Development of third sector and social enterprise within UK and internationally

Social Enterprise

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Introduction

An organization that is owned by those who work in it or reside in a given locality is governed by registered social as well as commercial aims. In a social enterprise, labour hires assets in relation to; environmental, personal, or social benefit (Spreckley, 2008). This is the expression of social enterprise whereby businesses are owned by individuals within the community who manage them for the benefit of others. In UK, one of the leading social enterprise organizations is Divine Chocolate Ltd that was formed to encourage local people at the same time, giving its share of profit to the government in terms of revenue.

Development of third sector and social enterprise within UK and internationally

Third sector and social economy is increasingly developing as more organizations and institutions aim at improving their performance through setting good management strategies. Social enterprise development comes from within the social economy sector sandwiched between the state and the need, associated with third sector concepts. The organizational structure of social enterprise adopted depends on the already available frameworks, political economy of welfare provision, and culture. In their development, social enterprises are engaged in the production or sale of products, that is, goods, and services. On the other hand, social enterprise are created and managed by citizens therefore; get funds from government institutions and private donors. Therefore, development of social enterprise in UK is aimed at improving the lives of citizens and even if the government gives out funds, the organizations must repay the funds at a specified interest rate (Mike & Ridley-Duff, 2011).

Role of third sector and social enterprise within UK and Internationally

The role of social enterprise is gaining its importance in an ever-changing economy in UK and worldwide. Policy makers, community members, and organizations, both public and private, are harnessing social enterprise potential due to the impact it creates on them. In all businesses, government organizations, and nongovernmental sectors, a lot of interest has grown in an effort to measure social impact. In the current business environment, institutions are keenly observing the effects of third sector and social enterprise factors in carrying out their operations (Mike & Ridley-Duff, 2011). Analysts have the capability to discern financial metrics of factors that contribute to corporate value and offer reliable interpretation of the complex accounting data.

The impact of third sector and social enterprise

In some countries like UK, there are moves towards using some forms of social impact measurement framework that is compulsory for all third sector institutions that get funds from the government. With all these efforts, the exercise is termed as dangerous since social impact performance is manipulated by organization managers. In a social enterprise, performance is not an attribute that every individual involved with the organization operations know, but is what individuals in an institution agree upon (Zappala’ & Lyons, 2009). In the next ten years, the UK government wishes to create a great recognition available and presented in the third sector, together with a culture whereby the government understands the right of third sector organizations in their campaign for change. Although, the government on realizing the third sector puts an organization in a situation where they may fail to get more revenue from them, this policy is being slowed down (HM Treasury, 2007).

Divine Chocolate Social Enterprise

An organization that fits in a social enterprise model does its trading activities that have no direct impact on the society, makes profit, but takes all its funds to another organization that has direct social impact. This is the profit generator model. Divine Chocolate Social Enterprise is suited to the above model. According to Trading Visions (2009), Divine Chocolate Enterprise serves the local community in UK and at the same time produce high quality chocolate that sells well in the international markets. Currently, a debate is going on concerning the role the profit distribution social enterprises play while adding to social capital and social inclusion. This debate came was initiated because the UK winners of the “Social Enterprise of the Year Awards” for 2006 and 2007 were won by Divine Chocolate, which is a profit making company but owned by community (Greig, 2011).

Social enterprise is also involved with overcoming barriers to behavioral change therefore, a social marketing approach on Divine Chocolate Limited tries to get a reason why customers buy the kind of chocolate offered. With reference to social enterprise, Divine Chocolate Ltd has the following marketing objectives; Producing quality and affordable chocolate at a range of fair trade to the chocolate markets. Secondly, the company aims at raising awareness of trade fair issues in UK retailers and consumers of all age groups. Thirdly, the company wants to be highly recognized in UK Chocolate sector and bring changes to this market area. Finally, the company wishes to purchase all cocoa produced in the country following the trade criteria. Through its mission, Divine wants to effect change in the International Trading System bearing in mind that even the top UK politicians are supporting the company. Being a social enterprise company, it organizes Fair trade campaigns for farmers in UK in an effort of explaining the benefits of Divine’s business model (Foster, et al, 2009).

