Japan’s perspective on Nanjing Massacre

Introduction

            Nanjing Massacre dates back to December 13^th 1937, surveys indicated that Nanjing Massacre was also referred to as the Rape of Nanking where war rape and mass murder were carried out in the course of six weeks. Japanese soldiers captured Nanjing City which was formerly under the control of Republic of China[1]. The relationships between China and Japan have been cold basing on the Nanjing massacre. Historical scars have influenced the relationships between the two nations, which are critical in the powers of the East Asia.

Main Body

            Evidence collected in the region argues that there was information enough to indicate that Japan had carried out the ill attacks, although Japan has never officially admitted committing any offence. There are evidence sources from the eye witnesses, documentary evidence, photographic evidence and some of Japanese soldiers admitted participation in the attacks[2]. Japanese revisionalists categorically resisted any involvements in the atrocities and war crimes.

Recent publications from the Japanese mayor of Nagoya city argued that there are high probabilities that Nanjing massacre is just an imagination, and that it never happened, the mayor went ahead to argue that the combats that took place in the region was convectional and within the limits. China and Japan are always contesting basing of on diversity of national interest, fog of war and on issues of Japanese nationalists.

Nanjing disputes over the decades have generated international disputes and to some extent generated to nationalist tensions[3]. Accounts by the Japanese nationalist-revisionist categorically deny any forms of war crimes. Evidence was collected from the survivors of the tragic events, an indication that militarism leftist critics are mainly based on the accounts delivered by the Chinese people. Japan argued that there are high chances that the crimes are crafted against Japan basing on manipulation and one-sidedness of the informants[4].

Nanjing massacre’s Debate in 1930s and 1940s

Japanese revisionist has generated diverse debates in domestic politics in Japan, and some of the arguments are controversial. It has been noted that materials from the Japanese Language historiographical has been influential in sophisticated and diverse research on the massacre. Surveys argues that in the time of war, the government of Japan never allowed news media during the war, a move that led to the general public in Japan unaware of what was happening in Nanjing. Japanese government covered war crimes and Nanjing Massacre that were committed by the military. Ultranationalists in Japan went ahead to deny Nanjing massacre.

The Japanese government denied negative depictions and dehumanizing effects that were carried out by the army. A novel written by Tatsuzo Ishikawa by the name ‘Living Soldier’ was seized from the market in 1938 after the Japanese government learnt that the book was disturbing order and peace, Tatsuzo Ishikawa was served with four months in jail.

In 1943, another confusion and controversy arose after another writer by the name George Orwel published a book by the name ‘Looking Back on the Spanish War’; the book argued that the same people who carried out the Nanjing Massacre were the same people in the front line denying the actions. Nanjing massacre even drew the attention of the United Kingdom Government; there were high doubts that Japanese government had a positive role in the massacre that happened in 1937. It is said that the Japanese solders butchered and raped people in the Chinese cities. Japanese Civilians came to understand on Nanjing Massacre after the Far East International Military Tribunal (Tokyo Trial) and on the Nanjing Trial, the Japanese society was shocked with the news of the Nanjing Massacre[5].

Nanjing massacre’s Debate in1950s – 1980s

Yoshie Hotta in 1950s published historical fictions about Nanjing atrocities, in which the Japanese government was categorically against, arguing that there were high chances that the atrocities were never committed, and that they were just allegations. Tomio Hora in 1967 published Nankin Jiken, in which he attacked the denial of the revisionist on the Nanjing massacre. It was noted that the research was carried out in the period involved in the research of the American War in Vietnam.

Japan and China since the Nanjing massacre has been having poor diplomatic relations, the year 1972 was involved in serious talks on the issues although the statements of the Chinese Government were refuted by the diplomats from Japan. Japan argued that the Nanjing massacre atrocities were exaggerated and tuned to support China, in that the evidence obtained was sourced from anecdotal evidence and personal testimony evidence[6]. Japan also attacked the photographs and burial records that were presented as part of the evidence in Tokyo War Crime Court.

Japanese government argued that the Chinese government fabricated the evidence to suite their preferences against Japan[7]. Japanese government also argued that the Chinese government incorrectly attributed and artificially manipulated issues of the Nanjing massacre. Surveys indicated that Katsuichi Honda in the 1970s was sent by the Japanese government to China to research on Imperial Army and how they conducted themselves in times of war[8]. Honda did comprehensive research on atrocities committed in the Asahi Shimbun which was similar in nature to that of Nanjing Massacre. Asahi Shimbun atrocities in the World War II were carried out by the Japanese army, which were commonly referred to as the ‘Chugoku no Tabi’ signaling ‘travels in China’.

Articles published by Katsuichi Honda were received with hostility on the part of the Japanese government. Japan refuted the claims by referring to the research and documentaries done by Akira Suzuki on the Nanjing massacre Phantom and on the research done by Shichihei Yamamoto which was a response to publication to the research done by Katsuichi Honda[9].

