Henley Business School

University of Reading

Exploring Social Entrepreneurship in the Context

of the Social Challenges in South Africa

By

Anikendre Nursinghdass
Student number: 82105282

Report submitted in partial fulfilment of the requirements for the degree

of Master of Business Administration

2013
Executive summary
South Africa is a relative young democracy that continues to struggle
with many social challenges affecting the lives of countless people. In a

bid to make a change on the social front, a large number of Non-Profit

Organisations have sprung over the years. Unfortunately, their efforts

are being impacted by reduced funding since the recent global recession
but in order to break away from the dependency on grants and

donations, a new breed of organisations has recently emerged. They are

called “Social Enterprises” and aim at generating income by adopting

commercial practices.

A lot has been written around Social Entrepreneurship as an academic

field and many examples have been documented. Several prominent

foundations have even been set up to support the field and yet, little is
known in the South African context. This research aims at contributing

to the SE field by identifying the key drivers of sustainability among

some of the most successful and mature social enterprises operating in

the country.

Starting with a Review of Current Thinking (ROCT), a set of propositions

and a theoretical framework were developed in order to guide the

research phase. The unit of analysis was ‘organisations’ and the initial list

of social enterprises was taken from recent efforts from the International
Labour Organisation. After a careful selection process, interviews were

conducted with leaders of 3 sample organisations. Data was

triangulated from various sources and a cross-case analysis was

conducted in order to identify the common dimensions that contribute

to their sustainability, which is in line with ‘literal replication logic’.

Page 2 of 102
The key findings revolve around the fact that sustainability is not merely

a consequence of financial aspects. A wider range of sustainability

drivers was identified, which can be categorized under the Leader, the
Organisation and the Social Value within Social Entrepreneurship. From

an individual perspective, the leader plays a pivotal in terms of personal

characteristics and experience, skills and competencies as well as

leadership style. In terms of organisational aspects, the key dimensions

revolve around the business model, resources and capabilities, key

business practices and processes such as funding strategies, long-term

strategic planning, financial discipline, strong partnerships and

reputation management. It is also evident that when the social mission

is directly related to social challenges of national importance, it

contributes to the sustainability of the social enterprise.

Despite some gaps and limitations in this research project, the findings
can be leveraged by new social entrepreneurs or NPO’s who are aspiring

to rewire their organisation in order to operate as such. The findings

have been transformed into a table of sustainability drivers that such

organisations or individuals can plan for integration in their existing or

future business model, structure, processes and practices.

Page 3 of 102
Table of contents

1. Introduction 5

1.1 A macro-level context 5

1.2 History of SE 6

1.3 SE around the globe 6

1.4 SE in South Africa 8

1.5 Definition of the issue 9

1.6 Terms of Reference 11

2. Review of Current Thinking (ROCT) 13

2.1 Introduction 13

2.2 The individual in SE 17

2.3 The organization in SE and its context 18

2.4 Adopted definition 21

2.5 Sustainability as a key internal consideration 22

2.6 The social value in SE 27

2.7 Summary of output from literature review 29

3. Investigation section 32
3.1 Research objective 32

3.2 Investigation design 34

3.3 Findings and Analysis 45

3.4 Recommendations & Conclusion 71

5. Reflection 77

5.1 Evaluation of research findings 77

5.2 Experience of the research process 79

5.3 Achievement of personal development objectives 81

5.4 Key challenges & learning’s 82

6. References 86

Appendix 92

A. Interview design 92

B. Data coding of primary data from ILO case studies 96

C. Feedback received from some interviewees 97

D. Management Challenge diary 98

Page 4 of 102
1. Introduction
1.1 A macro-level context

The world has become inter-connected like never before with the advent
of the digital age. Most nations have become increasingly aware of the

social, environmental and economic challenges that plague the human

race and the planet, aggravated by globalization (Pirson, 2011).

Environmental impact, climate change, income and gender inequality,

access to good education, unemployment, poverty and malnutrition are

among major growing concerns that many believe need to be tackled

with urgency.

In this respect, several stakeholders are involved in nurturing social value:

Corporations with their Corporate Social Responsibility (CSR)

programmes, Non-Government Organisations (NGO’s) with their social

missions, governments with their social support & legislation, non-profit

& for-profit organisations, foundations, grant donors are all contributing

to the greater good of mankind. In the face of increasing criticism

towards capitalism (Porter & Kramer, 2011), Social Entrepreneurship (SE)

has emerged in many parts of the world as a meaningful platform of

social change (Davie, 2011).

In the context of South Africa, the social challenges remain grand, even

after 18 years since the end of the apartheid era. A recent task force set
up by the country’s President recently advocated greater efforts to be

deployed on poverty elimination and the expansion of a robust,

entrepreneurial and innovative economy (National Planning Commission,

2011). This researcher believes that SE can play a supporting role in

addressing the social challenges of this country.

Page 5 of 102
1.2 History of SE

SE as a research field may be relatively new (Hoogendoorn, Pennings &

Thurik, 2010), (Lumpkin, Moss & Short, 2009) but as a concept, it

originates from the long-established field of entrepreneurship and the

idea that certain entities can exist for the social benefit of communities
in need (Corner & Ho, 2010). According to Kim Alter (2010), some of the

roots of SE can be traced back to the cooperative movement, pioneered

by Robert Owen (1771-1858). Well-established examples are agricultural

marketing cooperatives, self-help groups and credit unions (including

micro-financing). The Fair Trade movement is another predecessor of SE

and the British Oxfam organisation is a long-time successful example

(Alter, 2010). Bacq & Janssen (2008) go as far as to suggest that the

concept of “social enterprise” first appeared in Italy in the late 1980s.

1.3 SE around the globe

Recently, SE has garnered a growing interest and support around the

world: the recent global economic crisis that began in 2008 has impacted
the availability of financial resources to non-profit social organisations

and pushed more people in need of social support. Van Putten II, P &
Green, R (2011) suggest that during the recession, several factors have

generated renewed interest in SE:

 the need for low-cost skilled labour

 cheaper supplies
 tax advantages
 social networks
 new internet-based tools

The International Labour Organisation (ILO) explains this phenomenon in

terms of 3 contributing factors:

Page 6 of 102
  Increased pressure on NGO’s to find new income streams due to
reduced grants and donations. This view is also supported by Boyd et
al (2008)
 Business practices can drive sustainability
 Some governments are increasingly outsourcing public services

Several prominent foundations are actively contributing to the

development of SE around the world. The Ashoka Foundation provides

direct help to social entrepreneurs across the world, promotes social

networking or ‘group entrepreneurship’ to increase the reach of social

impact, builds the necessary infrastructure in terms of social financing,

the bridge between business and academic sectors, and partnerships

(Ashoka Foundation, 2012). The Skoll Foundation supports the

education of social entrepreneurs, offers grants and investments to

support their ventures and provides a platform for recognition of their

work (Skoll Foundation, 2011). The Schwab Foundation aims at

advancing SE through recognition of leading social entrepreneurs, by

creating a network of active social entrepreneurs, solution development

and identifying future social entrepreneurs (Schwab Foundation, 2011).

Some countries have even established legal forms to support social

enterprises, such as the Community Interest Company (CIC) in the UK

and the Low-profit Limited Liability Company (L3C) in the USA.

A number of universities and business schools across the globe have

recognized the importance of SE and have introduced either stand-alone

SE programmes or extended their MBA offerings to cover SE. Many of

them provide scholarships and the ability to connect within a social

network. Some of the centres of education are actively expanding

academic research and offering freely available material to the general

public. There is therefore, no doubt that SE is a field that is rapidly

expanding throughout the world.

Page 7 of 102
1.4 SE in South Africa

The social context

Despite having enjoyed a decade of economic growth, the South Africa

of today is still paying the price of past policies that imposed social and

economic exclusions towards certain targeted communities. Historically,

the colonial and apartheid forces had deliberately maintained a cheap

and uneducated labour force for the benefit of a minority. To date, this
unfair legacy has left the country with one of the highest income

disparities in the world, a very low Human Development Index and with
large under-developed geographical areas. The country is still struggling

with towering social challenges and in a desperate effort, the

government has created a huge dependency on social grants among the

less fortunate.

Local support for SE

Compared to the rest of the world, local support for SE appears limited.

The Schwab Foundation reports little local activity besides recognizing a

few individuals as social entrepreneurs. The local chapter of UnLtd

seems to provide support in the Western Cape Province only at the time
of the research (UnLtd South Africa, 2012). The most influential, locally-

based organisations appear to be the ILO’s Pretoria office and the

University of Johannesburg’s Centre for Social Entrepreneurship and

Social Economy (CSESE). They recently partnered in the creation of the

African Social Entrepreneurs Network (ASEN), which provides a platform

for social networking and partnership-building. Yet again, the ASEN

website showed little activity in 2011 although there appears to be a

fresh impetus since February 2012 (African Social Entrepreneurs Network,

2012). The local ILO office has recently released valuable reports such as

‘The Social Entrepreneurship Development Targeting Unemployed Youth

Page 8 of 102
in South Africa’ (SETYSA) project and the ‘Guide to Legal Forms of Social

Entrepreneurship in South Africa’. A few local institutions are raising the

profile of SE through business plan competitions, such as The Business

Place Philippi (The Business Place, 2011) and GIBS business school, but

their impact appears to be small. The University of Johannesburg

remains at the forefront in SE and even hosted the 4th Social Enterprise

World Forum in 2011. Other educational institutions tend to focus on

the broader entrepreneurship field and have yet to cover SE. For

instance, the business school of the University of Cape Town intends to

open a dedicated centre to Social Innovation and Entrepreneurship in

the near future (Graduate School of Business: University of Cape Town,

2012). More efforts are needed to address the low propensity among

local students to embark in SE, as reported by a recent local research

paper (Urban, 2008). A few other entities are providing support in the

form of business development services and funding. Meanwhile,

support from government appears to be limited to policy formulation

while not enough is done in implementing these policies, according to

Dr. Steinman in an interview conducted by this researcher on 20th April

2012.

1.5 Definition of the issue

In South Africa, as in many parts of the world, Non-Profit Organisations

(NPO’s) pursuing a social mission are realizing that they cannot continue

to rely solely on grants and donations. As an example of the issues they

face, the South African National Lottery Board, a key provider of funding

to local NPO’s, has come under fierce criticism for not being able to fulfil
its mandate in a timely and objective manner (Funding Practice Alliance,

2011).

Page 9 of 102
The idea that these organisations should consider evolving over time,

gradually shifting away from total grant dependence towards financial

viability is gaining momentum across the globe and even locally under
SE: Steinman recently explained:

“While start-up social enterprises are grant-dependent, mature

social enterprises trade in goods or services to raise income for

the social purpose and in many cases show a profit.”

(Sowetan Live, 2011)

Social enterprises with predominantly an income-generating stream

bring several benefits, which is why many governments such as the UK

and the USA are building an enabling environment for SE. For instance:

 A more sustainable business model, not entirely dependable on

external funding
 Greater accountability with entrenched business practices
 Greater attractiveness as a responsible career option

However, the concept of SE may not be universally appropriate: critics

argue that there are instances when an organisation may want to remain

focused on their core social activity and avoid being distracted by

income generation, such as in the provision of care (GreaterGood, 2012).

SE is a nascent field in South Africa and research is limited to this date.

In practice, social enterprises exist in many business and legal forms,

which may evolve depending on their lifecycle phase. This project

investigates factors that promote sustainability in mature social

enterprises to determine if and how SE represents a sustainable means

of addressing important social challenges in South Africa. This paper will

not focus on the debate around the definition of SE; this researcher will

Page 10 of 102
accept the fact that SE is a wide topic and materializes itself in many

forms and with varying degrees of success. It will also avoid the raging

debate about how capitalism must evolve in the future.

1.6 Terms of Reference

Personal objectives

This researcher considers himself as main beneficiary of this

Management Challenge (MC): he and his family intend to immigrate to

Australia and he wants to consider starting a business there. A social

business would help him integrate a new community more easily and

fulfil the dream of becoming an entrepreneur. Therefore, this project is

of fundamental importance to this author as an alternative career path to

his current corporate employment. It will enable him to progress on two

Personal Development (PD) objectives captured in Stage 2 of the Henley

MBA programme:

 Pursue an entrepreneurial route in parallel to a corporate career until

the right time comes to switch
 Enlarge the network of contacts beyond the Coca-Cola system

In the context of this project, these translate into the following goals:

 To gain knowledge and understanding of SE by conducting a review

of global and local literature and extract key findings pertinent to this
project
 To initiate contact with key local players in the field of SE both from
academic and practitioner background

Page 11 of 102
Henley Business School objectives

This MC project will meet all the following tasks defined in the
Management Challenge Guide (Henley Business School, 2008):

 To conduct a review of current thinking from both academic and

practitioner literature around the topic of SE
 To identify an issue within a chosen industry or field that requires
investigation
 To propose, plan and implement a research design that is justified for
the issue under investigation
 To collect and analyse appropriate data and report on the findings of
the investigation
 To draw logical, appropriate and actionable recommendations as a
result of your investigation

Overview of structure & key contents of each section

The Introduction has provided a broad context and history of SE in SA

and around the world. It has also clearly identified the issue chosen for

further investigation. In the following Review of Current Thinking (ROCT),

a critical assessment of both academic and practitioner literature will

assist in examining the chosen issue from various relevant angles and
thus, better inform the research approach. This is followed by the

Investigation section, which will clearly articulate the research objectives

and describe the research strategy. Thereafter, the findings and analysis

will be presented followed by recommendations made by this researcher.

This project will end with a section on Reflection, in which this researcher

will share his personal evaluation of the research findings, the research
process, achievement of his personal objectives and the key challenges

faced in this project.

Page 12 of 102
2. Review of Current Thinking (ROCT)
2.1 Introduction

Status of SE as a research field

From an academic point of view, SE has its roots in the broader subject

of entrepreneurship and shares similar findings. Having evolved within a

tumultuous political, social and economic landscape both at global and

regional levels (Urban, 2008), different schools of thought have emerged,

particularly between American and European geographies. The points of

view have been greatly influenced by diverging government stances,

resulting in a wide range of definitions of SE. Some see it as a good

thing, based on the fact that what is critical is the social value delivered,
while others lament the lack of clear boundaries to guide further

research on SE.