Divine Chocolate Ltd also offers gifts to its customers and media companies as found out during the G8 Summit in 2005. This is done through a package with information regarding the company background and the type of products sold. The information on the list of major supermarkets where the company stocks its products was important for customers, journalists, and campaigners. This ensures people attend fair trade campaigns within the region on finding the company’s name on the posters. Divine Chocolate Ltd is for the people and does not restrict itself to just one Media Company but also targets ethical titles (Ethical Consumers), political titles New Statesman), Internationalists (Parliamentary briefs), and religious media houses (Church Times). This approach towards many media houses ensures that the company develops a strong fair trade for its brands in the country (Robert, Fortner, & Fackler, 1997). In addition, Divine Chocolate Ltd is a social enterprise since it reaches consumers from all corners in the country, going deep into the high streets. One of the Company’s strategies is to market its products into the high streets since this is where both social action and ethically based consumption take place. Virtual high streets are also created to in order to protect the integrity of fair trade that include fair trade towns, and colleges of higher learning. Divine Chocolate Ltd also provides alternative trading systems (ATOs) that ensure people from all levels have access to their brands. ATOs also ensure that products reach local people in the society through promotions and giving free samples. Divine Chocolate Ltd is thus a social enterprise owing to the fact that it has arrange of consumers from high streets to mainstreams in UK. This social and conventional marketing plan adopted by Divine Chocolate Ltd gives a valuable lesson for other Social Enterprise organizations with an aim of changing buyers’ behavior. Figure 1 shows how Divine Chocolate Ltd relates with consumers, partners, and raw material produces.

Fair trade consumers (High street, supermarkets, retailers

& Customer partnerships

DIVINE CHOCOLATE LTD

UK Cocoa producers’internal partnerships

Manufacturers(Devine employees

SuppliersShareholders)

External partnerships

(Department for International Development, NGOs)

Figure 1: Divine Chocolate Ltd and its relationships

The relationship between the government and business has intensified due to dynamics in economic situations of different nations. The business environment has also been faced with many dynamics. As such, the government formulates and implements policies that aid in providing an equal business operation environment. As such, Divine Chocolate ensures that the operations within the organization are aimed at making the live of local citizens easier through offering affordable products. The government may limit business behavior through several means such restricting export and import volumes of the business. In addition, the government may introduce a total burn measure on business products and services. This affects the business negatively. To influence the regulation process, businesses form organizations that aid in protecting business operations influence from the government. The businesses may also adopt the regulations into their process operation chain in order to eliminate any possibility of negative influence from government (Bangs & David, 2011; Amin, 2009).

Cafedirect is another social enterprise in UK that compares with Divine Chocolate. Both organizations pioneered the fair-trade movement in UK during the year 1990. The two assisted in improving fair trade sales by more than 40% from the year 1999 to 2010. Cafedirect offers its customers with a variety of products and just as Divine Chocolate; it has no social impact but makes a lot of profits from its sales (Doherty & Lyon, 2011). The market structure adopted by an organization acts as an element of undertaking need analysis of the market share. In this, the market structure has to segment the potential market of the organization products for effective analysis of the needs, and formulation of measures that need adoption by the company. If the marketing relationship develops, the values derived increases largely. This increase has the association of the easiness in the achievement of the desired satisfaction among the parties (Gale Bradley & Wood Robert, 1994).

PESTEL Analysis

Political factors

The political environment in UK is of sound nature. The social enterprises consist of modern and traditional governance. The government allows and supports the emergence of local industry. In this, the government offers fund to steer development of new industries in the country. As such, Divine Chocolate social enterprise receives minimal influence from the political arena. However, the government undertakes measures to regulate and screen the type of products offered into the market. Therefore, the business stands a chance of surviving the political environment in United Kingdom and at the same time get financial support. On the other hand, the UK government promotes social enterprises within the country by offering them political support and giving them finances to venture into the global market. Divine Chocolate Ltd has full support from various politicians within the country and as such, its political environment is well catered for (Greig, 2011). Moreover, the company is internationally registered therefore with the help of UK government therefore; can export its brands all over the continent.

UK government came up with policies to streamline business organizations in the social enterprise sector by deciding on how to use their profits. The social enterprises denied this policy since it meant that the companies were being run by the government which would led to low returns as consumers turn away to private sectors. The government terms to centralize the enterprises’ operations also meant to slow down their production since many people from high streets and villages will have no access to these products. Cumulative voting, existence of takeover defenses, different kinds of staggered boards, diversity in shareowners rights, and varying forms of executive compensation, form the governance issues that affect company’s business operations (CFA Institute, 2008).

