Harvard Case - Manchester Craftsmen's Guild and Bidwell Training Center: Governing Social Entrepreneurship
"Manchester Craftsmen's Guild and Bidwell Training Center: Governing Social Entrepreneurship" Harvard business case study is written by James L. Heskett, Douglas Freeman, Roopchand Ramgolam, Joshua Wallack. It deals with the challenges in the field of Social Enterprise. The case study is 28 page(s) long and it was first published on : Jan 28, 2000
At Fern Fort University, we recommend that the Manchester Craftsmen's Guild (MCG) and Bidwell Training Center (BTC) adopt a hybrid organizational structure, leveraging the strengths of both nonprofit and for-profit models to achieve sustainable growth and maximize social impact. This approach will allow them to address the challenges of financial sustainability while remaining true to their mission of empowering communities through arts and crafts education.
2. Background
The case study focuses on the MCG and BTC, two Pittsburgh-based organizations dedicated to providing arts and crafts education, particularly to underserved communities. MCG, a nonprofit, faces financial challenges despite its strong community impact. BTC, a for-profit organization, struggles to scale its impact due to its focus on generating profits. The case study explores the challenges and opportunities of governing social entrepreneurship, highlighting the need for a model that balances social mission with financial viability.
The main protagonists are:
- Richard Armstrong: Executive Director of MCG, committed to the organization's social mission but facing financial constraints.
- John DeSantis: Founder of BTC, driven by entrepreneurial spirit but concerned about balancing profit with social impact.
- The Board of Directors: Responsible for guiding both organizations and navigating the complex interplay between social mission and financial sustainability.
3. Analysis of the Case Study
The case study highlights the tension between social mission and financial sustainability, a common challenge for social enterprises. We can analyze this using the Triple Bottom Line framework, which emphasizes the importance of balancing social, environmental, and economic performance.
- Social Impact: Both organizations have a strong social mission, providing valuable skills and opportunities to underserved communities. However, MCG's financial struggles threaten its ability to continue its work, while BTC's profit focus may limit its social impact.
- Environmental Sustainability: The case study does not explicitly address environmental sustainability, but it is relevant to the arts and crafts sector. Both organizations could explore eco-friendly materials and practices to enhance their sustainability.
- Economic Viability: MCG's financial difficulties demonstrate the need for a more sustainable business model. BTC's for-profit structure offers potential for financial growth, but it must be balanced with the social mission.
4. Recommendations
To address the challenges and maximize the impact of both organizations, we recommend the following:
- Hybrid Organizational Structure: Create a hybrid structure that combines the strengths of both nonprofit and for-profit models. This could involve establishing a for-profit subsidiary under the MCG umbrella or creating a joint venture between MCG and BTC.
- Social Impact Measurement: Develop a robust social impact measurement framework to track and quantify the impact of both organizations. This will help demonstrate the value of their work and attract investors and partners.
- Impact Investing: Seek out impact investors who are interested in supporting organizations with a strong social mission and a clear path to financial sustainability. This could involve offering equity in the for-profit subsidiary or issuing social impact bonds.
- Strategic Partnerships: Build strategic partnerships with corporations, foundations, and government agencies to leverage resources and expand the reach of both organizations. This could involve joint programming, co-branding initiatives, and shared marketing campaigns.
- Innovation and Diversification: Explore new revenue streams and innovative business models to enhance financial sustainability. This could involve developing new products and services, expanding into new markets, and leveraging technology to reach wider audiences.
- Leadership Development: Invest in leadership development programs for both organizations to ensure that future leaders are equipped to navigate the complexities of social entrepreneurship. This could involve training in social impact measurement, financial management, and strategic planning.
- Governance and Transparency: Establish clear governance structures and transparent reporting mechanisms to ensure accountability and build trust with stakeholders. This could involve creating a joint board of directors or establishing a shared governance framework.
5. Basis of Recommendations
Our recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The hybrid structure allows both organizations to leverage their core competencies while remaining true to their mission of empowering communities.
- External Customers and Internal Clients: The recommendations address the needs of both external customers (students, communities) and internal clients (staff, board members).
- Competitors: The recommendations aim to create a competitive advantage by leveraging innovation, partnerships, and impact investing.
- Attractiveness ' Quantitative Measures: The recommendations are expected to enhance financial sustainability, increase social impact, and attract investors.
- Assumptions: We assume that both organizations are committed to their mission, have the capacity to implement the recommendations, and can attract the necessary resources.
6. Conclusion
By adopting a hybrid organizational structure, leveraging impact investing, and fostering strategic partnerships, MCG and BTC can achieve sustainable growth while maximizing their social impact. This approach will allow them to address the challenges of financial sustainability while remaining true to their mission of empowering communities through arts and crafts education.
7. Discussion
Other alternatives not selected include:
- Merging the organizations: This could create a single entity with a combined mission and resources. However, it could also lead to cultural clashes and loss of identity.
- Remaining independent: This would maintain the distinct identities of both organizations but would require them to overcome their individual challenges independently.
Risks and Key Assumptions:
- Cultural clashes: The hybrid structure could lead to cultural clashes between the nonprofit and for-profit entities.
- Financial risk: Impact investing and partnerships may not generate sufficient returns to ensure financial sustainability.
- Loss of mission focus: The focus on financial sustainability could potentially overshadow the social mission.
8. Next Steps
To implement the recommendations, the following steps should be taken:
- Form a joint task force: This task force should include representatives from both organizations and be responsible for developing a detailed implementation plan.
- Conduct a feasibility study: This study should assess the financial viability and social impact of the hybrid structure.
- Develop a communication strategy: This strategy should ensure that all stakeholders are informed about the changes and the rationale behind them.
- Seek funding and partnerships: The organizations should actively seek funding and partnerships to support the implementation of the recommendations.
By taking these steps, MCG and BTC can create a sustainable and impactful future for themselves and the communities they serve.
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Case Description
A super board is created to oversee activities of the boards of Manchester Craftsmen's Guild (an arts organization dedicated to serving "at risk" youth) and Bidwell Training Center (a job retraining venture) in Pittsburgh. The structure is tested with decisions regarding the creation of a for-profit greenhouse, a recording and performance business, and a consulting venture.
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