SE research is still in its infancy but is enjoying a growing academic

interest. Carl et al (2011) and Hoogendoorn, Pennings & Thurik (2010)

conducted extensive textual analysis around the topic and confirmed a

lack of empirical research. Swanson and Di Zhang (2010) reiterate that

the body of research is relatively thin when compared with that of

commercial entrepreneurship. Dacin, Dacin & Tracey (2011) and Pirson

(2011) also emphasize the fact that academic literature around SE

remains unfocused due to an inclination towards conceptual matters

such as definitional and domain issues instead of empirical research.

Corner & Ho (2010) deplore the exaggerated focus on the heroic,

individual social entrepreneur to the detriment of research on what they

term ‘collective action’. In their review of literature, Lumpkin, Moss &

Short (2009 report that ‘conceptual articles outnumber empirical studies,

and empirical efforts often lack formal hypotheses and rigorous methods’.

Page 13 of 102
They identified only 152 scholarly articles relevant to SE since 1991 and

further state:

“(…) disparity of terminology is troubling because lack of a

unified definition makes establishing the legitimacy of a field

or construct difficult’ and ‘hinders empirical research seeking

to examine the antecedents and consequences of social

entrepreneurship.”

(Lumpkin, Moss & Short, 2009:161-162)

Scope of SE research in South Africa

This researcher has come across very limited academic resources while

searching on the internet and on the databases provided by Henley

Business School (‘Henley’). One dissertation from a past MBA student at

Henley attempted to identify organisations operating as social

businesses in South Africa (Fraser, 2008). The scope of that paper is

however, focused on poverty alleviation and favours the definition of a

social business as put forward by Yunus (2007), founder of the Grameen

Bank. Many NPO’s responded in the research survey that their main
challenge was the dependency on unreliable sources of income such as

grants and donations.

More recent efforts to promote SE have been led by some institutions

joining forces: the Pretoria office of the International Labour

Organization (ILO), GreaterGroup South Africa, the University of

Johannesburg, the ASEN network and a few governmental departments.

To date, the ILO and the ASEN network provide the most comprehensive
empirical reports and case studies within the South African context and

these will be leveraged extensively in this project.

Page 14 of 102
However, SE is still undermined locally by a lack of a formal definition.

Imminent changes to company legislation will still not recognize a social

enterprise as a legal form on its own.

Common aspects of current SE research

Dacin, Dacin & Matear (2010) call out the following key dimensions

within the broad range of definitions for SE, which appear common
among several scholars such as Bacq & Janssen (2008), Pirson (2011) and

Gartner’s framework for new venture creation (Hoogendoorn, Pennings

& Thurik, 2010):

 An individual aspect, looking at the characteristics of the social

entrepreneur
 An organisational aspect, focusing on the sphere of operation of the
enterprise (including structure and ownership) as well as examining
the business processes and resources utilized
 A social aspect, exploring the social aim, also referred to as the social
vision, mission or purpose

Similarly, Carl et al (2011) found that existing research has been

fragmented along 3 levels of analysis:

 At a micro-level, focusing on the entrepreneur as an individual and

including various definitions such as provided by Dees (1998), Martin
& Osberg (2007) and discussed by Swanson & Di Zhang (2010).
 At a meso-level, involving entrepreneurial organisational processes
including business models, structure and purpose
 At a macro-level, with a focus on the socio-economic impact of
entrepreneurship

Page 15 of 102
Alter (2010) argues that the lack of integration in the SE field is due to

diverging schools of thought and describes them as being:

 The ‘leadership approach’, with an over-emphasis on the social

entrepreneurs
 The ‘funding approach’, which advocates that non-profits engage in
commercial ventures in order to diversify their sources of income,
often materializing as separate projects.
 The ‘program approach’ when business activities and social
programmes are fused, typically making them compatible with each
other. The downside may be an over-reliance on social sector
resources and insufficient business acumen.

Composites of literature review

Inspired by the Alter’s breakdown, the ensuing literature review is

structured along the following lines:

Table 1: Proposed segmented analytical framework

Analytical Dimension Key elements

level

Micro-level The individual in SE Personal qualities

1) Typology & business model

spectrum
The organisation in 2) Internal considerations and
Meso-level
SE & its context challenges
3) External considerations and
challenges
Degree of fit with the main social
The social value in
Macro-level challenges faced by South African
SE
communities

Page 16 of 102
2.2 The individual in SE

Most empirical articles dealing with the individual perspective within SE

can be grouped along five main themes, according to Hoogendoorn,

Pennings & Thurik (2010):

 Skills
 Background/experience
 Discourse
 Demographics
 Motives

Koe Hwee Nga & Shamuganathan (2010) ascertain that a social

entrepreneur exhibits certain personality traits that drive success and

sustainability of the organisation:

 they have a deep commitment towards a social vision

 they appreciate the need for sustainable practices
 they embrace innovation and
 they are able to build social networks and generate viable financial
returns

Martin & Osberg (2007) believe that the entrepreneur is attracted to

what they call a ‘sub-optimal equilibrium’, which is a condition that many

others see as a nuisance to be tolerated, while the entrepreneur views it

as an opportunity to provide a new solution. They explain that the

entrepreneur then shifts to an action-oriented mode and demonstrates

courage while going through the process of innovation and finally,

exhibits resilience in order to see their ideas to fruition.

The challenge with this ‘leadership approach”, as Alter (2010) calls it, is
that it only tells a fragment of the broader story as to why a social

enterprise may be more apt at achieving its social mission.

Page 17 of 102
Social entrepreneurs in South Africa

As it happens in other parts of the world, social entrepreneurs are locally

recognized through awards, fellowship/membership to foundations and

business plan competitions. The Schwab foundation lists 15 social

entrepreneurs locally (Schwab Foundation, 2012) while Steinman

reported around 40 social entrepreneurs on the ASEN network

(Steinman, 2010). However, there has yet to be a definitive and formal

database that captures all local social entrepreneurs. The ASEN

administrators advised the author that membership to their network was

purposefully kept open so as to accept all those who expressed an

interest in social entrepreneurship (Rose, 2012).

2.3 The organization in SE and its context

The biggest plague of SE as a research field is the wide range of

definitions. What follows is an exploration of some definitions with a

view of adopting one that is most relevant to the South African context

and the objectives of this project.

SE typology

The International Labour Organisation (ILO) describes SE in its learner’s

guide as simply being ‘an organisation that is run like a business but that
has a social purpose’ (International Labour Organisation, 2011). The

Schwab Foundation explains that ‘such businesses apply innovative,

transformational approaches to address government or market failures to

provide goods, services and opportunities to excluded or marginalized

sections of society’. It characterizes for-profit social businesses as being

able to recover their costs and make a profit that is used to promote
their social mission, instead of personal wealth accumulation (Linklaters,

2006). Similarly, Darby & Jenkins (2006) suggest that by adopting

Page 18 of 102
commercial business practices, these business models do not depend on

external sources of funding in order to be sustainable. Social Enterprise

UK also offers a simple definition along the same line, but brings a
worthwhile notion that while income generation is necessary for the

long-term, external support from grants or donations is permissible at

start-up (Social Enterprise UK, 2011).

The hybrid spectrum model

As long ago as 1998, Dees proposed that social ventures can be

structured between purely charitable and purely commercial purposes,

depending on the entrepreneurial mission (Pirson, 2011). This idea has

been captured diagrammatically by Seelos & Mair (2004) and Alter (2010)

as follows:

Figure 1: Hybrid SE models

(Seelos & Mair, 2004:9)

Page 19 of 102
 Figure 2: Alter’s Hybrid Spectrum model

(Alter, 2010)

Alter explains that a social enterprise is compelled by two strong forces:

the pursuit of social value creation as well as the need to drive

sustainability through economic value creation. She argues that an

organisation rarely evolves along the entire spectrum. In trying to

encompass the multitude of variations in definition, Alter provides a

succinct description:

“A social enterprise is any business venture created for a

social purpose - mitigating/reducing a social problem or a
market failure - and to generate social value while
operating with the financial discipline, innovation and

determination of a private sector business.”

(Alter, 2010)

Page 20 of 102
2.4 Adopted definition

In searching for a working definition, what is important is to find one

that is most relevant to the local context and the MC. In this respect, the
recent joint effort led by the ILO provides the most workable definition

after having engaged a wide panel of local stakeholders (Steinman,

2010):

‘A social enterprise’s primary objective is to ameliorate social

problems through a financially sustainable business model, where

surpluses (if any) are principally reinvested for that purpose’

The table below indicates how this proposed definition compares with
other schools of thought around the world:

Table 2: Distinctions between various schools of thought on SE

American tradition European tradition

Social Social South Africa
Distinctions EMES
Innovation Enterprise UK approach proposal
approach
School School
Unit of
Individual Enterprise Enterprise Enterprise Enterprise
observation
Link
Direct / Direct / Direct /
mission- Direct Direct
Indirect Indirect Indirect
services
Legal No Some No
Non-profit No constraints
structure constraints constraints constraints
Not Not Not Not
Innovation Pre-requisite
emphasized emphasized emphasized emphasized
Some
Profit No Some Some constraint,
Constrained
distribution constraint constraints constraints but
ambiguous
Earned Not Not
Pre-requisite Important Not explicit
income emphasized emphasized
Involvement Involvement of
Not Not of multiple multiple Not
Governance
emphasized emphasized stakeholders stakeholders emphasized
emphasized recommended
Adapted from Hoogendoorn, Pennings & Thurik (2010)

Page 21 of 102
Although the latter definition is henceforth adopted for the purpose of

this research, it is not without challenges:

 Some definitional aspects have remained too ambiguous or broad for

the benefit of research: profit distribution1, earned income strategies
and social purpose were discussed but not clearly defined in the 2010
report. This may be due to attempts to reach consensus among
multiple stakeholders2 and galvanize attention from diverse groups of
interest3
 Despite providing clear criteria for the meanings of social purpose
and financial sustainability, the author of the ILO case studies
conceded that not all the featured entities met the definitional
elements in entirety (International Labour Organization, 2011).

Nevertheless, the ILO work is the most comprehensive to date in the

local context and hence, will be the basis of the MC research.

2.5 Sustainability as a key internal consideration

Sustainability is a paramount concern for a social enterprise. Alter (2010)

suggests that it requires ‘organisational and leadership capacity,

business-oriented culture and financial viability’, while the pursuit of
social value must be the overarching raison d’être, with clearly articulated
performance and business metrics. Of course, the business model of a

social enterprise itself is meant to support sustainability, but the topic

needs to be explored further, as it is central to the chosen research issue.

First of all, there is a nuance between financial and organisational

sustainability. While the ILO work focused more on the former, this

1
referred to as ‘surplus’ in the definition (Steinman, 2010, p. 63)
2
nearly 2/3 of the sample coming from the domains of NGO, government and Business
Development Services (BDS)
3
This researcher believes that the scope of discussion was expanded to the wider topic
of the social sector or ‘social economy’.
Page 22 of 102
researcher suggests that there is a need to broaden the topic to

encompass other drivers of sustainability.

Proposition 1: Sustainability needs to be looked at from a

broader organizational perspective and not only from a
financial perspective

Financial sustainability

The ILO describes financial sustainability as mainly being concerned with

‘financial or business practices that would ensure the continued viability of

a product, practice or service well into the future’ (Steinman, 2010). The
description can be further clarified as follows:

 The social enterprise is expected to be self-sufficient with income

generation as part of its activities in order to cover its operational
costs. A surplus may or may not be present.
 For ‘emerging social enterprises’, they may be dependent on seed
funding to start up their operations but they should have a formal
plan to start generating income on their own so as not to be solely
dependent on the initial source of funding. Furthermore, it may take
a social enterprise longer than its commercial counterpart to achieve
such financial sustainability.

Two important points around financial sustainability are that it is about

supporting the future of the organisation and this can be accomplished

by a combination of earned income, grants and donations. As an

illustration, the National Executive Services Corps (NESC) provides the

following classification of earned income strategies:

Page 23 of 102
Figure 3: Matrix of earned income level and alignment with social mission

(National Executive Services Corps, 2010)

Organisational sustainability

In terms of broader organisational sustainability, a list of key factors has

been drawn from two sources: the “Built to Last” toolkit from UnLtd

organisation (UnLtd, 2012) and a recent study by the Scottish

government (Coburn & Rijsdijk, 2010):

 A clear and shared vision supported by strong and inspiring

leadership
 Knowledge, skills and abilities of the leader
 Business model selection, which has a direct bearing on legal and
financial structures of the organization
 Effective business planning
 Close alignment with stakeholders and market needs
 Funding strategies; a sustainable scale and income base
 Money management discipline, including an understanding of
breakeven point and full cost recovery
 Partnerships, which can take different forms
 The capabilities and energy of the organisational workforce; a culture
of learning, openness, and innovation; an entrepreneurial spirit and a strong
business acumen
 Having proper monitoring and evaluation methods in place; systems
that ensure operational excellence
 Effective governance
 Sound marketing strategy; a product (or service) of value to others

Page 24 of 102
These reports do not weigh the relative importance of the sustainability

factors and this researcher suggests that this may be best evaluated in

the context of each social enterprise.

Proposition 2: The relative importance of sustainability factors

can be best understood in the context of each social enterprise

Achieving scale and other internal considerations

Dees (2010) suggests that there are different ways of scaling impact, not
only through organisational expansion or replication. For instance, it

could be by:

 influencing policy changes

 shifting social norms, behaviours and attitudes among individuals,
corporates and governments
 influencing the way markets operate (e.g. fair trade movement)
 preventing the recurrence of the problems they are tackling
 reducing the needs they have been serving (e.g. the use of condoms
to prevent the spread of HIV/AIDS versus providing medication)

Dees also contends that achieving widespread and lasting impact is a

shared responsibility between the greater society and the social

entrepreneur. It can be discouraging if the social business is unable to

achieve a meaningful level of scale or contribution amidst the growing

impact of the social challenge(s) it is trying to tackle.

In terms of potential pitfalls, Boyd, B, Henning, N, Reyna, E, et al (2008)

and Pirson (2011) and call out the risk of ‘mission drift’ in hybrid or

balance-oriented organisations because the added complexity and

greater potential conflict can negatively impact decision-making and

performance. There may be a risk if there is an over-reliance on the

Page 25 of 102
founding social entrepreneur to keep the social mission alive – what if

the social business is sold to someone else? What if a decision is made

to change the business model? Will the social mission suffer? Will it
impact its sustainability?

