How the social entrepreneurship business model designs in South Africa create value : a complex adaptive systems approach

Abstract

PURPOSE : This paper aims to understand social entrepreneurship (SE) business model design to create values whilst undertaking public service delivery within the complex environments of local governments in South Africa. DESIGN/METHODOLOGY/APPROACH : Face-to-face semi-structured interview was conducted with 15 purposively selected social entrepreneurs in Gauteng and Western Cape provinces. The interview guide consisted of main themes and follow-up questions. Themes included SEs’ general history, the social business model; challenges faced and how these were overcome; scaling and growth/survival strategies. These enabled the evaluation of SEs in terms of identifying key criteria of affordability, availability, awareness and acceptability, which SEs must achieve to operate successfully in low-income markets. Social enterprise owners/managers within the electricity distribution, water reticulation and waste management services sectors were surveyed. FINDINGS : Most respondents focus on building a network of trust with stakeholders, through communication mechanisms that emphasize high-frequency engagements. There is also a strong focus on design-thinking and customer-centric approaches that strengthen value creation. The value creation process used both product value and service value mechanisms and emphasized quality and excellence to provide stakeholder, as well as societal value, within their specific contexts. PRACTICAL IMPLICATIONS : This study builds upon other research that emphasizes SEs’ customer-centric approaches to strengthen value creation and on building a network of trust with multiple stakeholders. It contributes to emphasizing the business paradigm shift towards bringing social values to the business practice. SOCIAL IMPLICATIONS : Social good, but resource providers are demanding more concrete evidence to help them understand their impact (Struthers, 2013). This is because it is intrinsically difficult for many social organizations to document and communicate their impact in more than an anecdotal way. The research has contributed to the understanding of how SEs can provide evidence of value creation. ORIGINALITY/VALUE : This study contributes to the understanding of how business models are designed to create value within the context of the overwhelming complexity of local government services in South Africa.