Saburo Lenaga a well known author of books in Japan sued ministry of education, citing harassment by the Japanese government, in that he was being forced to alter the contents of his publications by the government of Japan. Lenaga argued that the government of Japan was violating and interfering with his freedom of expression, the court’s decision was in the favor of Lenaga in 1997. Controversies on the way history was carried out in Japanese schools generated heated debates in 1982-1986, in that issues of the Nanjing massacre were categorically missing from all the history books in Japanese schools, although the massacre practically happened[10].

Surveys indicated that earlier history school books reflected on the Nanjing massacre particularly at the junior high schools, although it was cancelled later and removed from the school books in the in the elementary school. Books published by Kyoiku Shuppan and Nihon Shoseki all in the junior schools reflected that Nanjing massacre had more than 42,000 Chinese people were killed, mainly women and children. Ministry of Education in Japan managed to remove the extract showing the number of people that were killed in the Nanjing massacre.

Ministry of Education in Japan in 1982 were involved in vigorous campaigns in reframing the way history was presented in schools, particularly focusing at the issues that happened during the World War II. Surveys indicated that books involved in history were reworded to express different feelings on issues of Sino-Japanese War[11]. It was noted that instead of using the words aggression, the books were reworded to indicate ‘advancing in and out China’; which was a term expressing disapproval of the Nanjing massacre.

Japanese government expressed Nanjing massacre as simply as a minor accident which was initiated by the frustration that was felt by the soldiers in Japan after they encountered substantial resistance from the armies of China. Strong protests soon occurred in Asian nations, in which Japan was the immediate nation to react. Reflecting on 1990s, things started to change with some of the forces in the Japanese government calling for outright reconciliation with Asian nations by taking responsibility of the war. Three prime ministers acknowledged the need of reconciliation.

Hosokawa Morihiro in 1993 after taking over the office as the prime minister of Japan through the Non-Liberal Democratic Party government, other prime ministers with the same sentiments were Murayama Tomiichi and Hata Tsutomu. The three prime ministers argued that Japan was aggressive to expand its territories in Asia in the 1930s and 1940s. Taking at sentiments made by Murayama Tomiichi, he categorically conveyed deep regret for what happened in the aggression and colonial rule in Japan.

School books were later re-written to express the feelings of Japan on the war, and that the government of Japan was responsible for the things that happened during the war. In 1997, it was noted that history books particularly for use in the junior high schools indicated that more than two hundred thousand people were massacred at the Nanking capture, all these were carried out by the Japanese military[12].

Controversies were still in place expressing disapproval on the number of people that lost their lives in the Nanjing massacre, there were a number of reports that indicated that Chinese government inflated the figures on the number of people that died in the war. Ikuhiko Hata published a book expounding on Nanjing massacre, and that the number of people killed were around thirty eight thousands people and that only civilians and Prisoners of War (POWs) were included, he continued to argue that the soldiers involved in the massacre were not counted, since they took part in the battlefield.

Reflecting in the 1980s, the interest of China argued that more than three hundred thousand people were killed, information that coincided with the details at the Tokyo War Crimes Tribunal. New evidence came to light in Japan mainly sourced from the private journals which had interviewed ordinary soldiers and Japanese generals. Records also showed the official units on the soldiers involved in the war. Japanese veterans admitted witnessing or being involved in the Nanjing atrocities.

‘Fabrication of Nanjing massacre’ book published by Masaaki Tanaka did not support sentiments that Nanjing massacre was pre-planned and that the massacre was as a result of the Sino-Japanese war, this was an indication that Japanese government had no issues with the Chinese government, and that the controversies were provoked by the Sino-Japanese war. Fijio Masayuki in 1986 acting as the Education Minister in Japan argued on dismissing ‘Rape of Nanking’ citing that rape was a side effect of the war. The film reflected on the ‘Rape of Nanking’ in 1987 was not submittal on which country organized the war, and what the main reasons for the war were based on political superiority[13].

Nanjing massacre’s Debate in 1990s

Issues of controversy on the Nanjing massacre were resolved in the 1990s. This was followed by Japan and China accepting that atrocities occurred in the war, although there has been some controversies on the actual numbers of people that were massacred, and that the geographical area could not have been used to represent the number of people massacred, although most publications cited that around three hundred thousand and four hundred thousand people were killed in the massacre. The figures of the dead people were obtained from the burial records from the Chinese side and the disposed bodies in Japan as a result of the massacre[14].

High ranking politicians and some of the cabinet ministers in Japan denied any forms of atrocities believed to have been committed in World War II by the Japanese army. General Nagano Shigeto was one of the influential members involved in denying Nanjing massacre. Shigeto was the justice minister in 1994, and previously occupied senior positions in the Japan Ground Self-Defense Force and he was a war veteran in the World War II. In a newspaper interview, he argued that Nanjing massacre was a mere fabrication, and that the act never occurred[15].

Shintano Ishihara a Tokyo Governor during a Playboy magazine interview argued that Nanjing massacre was just a story that was organized the Chinese government. He continued to assert that the lie had an influence in tarnishing the image of Japan, the lie is said to have been organized after protests happened in South Korea and in China.