Economical factors

Divine Chocolate Ltd social enterprice experiences a sound economic status. This establishes a suitable environment of setting the social enterprise industry in which there will be insignificant economic influences on the business. However, the business has to align itself with the economic dynamics that occur within UK. UK is a developed country therefore, its economy is stable and Divine Chocolate Ltd has an opportunity of making a lot of profits from its sales. According to Trading Visions (2009), Divine Chocolate is the leading social enterprise in UK thus, attracts many consumers and foreign investors who assist in boosting its economy.

Home economy trends also determine the economic factors of an organization. UK has good economic trends on the economy sector as shown in figure 2 below. The rapid increase in retail prices of commodities between year 1900 and 1920 indicates a state of unstable economy. From the graph, the prices decreased in the year 2000 and the trend continues up to 2011. This indicates that UK is rarely affected by inflation thus; social enterprises have the potential of being economically stable for a long period of time (Hicks, & Allen, 1999). Although, the instability of UK currency might end up disturbing this trend in case it decreases on value.

Figure 2: Change in commodity prices in UK between 1900 to 2000

Socio cultural factors

In the context of societal acceptance, chocolate has a sense of relaxation in a human’s body when consumed. The chocolate flavor, in addition, addresses issues of change from the normal brands and other caffeine varieties to a new taste. People lifestyle determines the consumption of a commodity in a given market. In UK people are more to modern living than cultural settings therefore, social enterprises find great market in the region. On the hand, the country promotes social culture through recognition of people from different cultures. Divine Chocolate Ltd is also not left behind as it sponsors events organized by people from different cultural groups. Through this the company creates good relationship with people and at the same time, advertising the brands. Consumer buying system is streamlined in all social enterprises in UK. Divine Chocolate creates a good buying environment that every buyer and merchandiser loves to transact in. In so doing, the company attracts more consumers from different cultures and social backgrounds (Greig, 2011).

CFA Institute (2008) argues that, social issues that influence a company’s performance include people welfare at all geographical locations, the discrimination aspects in the society, diversity of employees, wage disputes, presence of organisms that are genetically modified, political involvement, and child and slave labor. It is clear that Issues of a poor safety record or and use of forced labor has the potential to tarnish a company’s reputation (Horrigan, 2009).

Technological:

The social enterprise has employed a rich blend of current technological advances in the globe. Divine Chocolate id well technologically advanced and the government has set aside funds to further improve its Information Communications and Technology system to the current trends. A research carried out in the company indicated that most of its operations are machine driven and human intervention is very minimal. This ensures precision in its products and at the same time saved time and cost of production (Doherty & Lyon, 2011). The technology further aids in distribution and production of goods and services within organizations. In this, the product manufacturing, production and distribution process will incorporate the modern technology, in order to ease the production process and ensure that consumers get the required quality attribute from the brands.

On the other hand, the company makes use of internet marketing so as to reach many consumers. On-line presence gives the business benefit of exploring an external market. Through this, the enterprise benefits in that, creation of new customers takes place and marketing of its goods and services occurs globally. In addition, the businesses benefit from the opportunity of knowledge sharing and global interaction. The 20th century has developed a remarkable change of technology advancement and adoption in most the key sectors of the economy. As such, all businesses need to embrace technology and exploit all the benefits inherent with technology change. Considering physical and on-line presence for the businesses, there is a need of all businesses to incorporate these two factors in order to synchronize business operations effectively (Schwalbe, 2009).

Recommendations

It is advisable for organizations to give back to the citizens so that people can appreciate their effort in improving their lifestyles. From the study, Divine Chocolate is well connected to the society and as such, performs different activities for the benefit of people in the communities. On the other hand, the government should play a great role in ensuring that the social enterprises get the necessary funds in order to continue with their production since they earn a lot of revenue for the government. In UK, there is limited number of social enterprises, therefore the government should encourage more private investors to start up these enterprises and make quality products like Divine Chocolate.

In the case of promotions and advertisements, Divine Ltd should create a website whereby customers can log in and make purchases online. This will ensure that their products are viewed worldwide and also, create a good name on other nations.

References

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