise, 2018), yet after 40 years there is still no universal definition of social enterprises. The commonly adopted clarification is the “double bottom line” of achieving social objectives as well as generating economic profit that can be reinvested in the business (Government of the Hong Kong Special Administrative Region, 2016). As the term indicates, social enterprises are to fulfill all kinds of unmet social needs and present in different forms, including but not limited to retailing, catering, and serving. By actively involving in social issues and accomplishing specific pre-determined social objectives, social enterprises are leaving an enormous impact on the planet, profit, and people for the entire community.In terms of environmental impact, they motivate the mindset of reduce, reuse and recycle among the society.
There are social enterprises that operate as thrift stores and encourage residents to donate new or second-hand goods. Also, some of them will repair or re-assembly those second-hand items and sell at a lower price or donate back to the people in need (The Salvation Army, 2016). Instead of consuming additional energy and landfill to dispose of useable stuff, giving them to the needy not only maximize the utility but also strengthen the recycle mindset among the public, which will create a virtuous sustainable circle.In addition to sustainability, social enterprises play a gradually important role in the economy, especially in poverty alleviation and job creation. In the United Kingdom Liverpool City Region, 1400 social enterprises directly hired 45000 people and created income merely below £3 billion while one of its local major industries, tourism, had 50000 employees and a revenue of £4 billion in 2016 (McCabe, 2017), indicating the vast economic contribution brought by social organizations. Similarly, in Hong Kong, around 60% of 574 social enterprises are reported profitable (Contributor, 2016).
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These self-financed and even profitable social enterprises prove that it’s possible to do well by doing good and incentivize for-profit business to participate in CSR (corporate social responsibility) projects.Both the above two dimensions have people’s engagement and social enterprises are leaving a long-lasting impact on everyone involved. Disadvantaged people, such as ethnic minorities, refugees, homeless people etc., can benefit from goods and care provided by social enterprises, which enable them to get through the short-term hardship. Customers, who use social enterprises’ services or donate goods to them, can obtain spiritual fulfillment when helping others and are likely to continue. Apart from this, to further address the needs for the underprivileged, social enterprises improve their long-term well-being by directly employing them, providing on-job training and equipping them with sufficient knowledge to earn their own living rather than relying on welfare (Center for Entrepreneurship, The Chinese University of Hong Kong, 2014).
This can re-establish the confidence of the marginalization in the workforce and help them establish social networks and earn economic income. By reducing their dependence on the society, a lot of social problems can be prevented. Moreover, having the disadvantaged to serve each other can build-up the social enterprises’ names and attracting more people to engage in related voluntary works, which is a double-edged sword.From the above analysis, it can be told that social enterprises are doing quite well in addressing the unmet social needs. However, many of them are thriving in meeting the other bottom line which is self-sustain, especially for social enterprises in Hong Kong.
After the HKSAR government change its rental policy from tendering system to quotations, it’s been a difficult period for social enterprises to renew their rental contracts because the new tendering system solely considers bidding price rather overall factors including the business background, whether it’s a social enterprise or not. Thus, it’s tough for social enterprise to offer the same high price as a for-profit business and eventually results in a close, such as medicines retailer Cheers Gallery set up by MentalCare Connect closed two stores and Fantastic Ladies Café shut down a restaurant in Tsuen Wan (Ip, Lai, & Yu, 2017). Let’s take Fantastic Ladies Café, a social enterprise aiming to help unemployed women and teenagers who suffer from low qualifications, low skills, and economic restructuring, as an example to discuss how social enterprises in Hong Kong can overcome the challenge of surviving in the tight corner formed by the high-cost pressure and fulfilling their social missions.
First, introduce marketing and promotion strategies to build up the brand image. Anaka Ma Lai-wah, the general secretary of the Free Methodist Church of Hong Kong Social Service Division, once mentioned she would run Fantastic Ladies Café as a professional business (Ip, Lai, & Yu, 2017), yet currently, there are not much promotion events nor advertisements available. Given the price is fixed by cost while the café is doing quite good in this aspect, the most feasible way to increase revenue is through marketing to raise the quantity.
It can corporate with other social enterprises to appeal more customers and encourage loyal customers to attract new consumers via the word of mouth. Yan Oi Tong Social Enterprise is a good example to illustrate the power of marketing. Via operations of four stores covering diverse industries, it achieves a synergetic promotion effect, triggers different consumer groups’ needs and eventually manages to sustain a balanced business (David, 2013). Designing and implementation of marketing schemes will require the Café to hire managers with both specialized business and social enterprise background or consult qualified marketing company on the optimal scheme (Chun-man, 2012).On the other hand, maintain and improve the high-quality services as well as limit cost via mature operations practices.
Fantastic Ladies Café has been operated for nine years, which proves its success in keeping clients under the current capacity. Innovation in the menu, the introduction of new dishes and improvements in quality are needed to maintain extra customer. Cost control is also an essential prospect since additional variable cost is associated with increased revenue, which requires managers to efficiently corroborate labor by means of operation techniques. This somehow relates to the aforementioned that skilled businessmen with social enterprise experience are needed. Nowadays, there are more and more well-educated young people devote to social entrepreneurship and the café can recruit some new blood to achieve the integration of social works and professional operational management knowledge.
In short, although it may be tough for social enterprises as they bear more missions and face more challenges than pure profit-driven business, the influence they create is numerous and permanent and everyone, both individual and government, should try their best in assisting them in surviving in the competitive business world.ReferencesCenter for Entrepreneurship, The Chinese University of Hong Kong. (2014). Research Study on the Social Enterprise Sector in Hong Kong. Hong Kong. Retrieved from http://www.social-enterprises.gov.
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(2012). What makes social enterprise effective in Hong Kong. Hong Kong: The University of Hong Kong, Pokfulam, Hong Kong. Retrieved from http://hub.hku.
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Retrieved from Wikipedia, the free encyclopedia: https://en.wikipedia.org/wiki/Social_enterprise#HistoryThe Salvation Army. (2016). Recycling Programme. Retrieved from The Salvation Army: http://www.salvationarmy.org.hk/en/services/news_and_schemes