Houston based Deputy Japanese Consul argued that Nanjing massacre was just a fabrication and that it never occurred; this happened in the 1990s after protests broke out rejecting the actions of the Japanese government by the Chinese American governments, the protests happened in Diao Yu Tai.

The government of Japan in refuting the Nanjing massacre came together and formed a research group with the mandates of proving that Nanjing massacre never occurred, and that China had framed Japan on the atrocities. The group was known as the ‘Nanjing Incident Research Group’. The group has been involved in research both from the Japanese government and the Chinese government with testimonials and archival materials, in showing exactly what happened at the Nanjing massacre.

Tomiichi Murayama in 1995, by then the Japanese prime minister offered condolences to the people who were involved in the Nanjing massacre. The apology was formal and clear and that he regretted the actions of Japanese soldiers during the war. He continued to apologize to the Chinese government arguing that Japan had made the wrong approach in expanding its territories. Murayama also apologized to the Asian nations on the sufferings that it created to the parties involved in the Nanjing massacre. His heartfelt apology was directed to the survivors, friends and relatives of the people who suffered as a result of the Nanjing massacre[16].

Nippon Budokan in Tokyo was the venue where apologies by the Japanese senior people in the government made their assertions. Emperor Akihito of Japan and Murayama made mourning statements to all those people who were hurt in one way or another by the Nanjing massacre. The leaders argued that such occurrences were highly regretted and that they would never occur again. Western audience on Nanjing massacre was highlighted after Iris Chang published a book on rape and massacre in Nanjing. The 1997 publication was released to the general public in Western world, although the copy was met with hostility from Japan, the accuracy of the book was flawed by both the Chinese government and the Japanese government[17]. The Western world was concerned on what happened in Nanjing.

Nanjing massacre’s Debate in 2000s and 2010s

There are no active debates groups on Nanjing massacres in the recent decade, killings over the years have been denied by the Right-wing nationalists. The main controversy is placed at the number of people who lost their lives in the massacre. Japanese government is not comfortable with using the word massacre, arguing that the word carries the wrong image on Japan. Controversies are on the civilian killed, rapes that took place, suspected guerrillas and the prisoners of wars.

Burial records at the Chung Shan Tang and Red Swastika Society were not examined at the Nanjing trials and Tokyo Trials hence questioning their authenticity. There are diverse personal testimonies from the Japanese soldiers on killings and rapes, but the figures are unclear and disputed by the Japanese government and the Chinese government[18]. Japanese government strongly argues that anecdotal evidence is not enough in justifying the number of rapes that happened during the Nanjing war, in the sense that the evidence is diluted with propagandas mainly from the Chinese people involved in the personal testimonials.

Debate in the public limelight is still live and continues to generate new controversies, massacre denialists are mainly journalists and academicians with a link to Tsukurukai. The views of the massacre denialists are linked to right wing publishers and conservative publishers sound examples identifying with Sankei Shuppan and Bungei Shunju among others. There are a number of organizations in Japan involved in colleting and publishing materials on the Nanjing massacre to determine exactly what happened at that time[19]. Minister of Education in Japan in 2004 expressed the need of overcoming the ill accounts that portray the history of Japan.

Critically reflecting on 2005, a book published by Fusosha, it generated violent riots in China after the book was approved by the ministry of education in Japan. Fusocha was attached to the right wing publishers. In 2007, one hundred lawmakers of LDP (Liberal Democratic Party) argued that Japan was not connected with the Nanjing massacre and that the allegations were framed since there were no substantial evidence proving mass killings and mass rapes, the lawmakers argued that China was using the Nanjing massacre for political fame and advertisement.   Japan and China should bury the hatchet and develop mechanisms of working together in the twenty first century as the global business becomes more and more integrated, since the future is more important than the past.

Conclusion

            Japanese government argues that even if the deaths were documented, there were no substantial records showing the right number of rape cases that occurred at that time, which makes the Japanese government disassociate itself with issues of mass rape. Massacre denialists on Nanjing massacre argues that most of the people who were killed were not civilians, and that they were suspected guerrillas and prisoners of wars, who were killed legitimately, hence the word massacre is inappropriate and intended to tarnish the image of Japan[20].

 

References

Chang, Iris. The Chinese in America: A Narrative History. City of Westminster London, England: Penguin Books, 2004.

Chang, Iris. The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012.

Chang, Ying-Ying. The Woman Who Could Not Forget: Iris Chang Before and Beyond The Rape of Nanking. Canterbury, New Zealand: Pegasus, 2012.

Hicks, George. The Comfort Women: Japan’s Brutal Regime of Enforced Prostitution in the Second World War. New York: W. W. Norton & Company, 2007.

Honda, Katsuichi. The Nanjing Massacre. Armonk, New York: M E Sharpe Inc, 2009.

Rabe, John. The Good Man Of Nanking: The Diaries of John Rabe. New York: Vintage, 2000.

 

 

[1] Iris Chang, The Chinese in America: A Narrative History. City of Westminster London, England: Penguin Books, 2004, pp. 12.

[2] Rabe John, The Good Man Of Nanking: The Diaries of John Rabe. New York: Vintage, 2000, pp. 105.