Key external considerations

Legislation

The choice of legal form is important as it has implications in terms of

costs, tax liability, access to capital, autonomy of management,

reputation and image, market access, reporting requirements, and the

way profits can be distributed or used (International Labour Organization,

2011). The new Companies Act will identify 2 main groups of companies:
For-profit and Non-profit companies (Steinman 2010) and their

implications need to be carefully considered.

Tax implications

Boyd et al (2008) believe that tax classification is a key factor that

impacts the expansion of a social enterprise. The ILO sites several

considerations in choosing the legal form for a social enterprise
(International Labour Organization, 2011):

 The Income Tax Act

 Tax exemptions for NPO’s
 Donor preferences in legal form

Commercial challenges

Social enterprises sometimes have to compete against private business

for the same resources, especially in terms of skilled and experienced

labour. They may face tough competition from more competent ‘big

businesses,’ although they may benefit from being leaner, innovative and
risk-taking (Boyd et al, 2008). Therefore, adopting a social enterprise

Page 26 of 102
business model does not guarantee sustainability. Instead, it appears

that each organisation needs to be assessed within its own context, both

internal and external, before one is able to recommend the most viable
business model.

2.6 The social value in SE

Corner & Ho (2010) define social value creation in terms of engaging

with social problems and trying to generate solutions for these problems.

As Steinman (2010) suggests, a social enterprise should uphold a strong

and clear linkage between its social mission and social challenges of the

communities it aims at supporting. This leads to a third proposition:

Proposition 3: the sustainability of a social enterprise may be

influenced by the national importance placed on the social
challenge it aims at addressing

When it comes to South Africa’s most pressing social challenges,

Steinman provides only a loose explanation and a clearer understanding

is required for the purpose of this project.

Current social challenges in South Africa

Recently, the National Planning Commission (NPC) was set up by

President Zuma (National Planning Commission Online, 2011) to analyse

the current state of the economy and develop a long-term vision and
strategic plan for the country. Although the social challenges are many

and appear dire, the Commission believes that the country has both the
resources and capacity to eliminate poverty and reduce inequality over

the next two decades. This will require a radically new approach, moving
away from state-fuelled social grants to people becoming ‘active

champions of their own development’ (Overview & Mission Statement:

Page 27 of 102
National Planning Commission, 2011). The NPC identified the following

key social challenges of the nation and argued that unemployment and

access to good education for the majority are the ones that need the
most pressing attention.

Table 3: key social challenges according to the NPC

About 25% of the active labour force is persistently

without a job but most worryingly, only about 41% of the
adult population are at work either in the formal or
informal sector. The impact of long-term unemployment
Unemploy- is alarming: the Commission says that if young people do
ment not find a job by the age of 24, ‘they are almost never
likely to get full-time employment’ (National Planning
Commission, 2011). About two thirds of those
unemployed are aged below 35 and the Commission goes
as far as calling it a time bomb.

There is no official poverty line, but if the joint proposal

from the Commission and Statistics South Africa of about
Poverty ZAR 418 (in 2009 prices) is adopted, then the current
poverty level stands at 39% (Overview & Mission
Statement: National Planning Commission, 2011).

The NPC reports that income inequality causes a range of

socio-economic indicators to deteriorate (Diagnostic
Human Conditions: National Planning Commission, 2011).
Income
South Africa has one of the highest Gini coefficients in the
inequality
world at about 0.7. While the black middle and elite class
have been growing rapidly, the African masses remain
impoverished and reliant on social grants to survive.

Deaths are particularly high among children and women.

Statistics South Africa (2009) affirms that the main natural
causes of death are diseases such as tuberculosis,
Mortality influenza, pneumonia and the prevalence of HIV/AIDS. It
rates lists the leading cause of death among children under 15
as intestinal infectious diseases. The Public Health
Association of South Africa (PHASA) calls out that
maternal mortality has been increasing from 150 to nearly
Page 28 of 102
 250 maternal mortality ratios (MMR, deaths per 100,000
live births) mainly due to HIV/AIDS (Maternal mortality
and morbidity: Public Health Association of South Africa,
2011).

The Commission states that ‘good education provides

access to the top end of the labour market and facilitates
social mobility, while poor education perpetuates the skills
shortage at the top end, causing a wage premium’. It cites
Access to
Van der Berg (2011) as suggesting that the educational
good
system is grossly under-performing, despite significant
education
improvement from government recently. Basically, the
quality of education for the black majority of children
remains of poor standards (Diagnostic Human Conditions:
National Planning Commission, 2011)

2.7 Summary of output from literature review

There is thus a broad range of topics that surround SE as an academic

field, but it is all too often hindered by issues around definition and a
lack of empirical research across the world, including South Africa.

Putting these limitations aside and focusing on the chosen topic of

sustainability, several enabling factors exist beyond just purely financial

sustainability.

The hybrid business spectrum model suggests that organisations can

evolve over time from being purely NPO’s to hybrid models and
eventually, full-fledged social enterprises. The pivotal work by the

regional ILO office with the University of Johannesburg provides a sound

platform for the MC but their proposed definition needed to be refined

further before being adopted.

It transpired that the topic of sustainability needs to be broadened

beyond financial aspects. For instance, the individual qualities of a social

Page 29 of 102
entrepreneur also have a bearing on the success of the organisation.

Similarly, a broad range of internal and external considerations to an SE

were identified and it was suggested that their importance can be best
understood in the context of each organisation.

Finally, it was posited that the strength of the linkage between the social

purpose of the organisation and the nation’s social challenges may have
a bearing on the success of an SE as it emphasizes relevance and can

nurture motivation internally. The social challenges were clarified based

on the recent work conducted by the NPC.

The following is a summary of the key sustainability factors arising from

the ROCT, which will guide the investigation section of this project:

Page 30 of 102
 Table 4: Summary of sustainability factors from ROCT

Dimension
Analytical Key
level
Summary of findings
elements

Most of global research can be

grouped along 5 main themes, while
The individual in SE

there is little to no data available for

Micro-level

Personal RSA:
qualities of the
 skills
social
 background / experience
entrepreneur
 discourse
 demographics
 motives

1) Typology & The local definition put forward by the

business ILO in 2010 is herewith adopted,
The organisation in SE and its context

model despite some issues.

spectrum NPO’s can evolve along Alter’s
Meso / Macro-level

spectrum in trying to diversify their

income streams.

2) Internal  Organizational & Financial

considerations sustainability
 Risk of ‘mission drift’

3) External  Legislation
considerations  Taxation
 Other forms of government support
 Commercial challenges

The most pressing social challenges are

The social value in SE

those defined by the NPC:

Linkage
between social  Unemployment
Macro-level

mission and  Poverty

social  Income inequality
challenges  Mortality rates
 Access to good education

Page 31 of 102
3. Investigation section

3.1 Research objective

In order to articulate the key research objective, the following conditions

have been considered:

 Stay close to the issues originally defined in the MC Proposal

 Keep it achievable within the time constraint and in terms of data
availability
 Aim at supporting the SE field locally with key insights

The following diagram shows how the research objective and questions

were derived:

Figure 4: Research objectives

•SE is a very nascent field in South Africa and research is still limited.
Further empirical research is required in order to build awareness and
understanding as well as support local practitioners with relevant
Issue insights in order to enhance their SE efforts.

•Explore the SE landscape in South Africa and seek to better

understand the choices and challenges faced by local SE
Research organisations in achieving sustainability within their respective
setting
problem

•Determine how social enterprises are achieving overall sustainability

Research in South Africa?
objective

•What external factors impact the sustainability of social enterprises in

SA?
Research •What internal practices and considerations are key to support
sustainability?
questions

Page 32 of 102
Theoretical framework to guide research

It is hereby suggested that the scope of the project be narrowed to the

‘funding’ and ‘program’ approaches as described by Alter (2010). In

doing so, the following theoretical framework is derived from the key
findings of the ROCT and will assist in guiding and narrowing this

investigation:

Figure 5: Theoretical framework to guide the MC investigation

Individual Organisation

 Experience of leader  Business model (legal form,

(knowledge, skills, structure, tax implications)
competencies, abilities)  Resources and capabilities
 Personal qualities  Ability to survive if leader leaves
 Vision & aspirations

Processes & Practices Social value

 Long-term planning
 Funding strategies
 Reach or scope of impact
 Cost management
 Linkage with key social challenges
 Relationships
 Governance
 Performance monitoring

Similarly, the 3 propositions put forward in the ROCT will act guiding

rails for this research. As a reminder, it has been posited that:

 Sustainability needs to be considered from a broader perspective than

just from a financial lens
 The relative importance of sustainability drivers can be best
understood in the context of each social enterprise
 Sustainability of a social enterprise may also be influenced by the
importance of the social challenge it aims at addressing

Page 33 of 102
3.2 Investigation design

Research method

The following table captures the suggestions put forward by Yin (2009)
in selecting research methods, based on the following criteria:

 The type of research questions being posed

 The extent of control of the investigator over actual behavioural
events
 The degree of focus on contemporary rather than historical events

Table 5: Selection of research methods

METHOD Form of research Does it require Does it focus

question control of on
behavioural contemporary
events? events?
Experiment How? Why? YES YES

Who? What?
Survey Where? How NO YES
many? How
much?
Who? What?
Archival Where? How NO YES/NO
analysis many? How
much?
History How? Why? NO NO

Case Study How? Why? NO YES

Since this research deals with ‘a contemporary set of events, over which

the investigator has little or no control’ (Yin, 2009), the most appropriate
research methods are the survey and case study methods. As discussed

previously in the ROCT, this researcher could not find a suitable number
of social entrepreneurs to meet the sample requirements for a survey

method.

Page 34 of 102
Thus, the investigation will follow a qualitative case study research

method that will employ a flexible approach due to:

 the exploratory nature of the study

 the type of research question posed
 a lack of empirical research on Social Entrepreneurship in South Africa

Yin provides further justification by stating that case studies are most
appropriate when dealing with phenomena that cannot be fully

understood without contextual meaning. It is the preferred method

when there is little control over the behavioural events under study and

when empirical research is limited.

Data collection

The unit of analysis will be ‘organisation’ (social enterprises) and data will

be triangulated from multiple sources for the following reasons:

 The case studies were documented in the past while sustainability is

forward-looking
 Triangulation of data sources improves the construct validity of
emerging patterns (Yin, 2009)
 it can also greatly improve reliability of qualitative research data (Hair
et al, 2007)

The analysis will be conducted across multiple cases (cross-case analysis)

in order to strengthen the analytic conclusions. The secondary data

contained in the case studies published by the ILO Pretoria office will be

analysed in conjunction with primary data from interviews, data from

public sources and from the selected organisations. The analysis will

start with the secondary data, which will then be augmented with
primary data before this researcher will look for similarities and

differences across the cases.

Page 35 of 102
 Table 6: sources of data for the research

Data type Sources

 Interviews
Primary  Organisational reports
 Articles and other reports from the internet

Secondary  ILO case studies

Conducting interviews

The principal aim of the interviews is to capture input around the

elements described in the theoretical framework and probe feedback on

the propositions made herewith. At the same time, flexibility is needed

in order to capture additional or complimentary topics. Since there is a

fairly clear understanding of the topic of sustainability arising from ROCT

and in order to ensure cross-case comparability, interviews will be

conducted in a semi-structured manner.

Face-to-face interviews will be conducted with the leaders of the

selected social enterprises as they would be best placed to provide

insights in terms of strategic decision-making. Contact will be initiated

through the ASEN network in order to boost credibility of this research.

Page 36 of 102
In order to help with both analysis and improve reliability, the following

steps will be taken:

 An interview guide or protocol will be prepared based on

recommendations made by Turner (2010), (see section A in the
appendix). This will allow information to be collected on the same
general topics from all interviewees and reduce variability between
interviews. A degree of flexibility will be kept in terms of the flow of
questions, depending on the responses from each interviewee
 Standardized, open-ended questions will be carefully formulated by
staying close to the research questions. Using the same pre-worded
questions will enable interviews to be conducted faster and will ease
analysis and data comparison. The open-ended nature of the
questions will allow interviewees to provide as much detail as they
deem necessary and will help reduce bias by the interviewer
 The interview protocol will be tested with a founding member of the
ASEN network, Jeanne Rose. Adjustment in scope and framing of the
questions will be made following this as well as feedback obtained
from the research supervisor

Data analysis

Yin (2009) argues that a cross-case analysis requires ‘replication logic’ to

be followed instead of a ‘sampling logic’ that is usually adopted in

research surveys. He explains that this reasoning is similar to that

adopted in multiple experiments, when one would attempt to confirm

the robustness of an original finding by conducting an additional set of

tests, either under the exact same conditions as the original one or by

varying certain experimental factors, and assessing whether the original

finding is observed or not. Likewise, each case must be chosen with care

so that it either follows a ‘literal replication’ (when similar results are

predicted from a series of cases) or a ‘theoretical replication’ (when

differing results are observed but in an explainable way).

Page 37 of 102
This research attempts to identify the set of conditions under which a

particular phenomenon (organisational and financial sustainability) is

likely to be found among social enterprises. This could be achieved

through either type of replication logic, but the literal replication

approach is hereby chosen for the following reasons:

 this researcher believes that the topic of organisational sustainability

rests on fairly robust theory and there is no meaningful rival
explanation to be explored
 it is the simpler approach of the two and so, is a better fit within the
time constraint of this project

First of all, data contained in the ILO case studies will be coded. This will

in turn, allow a first-pass analysis in order to:

 support the final selection of the sample cases from the ILO
 identify key insights and direct the formulation of the interview
questions
 prepare ahead of the interviews with background information on the
chosen organisations

Avoiding bias to improve dependability and credibility

The analytical method will seek to identify common themes and patterns

across the selected cases, using the theoretical framework and

propositions as guiding points. Since the cases originate from existing

literature, it limits the ability to gain precisely comparable data and

subjects this project to the biases of other observers. This researcher is

willing to accept such limitations due to time constraints in documenting

the case studies himself. However, a number of actions will be taken in

order to limit bias:

 Remain open to contrary findings during data collection phase and if

they arise, seek to explore significant differences within and between
cases
 Keep a diary to maintain credibility

Page 38 of 102
The theoretical framework developed post-ROCT will help to overcome

variability that may arise in many aspects, which can make it difficult to

identify similarities or patterns as reported by Hoogendoorn, Pennings &

Thurik (2010).

