Harvard Case - Haboydem: A Social Enterprise in the Holy Land
"Haboydem: A Social Enterprise in the Holy Land" Harvard business case study is written by Mark S Schwartz. It deals with the challenges in the field of Social Enterprise. The case study is 10 page(s) long and it was first published on : Jun 25, 2020
At Fern Fort University, we recommend Haboydem adopt a hybrid organizational structure, leveraging a social enterprise model to expand its impact while ensuring financial sustainability. This approach will enable Haboydem to address the complex challenges of poverty, unemployment, and social exclusion in the Holy Land while maintaining its commitment to social innovation and sustainable business models.
2. Background
Haboydem, a social enterprise operating in the Holy Land, faces the challenge of balancing its social mission with financial viability. Founded by a group of Palestinian entrepreneurs, Haboydem aims to empower marginalized communities through fair trade practices, providing employment opportunities and promoting economic development. The organization currently operates a bakery and a restaurant, employing individuals from disadvantaged backgrounds. However, Haboydem faces challenges in scaling its operations due to limited resources and the volatile political and economic environment in the region.
The main protagonists of the case study are:
- The founders: Passionate about social change and committed to creating sustainable economic opportunities for marginalized communities.
- The employees: Individuals from disadvantaged backgrounds who rely on Haboydem for employment and income.
- The customers: Local residents and tourists seeking fair trade products and ethical dining experiences.
- The stakeholders: Local NGOs, government agencies, international donors, and potential investors.
3. Analysis of the Case Study
To analyze Haboydem's situation, we can utilize the Triple Bottom Line framework, which emphasizes the importance of considering social, environmental, and economic performance.
Social Impact: Haboydem's social impact is significant. It provides employment opportunities for marginalized communities, promoting economic empowerment and social inclusion. The organization also contributes to community development through its fair trade practices and focus on local sourcing.
Environmental Sustainability: Haboydem's bakery and restaurant prioritize local ingredients and sustainable practices, minimizing their environmental footprint. This aligns with the growing demand for ethical supply chains and circular economy models.
Financial Viability: Haboydem's current business model faces challenges in achieving financial sustainability. The volatile political and economic environment, coupled with limited resources, hinders its growth potential.
Strategic Analysis:
- Strengths: Strong social mission, dedicated team, positive community impact, fair trade practices, and a growing customer base.
- Weaknesses: Limited resources, dependence on external funding, lack of scalability, and operational inefficiencies.
- Opportunities: Growing demand for social enterprises, potential for partnerships with NGOs and international organizations, expansion into new markets, and development of innovative social business models.
- Threats: Political instability, economic downturn, competition from traditional businesses, and difficulty attracting investment.
4. Recommendations
To address Haboydem's challenges and maximize its impact, we recommend the following:
- Adopt a Hybrid Organizational Structure: Transition from a traditional non-profit model to a hybrid structure that combines social mission with financial sustainability. This can be achieved by incorporating elements of a Benefit Corporation or a B Corporation model.
- Develop a Scalable Business Model: Expand beyond the bakery and restaurant, exploring new product lines and services that align with Haboydem's social mission. This could include:
- Social franchising: Empowering local communities to establish their own Haboydem branches, creating a network of social enterprises.
- Microfinance: Offering microloans and financial services to marginalized entrepreneurs, providing access to capital and fostering economic empowerment.
- Social impact bonds: Partnering with investors to fund social programs with measurable outcomes, attracting capital for sustainable impact.
- Strengthen Partnerships: Collaborate with local NGOs, government agencies, and international organizations to leverage resources, expertise, and market access. This can include:
- Cross-sector partnerships: Working with businesses to develop shared value creation opportunities, integrating social responsibility into corporate strategies.
- Strategic alliances: Partnering with international organizations to expand operations and access new markets, leveraging global networks and resources.
- Invest in Capacity Building: Develop a comprehensive training program for employees, focusing on business skills, entrepreneurship, and leadership development. This will empower employees to contribute to Haboydem's growth and sustainability.
- Implement a Robust Social Impact Measurement Framework: Track and measure Haboydem's social impact, demonstrating the value created for communities and attracting investors. This can include:
- Social return on investment (SROI) analysis: Quantifying the social and economic benefits of Haboydem's activities, providing evidence for impact investors.
- Social impact measurement tools: Utilizing standardized metrics to track progress towards achieving social goals, ensuring transparency and accountability.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with Haboydem's core competencies in fair trade practices, community development, and social entrepreneurship. They also support the organization's mission of empowering marginalized communities and promoting economic development.
- External customers and internal clients: The recommendations consider the needs of Haboydem's customers, employees, and stakeholders, ensuring their satisfaction and continued engagement.
- Competitors: The recommendations acknowledge the competitive landscape, highlighting the need for innovation and differentiation to attract customers and investors.
- Attractiveness ' quantitative measures if applicable (e.g., NPV, ROI, break-even, payback): The recommendations aim to enhance Haboydem's financial viability, leveraging a blended value approach that considers both social and financial returns.
- Assumptions: The recommendations assume a stable political and economic environment, a supportive government policy framework, and a growing demand for social enterprises in the region.
6. Conclusion
By adopting a hybrid organizational structure, developing a scalable business model, strengthening partnerships, investing in capacity building, and implementing a robust social impact measurement framework, Haboydem can achieve sustainable growth and maximize its social impact. This will contribute to a more equitable and just society in the Holy Land, demonstrating the power of social enterprise to address complex social challenges.
7. Discussion
Other alternatives not selected include:
- Remaining a traditional non-profit: This would limit Haboydem's growth potential and dependence on external funding.
- Focusing solely on profit maximization: This would compromise the organization's social mission and alienate stakeholders.
Key assumptions and risks include:
- Political instability: The volatile political environment in the Holy Land could disrupt Haboydem's operations and hinder its growth.
- Economic downturn: A global economic recession could impact demand for Haboydem's products and services, affecting its financial viability.
- Competition: Traditional businesses could pose a threat to Haboydem's market share, requiring the organization to differentiate itself through its social mission and innovative business models.
8. Next Steps
To implement these recommendations, Haboydem should take the following steps:
- Develop a strategic plan: Define clear goals, objectives, and strategies for achieving a hybrid organizational structure and a scalable business model.
- Conduct a feasibility study: Assess the potential of new product lines and services, identifying opportunities for growth and impact.
- Establish partnerships: Engage with local NGOs, government agencies, and international organizations to explore collaborative opportunities.
- Develop a training program: Invest in capacity building for employees, equipping them with the skills and knowledge to contribute to Haboydem's success.
- Implement social impact measurement tools: Track and measure Haboydem's social impact, demonstrating its value creation and attracting investors.
By taking these steps, Haboydem can position itself for sustainable growth and maximize its impact on the Holy Land, becoming a model for social enterprise success in a challenging environment.
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Case Description
Haboydem was a second hand clothing store in Jerusalem that operated as a social enterprise by hiring and training individuals who were living with mental illness. The two store locations had successfully trained workers, and 70 per cent were able to find employment in mainstream businesses; however, in mid-2017, the co founders faced new issues. How should they deal with emerging competition from other second hand clothing retailers? How should they address the possibility of partnerships with other organizations? Should the company expand to additional locations or into additional activities? How should the co-founders measure Haboydem's success? They needed to reflect on how to best address these challenges, and how their social enterprise could best move forward toward a long term future.
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