 

[3] Iris Chang, The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012, pp. 19.

[4] Ying-Ying Chang, The Woman Who Could Not Forget: Iris Chang Before and Beyond The Rape of Nanking. Canterbury, New Zealand: Pegasus, 2012, pp. 400.

 

[5] Iris Chang, The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012, pp. 219.

[6] Iris Chang, The Chinese in America: A Narrative History. City of Westminster London, England: Penguin Books, 2004, pp. 300.

[7] Iris Chang, The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012, pp. 189.

[8] Katsuichi Honda, The Nanjing Massacre. Armonk, New York: M E Sharpe Inc, 2009, pp 232.

[9] Katsuichi Honda, The Nanjing Massacre. Armonk, New York: M E Sharpe Inc, 2009, pp 294.

[10] George Hicks, The Comfort Women: Japan’s Brutal Regime of Enforced Prostitution in the Second World War. New York: W. W. Norton & Company, 2007, pp. 241.

[11] Ying-Ying Chang, The Woman Who Could Not Forget: Iris Chang Before and Beyond The Rape of Nanking. Canterbury, New Zealand: Pegasus, 2012, pp. 229.

[12] Iris Chang, The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012, pp. 209.

[13] Rabe John, The Good Man Of Nanking: The Diaries of John Rabe. New York: Vintage, 2000, pp. 285.

[14] Ying-Ying Chang, The Woman Who Could Not Forget: Iris Chang Before and Beyond The Rape of Nanking. Canterbury, New Zealand: Pegasus, 2012, pp. 199.

[15] Iris Chang, The Chinese in America: A Narrative History. City of Westminster London, England: Penguin Books, 2004, pp. 251.

[16] George Hicks, The Comfort Women: Japan’s Brutal Regime of Enforced Prostitution in the Second World War. New York: W. W. Norton & Company, 2007, pp. 87.

[17] Iris Chang, The Chinese in America: A Narrative History. City of Westminster London, England: Penguin Books, 2004, pp. 299.

 

[18] Iris Chang, The Rape Of Nanking: The Forgotten Holocaust Of World War II. New York: Basic Books, 2012, pp. 302.

[19] George Hicks, The Comfort Women: Japan’s Brutal Regime of Enforced Prostitution in the Second World War. New York: W. W. Norton & Company, 2007, pp. 201.

 

[20] Ying-Ying Chang, The Woman Who Could Not Forget: Iris Chang Before and Beyond The Rape of Nanking. Canterbury, New Zealand: Pegasus, 2012, pp. 200.

Vodafone: Case Study

Table of Contents

1.0Introduction. 3

2.0 Vodafone’s Capabilities and Core Competencies in 2005. 4

3.0Deployment of Core Competencies. 9

4.0Vodafone’s Acquisition Strategy. 12

5.0 Vodafone’s International Strategy. 16

6.0 Conclusion. 17

 

 

1.0Introduction

 

Each asset both real and financial has some aspects of value. The main issue relating to the successive investment and management of such assets is the knowledge of not only the value, but the cause of that value. Vodafone communications group, which is famous in both developing and existing markets, is the focus of this paper. In particular, the paper assesses the company’s performance and capabilities during 2005. We also analyze the groups’ management strategy that made them to succeed and enhance the company’s value at this time.

Vodafone Group is a multinational corporation involved in mobile telephony that is based on Britain. It is the second largest mobile telecommunications organization in the world after China Mobile, as measured by its returns and subscribers. Presently, the company owns and manages networks in more than 26 states across the world. It has also collaborated with similar entities in more than 40 other nations. The company is primarily listed in London Stock Exchange and is a constituent of FTSE 100 Index . It has also a secondary listing in on NASDAQ.

Vodafone, out of many is a case that is concerned on the growth of Vodafone Corporation from its inception back in 1980 to becoming a leader in UK and global service industry. It was by 2006 the leading   global competitor and had penetrated more than 26 countries. Some of the barriers, which the company encountered while entering the foreign markets, includes, high costs of infrastructure, national and international regulations.  Consequently, Vodafone decided during its early phases  to gain the mover  benefits  by expanding  its worldwide  presence through  such aspects as joint ventures,  organizational alliances,  and establishing  subsidiary companies in other nations  mostly through acquisitions. When the company experienced a high rate of growth and development, the management in conjunction with investors saw the necessity of reappraising and consolidating its worldwide strategy.

2.0 Vodafone’s Capabilities and Core Competencies in 2005

Some of the Companies competencies in 2005 are that they had a ready international market as depicted by France, China, India, USA and   other nations. It was also the predominant firm in Britain. In addition to these are the effective business strategies that were designed by the business management. Other competencies resulted from the acquisition of other mobile operators such as Oskar in the Czech Republic and MobiFon in Romania, and China Mobile which was very much significant in the expansion of the corporation’s market. In essence, its market at that time was not only large but also aware some. Taking an example of China Market, there were more than 150 million customers for Vodafone’s chief partner in the country, China Mobile. Out of this, Vodafone had only 3.27 stakes on that. This was strategic since though China was a very significant market, China Mobile was the fastest growing organization globally at that time. The company was connecting more than 3 million customers each month. Moreover, it held more than 70% of the market share in China alone.