Analytical techniques will predominantly be in terms of comparison

tables as used in a similar research project such as Weerawardena &

Mort (2006), Alvord, Brown & Letts (2003) and Bovier (2006).

The research strategy can be summarized as follows:

Figure 5: Research Strategy Framework

Research • Qualitative
method • Flexible

Research
• Multiple case study method
design

• Primary data from interviews with SE leaders

and others
Data
• Secondary data from existing ILO case studies,
collection internet articles and reports from the chosen
organisations

• Literal replication logic

Data analysis • Cross-case analysis
• Analysis within each case and across cases

Page 39 of 102
Quality test of research design

The research design passes the four tests that are commonly applied to
social science research methods (Yin, 2009):

Table 7: Research design tests

TEST Tactic Research phase

Construct  Multiple sources of evidence

Data collection
validity (primary and secondary data,
from different sources)
 Explanation building within
Internal validity Data analysis
each case

 Literal replication logic

External validity Research design
across multiple cases

 Use of an interview protocol

Reliability Data collection
 Keep all records (written
and/or audio)

Sampling methodology

Due to the lack of a formal dataset on social enterprises in SA, the

following 2-step approach is taken to identify an appropriate sample of

SE organisations to answer the research question.

1. The 25 case studies published by the ILO Pretoria office represent

the starting sample of South African social enterprises. In line with

the literal replication logic, the list will be narrowed to ‘pure social
enterprises’.

2. A final sample is selected using a non-probability, purposive

method (Hair et al, 2007), based on personal judgment.

Page 40 of 102
Step 1: potential starting candidates

The organisations described by the ILO fall under 3 broad groups

(International Labour Organization, 2011):

 ‘Transitioning Non-Profit (NP) Organisations’ appear on the left-hand

side of Alter’s hybrid business spectrum model and have started to
follow earned-income strategies but have not yet reached 50% of
their financial needs
 ‘Pure social enterprises’ are those organisations that fit the adopted
definition and operated under FP, NP or hybrid structures
 For-Profit (FP) organisations with a primary social purpose, in which
director shareholding is allowed to >50% with the possibility of
dividend pay-out

Steinman explained in an interview with this researcher that the selection

of these organisations was not done in a scientific way: there was a

strong bias in terms of ‘who was available and who we liked’ (Steinman,

2012). Nevertheless, this researcher did not come across better sources
of secondary data at the time of writing, nor have enough time to

identify case studies as a primary source of data.

Page 41 of 102
The list of selected social enterprises is highlighted in red in the

following figure, against Alter’s hybrid business model:

Figure 6: Overlay of SA organisations on Alter’s Hybrid Spectrum Model

Of the 12 ‘pure social enterprises’, the St Philomena Community

Development Centre, currently operating as a volunteer organisation,

provides too little information for meaningful analysis and will be

discarded, which leaves 11 potential units of analysis.

Page 42 of 102
Step 2: screening based on ‘non-probability method’

The aim is to identify a sample of 3 to 5 organisations, which is adequate

according to the guidelines from Henley and Eisenhardt (1989). The final

selection is founded on judgement, after coding the data contained in

the ILO case studies and conducting a ‘first-pass analysis’. The intended

approach is to select a sample of cases that will best support ‘literal

replication logic’ and this is done by evaluating the current degree of

sustainability of the organisations according to the following criteria

proposed by this researcher:

Table 8: Criteria for final selection of case studies

Criteria Assumption

≥10 years of Past sustainability can be a reasonable indicator of

operation future sustainability

Although the ILO uses a threshold of >50% earned

income in their definition, it is hereby posited that
≥90% %
a larger proportion of earned income needs to be
earned income
derived from other sources than grants &
donations to truly be sustainable

As a supplementary criterion, external recognition

External
by subject matter experts in the field is hereby
recognition
considered as a sign of success

Page 43 of 102
The author of the ILO case studies supported this research by

introducing it to the leaders of the targeted organisations (Nambiar,

2012). Thereafter, this researcher followed up with a more detailed email

to confirm their participation to the interviews. Of the 4 organisations,

Johannesburg Housing Company (“JHC”) declined to participate because

of work pressure. The final list of social enterprises is thus, Dreamhouse

Workshop for the blind (“Dreamhouse”), Khulisa Social Solutions

(“Khulisa”) and Small Enterprise Foundation (“SEF”):

Table 9: List of selected cases for cross-case analysis

Page 44 of 102
3.3 Findings and Analysis

The ILO case studies provide a good introduction to each of the selected

organisations. In this section, the focus is on presenting the findings of

the cross-case analysis but in order to set the scene, a brief overview of

the 3 case studies is described below:

Table 10: Description of selected case studies

Case Interviewee Social mission Location Reach

MD & 1 Senior Job creation for disabled

D Manager individuals in Pretoria area
Pretoria Regional

Shifting from crime

reduction programmes to
K MD more holistic social Johannesburg National
solutions for vulnerable
communities

Poverty alleviation
S MD through micro-financing Limpopo Regional
in the province

D: Dreamhouse, K: Khulisa, S: Small Enterprise Foundation

Page 45 of 102
Comparison within ‘pure social enterprises’

Table 11: Comparison of selected cases with ‘pure social enterprises’

Data table Insights

The 3 identified organisations were

chosen because of their long

standing. Indeed, most of the ‘pure

social enterprises’ have been

operating for more than 10 years.

The majority of the ‘pure social

enterprises’ employ more than 10

permanent staff. The selected

cases have the highest staff count

among ‘pure social enterprises’.

This reinforces their status as firmly

established organisations.

The selected cases generated

significantly more turnover than

most of the ‘pure social

enterprises’, with one of them

exceeding ZAR 50 million.

Page 46 of 102
 Most ‘pure social enterprises’ claim
to be able to earn their required

income by themselves and do not

rely on other sources. In the 3

cases, their required capital does

not necessarily all come from

earned income.

Only 4 of the 11 ‘pure social

enterprises’ operate solely on direct

income-generating activities. The

others employ a mixed approach

by combining income-generating

activities with fundraising, grants

and other donations.

In summary, the selected cases stand out from the rest of the ‘pure social

enterprises’ because they employ the highest number of permanent staff

and have the highest turnover. Like many of the other ‘pure social

enterprises’ they employ a mixed approach to income generation.

Although they earn the greatest portion of their income through internal

business activities, they may rely on external funding. Overall, the

selected cases do not stand out from the rest of the ‘pure social

enterprises’ and can be considered as a reasonable and appropriate

sample for the purpose of this analysis.
Page 47 of 102
Introduction to the interview findings

The semi-structured interviews were planned according to an interview

protocol. The questions were developed based on the output of the

ROCT and piloted with Rose from the ASEN network (see section A in the
appendix). The interview findings were recorded and transcribed. Data

coding was conducted and key concepts were extracted (see section B in
the appendix). They were then further condensed by looking across all 3

cases and identifying commonalities as well as unique statements, based

on the propositions and theoretical framework described in the ROCT.

Following the ‘literal replication’ logic already explained, dimensions that

appear across all 3 cases qualify as key sustainability drivers. Each
finding is supported with evidence from both interview data and other
document sources such as those offered by the interviewees, their

website content and annual reports when available.

Page 48 of 102
Findings on the individual (leader) in SE

In the summary tables below, “K” represents Khulisa, “S” means SEF and
“D” represents Dreamhouse.

Personal characteristics and experience

Table 12: key attributes in personal characteristics and experience

All 3 leaders indicate relentless passion for their social mission and their

staff. They are highly motivated to achieve their social purpose because
of their strong personality trait as a Giver. This may explain why they

have been in their leadership position for a long time. It does not
appear related to age, gender nor whether they are the founder of their

organisation or not. For instance, the MD of Dreamhouse started

working with the organisation at the young age of 23 and has risen

through the ranks over 40 years. She has been in her present leadership
role for 23 years, even though she is not the founder of the organisation.

The MD of SEF has been in his role for 20 years while at Khulisa, the MD
has been in her position for 15 years. They all cite their vast experience

as a key contributor to the success of their organisation and call out their
strong passion for their business.

Page 49 of 102
Skills and competencies

Table 13: key attributes in skills and competencies

The leaders add considerable value to their organisation with a wide

range of skills and competencies accumulated over their vast work

experience. In all 3 cases, the leader maintains a long-term vision as

they are genuinely concerned about the future success of their

organisation. They actively stay informed within their respective field

and are very well aware of macro-level considerations that have a

bearing on their social mission.

The MD of SEF cites the ability to put various systems and work

processes in place. He says that this complements his expertise and

attention to details necessary in the micro-finance field. The MD of

Dreamhouse started in blind welfare with accounting as her key strength,

which she later complemented with the ability to implement sound

business practices and computerization in order to manage the

organisational units as full-fledged businesses. She built her skillset

throughout her career when she gained additional responsibilities in HR,

fund-raising and general management. In contrast, the MD of Khulisa

believes that her entrepreneurial mind-set (risk-taking, creativity, being

Page 50 of 102
opportunity-driven and relentlessly optimistic) coupled with her acute

business intuition are key drivers of sustainability for her organisation.

Khulisa is undergoing business re-engineering because the MD was

proactive about the need to change the organisation: a few years ago,
she predicted that government would significantly reduce support to

NGO’s (Khulisa internal document) and is currently gearing her business

towards a more holistic approach to addressing social problems faced by

vulnerable communities. She says that “you need to know your landscape,
your PESTEL factors”. The MD of Dreamhouse calls out her ability to plan

ahead and keep a broader look at the business as key skills. She states
that “we need to always look further as needs change and people will

always need help”.

All 3 leaders have very clear aspirations for their organisation, which tend

to be translation into the organisation’s vision and mission:

Figure 7: Business aspirations according to each leader

Dreamhouse
• To maintain a healthy cash flow whilst creating employment
opportunities for visually impaired persons, people with disabilities
and previously disadvantaged individuals from the nearby
community; to be able to pay market-related salaries and wages

Khulisa
• To successfully steer the organisation towards the new strategic role
as facilitators of development and empowerment in targeted
communities by maintaining a more holistic approach to solutions
development, supported by partnership with local NGO’s and the
communities themselves.

SEF
• To help poor people in the targeted communities to come out of
poverty through micro-financing by leveraging learning’s from
other successful micro-finance organisations

Page 51 of 102
Leadership style

Table 14: key attributes in leadership style

All 3 leaders engage in a regular dialogue with their staff, both in formal

and informal ways, during which they seek to keep the vision alive and
maintain the social mission ahead of the profit motive. This is perhaps,

one of the most crucial aspects of leadership at these social enterprises.

The MDs also highlight the need to promote consistency and fairness

among staff, especially since this is a sensitive topic in South Africa.

Transparency is maintained by keeping regular contact meetings with

staff while consistency and fairness are ensured during recruitment and
promotion.

As the MD of Dreamhouse puts it, “There’s always a very fine line

between managing the business requirements and the social needs. You
can’t go to your German client and say – I’m sorry I’m late with your order

because my employees are disabled”. It is also important to know how to

address and manage disabled employees, says the Dreamhouse MD. At

SEF, the MD explains that as the organisation grows, it is easy for the
staff to focus on their business targets and forget that the priority is not

profitability but poverty alleviation.

Page 52 of 102
At SEF, the vision is very clearly articulated on their website and in their

annual reports. It is shared with new recruits, as part of their on-

boarding as well as with donors, as part of funding requests. SEF even

evaluates the level of staff alignment to the vision via an external body.
At Dreamhouse, the MD discusses strategic issues and long-term

aspirations to all the staff in a way as to build transparency and trust

(they went through a painful strike recently). At Khulisa, a new vision has

been documented and proactive efforts are being deployed to ensure

that it is clearly understood by staff at the head office and regional

offices.

Two of the leaders indicate strong personal interest to run their

organisation like a full-fledged business by implementing proven

business processes and practices. In other words, they have clearly

adopted the concept of the ‘pure social enterprise’ and seek to entrench

it in the way they run their organisation.

For instance, the MD of Dreamhouse introduced ‘sound business

principles’ and computerization to transform what was once seen as a

community welfare society. At Khulisa, it appears that the business re-

engineering efforts will further strengthen business-like principles and

practices (more details will follow under business processes and practices).

Dreamhouse presents a somewhat unique context since the MD is at the

end of her career and therefore, puts greater emphasis on the need to

delegate responsibilities further to her managers.

Page 53 of 102
Findings on the organisation in SE

Business model

Table 15: key attributes in terms of business model

All 3 entities are registered as Non-Profit companies and this may be

because they also rely on funds from donors who may not perceive it
appropriate if they were For-Profit companies (see funding strategies

section for more).

While SEF & Khulisa operate as Section 21 companies4, Dreamhouse has

a more complicated hybrid structure due to growing tax implications

with the rapid expansion of the organisation. It is also a Section 21

company but is fully owned by a Trust. In contrast, the MD of SEF

explains that he finds it easier to manage and simpler to operate his

enterprise as a Section 21 company than a Trust as it is similar to a

normal company structure except that profit is not distributed to

anybody. Khulisa has been a Section 21 company since inception but

reports in the ILO case study that it may consider a hybrid structure in
the future in order to access other sources of finance.

4
A Section 21 company is registered as a Non-Profit organisation
Page 54 of 102
They all operate in a specialized field with very few if no direct

competitor, perhaps due to high barriers to entry. For SEF, micro-finance

is a difficult arena in itself and “due to the inequality of its inherited

economy, South Africa is recognised as a particularly tough environment

for developmental microfinance organisations to attain financial

sustainability” (Small Enterprise Foundation, 2012). Khulisa has on the

other hand, developed unique and award-winning solutions in the crime

prevention and offender rehabilitation arena and continues to innovate

with more holistic social solutions (Khulisa Social Solutions, 2012). As for

Dreamhouse, it has acquired the sole rights for the manufacture and sale
of fertilizer sticks, its pivotal source of income.

All 3 organisations are actively pursuing business expansion efforts.

