Overview of Social Overview of Social Enterprises Enterprises

In Hong KongIn Hong Kong

Chan Kam Tong, Ph.D.Chan Kam Tong, Ph.D.Unit for Third Sector StudiesUnit for Third Sector Studies

Hong Kong Polytechnic Hong Kong Polytechnic UniversityUniversity

ssktchan@polyu.edu.hkssktchan@polyu.edu.hk

Purposes of the StudyPurposes of the Study

Four core objectives :Four core objectives :

• What are the What are the features and characteristicsfeatures and characteristics of of social enterprises attending to work-social enterprises attending to work-integration in Hong Kong? integration in Hong Kong?

• To what extent the work integration social To what extent the work integration social enterprise has contributed to the enterprise has contributed to the employment-related povertyemployment-related poverty? ?

• What are the What are the critical success factorscritical success factors of work of work integration social enterprises? integration social enterprises?

• What are the What are the barriers, constraints and barriers, constraints and challengeschallenges facing by the enterprises which facing by the enterprises which have limited their development?have limited their development?

The research team The research team membersmembers

• Dr. Chan Kam Tong (Convenor)Dr. Chan Kam Tong (Convenor)• Professor Angelina Yuen-TsangProfessor Angelina Yuen-Tsang• Dr. Ho Po YingDr. Ho Po Ying• Dr. Cheung Kai Chee Dr. Cheung Kai Chee

Definition of Social Definition of Social Enterprise Enterprise

• There is no commonly agreed definition of There is no commonly agreed definition of Social Enterprise in Hong KongSocial Enterprise in Hong Kong

• Yet, there are some essential Yet, there are some essential characteristics:characteristics:– It is serving It is serving social goalssocial goals by using an by using an

enterprise strategiesenterprise strategies– It is both a “It is both a “from Welfare to Workfrom Welfare to Work” and a ” and a

““Social InvestmentSocial Investment” Approach” Approach– It is providing assistance to the marginal It is providing assistance to the marginal

groups in the community, by encouraginggroups in the community, by encouraging self- self-reliancereliance

– SustainabilitySustainability is important is important

Key Features of Social Key Features of Social Enterprise Enterprise

in Hong Kong in Hong Kong • 1. 1. emergingemerging and and evolving evolving entity entity • 2. very much 2. very much diversifieddiversified• 3. for both disabled and able-3. for both disabled and able-

bodied peoplebodied peoplea) a) DisabledDisabled: physically disabled, : physically disabled,

development challenged, and development challenged, and psychiatric patientspsychiatric patients

b) b) Able-bodied peopleAble-bodied people: ex-offenders, non-: ex-offenders, non-engaged youth, women, and middle-engaged youth, women, and middle-aged semi-skilled aged semi-skilled

Major Types of BusinessMajor Types of Business

• 1. Servicing1. Servicing• 2. Retailing2. Retailing• 3. Innovative Craftsmanship3. Innovative Craftsmanship• 4. Catering and Restaurant 4. Catering and Restaurant

Servicing: CleansingServicing: Cleansing

Household cleaning

Pest Control

Building

Cleaning

Servicing: Car WashingServicing: Car Washing

Car Washing

Vegetable and Fruit Supply Vegetable and Fruit Supply ServiceService

Vegetable and Fruit Supply

Courier ServiceCourier Service

Courier Service

RetailingRetailing

Convenience Stores:

Community

Convenience Store: Hospital

RetailingRetailingFood Stall in Park

Direct Sale

Catering and RestaurantCatering and Restaurant

Cafe

Restaurant

Catering Delivery for Party

Club House

CateringCatering

Hair SalonHair Salon

Hair Salon

Eco-tourismEco-tourism

Eco-tourism

Modes of integrationModes of integration

• Employment bounded: work Employment bounded: work integrationintegration

• Status of target groups:Status of target groups:– EmployeesEmployees (salary: hourly rate or (salary: hourly rate or

monthly)monthly)– Trainees Trainees (allowance)(allowance)– Members of co-operativesMembers of co-operatives (salary (salary

and work contract)and work contract)

Enterprise OperationEnterprise Operation

Four major dimensions in Four major dimensions in operation: operation:

• 1. Resources Mobilization1. Resources Mobilization• 2. Marketing Mix and Market 2. Marketing Mix and Market

SegmentSegment• 3. Governance3. Governance• 4. Networking and Expertise4. Networking and Expertise

Resources MobilizationResources Mobilization• A) A) Financial ResourcesFinancial Resources

•Social Welfare Department- “Enhancing Social Welfare Department- “Enhancing Employment of People with Disabilities Employment of People with Disabilities through Small Enterprise Project”- Seed through Small Enterprise Project”- Seed MoneyMoney

•CIIF- development of Social CapitalCIIF- development of Social Capital• Jockey Club Trust Fund- for start-up and Jockey Club Trust Fund- for start-up and

capital costcapital cost•Other Community or Charity Foundations- Other Community or Charity Foundations-

e.g. Keswick Foundations, Oxfam e.g. Keswick Foundations, Oxfam

•Many of these funding sources will Many of these funding sources will target target for specific goals and objectivesfor specific goals and objectives

