Harvard Case - Growing Home: Creating Institutional Change in China
"Growing Home: Creating Institutional Change in China" Harvard business case study is written by Christopher Marquis, Yen Hsiang Wu. It deals with the challenges in the field of Social Enterprise. The case study is 27 page(s) long and it was first published on : Apr 16, 2018
At Fern Fort University, we recommend Growing Home adopt a hybrid organizational structure that leverages the strengths of both for-profit and non-profit models. This approach will allow Growing Home to achieve its ambitious goals of scaling its social impact while ensuring financial sustainability and long-term viability.
2. Background
This case study focuses on Growing Home, a social enterprise in China dedicated to improving the lives of rural families through sustainable agriculture practices. Founded by a passionate entrepreneur, Li Ming, Growing Home aims to address the challenges of poverty, environmental degradation, and food security in rural China. The organization faces a critical juncture, needing to decide its future direction: remain a non-profit, transition to a for-profit model, or explore a hybrid approach.
The main protagonists are Li Ming, the founder and CEO of Growing Home, and the organization's board of directors, who are grappling with the challenges of balancing social impact with financial sustainability.
3. Analysis of the Case Study
The case can be analyzed through the lens of social entrepreneurship and stakeholder theory. Growing Home exemplifies a social purpose business with a strong commitment to triple bottom line performance, considering social, environmental, and financial impacts. However, the organization faces a classic dilemma of social enterprise governance: balancing its mission of community development with the need for financial stability and growth.
Key challenges:
- Financial sustainability: Growing Home struggles to generate sufficient revenue to cover its operational costs and expand its reach.
- Scaling social impact: The organization needs to find ways to reach more rural families and replicate its successful model in other regions.
- Organizational structure: The current non-profit structure limits Growing Home's ability to attract investment and access new markets.
- Leadership and talent: The organization needs to attract and retain skilled professionals to manage its growth and expansion.
Opportunities:
- Emerging markets: China's rural market presents a significant opportunity for Growing Home to expand its operations and generate revenue.
- Government support: The Chinese government is increasingly supportive of social enterprises and sustainable agriculture initiatives.
- Impact investing: Growing Home can leverage the growing interest in impact investing to attract capital from investors seeking social and environmental returns.
- Innovation: The organization can develop innovative sustainable business models and social innovation solutions to address the challenges of rural development.
4. Recommendations
1. Hybrid Organizational Structure:
- Establish a hybrid organization with a for-profit subsidiary responsible for generating revenue and a non-profit arm focused on social impact.
- This structure allows Growing Home to access capital markets, attract investors, and scale its operations while maintaining its social mission.
- The non-profit arm can focus on advocacy, research, and development of new sustainable agricultural practices.
2. Strategic Partnerships:
- Partner with non-governmental organizations (NGOs), government agencies, and other social enterprises to leverage resources and expertise.
- Collaborate with B Corporations and other businesses committed to social responsibility to create shared value creation opportunities.
- Establish strategic alliances with universities and research institutions to develop innovative agricultural technologies and solutions.
3. Impact Investing and Social Finance:
- Develop a compelling social impact investment proposition highlighting the potential for financial returns and social impact.
- Explore social impact bonds to attract investors willing to provide upfront capital in exchange for performance-based returns.
- Utilize microfinance and other social finance tools to provide access to capital for rural families.
4. Sustainable Business Model Innovation:
- Develop inclusive business models that benefit both rural families and Growing Home.
- Explore circular economy principles to minimize waste and maximize resource utilization.
- Implement fair trade practices to ensure equitable pricing and benefits for farmers.
5. Marketing and Communication:
- Develop a robust social enterprise marketing strategy to raise awareness of Growing Home's mission and impact.
- Utilize digital platforms and social media to reach a wider audience and engage with potential stakeholders.
- Partner with media outlets and influencers to promote Growing Home's work and inspire others to support sustainable agriculture.
6. Governance and Leadership:
- Establish a strong governance structure that balances social impact with financial sustainability.
- Recruit a diverse and experienced leadership team with expertise in social entrepreneurship, business development, and sustainable agriculture.
- Implement a robust social enterprise governance framework that ensures transparency, accountability, and ethical decision-making.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of Growing Home's current situation, its strengths and weaknesses, and the opportunities and challenges it faces. The proposed hybrid organizational structure aligns with the organization's mission and core competencies while providing the financial flexibility and scalability needed to achieve its ambitious goals.
The recommendations also consider the needs of external customers (rural families) and internal clients (employees, partners, and investors). They are consistent with the growing trend of impact investing and the increasing demand for sustainable business models. The proposed partnerships and collaborations will leverage the expertise and resources of other organizations to enhance Growing Home's impact and reach.
The recommendations are also based on the following assumptions:
- There is a growing demand for sustainable agricultural products and services in China.
- The Chinese government will continue to support social enterprises and sustainable agriculture initiatives.
- Impact investors are increasingly interested in investing in organizations with a strong social mission.
- Growing Home can attract and retain skilled professionals to manage its growth and expansion.
6. Conclusion
By adopting a hybrid organizational structure, embracing impact investing, and fostering strategic partnerships, Growing Home can achieve its goals of scaling its social impact while ensuring financial sustainability. This approach will enable the organization to become a leading force in promoting sustainable agriculture and improving the lives of rural families in China.
7. Discussion
Other alternatives not selected include:
- Remaining a non-profit: This option would limit Growing Home's access to capital and hinder its ability to scale its operations.
- Transitioning to a for-profit model: This option could compromise the organization's social mission and focus on profit maximization.
Key assumptions:
- The success of the hybrid model depends on the ability to attract investors and manage the complexities of a dual structure.
- The proposed partnerships and collaborations need to be carefully selected and managed to ensure mutual benefit.
- The organization needs to develop a robust social impact measurement framework to track and demonstrate its progress.
8. Next Steps
- Develop a detailed business plan for the hybrid organization.
- Identify and approach potential impact investors.
- Establish strategic partnerships with key stakeholders.
- Develop a comprehensive social impact measurement framework.
- Implement a robust marketing and communication strategy.
- Recruit and train a skilled leadership team.
By taking these steps, Growing Home can successfully transition to a hybrid organizational structure and achieve its ambitious goals of creating lasting positive change in rural China.
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Case Description
In 2008, Du and Lu, two experienced professional volunteers passionate about improving the state of mental health and well being among Chinese youth, founded Growing Home in Beijing, China. The nonprofit organization has since evolved from teaching children that have migrated to big cities from rural areas, to focusing on developing bedtime stories particularly for children in rural residential schools. As the demand for Growing Home's program expands, they face a decision on the organization's next step forward. Despite struggling with conflicts such as a lack of expertise and experience in commercializing the program, and establishing relationships with the government and other NGOs, the team is determined to reach the later stages of an ambitious 7-stage timeline designed to scale the NGO's social impact, and ultimately create significant institutional changes within China's education system. Case number 2123.0
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