Complex adaptive systems appraoch to social entrepreneurship business model designs within local government

Abstract

This research study set out to understand social entrepreneurship business model design paradigms within the complex environments of local governments in South Africa. Although the current theory base suggests that social entrepreneurship ventures in local government also known as public-sector entrepreneurship, is severely limited by regulatory constraints, social entrepreneurs have a mandate to alleviate the service delivery pressures on local government by engaging in robust action and creating alternative service delivery models, especially in the terrain of electricity distribution, water reticulation and waste management services to communities. The research study has found that social entrepreneurs do indeed deliver on this mandate and that they actively see the private sector as a pivotal stakeholder in solving market failures. The empirical research is however very limited and almost absent as to how business model designs within this context should account for the overwhelming complexity of local government services as there exists a paradox between the simple and causal-based business model and the complex nature of the enacted environment. It can be concluded that the exploratory research has achieved its aim to answer the research problems, namely: To understand the rules and logic of social entrepreneurship business models, how this model creates network value, how stakeholders are included in this model, how it creates social impact, and lastly how the model adapts to complex environments. In summary, the findings show that especially the individual contexts of the social entrepreneur and the content and capabilities of the organisation are focal elements of social entrepreneurship business models. These business models create and capture value by virtue of its network interface and stakeholder management mechanisms and that private sector partnerships have a key role in this network. The social enterprise can be construed as a complex adaptive system that senses and adapts to the contextual environment so that it can create scalable and sustainable solutions. These findings are therefore significant and will consequently be summarised in more depth by the following subsections. Although an explorative approach was conducted, the qualitative interviews with 15 respondents, five from each sector in the sample group, provided rich insights that could be empirically validated through triangulation. Although it has not been definitively validated by quantitative methods, this could pose an avenue for further research. The study yielded exciting findings that emphasised the value of shifting the design paradigm of business models towards a theoretical frame that aligns praxis with academia. Complex adaptive systems theory provided an invaluable framework for analysing the research problem and has achieved the research aims beyond expectations. One of the key findings has shown that the manifestation of the social business at its heart vests in the rules and logic of the social entrepreneur. Therefore, if the social entrepreneur can grasp the theoretical context of iii complex adaptive business models, it could potentially provide a new and exciting avenue for entrepreneurial paradigms. Finally, the five research questions yielded emerging themes that were aligned with the conceptual framework that was developed by triangulating three different bases of theory and consequently not only validated this conceptual framework, but also yielded deep insights that strengthened and developed the proposed framework into a testable and viable frame of business model design thinking. This new theoretical framework could provide an ontological model that may prove to become an invaluable tool for organisational development practitioners, executive managers and entrepreneurs alike to develop sustainable business models.