The company was managing more than 67, 000 employees in its various departments worldwide. This means that it had an effective human resource management system to be able to handle such a huge number of employees as per that particular time. It is apparent that the company could not ignore the capabilities or lack of it, which its employees harbored. This is more particular in the sense that economic conditions of that time were not favorable either to growth in mobile service business. High company performance is ultimately related to how employees relate their work. Effective management of employees according to the value chain framework is the source of   a firm’s competitive advantage. Employees would offer a sure competitive advantage especially to organizations that are progressive and savvy in their operations.

The management of Vodafone had understood that China Mobile could not become Vodafone China. This was due to the quasi-political situation and investment options experienced in Chinese market. Their investment  in China mobile was also strategic because  they wanted to learn  from what other  successful  mobile entities  were doing  and have regular knowledge  on the  development  in the mobile service industry. The company also designed effective exist strategies in all the foreign markets they ventured such that in case they failed to succeed, they could pull out without any hindrance. On the other hand, if particular market happened to do well, the   company increased the investment   in a gradual manner. In 2005, the company had a market foothold in some of the largest markets in the world.

It has been acknowledge that acquisitions and mergers may results into firms making substantial amount of profits especially to acquired firms. In essence, mergers and acquisitions create an economic value for the acquiring organization. This is due to the fact that the assets   transferred from the acquired firms are put in the hands of the management team that handles them more efficiently and effectively. It is probable that it is these acquisitions and mergers, which generated greater value for Vodafone through retention of core resources which they generated and integrated into their business prospects. Other benefits that were derived from acquisitions included reduction of fixed costs through removal of duplicate operations and departments, thus lowering the company cost in relation to the similar revenue stream. This therefore, increased the revenue returns. We can also not forget the increment of the market share derived from acquisitions and mergers. Many of the companies acquired by Vodafone in different countries were actually its main rivals and could provide major competition if there were no acquisition. Acquisitions were therefore, the major channels that Vodafone employed to reduce competition in international markets. The transfer of resources from the different firms acquired by Vodafone boosted its asset base. This in turn created value through overcoming information asymmetry and combing its resources and those of the acquired firms.

 

The general environment where Vodafone was operating at that time also contributed to its success.  This segment of the environment included the political/legal, demographic, social cultural, economic and global. The company’s core resources in terms of   innovations, human resources and knowledge acquisition from other mobile operators also enabled them to go a step ahead   of their main rivals. The resources were designed in such a way that other firms could not easily imitate or ape them. Further, the resources  were deep rooted in the organization’s  history  by being focused in  one business  area,  the business  market rather  than diversification  into other business categories which would have loosened  the organization’s  basic focus  and drive through  main competencies. In the course of its development, the company focused itself on its primary activity when conditions did not allow for diversification. However, the company opted to diversify itself in an attempt to satisfy their clients. This was another area of its competency. Vodafone’s internal expansion was very much successful. Its technology was established based on the international standards. The international market strategy of this company produced a lower risk since they could pull out of those markets which were not very productive and increase their investment to markets that proved productive.

 

Vodafone was in 2005 considered the leading mobile phone operator globally. This means that it was more of   a monopoly by nature. This a pointer that competition in wireless mobile was not very high as presently witnessed in this industry. The high competition among the firms results into extreme spending on marketing, and advertising. In the end, the leading companies make extreme profits as the new firms find many barriers on the way. The mutual interdependence, homogenous products, few large players and high rate of entry barriers by small firms are some of the characteristics of Monopolistic firms.  This is typical of Vodafone at that time.

This aspect made the company to generate a huge amount of revenue as   the gross margins. The cash flow accrued from its operations   prior to capital expenditure and other costs, its gross profit amounted to £12.3 billion equivalent to US$22.7 billion at the end of the financial year. On the other hand, the free cash flow reached a whooping US$15.7 billion. At this time, Vodafone was the only company that was   regularly paying dividends to its investors. The management announced a total of £3 billion repurchase programs.

Other effective strategies, which also made the company succeed included, a well thought investment options, which the management undertook in this time. Vodafone took   its time    prior to investing or disinvesting in a particular market. For instance, the company reinforced and committed itself in Japan market in 2005 when it added £2.6 billion in its investment. According to the chief executive officer of the company, Arum Sarin, the kind of transactions, which they undertook in Japan that, was in the form of the simplified structure pointed out their commitment to their market in Japan. In addition, it also enabled them to deliver the required changes in improving their positions. This was due to the fact that there was more potential in this Japanese market at this particular time and in future.

The partnership with Arco group of German was also influential in capturing the German market sphere. This served strategically to cannibalize the excess revenues of other emerging competitors in that country such as Deutsche Telekom. The entrance of Vodafone in France market was strategic because at that time, the mobile phone market in France was typically the largest in Europe with many customers requiring mobile services. In addition, there were only two mobile operators in the country, France Telecom’s Orange and Bouygues Telecom. These are the two   mobile companies, which had the largest shares in France during 2005. This created an opportunity for Vodafone to reap from this market.