Dreamhouse has recently faced a tough financial period due to the

global recession and detrimental currency exchange rate, which affected

the commercial arms of the organisation. The MD does not foresee a

need to change the business model but instead, revenue streams are

being increased with new products, adjusted pricing of existing products

and increased sales staff. Recently, a modern showroom was opened to

better showcase the wide range of products from all 3 profit-making

units and it also generates revenue by renting space on the floor.

Khulisa has expanded its portfolio of services to better meet the needs of
funders and donors while SEF also intends to expand its geographical

reach and increase its active client base.

Another key element that the 3 organisations have in common is an

experienced and active board of directors. The MD of SEF sees its board

as providing ‘strategic leadership and oversight’ (SEF annual financial

statement 2011:15). Similarly, the MD of Dreamhouse states that the

Page 55 of 102
widely experienced board members not only provide strategic direction

to the organisation but often take responsibility for the execution of

projects. They also have valuable contacts that the organisation benefits
from. Khulisa’s 2011 annual report also lists a diverse group of directors,

who bring a wealth of experience in a wide range of areas. At SEF, the

MD believes that the organisation benefits from a strong board whose

members were selected carefully and who are not only socially involved
but have already achieved personal success and in some cases, wealth.

Both Dreamhouse and Khulisa are currently pursuing major business

transformation while SEF reports that it is satisfied with its current

business model. Although tax implications have a bearing on the choice

of business model, it is not the case for all 3 organisations.

Resources and Capabilities

Table 16: key attributes in resources and capabilities

All 3 leaders have given much thought to succession planning as they

view it as critical for long-term sustainability of the social enterprise. At

Dreamhouse, the workshop manager has been formally identified as the

successor to the MD and is actively being groomed for it. A contingency

plan is in place for potential employees to take over more senior roles.
Page 56 of 102
At SEF, a conscious effort is in place for the current COO to take over but

this is subject to board approval. Khulisa does not have a succession

plan currently but potential candidates will be identified as part of the

ongoing organization re-design.

In all 3 cases, management staff are generally aligned with the vision

espoused by the leaders. The SEF MD reports that the strong alignment
with and belief of his staff in the mission of the organization is a key

strength. The Khulisa MD also highlights a strong belief in their social

mission and real passion among staff as vital for success5. The

Dreamhouse MD rates their extreme passion and faith in their actions as

the key factors for their longevity.

In terms of staffing, the MD of SEF describes a very robust and targeted

process to ensure that new hires bring the right competencies into the
organization as micro-finance requires a special set of skills in finance

and an understanding of the social issues. SEF has tried various

approaches over the years but has found success with a targeted

graduate recruitment and training programme (SEF Annual Report

2011:8). At Dreamhouse, lower-level staffing is facilitated by an open-

door policy whereby anybody looking for work can walk into the
premises and will be given an opportunity on a trial basis. If they are

successful, they will be hired but the challenge is to be able to find

enough work to keep them busy and salaried throughout the year. At a

higher managerial level, the team has had to learn on the job as the
organization grew and are now competent in their respective field.

Dreamhouse is aware that it needs a resource in sales as well as

5
Although Khulisa recently went through a difficult time when a forensic audit was
conducted to investigate allegations against the MD, she reports that some of her
colleagues have respect and admiration for her.
Page 57 of 102
marketing the product and the company. As it cannot afford to hire

professional recruiters, it relies on its network of personal contacts

(managers and board members) to identify potential candidates. With

the ongoing organization re-structure, Khulisa is currently conducting a

people and competency gap analysis. The leader is very well aware of
which core competencies she will need to recruit for and recognizes the

need to bring diversity within senior management. She considers

staffing as a key business practice in terms of attracting and retaining the

right talent.

All 3 leaders highlight a strong teamwork and team spirit as drivers of

sustainability. Khulisa provides the most compelling context as it

recently emerged from a 6-month long forensic audit process, which put
a lot of strain on the social enterprise6. In their 2011 annual report, the

MD calls out:

“(…) the incredible efforts of the loyal individuals within our

organization who have strived to overcome the challenges and see

Khulisa succeed.”
(Khulisa Annual Report, 2011:4)

She is currently focusing on building a team of talented people to ensure

the organization continues to deliver on its social purpose into the future.

6
The leader was suspended for a few months but eventually reintegrated. She states
that many employees have maintained their faith in her throughout the process. The
audit was eventually downgraded to a survey and it appears that they have successfully
overcome this difficult period by turning some of the key findings into areas of
improvement.
Page 58 of 102
Business practices and processes: financial sustainability

Table 17: key attributes in financial sustainability

Among the 3 cases, only SEF is in a satisfactory financial position and

ended the last financial year with a surplus. Dreamhouse has been

impacted by the global recession over the last 3 years that hit demand
for its pivotal export product to Germany. The MD reports that turnover

dropped from R8 million to R5.5 million in 2011 but she managed to

keep everyone on board. The Khulisa MD indicates that they are highly

at risk as they can barely cover head office costs.

All the MDs are very well aware of the risks their organisations will face
in the near future. Yet, they hold a firm belief that their financial position

will improve because they all have solid plans in place to turnaround or
expand their businesses. At Dreamhouse, there has been a relentless

drive to grow the export market beyond Germany: a contact from one
board member is helping secure a new customer for the fertilizer sticks

in Malaysia. The MD is aware of the threat of cane material import from

Indonesia and is currently evaluating alternatives. She is also planning to

raise enough funds to recruit a sales/marketing professional for at least a

year in order to help them position the social enterprise better, raise

awareness of their products and improve net sales revenue. She

contacted a local national grocery chain through the Department of

Page 59 of 102
Trade & Industry as well and managed to secure listing of the fertilizer

sticks at the stores. The MD of Khulisa says that they recently won a

contract from a mining company that is helping them stay afloat while
their long-term strategic re-structure is being implemented. She is

actively canvassing other mining companies in a bid to take over their

CSI projects. On the other hand, the MD of SEF sees little competitive

threat in the local micro-finance industry due to high barriers to entry in

terms of operational costs and specialized skills. He is less concerned

about financing than potential disturbance in the labour market arising

from the recent violent strikes in the mining sector. This may lead to

some of his employees expecting higher wages in the near term. He

believes that his social enterprise is very well poised to mitigate such

risks because it is able to cut back on growth expectations 7 when income

is low.

Business practices and processes: funding strategies

Table 18: key attributes in funding strategies

By the very nature of being a ‘pure social enterprise’, the majority of their
financial needs are met with income earned from proactive, internal

activities that are directly related to their respective social mission. Yet,
all 3 organisations maintain other income streams, mainly in the form of

7
In terms of number of active clients to be recruited
Page 60 of 102
grants and donor funds in order to bridge the gap when earned income

is not fully sufficient to meet their capital needs.

It is not a formal business objective to be 100% self-funded in any of the

3 cases although it has been an intention at SEF, which managed to do

so in the 2011-2012 financial year. The MD explains that in the early

stages of the business lifecycle, large grants were needed to jump-start

operations. He was turned down by local banks and businesses because

micro-finance was too new of a concept to them (The Global

Development Research Center, undated) and so, most of the funds came

from foreign donors. As the MD perceives government institutions to be

somewhat more risky than those in the private sector, he prefers to

maintain a cautious balance between government borrowing and private

sector borrowing. Thus, SEF has been focusing on the business side of

the social enterprise instead of seeking grant funding over the last 5
years: “We do what we need to reach more people” is the motto of the

organisation and in this spirit, the organisation has increased the active
client base while ensuring optimum loan repayment and effective use of

loans to achieve the social mission. The 2011-2012 financial report

indicates that donors provide operational grants (such as the expansion

in the Eastern Cape) as well as loan capital. The MD clarifies that this is
usually kept below 5% of total operating income.

81% of Khulisa’s income comes from the local government while foreign

bodies such as the EU contribute 9% and the rest is from private

institutions such as mining companies (Khulisa Annual report, 2011:10-

11). With the new operating model, the MD explains that income from
government will likely fall to around 50%, 25% of income will be actively

generated through consultancy services to other NGO’s and the

remaining 25% will still come from corporate and international donors.

Page 61 of 102
This evolution is planned over the next 3 years in order to adapt and

prosper in the new politico-economic environment.

At Dreamhouse, around 90% of revenue is generated through the sales

of fertilizer sticks, cane products and window blinds as displayed in their

newly acquired showroom. The MD explains that the earned income is

supplemented with fundraising money as well as grants from Lotto and a

mining company due to the hardship they recently faced post-recession.

A blind man is employed as a fundraiser and is able to raise capital for

small projects such as the purchase of new machinery to set up a new

business within the workshop. If they are not successful in generating

sufficient capital to cover such projects, the latter are delayed until funds

become available. “All the funders and government want you to be self-
sustaining. The moment that you become self-sustaining, they say that

you don’t need their money anymore” shares the MD. She further
explains that banks are not sympathetic to the social enterprise like

before and so the organisation is compelled to maintain a diversified

income strategy. Fundraising activities and approaching donors are a

good way of raising awareness on the work being done at Dreamhouse,

according to the MD.

It is interesting to note that in the local context, mining companies

especially Anglo-American, play a valuable role in funding small projects

and initiatives within the social sector. Both Dreamhouse and Khulisa

have a strong relationship with this company and have successfully

secured ad-hoc funding in the past.

Page 62 of 102
Business practices and processes: other key business practices

Table 19: key attributes in terms of key business practices

In all 3 cases, there is a formal strategic planning process that generates

business opportunities for the long-term success of the organisation. A

culture of continuous improvement exists whereby challenges are turned

into opportunities. This has come about with the help either

professional consultants or external bodies who hold expertise in the

chosen field. Furthermore, financial discipline is maintained with clear

controls and measures allowing the identification of cost reduction

opportunities and revenue growth expansion.

The most poignant example is at Khulisa, when Dr Barbara Holtmann

was brought in to help craft a more holistic vision and broader yet, more
integrated social purpose to the organisation (Khulisa Annual report,

2011:5). With the consultant, not only has a new strategic operating
model been developed, but also a gap analysis has been conducted in

Page 63 of 102
terms of staff and core competency requirements. The consultant is

currently helping to disseminate the new strategic plan with head office

and field employees to ensure full understanding and buy-in. This is part
of an overall implementation and transition plan that clearly sets out the

key areas of change to enable the long-term strategic vision (Khulisa

Social Solutions Strategic Intent, internal document, 2012).

At Dreamhouse, strategic planning is conducted every 2 years with the

help of an outside consultant during which a full SWOT analysis is done.

This is complemented with strategic direction from the board members

who meet bi-monthly. A consulting company has also been hired to

help formulate and disseminate HR policies. The MD believes the latter

to be paramount for long-term organisational sustainability8.

At SEF, long-term planning involves 5-year financial projections with

more detailed annual budgets. The MD is proud to say that they have

never been off their budgeted expenses by more than 1%. Consultants
have supported the organisation in its early years. The MD states that

‘we always question everything we do’ and cites the need to implement
more robust staff performance management system as an example. The

MD maintains a relationship with the Grameen Foundation (USA) and

attends various micro-finance forums globally in order to stay abreast of

latest thinking in the domain.

All 3 leaders are very well aware of their cost structure and revenue
streams but among them, SEF publishes the most comprehensive

financial information in its annual reports. SEF has achieved an alpha

rating from M-Cril agency, which praised the financial and social

8
Floor staff recently went on strike when there was no profit to share with them and
staff could not understand the profit sharing scheme.
Page 64 of 102
performance monitoring systems of SEF highly (SEF, 2009). The Khulisa

MD explains clearly where income is projected to come from and cost

reduction measures needed under the new strategic plan. At

Dreamhouse, the MD has implemented strict financial controls to offset

recent financial losses. For instance, no salary and wage increases were
granted for the current financial year and bonuses were terminated until

further notice.

It is worth mentioning that while social impact measures are in place in

all 3 cases, only Khulisa and SEF communicate on social progress to their

key stakeholders. However, the Dreamhouse MD acknowledges that it is

indeed important and is hoping to recruit a marketing & sales

professional to improve awareness of their activities among the public

and funders.

Business practices and processes: partnerships

Table 20: key attributes in partnerships

The leaders actively nurture a network of professionals to support them

on many different aspects of their business. They also maintain a strong

business relationship with at least 1 other entity. In this way, the

organisations are able to tap into expertise as and when needed in order
to grow their organisation and become more professional or more cost

Page 65 of 102
effective. They do not necessarily see government institutions as pivotal

to the success of their social enterprise

Khulisa has a strong relationship with Anglo-American as a key source of

funds. It has partnered with Dr Holtmann in re-designing its

organisational purpose and in implementing the new vision and the MD

also states that she can tap into a large network of professionals to help
her as and when needed.

Dreamhouse holds a solid network of experienced people through its

board members and through acquaintances from the church community.

It has maintained a solid relationship with its German distributor of

fertilizer sticks and also, with the consulting agency that is helping them
to establish HR policies and practices.

Over the past few years, SEF has partnered with the Masisizane Fund and

with lenders such as Triodos Bank, Cadiz and SAMAF. It has also teamed
with another institution to provide HIV/AIDS training to SEF clients as

part of portfolio expansion efforts.

Business practices and processes: other aspects

Table 21: key attributes in other business aspects

Page 66 of 102
Managing the reputation of their social enterprise is considered

paramount by all 3 leaders. At SEF, efforts are made to clearly

communicate both the vision of the organisation to donors and how

much progress has been made towards the vision through social impact
measures. The Khulisa MD believes that the ability to demonstrate social

impact (and not just reach) is key to their sustainability. She indicates
that for the first time, they are now able to demonstrate the ROI on

social investment made by Khulisa. At Dreamhouse, the MD is

preoccupied in changing the perception of the organisation in the eyes

of the public, government and donors.

The following findings are worth mentioning although not common

across all selected cases:

 Khulisa has fully embraced a more holistic approach to tacking social

challenges in vulnerable communities and is re-engineering its
organisational purpose along a sophisticated social transformation
model. Similarly, SEF goes beyond the provision of micro-loans and
‘an impact monitoring system is used to check, measure and
understand changes in the lives of clients over time’ (SEF Annual Report
2011, p.12)
 Khulisa and SEF leverage innovative IT solutions to support their
organisational purpose and SEF even has dedicated IT and research
departments
 Khulisa and SEF have used external auditing resources to objectively
identify opportunity gaps in the way they conduct business and have
thereafter, turned these into concrete improvement plans

Page 67 of 102
Findings on the social value in SE

Table 22: key attributes in terms of social mission

The social mission is clearly articulated and communicated to key

stakeholders such as staff and donors, and the information is readily

available on their websites. All 3 leaders express the intention to expand

their social impact and their social mission is directly related to one or

more of the social challenges highlighted by the National Planning

Commission.

