I was not entirely enlightened about the concept of ‘social enterprise’ when I agreed to collaborate with the team of writers responding to the invitation by Ajit Kanitkar. Having spent a lot of time understanding microfinance as it has transformed from a social innovation to a fully financialised lending technology, I am interested in and wary of social businesses and the concept of blended value – of combining social and commercial values in businesses. But it was important for me to check my apprehensions in a commodity setting.
I chose to study a medium scale dairy enterprise in Odisha, a state that has not been able to gain much from the white revolution. But the largest producer of milk in the state is a state-run cooperative, the Odisha State Cooperative Milk Producers Federation (Omfed), a social business entity by virtue of its legal format of an enterprise organisation. Milk Mantra, the enterprise that I focused on is a direct competitor to Omfed. It was established in 2009 as a partnership firm by Srikumar Mishra, a first-generation and professionally educated entrepreneur, who honed his skills of commodity marketing with a large, multi-brand producing conglomerate.
Milk Mantra, incidentally, is the first venture-funded agri-business start-up in India.
Mr. Mishra has never claimed himself to be a ‘social entrepreneur’. But the driving philosophy of his enterprise is stated as ‘conscious capitalism’.
That was an important trigger for me as it suggested the deliberate incorporation of a distinct social value in the organisation and management of the enterprise.
For those who are uninitiated to the term of conscious capitalism let me explain it very briefly. Conscious capitalism, as some would describe, is all about dreaming of a new world that allows all to bloom into free, compassionate, and prosperous individuals by leveraging the great power of capitalism. It promotes ethically-grounded free enterprises that are non-exploitative, transparent, non-divisive, and pro-environment. For the proponents of this philosophy, conscionable business practices are not in conflict with business profit. For some, that makes the idea a contested one. The scepticism notwithstanding, I thought, the concept of conscious capitalism needs to be recognised for the possibilities it offers to socially embed business entities or enhance the ‘socialness’ of businesses.
The question is whether conscious capitalism can potentially prevent the society from subordinating itself to the market forces passively.
Mishra translates conscious capitalism as a business vision of inclusive development that impacts the livelihood of farmers and continuous innovation to enhance the brand experience of customers. He has codified the terms of the social contract of Milk Mantra and is able to communicate through ranks. The growth of the enterprise has been made possible by the ability of the entrepreneur to tap socially committed venture capital in the early phase and leverage it to secure global blue-chip mainstream investments in recent years.
There indeed are serious challenges to the persistence of the ideal of conscionable business. As the capital structure changes, pressures of competition increase, and the compulsions of capital intensive nature of the enterprise become overwhelming, this ideal may undergo a transformation. In fact, all the cases included in the volume clearly suggest the appearance of performance plateaus and finance-market-technology-linkage bottlenecks as enterprises evolve through experimentations with business models. How do businesses resolve those issues would depend on a host of factors including the institutional support system, the entrepreneurial acumen of promoters, and their social embeddedness. In the case, I have documented, what impresses me the most is the ‘entrepreneur’. I am convinced that the person behind an enterprise embodies its values and aspirations. They are visualised mainly through the strategies and priorities chosen by the entrepreneur when faced with a crisis. Milk Mantra at this juncture in its growth appears to be led by an entrepreneur, who is driven by a vision to make a clear social impact while pursuing business goals. Whether he will be able to stay on that path forever is an important concern. Then that is a concern with any activity that follows the expansive logic of the market.
Finally, to me, the social enterprise still is an amorphous analytical category, often a subject of hermeneutics. It is complex and multi-layered and provokes more questions than answers. The case studies in the volume together make an attempt to unravel the many layers and resolve the paradoxes from multiple perspectives.
Tara Nair is a Professor at the Gujarat Institute of Development Research, Ahmedabad. She completed her M.Phil. (Applied Economics) and Ph.D. (Economics) from the Centre for Development Studies, Thiruvananthapuram affiliated to the Jawaharlal Nehru University, New Delhi. Her research mainly concerns issues in policy and institutional development in the areas of small and microfinance, financial education, women and development, livelihoods, and the political economy of media.