The management of Vodafone   bought stakes in VenFin Vodacom Group. Together with Telcom, Vodafone had a 50% share in Vodacom. However, the company bought 15% of Telecom stakes making its stakes to reach 65% from 50%. Towards the end of 2005, Vodafone established a 3 G technology in its France market, New Zealand and Australia. Other acquisition that was meant to expand its market includes Bharti Televentures where it had 10% stake in the company.  During this time, Bharti Televentures was the largest mobile phone network in India under the name of Airtel. This boosted Vodafone’s market share in India.

 

The company ventured into Romanians, where it put 99% of its stake in the local mobile industry. It went on to by the Oskar, the largest mobile operator in Czech Republic. The accruing of profit was very crucial for the organization. These profits were used to enhance the services to their customers while at the same time meeting the costs of its operations. It is noted that the company management did an extensive research and planning to ensure that the business activities generated high returns. The high returns were an indication to shareholder and other investors on the good performance of the firm. These made many investors to be interested in joining the firm. Maximization of profit is an element caused by different constraints of an organization. These constraints may relate to the technology, resources, government regulations, contractual obligations and so on. It is probable that in the attempt of  maximizing returns, the management at Vodafone  considered not only the short term and long term implications  from their decisions  but also external barriers  that may have  limited the capability of the firm  in achieving  its desired goals.

There is no doubt that consistent profits are very crucial   for the expansion and decision-making process in any particular firm. As earlier indicated, before and after investing in a particular market, Vodafone had to assess the costs and the accrued revenues from their investments. As the chief executive officer pointed out, the firm could pull out of the market where there were no meaningful profits. Concerning its exit and entry decisions, Vodafone management could evaluate the market that made higher profits. Apparently, it could exist the market when its operations did not generate a substantial amount of money.

 

3.0Deployment of Core Competencies

A market structure, which is monopolistic in nature, allows the market franchise, which is offered by the government to such entities. In franchising, an organization is offered to produce particular goods and or services in a given area. In exchange, the government imposes certain regulations in the organization’s operations. The regulations pertains to the pricing, behaviors conduct and other operations policies. This will also allow the government to obtain higher tariffs and taxes since the organization is the sole manipulator in the market. In addition, the government can impose the use of subsidiaries by the consumers to enhance their operations.

With regard to the welfare impact of pure monopoly, it can be argued that a monopolistic market structure was advantageous to Vodafone. The company did not have many competitors in the industry and therefore, was able to control its pricing strategy, therefore, maximizing the profits. Additionally, they were able to regulate their output and services and make it flexible so as to meet different client’s expectations. Since the monopolistic is the principal supplier of products in the market, Vodafone had to face the market demand curve. In other words, the prices determined by the company had to be at per to what the consumers expect. The law of demands dictates that the market demand slopes downwards. This is because consumers expect prices of the product produced by the monopolistic firm to be decreasing. Monopolistic firms determine prices after careful market research and a calculation of marginal revenue as well as cost of production. Vodafone employed the huge profits   accumulated from its services and products to invest with new products services so that they can also be of benefit to consumers.

Based on the particular situation at that time, there was an estimation of a long- run competitive advantage for Vodafone. At that time there had not been a major mobile wireless entrant other than Vodafone in this industry. In fact, the company had a market capitalization of US$165.7 billion all over the world. This also means that it had a large customer pool. The partnership with other international companies also worked to its advantage. The extensive market at that time was one of the basic   indicators that the company was doing fine against other firms of similar nature. A market value can be defined as the value of the company, which investors put on the whole organization. The stock market value is the indicator of the company’s worth in the perspective of the investors. Having a large market value potential   may put an organization at a better competitive position. In 2005, Vodafone had the largest market value around the world. This definitely translates that it was the most valuable organization at that time.

A combination of a large market value and high price of stock can assist an organization to develop in different ways. As noted in the case of Vodafone, they can be used as a source of cheap currency that can be used to acquire other firms. Acquisitions do indeed assist companies to improve the business quickly as it employs the large market share as its big edge. Apparently, a large market potential can be quite beneficial in the case when a firm needed to raise extra money through   its stock.

Acquisition of other operators in the industry such as Mannesmann D2 also gave it an edge in this service industry. Acquisition of other similar business entities is one way, which businesses use in order to expand. Acquisitions of other similar firms may lead to   a swift growth. They also assist the company in gaining experience, assets, and goodwill of   other business entities. With the increment of human resources and inventory, the organizational output may increase and its returns improve. As in the case of China, Vodafone assessed its weaknesses and sought to strengthen its business in the country through China Mobile. In addition to these is the advantage of culture combination, an acquisition assist in combining cultures of various entities from different backgrounds. Much business culture may take a long time to be established. There may be a problem for an organization   in adjusting to the prevalent culture in a new business environment.

