Harvard Case - Mercy Corps: Global Social Entrepreneurship (A)
"Mercy Corps: Global Social Entrepreneurship (A)" Harvard business case study is written by Christopher A. Bartlett, Daniel F. Curran. It deals with the challenges in the field of Social Enterprise. The case study is 25 page(s) long and it was first published on : Jun 10, 2003
At Fern Fort University, we recommend Mercy Corps adopt a hybrid organizational structure that leverages its existing strengths in nonprofit operations while embracing social entrepreneurship to achieve greater impact and sustainability. This approach involves creating a social enterprise arm within Mercy Corps, operating as a separate legal entity with its own business model and impact measurement framework. This strategy will allow Mercy Corps to:
- Scale its impact by reaching new beneficiaries and markets through innovative, market-driven solutions.
- Diversify revenue streams and reduce reliance on traditional grant funding.
- Build a sustainable and resilient organization capable of adapting to changing needs and environments.
- Demonstrate leadership in the social entrepreneurship space and inspire other organizations to adopt similar models.
2. Background
Mercy Corps is a leading international humanitarian organization dedicated to alleviating poverty and suffering. They operate in over 40 countries, providing a range of services including emergency relief, development programs, and microfinance. The case study focuses on Mercy Corps' efforts to leverage social entrepreneurship as a means to achieve greater impact and sustainability.
The main protagonists of the case are:
- Neal Keny-Guyer: CEO of Mercy Corps, who is a strong advocate for social entrepreneurship.
- The Mercy Corps team: They are faced with the challenge of integrating social entrepreneurship into their existing organizational structure and culture.
- Potential beneficiaries: The case highlights the need to reach new beneficiaries and markets through innovative solutions.
3. Analysis of the Case Study
Mercy Corps' current model relies heavily on traditional nonprofit funding and grant-making, which can be unpredictable and limited in scope. This creates challenges for scaling impact and achieving long-term sustainability.
Social entrepreneurship offers a potential solution by:
- Creating sustainable revenue streams: By developing market-driven solutions that address social needs, social enterprises can generate revenue to support their operations and expand their reach.
- Innovating and adapting to changing needs: Social entrepreneurs are often at the forefront of developing new and innovative solutions to address complex social problems.
- Building partnerships and leveraging resources: Social entrepreneurs can collaborate with businesses, governments, and other organizations to leverage resources and maximize impact.
However, integrating social entrepreneurship into a traditional nonprofit organization presents challenges:
- Organizational culture and mindset: Nonprofits often have a different culture and mindset than businesses, which can create barriers to adopting entrepreneurial approaches.
- Legal and regulatory frameworks: Nonprofits operate within a different legal and regulatory framework than businesses, which can create complexities in setting up and operating social enterprises.
- Impact measurement and accountability: Nonprofits are often held to different standards of impact measurement and accountability than businesses, which can create challenges in demonstrating the value of social enterprises.
Framework for Analysis:
To analyze the case, we can use the Triple Bottom Line framework, which considers the social, environmental, and economic impacts of an organization's activities. This framework helps us assess the potential benefits and challenges of adopting a hybrid organizational structure that combines nonprofit operations with social entrepreneurship.
4. Recommendations
Mercy Corps should adopt a hybrid organizational structure that includes a separate social enterprise arm. This arm should be a legally distinct entity with its own business model, impact measurement framework, and governance structure.
Key Steps:
- Develop a clear vision and strategy for the social enterprise arm: This should include defining the target market, identifying potential social problems to address, and developing a sustainable business model.
- Establish a dedicated team with entrepreneurial skills and experience: This team should be responsible for developing and managing the social enterprise, including marketing, operations, and finance.
- Develop a robust impact measurement framework: This framework should track the social, environmental, and economic impacts of the social enterprise, ensuring accountability and transparency.
- Secure funding and investment: This can include traditional grant funding, impact investing, and venture philanthropy.
- Build strategic partnerships with businesses, governments, and other organizations: This will help leverage resources, expand reach, and create a more sustainable ecosystem for the social enterprise.
5. Basis of Recommendations
- Core competencies and consistency with mission: This approach leverages Mercy Corps' existing expertise in development and humanitarian work while expanding its impact through innovative, market-driven solutions.
- External customers and internal clients: The social enterprise arm can reach new beneficiaries and markets, while also providing opportunities for internal staff to develop entrepreneurial skills and experience.
- Competitors: This approach allows Mercy Corps to stay ahead of the curve in the evolving landscape of social entrepreneurship and impact investing.
- Attractiveness ' quantitative measures: While quantifying the impact of social enterprises can be challenging, the potential for increased revenue, expanded reach, and greater sustainability makes this approach attractive.
- Assumptions: This approach assumes that Mercy Corps has the capacity and commitment to build and manage a successful social enterprise. It also assumes that there is a market for the social enterprise's products or services.
6. Conclusion
Adopting a hybrid organizational structure with a dedicated social enterprise arm is a strategic approach for Mercy Corps to achieve greater impact and sustainability. This model allows them to leverage their existing strengths while embracing innovation and entrepreneurial approaches to address complex social problems.
7. Discussion
Alternatives:
- Continuing with the current model: This would maintain the status quo, but limit Mercy Corps' ability to scale impact and achieve long-term sustainability.
- Fully transitioning to a social enterprise: This would require a significant shift in organizational culture and structure, and may not be feasible for Mercy Corps given its existing commitments and expertise in humanitarian work.
Risks and Key Assumptions:
- Market risk: The social enterprise may not be able to generate sufficient revenue to sustain itself.
- Operational risk: The social enterprise may face challenges in managing operations, including marketing, finance, and human resources.
- Impact measurement risk: It may be difficult to accurately measure the social impact of the social enterprise.
Options Grid:
| Option | Pros | Cons |
|---|---|---|
| Hybrid Organizational Structure | Greater impact, sustainability, innovation | Complexity, organizational change |
| Current Model | Stability, familiarity | Limited impact, sustainability |
| Full Transition to Social Enterprise | High impact, sustainability | Major organizational change, risk |
8. Next Steps
- Conduct a feasibility study: This should assess the potential market for the social enterprise, identify potential business models, and develop a preliminary impact measurement framework.
- Develop a pilot project: This will allow Mercy Corps to test the social enterprise model and gather data on its effectiveness.
- Secure funding and investment: This will be crucial for launching and scaling the social enterprise.
- Build a dedicated team: This team should have the skills and experience necessary to develop and manage the social enterprise.
- Develop a communication strategy: This will be important for raising awareness of the social enterprise and its impact.
By taking these steps, Mercy Corps can successfully integrate social entrepreneurship into its operations and achieve its mission of alleviating poverty and suffering in a more sustainable and impactful way.
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Case Description
Neal Keny-Guyer, CEO of Mercy Corps International, built his organization by following the advice of Theodore Roosevelt: "Be smart enough to hire good people and have sense enough to get out of their way." For eight years, Keny-Guyer helped Mercy Corps grow in size and scope and by 2001, delivered $117 million in social programs to people in over 30 countries. Convinced that much of that success had come from empowering front-line managers to lead the agency by pursuing opportunities in the field, he wanted to continue the approach. But, recent experiences in Afghanistan had exposed some weaknesses in Mercy Corps' ability to maintain an entrepreneurial approach in an emergency situation. What had worked so well in an organization of 200 was encountering difficulties now that worldwide staff exceeded 2,000. At a global leadership conference in late October 2002, Keny-Guyer met with his senior leadership team. In addition to wrestling with the political complexities of working in Iraq, he wanted to get their input on how Mercy Corps should respond if they decided it was the right course of action.
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