Позитивные изменения. Том 2, № 3 (2022). Positive changes. Volume 2, Issue 3 (2022) - Редакция журнала «Позитивные изменения»
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Stability in the Unstable: How Social Enterprises Survive and Adapt in the VUCA World
Yulia Aray
DOI 10.55140/2782–5817–2022–2–3–70–81
Social enterprises are rightfully considered a quintessential example of organizations with a high level of social impact. The founders of these projects are striving to create sustainable financial models and strike a balance between social mission and commercial performance. How do social entrepreneurs manage to live and work in a world where fast-paced change has become the norm? What innovations and strategies help them get through the tough times?
Yulia Aray
PhD, Associate Professor, Academic Director for Master in Management Program, Graduate School of Management, St. Petersburg State University
NEW OPPORTUNITIES FOR SOCIAL ENTREPRENEURS
Social entrepreneurship has enormous potential for development in today’s Russia. On the one hand, the state, the business and the public are gradually realizing the promise of this type of entrepreneurship for the implementation of systemic social change. On the other hand, more and more ambitious, enterprising, responsible people appear who want to change the situation, the usual way of doing things, and who are ready to do business “with a meaning.” Social entrepreneurs use new approaches, develop innovative and often “breakthrough” solutions in areas where unmet needs and demands exist.
As a reminder, “the peculiarity of social entrepreneurship is that it is aimed primarily at achieving the main mission, organizational goal associated with addressing a particular social problem; creating financial sustainability in this case is a necessary means to achieving this goal.” (Aray, Burmistrova, 2014)
Social entrepreneurship emerges in areas where the state or the traditional businesses simply cannot cope with social problems; this is why, strangely enough, instability, crises, deterioration of social and economic situation create new expectations and demands for social entrepreneurship. Thus, new opportunities are opening up for social entrepreneurs, which they are able to transform into sustainable business models that work for the benefit of the society. However, these organizations are known to operate in low-margin, unstable areas, so the success of any project, especially in a highly volatile business environment inherent to our time, depends on the social entrepreneurs’ skills to maneuver, adjust, be flexible, build partnerships and effectively manage resources. And it is not about adding some tools and management approaches, but about a change in the mental model of organizational management in the field of social entrepreneurship, which should ultimately improve resilience of such organizations.
THE VUCA WORLD — THE ORGANIZATIONAL HABITAT OF TODAY
As the great management guru Peter Drucker used to say: “Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes — it should be postponed as long as possible. But in a period of upheaval, such as the one we are living in, change is the norm.” (Drucker, 2006).
Indeed, we live in a world where rapid change experienced in all areas of life, from stock quotes, new technological solutions, changing fashion trends, etc., has become the norm. At the same time, change is often non-linear, unpredictable in nature, which complicates prediction of the course of events, long-term planning, and creates additional risks for all participants in the socioeconomic system.
VUCA is an acronym that is often used to describe today’s business environment. It is characterized by:
V (Volatility): changes occur all the time. The world is becoming more unstable every day, with big and small changes becoming increasingly unpredictable, more dramatic, and happening faster.
U (Uncertainty): the lack of predictability, the probability of unexpected events occurring makes predicting the future difficult, and sometimes impossible.
C (Complexity): more and more factors have to be considered when making decisions, it is difficult to establish causal relationships.
A (Ambiguity): the ambiguity of the information received, the possibility of misinterpretation leads to a lack of understanding of how to act in the market.
Today’s managers are forced to work in an environment where uncertainty is becoming the norm, the number of uncertainty factors is increasing, and their intensity and direction of impact is becoming unpredictable. In addition, events known as “Black Swans”[45], which can dramatically change the course of history, are happening more and more often. This environment makes planning horizons even shorter, and decision-making more ambiguous and complex.
ORGANIZATIONAL SURVIVAL STRATEGIES IN THE VUCA WORLD
The desire to survive is the goal of every organism on Earth. Like all living things, organizations are born, develop, and die, and regardless of their form and mission, they also all have the ultimate goal of surviving in a world full of volatility, uncertainty, complexity, and ambiguity (in other words, the VUCA world).
Features of the environment associated with the characteristics of VUCA determine the companies’ behavior today, as well as the strategies, approaches and management tools that are becoming the most demanded in terms of efficiency and applicability. Among the many modern, relevant management approaches that managers are guided by in a rapidly changing environment and which are highly relevant to social entrepreneurs, I would like to pay special