 

Vodafone’s pool of human resources is definitely the core of effective workforce management at the firm. This is a different case with many entities operating under the perception that by paying low compensation to workers, they are keeping company expenses down. Many of such organization think that employees are simply happy from the fact that they have their jobs. Still, they think that   they are not so conscious concerning their pay. What they   ultimately ignore is the fact that poorly paid employees are not contented to stay in the company and be productive and are always looking for an exit option given the slightest opportunity.   It would better for organizations to employ few people, which it could be able to sustain and maintain through better pay than having a large number with lower payments.

 

4.0Vodafone’s Acquisition Strategy

Concerning its pre acquisition strategy, the group’s director on business   integration claimed that the period had seen a tremendous change in the telecommunication industry. It was also a period where   many firms in this industry sought to   join others or invited others   to do business with them. As he noted, much of the strategy employed had been mobile centric, employing a combination of market strategies. In its acquisition strategies, Vodafone targeted small players such as Air touch, Mannesmann, and others.  The benefits accrued from these acquisitions were numerous. It has been acknowledged that these acquisitions generated cost efficient in terms of economies of scale for the company. In addition,  they improved on the  company’s  revenue  through  gaining  in the market share  and also generating  the tax  gains.  As noted elsewhere in the paper, increased value generation, increase in cost efficiency and increase in the market share are some of the advantages of acquisition. This points the reason why Vodafone realized an enormous amount of revenue after these acquisitions and the expansion of its market share at that time. Vodafone typically decided to hunt the small mobile operators in order to generate more value than their competitors in their operations do do. In buying smaller entities, the company management probably expected to generate higher shareholder value than if the   two similar but separate entities worked independently.

 

Before entering new markets, the management at Vodafone opted to acquire local entities in the various states in an attempt to make their presence felt in the new market.  This is the reason why it acquired entities in China, France, India and many parts of Europe. This strategy was also beneficial as the company was still unveiling new technology and services. In addition to these benefits is the shielding of the company from bad economic times. If a particular firm found it difficult to operate in a particular market environment and does not have the capabilities of going through the tough times, it may opt for an acquisition of the existing firms in that environment. On the other hand,  if an organization with  large market share  opts to acquire the weak one,  then the result  would be a more competitive and cost effective  organization. Apparently, the joint company accumulates expanded market shares and therefore, a larger market potential.

The use of shares instead of hard cash in its acquisitions was also a significant factor for its success. This in particular is the reason why the companies came out of the telecomm predicament and continue on its development despite similar entities finding a hard time to come out. It should be noted that most of the company’s competitors such as France telecom, Deutsche Telekom, MM02, KPN, and so on were still preoccupied on how to come out of recession. When the shares could no long accommodate the acquisitions  and the  company was prompted to  use hard cash  if it had to go with the acquisitions, the  company slowed  down the acquisition projects and  put  their focus on internal development for two years. This was because it did not want to compromise its good credit ratings under all circumstances, because it would jeopardize its performance.

Its successful acquisition strategy was also based on  the concept that the company did not  concentrate  in one line  of the business,  rather, other than  the phone business,  it also went into the area of fixed line  operations as realized  in the  acquisition of Mannesmann,  and Japan Telecomm. This   led to its diversification of services and products. Diversification is beneficial since it can maximize opportunity and minimize risks. Vodafone’s Diversification strategy was very influential to its development and success. Diversification was also influential in expanding the growth opportunities through expanding the business operations while at the same time leveraging administrative roles as well as the core facilities.

Prior to its diversification, Vodafone had been solely concentrating on mobile telephony. In most cases, it began to look for potential buyers for other businesses. According to the company’s director on business integration, the company had been mostly focused itself in mobile telephony in 1990s. Even in 2005, the company still put its focus in mobile telephony and this is the time when it saw the need to diversify.

Concerning its acquisition strategy, the company used first of all to identify the leading or second leading player in the national markets. Apparently, it was careful not to associate itself with a mobile operator that was related to the monopoly of the particular state. This is the reason why it did not enter into contact with mobile firms such as T- mobible, which was a department of Deutsche Telekom, Orange. It is probable that Vodafone did not want to be associated with the bureaucracy of those organizations, putting their focus on the entrepreneurially minded entities such as Mannesmann’s D2. In Vodafone’s perspective, Mannesmann’s D2 was a very good company that could challenge other competitors   in the local market.

When the company retreated on its plans to acquire US operator, AT and T mobile wireless, it made a sensation story in the local media. Cingular Wireless had offered a total of $41 billion for the acquisition and it is the reason why Vodafone retreated. Not  that the company did not  have such kind of money  and could have even afforded even a higher bid, however, the management had calculated that anything  that could go beyond $38 billion could not be of value to the business.  It is the offer of Vodafone, which made its rival Cingular to raise its bid from $30 billion to $41 billion, this means that it was not financially prepared and it could take many years before it actually came to terms with the meager.

In this respect, the company always looked forward for cheaper means of making its presence felt in the world economies with a big growth potential. The management, led by the  company’s  director   of business  integration  were well aware that  pursuing  growth  at all costs  were not of interest  to the company’s shareholders. It is true that growth in terms of expansion, earnings and revenue is among the priorities considered by many   firms, however, such growth priorities may not always be to the best interest to shareholders. Organizations may be tempted to invest large big money in other companies, which may be immature or even risky in an attempt to grow fast. Before any acquisition venture, it is crucial that the management and shareholders should ensure that   their ambitions are not only sustainable but realistic too.

