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Von Der Weppen & Cochrane - Social enterprises in tourism - an exploratory study of operational models snd success factors.pdf

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This article was downloaded by: [Ieva Zebryte] On: 06 January 2013, At: 11:50 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Sustainable Tourism Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rsus20 Social enterprises in tourism: an exploratory study of operational models and success factors Jan
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  This article was downloaded by: [Ieva Zebryte]On: 06 January 2013, At: 11:50Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Sustainable Tourism Publication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rsus20 Social enterprises in tourism: anexploratory study of operationalmodels and success factors Janina von der Weppen a  & Janet Cochrane aa  School of Events, Tourism and Hospitality, Leeds MetropolitanUniversity, UKVersion of record first published: 05 Mar 2012. To cite this article:  Janina von der Weppen & Janet Cochrane (2012): Social enterprises in tourism:an exploratory study of operational models and success factors, Journal of Sustainable Tourism,20:3, 497-511 To link to this article: http://dx.doi.org/10.1080/09669582.2012.663377 PLEASE SCROLL DOWN FOR ARTICLEFull terms and conditions of use: http://www.tandfonline.com/page/terms-and-conditionsThis article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden.The publisher does not give any warranty express or implied or make any representationthat the contents will be complete or accurate or up to date. The accuracy of anyinstructions, formulae, and drug doses should be independently verified with primarysources. The publisher shall not be liable for any loss, actions, claims, proceedings,demand, or costs or damages whatsoever or howsoever caused arising directly orindirectly in connection with or arising out of the use of this material.   Journal of Sustainable Tourism Vol. 20, No. 3, April 2012, 497–511 Social enterprises in tourism: an exploratory study of operationalmodels and success factors Janina von der Weppen and Janet Cochrane ∗ School of Events, Tourism and Hospitality, Leeds Metropolitan University, UK  (  Received 29 July 2010; final version received 16 January 2012 )Organisations using market-based approaches to achieve social and/or environmentalaims are increasingly appearing in tourism. These “social enterprises” express respon-sible tourism through contributing to poverty alleviation and environmental protectionwhile being financially self-sustaining. This study uncovers the approach of such en-terprises in balancing commercial and social/environmental objectives, and investigatesthe determinants of success. The paper applies Alter’s 2006 seven-model framework of social enterprise models to a sample of successful enterprises, “success” being aligned with the broader aims of social enterprises. Overall, it was found that touristic socialenterprises operate similarly to those in other sectors, although with a clear preferencefor three “Alter” models, depending on the type of activity, namely Service Subsidis-ation, Employment and the Market Intermediary Model. Success factors appear to bevalid across all social enterprises in tourism, irrespective of primary business activityor operational model, and cannot be attributed to a single factor but to combinationsof factors in the multiple dimensions of leadership, strategy and organisational cul-ture. These guide the implementing mechanisms of processes and structure, humanresources, financing, governance, performance measurement and marketing. The mostlikely success factors are strong leadership, clear market orientation and organisationalculture, which balances financial with social/environmental aims. Keywords:  social enterprise; responsible tourism; market-based approach; organisa-tional culture; leadership; dynamics of change Introduction The last decade has seen social enterprises increasingly appearing in the tourism sector alongside private industry, government institutions and charities. The landscape of socialenterprise covers a wide spectrum of institutions, but increasing academic scrutiny hasresulted in a consensus that the primary goal of any social enterprise is the adoption of financiallysustainablestrategiestoachievesocialaims(Haugh,2005,p.1).Thisfundamen-tal “double bottom line” characteristic, the imperative to achieve both financial and socialreturns on investment (Dart, 2004; Peredo & McLean, 2006; Wallace, 2005), has engen-dered many definitions of the movement, perhaps most succinctly encapsulated by Kerlin(2006, p. 247) as “the use of nongovernmental, market-based approaches to address socialissues”. The driving force is the organisation’s mission, which – despite the term “socialenterprise” – can be social or environmental and sometimes both (Pearce, 2003, p. 33). ∗ Corresponding author. Email: j.cochrane@leedsmet.ac.uk  ISSN 0966-9582 print / ISSN 1747-7646 online C  2012 Taylor & Francishttp://dx.doi.org/10.1080/09669582.2012.663377http://www.tandfonline.com    D  o  w  n   l  o  a   d  e   d   b  y   [   I  e  v  a   Z  e   b  r  y   t  e   ]  a   t   1   1  :   5   0   0   6   J  a  n  u  a  r  y   2   0   1   3  498  J. von der Weppen and J. Cochrane In2006,Nichollscalledforresearchintocasestudyexamplesthatillustratetherangeof socialenterprises,andthisstudyanswersthatcall.Thepaperisconcernedwiththeapproachof touristic social enterprises in pursuing their objectives, the challenges they face and thekey ingredients of success. The investigation is timely because of the growing importanceof such enterprises in the responsible development of tourism. Tourism is a key revenuesectorformanylow-andmiddle-incomecountriesandthereisaconstantsearchforwaysof ensuring that a greater share of benefits reaches the poorest segments of the community inthese countries (Mitchell & Ashley, 2010). One of these ways is through tourism-oriented socialenterprises.AsNichollsandYoung(2008,p.vii)comment:“Despitepatchyempiricaldata, it seems clear that over the last four years there has been steady growth in the number ofsociallyentrepreneurialorganisationsgloballyandthattheirinterventionsininstitutionalvoids or suboptimal markets are making a significant difference”. Tourism is a particularlyapt arena for study because of its potential for stimulating both social and financial added value along the supply chain.After a review of the emergence and development of the social enterprise