Emergent models and strategies of social enterprises in China

Abstract

Many nonprofits are turning to commercial strategies to enhance their income. While previous research identified challenges social enterprises face in balancing commercial and social missions, little is known about how Chinese social enterprises respond to similar challenges in meeting the double bottom line. Using 16 cases studies, this study identified different types of social enterprises extant in the Chinese context, and examined the strategies they adopt. We found that the fee-for-service is the most common operational model, and that despite attempts of heavy state influence, Chinese SEs were able to demonstrate their resilience by diversifying their operational models. Implications for China’s social work development are discussed.

Keywords:

• Social enterprise
• nonprofit
• China

Notes

1. Entrepreneur support model (selling business support and financial services to its target population – self-employed individuals or small firms who then sell their products and services in the open market), market intermediary model (providing product development, market access and credit services to its target population), employment model (provides employment opportunities and job training to its target populations), fee-for-service model (commercialising its social services and then selling them directly to the target population), service subsidisation model (selling products or services in the open market and using generated income to fund its social programme), market linkage (facilitating trading between the target population – small producers, local firms and cooperatives – and the market) and organisational support model (incorporating virtually any type of business and selling its products and services in the open market, businesses, the public or in some cases the non-profit clients).

2. The low-income client as market model is a variation on the fee-for-service model, which recognise the poor and low-income clients population or ‘clients’ a market to sell goods or services, whereas the cooperative model provides direct benefit to its target population, cooperative members, through member services such as market information, and technical assistance/extension services (Alter, 2017).

3. In 2014, for example, the Shunde district of Foshan located in Guangdong province introduced the ‘social enterprise incubation and supporting plan’ while the Beijing government clearly stated that the social enterprises should be promoted in its ‘social governance plan during the 13th Five years Plan’ in 2016.

4. Such as the field of activities, clients, services or products, governance, human resources, current revenue, etc.

5. B2B is abbreviation for business to business, and B2C is abbreviation for business to customer.

6. Asset light operation is a kind of capital strategy driven by value. It is a new structure responding to the demands of the Internet and knowledge economy Asset-light refers to the intangible assets including experiences, standardised programme management system, governance regulation, network resources, brand, human resources, organisational culture etc. The organisation focuses on its core business, while transfers other businesses out.