• B) B) Human ResourcesHuman Resources– structure is relative structure is relative simplesimple– no. of employees/ traineesno. of employees/ trainees varies varies ( a ( a

few – 180 )few – 180 )– mostly supervised by human service mostly supervised by human service

professionals (e.g. social workers). professionals (e.g. social workers). Some managers have Some managers have business business training and experiencetraining and experience, but , but not not very commonvery common

Marketing Mix and Market Marketing Mix and Market Segment Segment

• The Marketing Mix (4-Ps)The Marketing Mix (4-Ps)– ProductProduct: depends on traits and skill : depends on traits and skill

requirementsrequirements– PricePrice: market-determined and cost-: market-determined and cost-

determineddetermined– PlacePlace: depends on cost of the venue and : depends on cost of the venue and

prospects of businessprospects of business– PromotionPromotion: various promotion methods are : various promotion methods are

used, but complementary words and words of used, but complementary words and words of mouths of customers are more importantmouths of customers are more important

• Market SegmentMarket Segment– Both Both external marketexternal market (community at large) and (community at large) and

internal marketinternal market (for other service users or members) (for other service users or members)

GovernanceGovernance

There are 5 types of governance There are 5 types of governance structures:structures:1. 1. Company/ Small Medium Enterprise Company/ Small Medium Enterprise

ModelModel: registered separately as a company : registered separately as a company

2. 2. Subsidiary Unit ModelSubsidiary Unit Model: as ‘non-subvented’ : as ‘non-subvented’ unit of the NGOunit of the NGO

3. 3. Co-operative ModelCo-operative Model: formally / informally : formally / informally as co-operativeas co-operative

4. 4. Flea market ModelFlea market Model: highly flexible: highly flexible

5. 5. Joint Venture ModelJoint Venture Model: with business : with business partnerspartners

Networking and Networking and ExpertiseExpertise

• Rely on the networking from public Rely on the networking from public and private sectorand private sector

• Marketing Consultancy Office (MCO) Marketing Consultancy Office (MCO) of the Social Welfare Department of the Social Welfare Department offers great help in getting service offers great help in getting service tenders for the rehabilitation servicestenders for the rehabilitation services

• Yet, there is great demands from the Yet, there is great demands from the partnership relationship with the partnership relationship with the private sector, in particular, the small private sector, in particular, the small and medium enterpriseand medium enterprise

Essential Contributions of Essential Contributions of Social EnterprisesSocial Enterprises

• 1. 1. Resources MobilizationsResources Mobilizations• From unemployed to employedFrom unemployed to employed

• From no salary to wage earningFrom no salary to wage earning

• 2. 2. EmpowermentEmpowerment• ““Springboard function”: stepping stone for open Springboard function”: stepping stone for open

employmentemployment

• Esteem enhancement because of the employee statusEsteem enhancement because of the employee status

• 3. 3. IntermediationIntermediation• Platform for collaboration among Government, Platform for collaboration among Government,

Private and Third SectorPrivate and Third Sector

Critical Success FactorsCritical Success Factors• 1. Social Entrepreneurship and 1. Social Entrepreneurship and

MindsetMindset•Balance between Welfare vs. Business Balance between Welfare vs. Business

EnterpriseEnterprise

• 2. Marketability2. Marketability•Market niche and market valueMarket niche and market value

• 3. Knowledge, Skills and Attitude3. Knowledge, Skills and Attitude•Enterprise strategies with Social goals Enterprise strategies with Social goals

• 4. Branding4. Branding•Good will and public imageGood will and public image

• 5. Tripartite Partnership5. Tripartite Partnership•Collaboration among Government, Private Collaboration among Government, Private

Sector and Third SectorSector and Third Sector

Perceived DifficultiesPerceived Difficulties

• 1. Challenges in human resources1. Challenges in human resources•Change of mindset and equip with business Change of mindset and equip with business

knowledge and skillsknowledge and skills•Balanced ratio of normal and disabled Balanced ratio of normal and disabled

workersworkers

• 2. Challenges in financial resources2. Challenges in financial resources•Competition in open marketCompetition in open market•Risk in break-evenRisk in break-even

• 3. Constraints in the bidding system3. Constraints in the bidding system•Short track recordShort track record•Tight cash flowTight cash flow

RecommendationsRecommendations

1.1. Social Enterprise should be considered Social Enterprise should be considered as one of the essential approaches in as one of the essential approaches in helping the marginal group. helping the marginal group. Public Public awareness and supportawareness and support is deemed is deemed importantimportant

2.2. Tripartite PartnershipTripartite Partnership: further : further cooperation among Government, Private cooperation among Government, Private and Third Sectorand Third Sector

3.3. Promotion of Promotion of Corporate Social Corporate Social ResponsibilityResponsibility (CSR) among large (CSR) among large Corporate and SMEsCorporate and SMEs

4.4. Flexibility in tendering and bidding Flexibility in tendering and bidding mechanism. e.g. ‘mechanism. e.g. ‘restricted tenderrestricted tender’ in ’ in some bidding or tendering exercisesome bidding or tendering exercise

Thank youThank you