Case E partnership implementation

The fifth relationship analysed is between Case E, a social enterprise working with homeless youth, and their business partner, a large Australian property group. At the time of data collection, the relationship had been operating for a period of two years, and operated according to a formal lease agreement between partners. Data relating to each of the key themes within the partnership implementation stage of partnership, being the resources contributed by partner organisations and the power dynamics that exist in the relationship, will be presented below.

5.4.5.1 Resource contributions

A number of resources were shared between Case E and their BP, and are outlined in Table 18. Examples of key resources are highlighted in bold text.

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Table 18 - Resource contributions within Case E’s partnership

Resources contributed by BP

Resource contributions supporting positive commercial outcomes for social enterprise

Financial support (via funding and discounted products/ services)

When we were raising the money to build the kiosk we undertook a crowd funding campaign and raised over $40,000 from the general public to fit out the new kiosk. And they matched us dollar for dollar (E1)

Despite the fact that their other commercial tenants aren’t aware of this fact, but we get very preferable rental and lease arrangements here (E1)

Resource contributions supporting both social and commercial outcomes for social enterprise

Enhanced publicity regarding enterprise’s beneficiaries

So, at a conference late last year they did a huge presentation on creating shared value and how it was helping them engage with their local communities, and we were their case study. So it really is a partnership that we talk about and that they talk about and we both get a lot out of it (E1)

Resources contributed by social enterprises

Resource contributions supporting positive social outcomes for BP

Use of enterprise resources to develop positive publicity for business

It was six months after we’d been there and we were celebrating our 30,000th customer…we’d made a conscious decision to have the celebration at the site. And we got the Lord Mayor to come and be our 30,000th customer. The woman who was our contact there (in the partner) said to me…that was a stroke of genius. You guys will be untouchable this year (E2)

Resource contributions supporting positive commercial outcomes for BP

Development of business operations and efficiencies

And I think that the main thing that we bring to the party is that we’ve activated a space that they’ve found hard to activate. That’s the honest truth. Once they put us there they realised that it was quite a busy space that they probably could have rented that out. And before that they probably couldn’t. So we’ve actually activated an area of their asset that wasn’t working for them (E2)

Case E’s partner supported the commercial objectives of the social enterprise through the development of favourable lease arrangements that involved discounted rent. The

discounts helped to support the financial sustainability of Case E, as the money saved could be used elsewhere. The second way in which Case E’s BP contributed to the social enterprise’s commercial objectives was by providing financial support that enabled the retainment of premises within the BP’s retail complex. At the time of interview, the partners had signed a five year lease, which required the Case E to update the space rented within their BP’s complex. The social enterprise developed a campaign to raise funds through Pozible – a crowd funding platform used by ventures to source public funding.

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They were supported in this activity by their BP who promised to match the amount raised dollar-for-dollar. The Pozible campaign was a success, with the enterprise receiving $40,000 from their BP. In addition to the crowd sourcing donation, many of the costs involved in the upgrade of Case E’s café were absorbed by their BP:

‘But at the same time all through the build when they were core drilling to get light and power in, and water in – they would normally charge a commercial tenant. They’ve footed the bill for all of that, they’ve footed the bill for the lighting that they got their electricians to move and it’s on their light and power’ (E1).

The final resource contributed was the opportunity for Case E to be involved within the internal and external communications of their BP. Supporting objectives associated with both the enterprise’s social benefit and commercial logics, information about the Case E was included within internal newsletters distributed within the BP, but also external communications that involved the social enterprise being presented at business conferences as a case study illustrating the social responsibility of the BP. This

information was perceived to enhance awareness about the Case E and their social mission, as well as their commercial activities.

The resources contributed above were valued by the social enterprise as they supported the organisation’s sustainability, and ability to provide training and care to homeless youth. However, as Table 18 illustrates, Case E also provided resources that were perceived to generate value for their BP. For example, the social enterprise created a publicity event to celebrate their 30,000th customer, generating positive exposure for their BP and supporting the development of their social image. Case E, as a result of commercial capabilities associated with their commercial logic, were also able to enhance the operational efficiencies of their BP. The sale of quality coffee had led to the popularity of Case E, which had increased the flow of traffic through an area of the shopping complex that was historically less active. This then provided their BP the opportunity to earn more rent money from tenants in that area.