While the vision referred to previously is related to the expectations of

the leaders, the social mission describes what social impact the
organisation is aiming to address:

Page 68 of 102
 Figure 8: Social mission of the 3 organisations

Dreamhouse

• '... to create and maintain substantial permanent employment

opportunities for 150 blind, disabled and previously disadvantaged
people in the Tshwane area.' (Dreamhouse, 2012)

Khulisa

• “Our Mission - is to address social vulnerabilities and inequalities

by providing support and developmental know-how, through key
partnerships, for initiatives at a community level that quantifiably
demonstrate social impact.” (Khulisa Social Solutions, 2012)

SEF

• 'To work aggressively towards the elimination of poverty by

reaching the poor and very poor with a range of financial services
to enable them to realise their potential'(Small Enterprise
Foundation, 2012)

Khulisa has expanded its social mission to address a wider range of

social challenges depending on the expectations of donors and needs of

the targeted communities. Dreamhouse intends to employ more people

within their geographical area but also supports disabled people starting
up their own small businesses. SEF is aiming at addressing HIV/AIDS

awareness among their clients.

Each of these organisations aims at addressing at least one of the

priority social challenges called out by the National Planning

Commission as depicted in the figure below. This may be considered a

key factor in ensuring longevity of the social enterprise.

Page 69 of 102
 Figure 9: Linkage between social mission and critical national social
challenges

The SEF MD believes that the nature of the social challenge is

emotionally very powerful, is easier to relate and explain the social

mission and plays a key role in motivating staff. However, the other

MD’s do not call out any significant advantage in the choice of social
mission.

Page 70 of 102
3.4 Recommendations & Conclusion

Assessment against research objectives

The issue identified revolves around the fact that Social Entrepreneurship
is a nascent field in South Africa with limited research to date. It was

posited that a better understanding of the local landscape, in terms of

the choices and challenges social enterprises face, would greatly support

the development of new and aspiring social enterprises. In this respect,

the chosen research objective was to identify how local social enterprises

are achieving overall sustainability, by looking at both internal and

external drivers.

Guided by the theoretical framework and propositions arising from the

ROCT, this investigation has unearthed a comprehensive set of common

dimensions that are deemed critical for the sustainability of social

enterprises in the local context. This was done through a qualitative

research conducted across 3 carefully chosen case studies with data

triangulated from various sources to ensure credibility and robustness.

Inconsistent answers were rare.

The 3 draft propositions have proven to be true since:

 a wider range of drivers have indeed, been identified beyond simply

financial sustainability,
 each case has proven to have very unique contexts, and
 it has been determined that in all the chosen cases, the social mission
is directly related to at least one key national social challenge.

The theoretical framework has ensured that the research remained

focused and helped avoid this researcher getting lost in too much detail.

Page 71 of 102
Key Sustainability Drivers

The drivers of sustainability emerging from this research are listed below:

Table 23: Key drivers of sustainability from research

Dimension Key sustainability drivers

Personal characteristics & experience

 Highly passionate about social mission

 Highly motivated in achieving social mission
 Is a Giver at heart
The individual (Leader) in SE

 Has vast experience

Skills & competencies

 Adds value with a wide range of skills & competencies

 Is visionary with long-term thinking and planning
 Remains in touch with macro-level context and the
field

Leadership style

 Actively promotes and clarifies vision to staff

 Promotes consistency, transparency and fairness
 Engages in constant dialogue with staff

Business model
he organisation in SE

 Registered as a Non-Profit, mostly Section 21

company
 Operating in a highly specialized field
 Actively seeking to expand business
 Leverages an experienced board of directors

Page 72 of 102
 Resources & Capabilities

 Has set up or busy with a succession plan

 Staff generally aligned with the organisation’s vision
 An effective staffing process exists
 There is a strong teamwork and team spirit

Business practices & processes

Financial sustainability

 Risks to future sustainability are well known

 There is a belief that financial position will improve
The organisation in SE

Funding strategies

 Leveraging a diversified income generation strategy

(continued)

Key business practices

 There is a long-term strategic planning process

 Areas of improvement are actively being pursued
 Leveraging advice from consultants and other external
bodies
 A strong financial discipline exists

Partnerships

 Actively nurtures a network of professionals

 Strong relationship with at least 1 other organization
in pursuit of social mission

Reputation management

Perceives reputation management as paramount to

success

Page 73 of 102
 The social value in
 The social mission is clearly articulated and
communicated
 There is an intention to expand the social impact

SE
 The social objectives are directly related to the social
challenges called out by the National Planning
Commission

A clear pattern has emerged from the investigation: The SE leaders are

very passionate and serious about the sustainability of their business

because they are committed to making an impact in their chosen social

field. They have been with their respective enterprise for a very long
time over which they have acquired vast experience that their

organisation is benefitting from. They maintain long-term thinking and

do not hesitate to call on external support to implement business

processes and practices such as long-term strategic planning. They

actively communicate their vision to staff so as to ensure the social

mission is always placed ahead of profit motive. They do so by

constantly engaging in dialogue with the staff and at the same time,
promote consistency, transparency and fairness in the decisions.

They have registered their organisations as Non-Profit for various

reasons but generally find more advantages to be seen as such rather

than a For-Profit entity. They are all operating in a niche field, which

means that they do not face severe competition. However, they are at
the mercy of macro-forces that they are very well aware of. They are

actively seeking to expand their business in various ways and leverage

the benefits of an experienced board of directors to provide them

strategic direction and expand their network of acquaintances.

Page 74 of 102
In order to support sustainability, they take succession planning seriously.

The staff are chosen in an effective manner and are generally aligned

with the organisation’s vision. Hence, there is a strong teamwork and

team spirit. The leaders are very positive about the financial position of

their social enterprise, irrespective of where they stand today.

They are following a diversified income generation strategy to further

support sustainability and actively pursue a continuous improvement

philosophy. They all ensure that a strong financial discipline is in place

to manage costs down. Partnerships are crucial for their success and

they nurture relationships with other entities in order to succeed. They

all know that managing the reputation of their organisation with their

key stakeholders is another key driver of sustainability.

Their social mission is clearly laid out on their websites and they all
intend to expand its scope. They have all chosen to address social

problems of critical national importance, which is perhaps helping

promote their organisations.

Recommendations for would-be social enterprises

It is acknowledged that the chosen cases are large and mature

organisations with significant turnover. Nevertheless, the findings of this

research can be leveraged by new social enterprises or Non-Profit

Organisations who are keen to evolve along the hybrid business

spectrum towards a full-fledged social enterprise. Since the global

recession, the South African non-profit sector has seen a decrease in

grants slashed by as much as 30% and many have had to scale down or
perish (Heath, 2013), which makes the concept of earned income and

social entrepreneurship ever more critical. These organisations they can

conduct an assessment of which sustainability drivers are present and

Page 75 of 102
thereafter, plan to integrate the other sustainability drivers listed in the

previous table.

Gaps and limitations

This research is not without its weaknesses and further investigation is

recommended in order to ascertain the findings herewith proposed. The

key gaps as identified by this researcher are:

 The selection criteria used by the ILO to identify social enterprises

were not robust. Therefore, the initial population of organisations
considered in this research could have been improved and this could
have had an impact on the final sample of case studies considered for
analysis.
 Similarly, the selection criteria used in this research to identify the
sample of cases were mere proposals and could be strengthened
 The ILO case studies were documented in the past while the topic of
sustainability is forward-looking in the sense that we need to consider
how well an organisation is poised to succeed in the future. So, this
may be a limitation
 The initial aim was to analyse 4 cases but only 3 eventually agreed to
the interviews. A greater number of cases, up to 5 according to
Eisenhardt (1989), may have resulted in more robust findings
 Interview findings were mostly from the leaders of the social
enterprises. Their input could have been cross-checked with other
managers before accepting it as evidence for cross-case analysis
 The interview findings could have been strengthened if more effort
was put into differentiating hard facts from opinion. This is especially
true in Khulisa’s context

Page 76 of 102
5. Reflection
5.1 Evaluation of research findings

Confidence in research findings

First of all, the ROCT was conducted in a very comprehensive manner

since a broad landscape of primary as well as adjacent topics was

covered. Although this took a long time to complete, it boosted my

confidence and understanding of a field completely new to me. Once

the broad overview was completed, I was able to narrow down the key

primary topics to focus on. Furthermore, the geographical scope

covered by the reading materials compensated for the lack of local

content and provided sufficient insights to guide the investigation.

Even though one can argue that the ILO case studies do not represent
the full population of social enterprises in South Africa, I believe that the

3 final case organisations chosen are convincing examples of sustainable

and successful social enterprises. The way the interviews were designed

and conducted was carefully crafted and the semi-structured questions

allowed for sufficient unplanned input from the interviewees. I shared

the Analysis and Recommendations with the interviewees and 2 of them

expressed their satisfaction in terms of the content and conclusions.

Therefore, I feel very confident that the research method is appropriate,

the investigation was conducted at a satisfactory level and that the

findings are robust and conclusive.

Page 77 of 102
Alternative research method

Perhaps a quantitative survey among players in the Social

Entrepreneurship field (not only social entrepreneurs or leaders of social

enterprises) could have yielded a more robust sample size. I believe that
this would have uncovered mostly the same sustainability drivers if not a

few more. Nevertheless, I invested in additional reading material (Robert

Yin’s book on Case Study Research) in order to ensure that the

qualitative research method I embarked on was as robust and credible as

I could make it within the timeframe available. The book compensated

for the lack of concrete examples of this type of research in the Manager
as Investigator module.

The value of the research project

For the first time in the South African context, a research project is able
to provide a more holistic view of the characteristics that drive

organisational and financial sustainability in some of the best and most

established South African social enterprises. I firmly believe that aspiring

social entrepreneurs or even Non-Profit Organisations that intend to

evolve towards this business model will find value from this report

because the recommendations are clear. Many of those who have been
approached on this project have expressed their utmost interest in its

outcome. I intend to summarize the findings into a short guide to

sustainability that members of the ASEN network can benefit from.

The fit between the research findings and the output from the ROCT was

strengthened by the formulation of theoretical propositions and the

development of a theoretical framework. Indeed, the propositions were

confirmed by the findings and the theoretical framework was built upon.

Page 78 of 102
5.2 Experience of the research process

The research process was a real challenge in its own as I had to gather

new knowledge and skills all along. Since I did not believe that I had a
robust sample of individuals or organisations for quantitative research, I

had to shift to qualitative research based on case studies. I had to learn

how to conduct a cross-case analysis, data coding, interviews (protocol,

interviewing skills and developing semi-structured questions). I had to

follow my intuition and judgment in conducting the cross-case analysis

as the examples I came across in academic literature followed various

approaches that I could not necessarily replicate. During this learning

process, I discovered the advantages of having a theoretical framework

and propositions, which helped avoid ‘scope creep’ and kept the project

objective achievable. In the same way, the use of semi-structured

questions in the interview questionnaire helped narrow down the areas

being probed and significantly facilitated the analytical phase.

Page 79 of 102
 Table 24: Experience of the research process

Research
Difficulty Key challenges
process step

 Lack of a formal sponsor

Problem Medium  New field that required a comprehensive
definition review during MC Proposal before being able
to articulate the problem

 Was not targeted and ended up being very

ROCT Medium time consuming to sift through the broad
range of topics falling under SE

 Shifted from quantitative to qualitative

Research High method, which required new knowledge
Strategy  Had to learn about cross-case analysis,
interview techniques, data coding

 The use of semi-structured questions that

Data Low were defined in line with the theoretical
collection framework and propositions from ROCT made
the interviews easy

 There are a few examples of cross-case

analysis but none that was a good fit to this
Data analysis High research project. I had to apply personal
judgment in defining how I would conduct the
analysis

 Since I spent considerable time crafting the

Writing up Low data analysis phase, it was easy to report on
the findings and recommendations

Page 80 of 102
5.3 Achievement of personal development objectives

The personal objectives laid down at the onset of the MC were:

 To enlarge my network of professional contacts beyond the Coca-

Cola system
 To pursue an entrepreneurial route in parallel to a corporate career
until the right time comes to switch

I have faced job uncertainty at my present employer for far too long and

always felt that I would be happier if I could manage my own business.

At the same time, I have always known that being able to contribute to

broader change in society would bring greater meaning to my life,

leading to a happier life. This is the reason why I chose Entrepreneurship

as an elective during which my interest in Social Entrepreneurship

emerged.

While embarking on this project, I defined more specific goals in line

with the broader objectives defined previously:

 To gain knowledge and understanding of SE by conducting a review

of global and local literature and extract key findings pertinent to this
project
 To initiate contact with key local players in the field of SE both from
academic and practitioner background

I have reviewed a significant breadth of topics related to SE and

managed to identify which ones were most pertinent to the research

objective. The key findings were clearly summarized in the form of

theoretical propositions and framework, which greatly helped to guide

the investigation phase. While doing so, I have been able to make

contact with 6 important contributors in the SE field both in academia

Page 81 of 102
and in professional arenas. Therefore, I believe that I have achieved the

project-specific goals.

Furthermore, this project has given me greater clarity in terms of how I

can develop an entrepreneurial mindset in the SE field in parallel with a

corporate career. While interviewing the MDs of the selected social

enterprises, I learned about the value they receive from their board
members. I now believe that this is a more appropriate entry role for me

to play in the SE field. This will enable me to continue in my corporate

career while contributing to driving social entrepreneurship in South

Africa. Therefore, I joined the Institute of Directors of South Africa to

groom myself in becoming a Non-Executive Director and aim at serving

on the boards of social enterprises without remuneration. In this way, I

will be able to offer the experience I have gathered in strategic planning,

commercial and marketing strategy development and implementation.

5.4 Key challenges & learning’s

This has been the most daunting task I have ever embarked on. Yet, the
nature of the chosen subject has kept me hooked with keen interest.

The difficulty started with the development of the MC Proposal, the lack
of a sponsor, maintaining the right level of discipline and self-

management coupled with major changes both at work and in my

personal life.