and socialentrepreneurship movement, we take a case-study approach to explore the characteristicsof touristic social enterprises, with the features of 11 award-winning organisations activein tourism mapped against a business-oriented classification of social enterprises in order to ascertain the most frequent choice of organisational model. The literature revealed several attempts to typologise and classify social enterprises, and our choice of framework was deliberately chosen in order to understand the management models expressed byentrepreneursandbecauseitofferedawayofuncoveringpragmaticinsightsintothemotivesand behaviour of social entrepreneurs. We reach conclusions as to the most commonlyexpressed models for particular types of enterprise.The study is not intended to expand the already large corpus of writing on conceptualaspects of social enterprise, but to shed light on a particular sub-sector of the genus and to provide practical guidance to neophytes – those new to the concept and its practices – and as such we make no apology for referring to practitioner as well as academic literature.  Social enterprise A review of literature on social enterprise, social entrepreneurship and social entrepreneursover the last decade reveals a gradual convergence of opinion as to the core characteristicsof social enterprises and an increasing complexity of approach as these characteristics werediscussed and refined. Early conceptualisations (Defourny, 2001; Laville & Nyssens, 2001)emphasised the roots of the movement in the third sector and its collective and communityfacets; we would argue that it emanated from the same altruistic stream as the participatoryand sustainable livelihoods approaches to development advocated from the 1980s onwards,from a desire to address social and environmental injustices for reasons of morality and fairness and to counter the top-down neoliberal tools of economic manipulation.At the same time, the movement can be seen as a marriage between altruism and cap-italism in moving social interventions away from dependency by endeavouring to harnessmarket forces for social aims. This shift has given rise to tension concerning exactly howfar social enterprises can veer towards the profit-making end of the spectrum. Boschee and McClurg (2003, p. 3) make a useful distinction between social enterprises and traditionalones which act in a socially responsible way; the difference is that for social enterprises“their earned income strategies are tied   directly  to their mission”. Later authors stress theshared characteristics of economic or social entrepreneurs in that each has to understand social and economic processes in order to create both types of value (Chell, 2007), while    D  o  w  n   l  o  a   d  e   d   b  y   [   I  e  v  a   Z  e   b  r  y   t  e   ]  a   t   1   1  :   5   0   0   6   J  a  n  u  a  r  y   2   0   1   3   Journal of Sustainable Tourism  499Austin, Stevenson and Wei-Skillern (2006) use Sahlman’s (1996) analytical model of en-terprise management (a dynamic fit between People, Context, Deal and Opportunity) toidentify the similarity between social and economic entrepreneurs, but conclude that for the former a social-value proposition should be included as a key integrative driver. Simmsand Robinson (2008) use an identity-based analysis to assess the necessary characteristicsof entrepreneurs, and recognise that an entrepreneurial identity has to be cultivated in or-der to maximise the profits needed to plough back into social aims. Later still, Nicholls(2010) reminds us of the two predominant discourse streams on social entrepreneurship:one focusing on “hero social entrepreneurs” who evidence individualistic characteristicssuchasleadershipandambition,andtheotheroncollectivesettingsandnetworksofactions(Nicholls, 2010, p. 21). Several authors (including Defourny & Nyssens, 2006) recognisethat this dichotomy has been present since the early years of discussion of the social enter- prise phenomenon, in that the US model was focused on commercial entrepreneurship ata much earlier stage than in Europe, where there was more reliance on the deeply rooted tradition of the cooperative movement.Whether individually led or community-based, social enterprises “typically addressareas of unmet social need or new social opportunity creation that the public or privatesectors have failed to address” (Nicholls, 2006, p. 15). The central pillars of the businessesthemselves are generally agreed as threefold: the production and sale of goods and/or services, the creation of social value rather than financial capital for stakeholders, and someform of social ownership (Allan, 2005; Austin et al., 2006). The spectrum of operationalmodels of social enterprises is usefully typologised by Alter (2006) to explain “how socialvalue and economic value are created within the different social enterprise models  . . .  [and] . . . howmodelscanbecombinedandenhancedtoachievemaximumvaluecreation”(Alter,2006, p. 214; Table 1). Table 1. Operational models of social enterprise.Operational model and level of integration Model descriptionEntrepreneur SupportModelSells business support and financial services to individuals/smallfirms, which then sell products/services on the open market.Market IntermediaryModelProvides services to small producers to help them access markets, e.g. product development. Products are purchased at fair prices and sold on at a margin.Employment Model Provides employment opportunities/job training for people with high barriers to employment through enterprises that sell products or services on the open market.Fee-for-Service Model Commercialises its services, then sells them to individuals, firms,communities or a third party payer.Market Linkage Model Facilitates trading between small producers/local firms/cooperativesand external markets, e.g. through market information.Service SubsidisationModelSells products/services externally. Business mandate is separate fromsocial mission, but business activities are often mission-related.Income is used to subsidise/fund social programmes.Organisational SupportModelSells products/services externally. Business activities separate fromsocial programmes and unrelated to the mission. Income is used tocover programme costs and operating expenses of parentorganisation. Source: Alter (2006, pp. 212–227). By permission of Oxford University Press.    D  o  w  n   l  o  a   d  e   d   b  y   [   I  e  v  a   Z  e   b  r  y   t  e   ]  a   t   1   1  :   5   0   0   6   J  a  n  u  a  r  y   2   0   1   3
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