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5.4.5.3 Relationship dynamics

According to participants, the partnership between the social enterprise and their BP had evolved over the years it had been operating. In its current form, the relationship was described as involving a strong connection between partner organisations, whereby the BP was perceived to genuinely support Case E and their social mission:

‘So it’s really where they can stretch the corporate rules to make it work for us and them – they do it. And they don’t wait to be asked either’ (E1).

For the enterprise, their partnership provided a cost-effective space from which the

enterprise could operate its business, and provide training for its students. In order to retain use of their operational space, the enterprise alignedwith the commercial standards valued within the commercial logic of their business partner; improving the aesthetics of their site (see Table 19).

Table 19 - Social enterprise partnership adaptations (Case E)

Social enterprise adaptations

Alignment with quality requirements

I think because we’ve got good coffee they’ve overlooked the fact that the site has looked a bit below par…The second that you sign up for five years you’ve got to do some decent investment to make it look professional (E2)

The relaxation of the commercial requirements is one example of how Case E’s BP adapted their behaviour to meet the needs of the social enterprise (see Error! Reference source not found.). It was perceived that the BP supported the social enterprise by overlooking the shabbiness of their operational site during the initial stages of the lease partnership. As such, the BP was described as sacrificing requirements associated with their commercial logic in order to support the social enterprise (see Table 20).

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Table 20 - Business partner adaptations (Case E)

BP adaptations

Financial alignment

Yes they’ve put in $40,000 of match funding. But at the same time all through the build when they were core drilling to get light and power in, and water in – they would normally charge a commercial tenant. They’ve footed the bill for all of that, they’ve footed the bill for the lighting that they got their electricians to move and it’s on their light and power (E1)

Relaxed commercial expectations

I think because we’ve got good coffee they’ve overlooked the fact that the site has looked a bit below par. Retail shopping centres, they always try to make them look pretty slick. We were in there in a little cart that was falling apart a bit, and didn’t look as professional as it could have (E2)

In addition to this adaptation, the BP was also perceived to align their objectives with those of the social enterprise by partially funding the refurbishment of their operational site. According to Case E participants, the funding provided through the Pozible campaign was unexpected, as was the offer of their BP to absorb the cost of the core building work undertaken during renovations, as these costs would normally be absorbed by tenants. As has been detailed above, a number of adaptations were undertaken by both partners within the relationship. The reciprocated nature of these alignments reflects the relative balance of power between partners, perceived to arise from the ability for both partners to contribute resources of value to the relationship. From the enterprise’s perspective, this value was generated by resources and competencies associated with both their commercial and social benefit logics.

‘I think what we’ll show is that we’re bringing them probably at least as much value as they’re bringing us over time. And I think they will be surprised at how much extra value we can bring them’ (E2).

The alignment of BP values to those of the social enterprise was attributed by participants to the strong relationship that developed with a key contact within the BP. According to participant E2, this contact protected the partnership from individuals within the BP that wanted to replace the social enterprise with a full rent paying tenant:

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‘So she was almost trying to slip us under the radar. She found us the little spot, and I know that she personally had to work really hard to keep us there…there were people internally in that organisation who were constantly coming back and saying – we can make more money out of this space…And because they’re a publically listed company, they’ve got shareholders, so it’s always about shareholder return’ (E2).

As such, this alignment therefore reflected the capacity of individuals within partner organisations to resist the commercial logic of their business employer in order to support the social values and activities that underpin the social benefit logic driving social

enterprise.

In summary, Case E’s partnership was characterised by the contribution of resources that led to the creation of shared value. The findings illustrate that Case E’s exchange value was based on both their social benefit and commercial logics, whilst the exchange value of their BP was also based on the contribution of both social and commercially oriented resources. The ability for both partners to contribute valued commercial resources created conditions of equality within the relationship, whereby both partners were illustrated to undertake adaptations to further support the success of the relationship.