Defining the problem or issue

Initially, I was trying to identify a topic relevant to my employer since

they are sponsoring my MBA in full. However, I slowly realized that was

no interest in MBA projects, irrespective of the potential benefit it may

Page 82 of 102
bring. The fact that there have been frequent changes at senior

management has most certainly contributed to this state of mind. I

wasted about 2 months because of this and eventually resolved to find a

topic of utmost personal interest.

I first heard of social entrepreneurship during the Entrepreneurship

elective. My curiosity was sparked by the idea of starting a business that

is also aimed at a social mission. My parents have been involved on the

social front for many years and also got me exposed to it. I feel like a
Giver at heart and sometimes find it deeply conflicting to be making a

decent living in a country with high income disparity, significant

unemployment and mortality rates. Unfortunately, very little content

was provided in the elective, which forced me into an extensive search

for literature on RISIS and on the internet. I was taken aback by the

incredible breadth of subjects brought under “Social Entrepreneurship”

and I amassed hundreds of articles that I spent considerable time sifting

through. Yet, only a handful of articles discussed social entrepreneurship

in the context of South Africa.

Lack of a sponsor

It became clear during discussions with my supervisor that the

identification of a sponsor would help me complete the MC project. I

tried to contact a few individuals whom I came across during my

literature review (Dr. F. Bonnicci and J. Rose) but I was not successful in

garnering their interest as a sponsor. Eventually, I decided to consider

myself as the sponsor of this project as I intended to develop an

alternative career path to the corporate environment.

It is only after having read through the countless articles that I had
discovered that I was able to clearly define the problem. If I had a

Page 83 of 102
sponsor for this project, the definition of the issue to be researched

would have been more clearly articulated to me and I would have been

more focused in my search for academic literature. This in turn, would

have saved me at least 2-3 months during the ROCT development.

Self-management and motivation

It has been very hard to stay motivated with so many challenges both at
work and at home. However, my syndicate team played a pivotal role in

keeping the energy and enthusiasm at high levels. Eventually, the

completion of the MC proposal made me feel that this project was once

again achievable. A pivotal mindset change that has allowed me to re-

focus and aim for completion is when I started to approach the MBA as a

means to an end, and not an end in itself. In other words, I stopped

expecting major changes such as a promotion or a salary increase and

instead, started to view it as one of many building blocks towards long-

term career progression and life fulfillment.

Key learning’s

The most important learning is that I need to continue to learn how to

manage projects of this magnitude within the time and resources I have
available, especially because life will undoubtedly throw unexpected

challenges along the way. This will remain a competency that I need to
build on a continuous basis in order to maintain a work-life balance that

keeps people at work and at home happy.

As the graph indicates below, it has been hard to maintain a constant

level of progress for more than a year. I now firmly believe that I cannot

allow a project to run for too long, as the risk of having to deal with
external challenges simply becomes greater with more time.

Page 84 of 102
 Figure 10: MC progress in terms of word count

The most enjoyable moment was meeting with the MD’s of the social
enterprises as well as members of the ASEN network. Visiting the

showroom of Dreamhouse and the offices of Khulisa was a rejuvenating

experience as I could feel the passion behind the work they were doing.

I am particular pleased with the positive response I have received from 2

of the interviewees (see section C of the appendix). I sincerely hope that
I will be able to give back to the SE community by sharing the key

findings from this project locally. I will continue to raise awareness

around the concept of social enterprises and I hope to serve as a

valuable board member on at least one social enterprise by end of 2013.

(End of report; word count approximately 16,800)

Page 85 of 102
6. References
African Social Entrepreneurs Network (2012) [accessed 22 February 2012]
asenetwork.org/

Alter, K (2010) Social Enterprise Typology: The Four Lenses Strategic

Framework [15 January 2012] www.4lenses.org/setypology

Alvord, S, Brown, D & Letts, C (2003) Social Entrepreneurship: Leadership

That Facilitates Societal Transformation. Working Paper. Center for
Public Leadership

Ashoka (2011) [accessed 10 October 2011 & 10 January 2012]

www.ashoka.org/

Bacq, S & Janssen, F (2008) From Social Entrepreneurship as a Practice to

a Legitimate Field of Research. Louvain School of Management Working
Paper. Center for Research in Entrepreneurial Change & Innovative
Strategies

Boyd, B, Henning, N, Reyna, E, et al (2008) Hybrid Organisations:

Innovations towards Sustainability. Department of Science Project Paper.
University of Michigan

Bovier, T (2006) Developing Social Enterprise: Economic Empowerment

could be Seven Steps Away for the YWCA Of Binghamton. Masters paper,
Binghamton University.

Carl, D, Cukier, W, Gekas, G, Trenholm, S (2011). Social Entrepreneurship:

A Content Analysis. Journal of Strategic Innovation and Sustainability, 7
(1), 99-119

Coburn, J & Rijsdijk, R (2010) Evaluating the Success Factors for

Establishing a Thriving Social Enterprise in Scotland [accessed 14 January
2012] www.scotland.gov.uk/Resource/Doc/332260/0108115.pdf

Corner, P D, & Ho, M (2010) How opportunities develop in social

entrepreneurship. Entrepreneurship: Theory & Practice, 34 (4), 635-659

Dacin, P , Dacin, T, & Matear, M (2010) Social Entrepreneurship: Why We

Don’t Need a New Theory and How We Move Forward From Here.
Academy of Management Perspectives, 24 (3), 37-57

Dacin, P, Dacin, T, & Tracey, P (2011) Social Entrepreneurship: A Critique

and Future Directions. Organization Science, 22 (5), 1203-1213

Page 86 of 102
Darby, L, & Jenkins, H (2006). Applying sustainability indicators to the
social enterprise business model. International Journal of Social
Economics, 33 (5/6), 411-431

Davie, G (2011) Social Entrepreneurship - a call for collective action.

Organization Development Network, 43 (1), 17-23

Dees. G (1998) The Meaning of “Social Entrepreneurship” [accessed 13

February 2012] www.caseatduke.org/documents/dees_sedef.pdf

Dees, G (2010) McKinsey&Company What Matters: Creating large-scale

change: not 'can' but 'how' [accessed 11 February 2012]
voices.mckinseyonsociety.com/creating-large-scale-change-not-can-but-
how/

Dreamhouse (2012) Mission and Vision [accessed 10 January 2013]

www.dream-house.co.za

Eisenhardt, K (1989) Building Theories from Case Study Research. The

Academy of Management Review, 14 (4), 532-550

Fraser, M (2008) Using Business to Address Social Issues in South Africa:

an investigation into the state of play. Henley Business School

Funding Practice Alliance (2011) National Lottery Board needs to be

overhauled as it's failing to fulfill its mandate [accessed 19 December
2012] fpa.org.za/?p=1571

GreaterGood South Africa (2012) Generating Income [accessed 19 March

2012] www.greatergoodsa.co.za/posts/view/3679

Hair, J, Money, A, Page, M & Samouel, P (2007) Research Methods for

Business, Chichester: John Wiley & Sons

Heath, J (2013) 2013 Outlook: What Lies Ahead for the Non-Profit Sector.
The African Business Journal, 13 January 2013

Henley Business School (2008) Management Challenge Guide

Hoogendoorn, B, Pennings, E, & Thurik, R (2010) What Do We Know

about Social Entrepreneurship? An Analysis of Empirical Research.
International Review of Entrepreneurship 8 (2), 71-112

Khulisa Social Solutions (2012) Our Mission, Vision [accessed 10 January

2013] www.khulisaservices.co.za/about/our-mission-vision

Page 87 of 102
International Labour Organisation (2011) Introduction to Social Enterprise,
Learners’ guide [accessed 12 February 2012]
www.ilo.org/public/english/region/afpro/pretoria/pdf/pubs/ise.pdf

International Labour Organization (2011) A Guide to Legal Forms for

Social Enterprises in South Africa [accessed 12 February 2012]
www.ilo.org/public/english/region/afpro/pretoria/pdf/pubs/guide_legal_
forms.pdf

International Labour Organization (2011) Case Studies of Social

Enterprises in South Africa [accessed 12 February 2012]
asenetwork.org/resources/ilo-tools-category/casestudies/

Khulisa Social Solutions (2011) 2011-2012 Annual Report [accessed 15

December 2012] www.khulisaservices.co.za/files/downloads

Khulisa Social Solutions (Unpublished) internal strategy document

provided by Khulisa MD

Koe Hwee Nga, J, & Shamuganathan, G (2010) The Influence of

Personality Traits and Demographic Factors on Social Entrepreneurship
Start Up Intentions. Journal of Business Ethics, 95, 259-282

Linklaters (2006) Fostering Social Entrepreneurship. World Economic

Forum in Davos [accessed 05 October 2011]
www.schwabfound.org/pdf/schwabfound/Linklaters_Schwab_Report.pdf

Lumpkin, G, Moss, T & Short, J (2009) Research in Social

Entrepreneurship: Past Contributions and Future Opportunities. Strategic
Entrepreneurship Journal, 2009 (3), 161-194

Martin, R, & Osberg, S (2007) Social Entrepreneurship: The Case for

Definition. Stanford Social Innovation Review, 2007, 29-39

National Executive Services Corps (2010) NESC Social Enterprise White

Paper [accessed 15 September 2012] nesc.org/download/social-
enterprises-expanding-position-in-the-nonprofit-landscape.pdf

National Planning Commission (2011) Diagnostic Human Conditions

[accessed 20 February 2012]
www.npconline.co.za/MediaLib/Downloads/Home/Tabs/Diagnostic/Diag
nostic_Human_conditions.pdf

National Planning Commission Online (2011) [17 February 17 2012]

www.npconline.co.za/

National Planning Commission (2011) Overview & Mission Statement

[accessed 22 February 2012]

Page 88 of 102
www.npconline.co.za/medialib/downloads/home/NPC%20National%20D
evelopment%20Plan%20Vision%202030%20-lo-res.pdf

Pirson, M (2011) Social Entrepreneurs as the Paragons of Shared Value

Creation? A Critical Perspective. Working Paper 2011-001. Fordham
University School of Business

Porter, M & Kramer, M (2011) Creating Shared Value. Harvard Business

Review, January 2011, 16-77

Public Health Association of South Africa (2011) Maternal mortality and

morbidity [accessed 11 January 2012]
www.phasa.org.za/articles/maternal-mortality-and-morbidity-
%E2%80%93-still-not-right.html

Rose, J. (2012) Interview on the ASEN organisation. Interviewed by

Anikendre Nursinghdass [in person] Johannesburg, South Africa, 18 July
2012

Schwab Foundation (2011) What is social entrepreneurship [accessed 11

January 2012]
www.schwabfound.org/sf/SocialEntrepreneurs/Whatisasocialentrepreneu
r/index.htm

Schwab Foundation (2012) Search Social Entrepreneurs [accessed 03

March 2012] www.schwabfound.org/sf/index.htm

Seelos, C, & Mair, J (2004) Social Entrepreneurship: The Contribution of

Individual Entrepreneurs to Sustainable Development. Working Paper 553.
IESE Business School

Skoll Foundation (2011) [10 January 2012] www.skollfoundation.org

Small Enterprise Foundation (2011) 2011 Annual Financial Statement

[accessed 15 December 2012] www.sef.co.za/files/SEF_AFS_2011.pdf

Small Enterprise Foundation (2009) M-Cril Report [accessed 16 December

2012] www.sef.co.za/files/2009-02-13%20-
%20SEF%20Social%20Rating.pdf

Social Enterprise UK (undated) Social Enterprise Explained [accessed 11

February 2012] www.socialenterprise.org.uk/about

Sowetan Live (2011) Social enterprise will lift SA out of poverty [accessed
19 February 2012]
www.sowetanlive.co.za/news/business/2011/04/11/social-enterprise-will-
lift-sa-out-of-poverty

Page 89 of 102
Statistics South Africa. (2009) Mortality and causes of death in South
Africa: Findings from death notification, 2009 [17 February 2012]
www.statssa.gov.za/publications/statskeyfindings.asp?PPN=P0309.3&SC
H=5097

Steinman, S (2010) An Exploratory Study into Factors Influencing an

Enabling Environment for Social Enterprises in South Africa [accessed 20
July 2011] asenetwork.org/downloads/ilotools/steinmanse.pdf

Susan, S. (2012) Interview on social entrepreneurship in South Africa.

Interviewed by Anikendre Nursinghdass [in person] University of
Johannesburg, 20 April 2012

Swanson, L & Di Zhang, D (2010) The Social Entrepreneurship Zone.

Journal of Nonprofit & Public Sector Marketing, (22), 71-88

The Business Place (2011) Cape Town Social Enterprise Business Plan
Competition [accessed 19 February 2012]
www.thebusinessplace.co.za/news-1/cape-town-social-enterprise-
business-plan-competition

The Global Development Research Center (undated) [accessed 09

January 2013] www.gdrc.org/icm/grameen-safrica.html

Turner, D (2010) Qualitative Interview Design: A Practical Guide for

Novice Investigators. The Qualitative Report, 15 (3), 754-760

University of Cape Town Graduate School of Business (2012) [accessed

19 February 2012] www.gsb.uct.ac.za/s.asp?p=341

UnLtd South Africa (2012) Selection Criteria [accessed 19 March 2012]

www.unltdsouthafrica.org/apply/selection-criteria.html

UnLtd (2012) Built to last toolkit [accessed 14 January 2012]

unltd.org.uk/wp-content/uploads/2012/11/Built-To-Last.pdf

Urban, B. (2008). Social Entrepreneurship Activity and Different Skills

Associated with Successful Social Entrepreneurship in South Africa Van
Putten II, P., & Green, R. D. (n.d.). Does it take an economic recession to
advance social entrepreneurship? Research in Business and Economics
Journal.

Van Putten II, P & Green, R (2011) Does it take an economic recession to
advance social entrepreneurship?. Research in Business and Economics
Journal, July 2011 (3)

Weerawardena, J & Mort, G (2006) Investigating social entrepreneurship:

A multidimensional model. Journal of World Business, 41, 21-35

Page 90 of 102
Yin, R (2009) Case Study Research: Design and Methods, 4 th ed. California:
SAGE

Yunus, M & Weber, K (2007) Creating a World Without Poverty, New

York: PERSEUS

Page 91 of 102
Appendix
A. Interview design

Interview protocol

Recommendations from Turner (2009) were followed to develop this

protocol:

 Plan for the interview to be conducted in a quiet environment

Preparation  Go through the desired qualities of an interviewer prior to the
for the interviews
interviews  Practice with one independent social entrepreneur

 Start with a small set of standard background or demographics

questions (as a form of ‘ice-breaker’) and create a factsheet
Constructing with general information (name, age, gender etc.) and specific
effective data (position in company, duration of employment, current
research and past etc.)
questions  Most interview questions will involve topics of behaviours,
opinions and values, feelings and knowledge

 Explain purpose of interview

 Address terms of confidentiality
 Explain format of interview
 Indicate how long it will take
 Provide contact information of interviewer
 Address any doubt that interviewee may have
Conducting  Prepare data collection methods (take notes, record
conversation)
the
 Create a meaningful sequence in the topic areas but remain
interview flexible during the interview
 Formulate interview questions that will help answer the
research question; use open-ended questions around the key
themes or topics and probing questions for follow-up
 Maintain a language that is comprehensible to the interviewees
 Avoid leading questions at all times

 Record additional observations immediately after each

Post- interview such as how it went, where it took place, the setting
and any other feelings about it
interview
 Conduct analysis and ascertain findings with interviewees to
actions clarify/correct/seek further feedback

Page 92 of 102
Interview questionnaire

1. The social entrepreneur

1.1 Experience & personal qualities of the leader
1. Tell me about your background and past business experience
2. If you think of the knowledge, skills, competencies and other personal strengths
that you have, what would you rate as contributing the most to the success of your
organisation?
3. Please describe your vision and aspirations for your organisation

Probing questions

 How would you describe your leadership style?

 What would you need to improve at an individual level in order to
enhance the success of your organisation?
 How have your aspirations for this organisation evolved over time?
 How well is the vision of the organisation understood by the staff?
2. The social enterprise
2.1 The business model
4. Describe how the structure of the organisation was decided upon in terms of its
legal form and business model
5. Do you foresee the need to change your business model for future sustainability?
Can you explain why and how do you intend to go about this change?

Probing questions

 What are the advantages and disadvantages in the choice of legal

form and business model?
2.2 Resources & capabilities
6. What do you consider are the key strengths of your team and in terms of the way
the organisation is staffed?
7. How would you describe the prevailing culture in your organisation?
8. If you leave the organisation, will it be able to sustain itself in the long-term and
why?

Probing questions

 What are the strengths and other qualities that your team brings to
support the organisation in the long run?

Page 93 of 102
2.3 Business practices & processes

2.3.1 Financial sustainability

9. What is the financial situation of your current organisation?
10. How well is the organisation poised to sustain itself financially over the next few
years and why?

Probing questions

 Do you foresee risks to the sustainability of your organisation and if

yes, can you describe them?
 What plans do you have in place to mitigate those risks?
 What are the key drivers of financial sustainability?
2.4 Funding strategies
11. Tell me more about your current funding strategies, for instance in terms of direct
or indirect income generation or other sources of funding.
12. Do you intend to adapt your funding strategies in the future and why?

Probing questions

 Is there a target in terms of % income generation for the organisation

and can you explain why?
 Is there a policy that governs your reinvestment level? Is it important?
 How do you feel about other sources of income such as grants and
donations?
 Why did you choose to go for direct / indirect income-generating
activities?
2.5 Key business practices
13. When you think about the way your organisation conducts its operations, which
internal business practices and processes would you say are critical for long-term
sustainability?

Probing questions

 Are there particular areas that you’d like to improve?

 How do you go about long-term strategic planning / business
planning?
 Can you explain how governance is addressed in your organisation?
 If there are there other aspects of risk management than financial risk
that you focus on, can you explain how you go about it?
 How do you measure performance?
 How is cost management addressed?

Page 94 of 102
 How are the key performance indicators communicated with the
staff?
14. Can you tell me more about the partnerships or relationships that are important to
the success of your organisation?

3. Delivering social value

3.1 The nature of the social challenge being addressed
15. How important is the social challenge that your organisation is seeking to address
to you, to your staff, to your partners and the communities that you are helping?
16. What are your future plans in terms of the social mission of your organisation? Are
you planning to scale up or diversify, for instance?

Probing questions

 How do you feel about the level of social impact that your
organisation is achieving?
 How does it relate to staff morale and attitude?
 What do you believe are the most pressing social challenges of the
country?
 How important is it for the social purpose of a social enterprise be
aimed at addressing a pressing social challenge?

Page 95 of 102
 Page 96 of 102
Transitioning NP's Pure SE

Dreamhouse Workshop for the Blind

Johannesburg Housing Company
The Bondtitis Benefit Scheme

Small Enterprise Foundation

Bobs For Good Foundation
B. Data coding of primary data from ILO case studies

Sodla Sonke cooperative

The figure below is showing a sample of the data coding exercise

Khulisa Social Solutions

Zip Zap Circus school

Magwa volunteers
The Clothing Bank
Emmanuel Haven

Food and Trees

Learn to earn

Life College
Shawco
ICEE

Individual aspects
Prominent & impactful founder(s) (Yes or No) Y Y ? Y Y Y Y N Y N Y Y ? Y Y Y
Relevant skills or experience of founder/leader(s) (Yes or No) Y Y ? Y Y Y Y N Y ? Y Y Y Y Y Y
Organisational aspects
Location (no scientific representation) CT EC CT D CT CT CT EC JNB GTG EC JNB JNB JNB Pta O
S21+PT S21+
Tr Tr+S21 Tr S21 Tr+S21 S21 S21+ FP? Coop S21 Coop CC Tr+FP? S21 S21
Structure Y 3FP's
Has the structure evolved since start up? N Y N H ? ? Y N N Y N? Y? N N Y N
Age ?
0-5 years Y Y Y
6-10 years Y

conducted initially on the ILO case studies.

>10 years Y Y Y Y Y Y Y Y Y Y Y
Size (in terms of permanent staff)
<5 Y Y Y
5-10 staff Y
11-49 staff Y Y Y Y Y Y Y
≥ 50 staff Y Y Y Y Y
Process aspects (including business practices) ?
Social indicators or metrics are clear (Yes or No) Y Y N Y Y Y Y? ? Y Y Y? Y? Y Y Y Y?
There is a long term plan to scale geographically Y N N Y Y Y N? N Y N N N? N Y N Y
If partnerships in place, how strong is it? H H M H H H N? ? H M H H H H H H
Level of innovation (Low to High) H H M H L M H L H M M H ? M H L
Strategic planning and/or research (Yes = Y, No = N or Unknown = ?) ? ? ? Y Y Y ? Y ? ? N Y Y Y Y Y
Social value aspects
Scope (national = N, regional = R, community-specific = C) N R N N R R R C N R C R R N R R
Fit of social mission with social challenges (Direct = D, Indirect = I) I D I I D D D D D I D D I I D D
Success
Recognized externally through awards, nominations or fellowship (Yes or No) ? Y Y Y ? ? ? N Y ? ? ? Y Y Y Y
Turnover
< R 5 million Y Y Y ? Y ? Y
R 5-10 million Y Y Y Y
R 11-49 million Y Y Y
≥ R 50 million Y Y
% earned income
< 25%
25-49% Y Y Y Y 40-50%
50-74% Y 53% 55%
75-100% 100% 100% 100% 100% 100% 90-95% 95% 95%
Earned income strategies
Fundraising Y Y Y Y Y
Grant funding / CSR Y Y Y Y
Direct income-making activities Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Indirect income-making activities Y Y Y Y Y Y Y
Other sources of information Y Y Y Y Y
Google search hits (23 Apr'12) 73 300 30 300 326 41 600 4-172 349 21 500 4 150 218 000 2 620 4 150
C. Feedback received from some interviewees

Feedback from the MD of SEF, 20 th January 2013

Feedback from the MD of Dreamhouse, 23 rd January 2013

Page 97 of 102
D. Management Challenge diary

Week 1, February’12

Rhythm

 Very hard to get back into the subject if left untouched for more than
a week.
 Need to stay close to it on a daily basis.

Dilemma between quality & progress

 Still struggling to balance between seeking greater breadth versus

progress

Re-focusing the MC

 Concerned about presence of viable social enterprises in SA, while this

was a starting assumption.
 Therefore, needed to re-frame the MC and allow the definition of a
social enterprise to be expanded.

Progress overall

 Happy to know that it remains achievable, especially after the MC

clinic.
 I need to complete a draft of the literature review in 2-3 weeks to stay
on course

Week 2, February’12

While reflecting on the content currently provided by Henley Business

School on SE, it is remarkably thin when compared to other major

institutions such as Oxford University, Stanford, INSEAD. It is currently

only a small fraction of entrepreneurship, which is itself taught as an

elective of the Flexible MBA. This has contributed to the challenges I

have faced in reviewing current thinking as my entire research had to be

done outside of the Henley MBA content.

Page 98 of 102
Week 3, February’12

 I find myself spending too much time on form rather than completing
missing content.
 Time also spent in shifting sections from one part to another.
 Not too sure what differentiates content in Introduction and
Literature review
 Initially, I thought that SE could include non-profit entities but more
recent definitions suggest that SE implies there is indeed an income-
generating activity as a prerequisite, which makes the title incorrect in
terms of saying “for-profit social entrepreneurship”.

I can now define the key elements against which to evaluate my local
case studies:

 The social purpose

- Strategic fit with social needs
- What are the social indicators used to track social impact and what’s the current
social impact?
- Is it scalable? How to maximize social impact?
 The individual
- What happens to the organization if the founder/owner/manager leaves?
- What are his/her dominant characteristics and personality traits
 The organisation
- Business model within the hybrid spectrum – where does it fit and why
- What makes it financial viable and therefore, sustainable
 The process
- How did it originate? Was it planned or did it evolve over time?

Week 4 February to Week 1 March’12

 Draft Intro + Lit review was submitted to supervisor for comments.

 I now realize that it’s important to ask myself ‘so what’ in the context
of the forthcoming investigation piece.
 I have to tweak what I’ve done so far to make sure it flows into the
investigation section.
 So, the comments of the supervisor were very pertinent and forced
me to focus on how it all will link to the research piece.
 I started reading about case studies and bought the book from Yin, as
recommended.
 It’s taking me much longer than I thought to go through it, but every
page is very worthwhile and helping me better craft the research.

Page 99 of 102
  I found myself asking whether I had pitched the right question for my
MC and whether I had chosen the right research design.
 But upon learning further, I realize that I could have chosen a wide
range of research questions around SE, since what I’ve come across
was limited and since SE is a wide topic ranging from organizational,
process, individualistic and to social sciences.
 Therefore, I’ve decided to stick to my original research question and
try to answer it with a sample of case studies that will hopefully be
sufficient to confirm that SE can indeed be a viable means of
addressing social challenges in South Africa.

Week 2 March to Week 1 April‘12

 Battling to identify the most appropriate research method and

hesitating between a survey and a comparative analysis of case
studies.
 Time is against me and because of the lack of a formal list of social
entrepreneurs locally and the delayed response from ASEN/University
of Johannesburg, I’m having to do a case study analysis although I’m
not sure how to frame the questions yet.
 I’ve put together an analytical framework, based on literature review
and a few other case study analysis, but I’m looking at it from various
angles.

September to October’12

Completed 4 interviews but frustrated that more is needed according to

supervisor.

Have transcribed all interview recordings and as of 8th Oct, received a

boost to complete the project before my 2 daughters are born! My wife

was very clear that she would not cope with me continuing to need time
to study once the babies are born. So it’s really now or never!

This has given me the push / drive that I needed to apply myself.
Also, I have some free time right now until I hear more about being

offered a new job internally.

I’ve been thinking too much about how to do the analysis and right now,

I’m thinking about just starting to write about each of the key buckets in

Page 100 of 102

my theoretical framework. It’d be more like an explanatory form of

analysis.

October-December’12

I have not been able to make any progress with the arrival of the twins a
little earlier than expected. I had to devote all my time left after work to

help my wife and it’s been very difficult with a lack of sleep as the babies
were waking up almost every 2 hours. I gave up on the idea of trying to

finish before the year is over and decided to put the family first. My wife
threatened to leave me if I used the MBA as an excuse not to help her. I

also got promoted in November in an entirely new role and had to

prioritize work and family over the studies.

January’13

I managed to get back into the MC at the end of December when most
of my colleagues were away. I did not take leave and spent all of my

time at work to make some progress again. It took me quite some time
to understand how to analyze and interpret the data from the interviews

but after much to and fro, I started writing again and felt really good
about it. I set myself a new deadline to finish all outstanding

assignments by end of March because after that, I am sure work

demands will simply overtake the studies. By mid-January, I completed

the Analysis & Recommendations section and the feedback I received

from the supervisor and 2 of the MD’s I interviewed were very positive.

This has boosted my confidence and now that the babies are sleeping
for longer periods, I am trying to find some time at home in the evening

to progress further.

Page 101 of 102

Summary of progress

Month Approx. Comments

word
count
MC activities completed, proposal sent & supervisor feedback received
Oct'11 500
to proceed

Nov'11 500
MC paused in order to complete 3 other outstanding MBA assignments
Dec'11 500

Jan'12 950 Re-engaged with MC and started developing Introduction section

Feb'12 5550 Completed Introduction & ROCT & received feedback from supervisor

Added summary of output from ROCT, started Research Objectives

Mar'12 6860
section & updated with feedback from supervisor
Finetuned ROCT with feedback from supervisor & Nigel Spinks on
Apr'12 5550
Research Design

May'12 5600 Added terms of reference & finetuned ROCT

Added theoretical propositions & updated with feedback from

Jun'12 5710
Supervisor on Investigation section
Work on Investigation design & Supervisor feedback received on
Jul'12 7320
preliminary interview questionnaire
Finalized selection criteria for targeted case organisations and
Aug'12 8020
completed interview protocol & questionnaire design

Sep'12 8020 Completed 3 targeted interviews & interview findings transcribed

Oct'12 8020
MC paused with birth of twins
Nov'12 8020

Dec'12 9870 Work on data coding, data analysis and reporting

Analysis section completed & Supervisor feedback received; reference

Jan'13 17075
list completed

Page 102 of 102