In essence, first growth may appear a good thing to organizations but what these firms do not understand is that growing too fast may put them into trouble. These  is  due to the sense that they may not  be able to maintain the pace of  such growth,  employ and train  qualified staff, or  fill expected orders. The rush to improve returns may put companies in difficult situations in their   business endeavors. Fast startups may hold money for many years before they actually generate the profits anticipated. If the company’s expenditure on growth becomes higher than its revenue, then it may be forced to look for more capital elsewhere. If such capital may not be availed, it may breed trouble to both the shareholders and the company itself. This is what the management saw before undertaking the acquisition strategies.

 

5.0 Vodafone’s International Strategy

Vodafone’s international strategy can be said to be global. This is because it can be felt in many countries not only in UK, or   Europe but in many parts of the world. The company is felt in China, India, France and America. This presence in various parts of the world enables its clients to use the services   in many parts of the world. The company has also established strategic alliances even in those countries, which it may not be felt physically in order to ensure that all their customers are, not deprived their core services. The company’s global image and popularity has been influential in building its brand around the world. Vodafone’s world strategy is further depicted by the signing of various roaming agreements with international mobile companies such as Telecom, Finland, Air touch communications and others. These roaming agreements made it easy for the company’s customers to use their phones even on other networks while still billed by the Vodafone. This ensured that all Vodafone’s customers   in all parts of the world were connected with the company.

According to the group’s director of business integration, all operations of the company  are meant to broaden  the company’s  desire  of establish  mobile connections  for  individuals,  groups, businesses  and communities all over the  world. This is further backed by the company’s vision of being a world leader in mobile communications. The company’s commitment lies in its value which states that all which the company does is driven by its passion for its clients, the people and the world around them. The company was at that time being felt in more than 26 nations and partnership with other entities in more than   14 countries. To add the significance of its global presence was its massive number of its global customers, 151.8 million registered clients and another 398.5 million venture clients. This ultimately put the company in a global position. Another factor that raised the company to a global position was its market timeless and favorable cost. Further, the company employs different business systems ranging from network services, marketing strategies, sales, billing and customer care. The company also collaborates with other operators in achieving a global recognition.

According to the company’s management, the company was in a moment of integration and that is the reason why it was interested in acquisition in different parts of the   world. The business integration was not only based on technology, but human resources and customers. This was a significant part in branding of the company in the global perspective. In spite of this restructuring program, the company still saw the need of encouraging local initiatives while pursuing global strategies.

 

6.0 Conclusion

Each asset both real and financial has value. The main issue relating to the successive investment and management of such assets is the knowledge of not only the value, but the cause of that value. Vodafone communications, which is famous in both developing and existing markets, was the focus of this paper. In particular, the paper assessed the company’s performance and capabilities during 2005. We also analyzed the groups’ management strategy that made them to succeed and enhance the company’s value at this particular time.

The company’s strategic alliances and acquisitions are another factor which propelled it to another level. These were meant to expand the business and offer customized   services to their clients. The telecommunication market is still potential for Vodafone owing to the increased population and sophisticated consumers. If Vodafone continues with its careful market strategies and segmentation, then this will be the source of its great opportunity. Other strategies that are poised to increase the company’s performance in terms of revenue includes but not limited to  designing of  simple and more cheaper phones,  simplifying the pricing  for different customers  and  coming up with  sophisticated  technologies especially  for younger   population. The increasing market is also another opportunity for Vodafone to diversify its services from mobile services to fixed line operations so as to enjoy the benefits of its high investment in technologies.

Other effective strategies for the company that made them to succeed included a well thought investment options which the management undertook in this time. Vodafone took   its time prior to investing or disinvesting in a particular market. For instance, the company reinforced and committed itself in Japan market in 2005 when it added £2.6 billion in its investment. According to the chief executive officer of the company, Arun Sarin, the kind of transactions, which they undertook in Japan that, was in the form of the simplified structure pointed out their commitment to their market in Japan. In addition, it also enabled them to deliver the required changes in improving their positions.

As noted in the case study, the high number of buyers for the company ultimately marked the growth of this   mobile firm. In summary, the strengths  and opportunities of the company  would be  summarized as the strong leadership and management  position, the strength  of its global brand,  high  level of geographical reach,  market  expansions , technological growth as in 3G systems , acquisitions alliances and collaborations with other business entities. The brand recognition and image is noted as strength of the company. During 2005, Vodafone was already being felt globally. Another aspect of its success also lied on its effective marketing and careful planned operations strategies. Vodafone’s presence in global perspective has greatly enhanced its image.

 

Reference

 

Banzhaf, J., and Ashok, S (2009). Case 22: Vodafone: Out of Many, One from

Ireland, In   Duane, R; Hoskisson, R E. & Hitt, M.A. Hitt., The management of strategy: concepts & cases.pp.263-279, Mason, Ohio: South-Western Cengage

 

Summary of the Speech

Introduction

Below is a summary of the speech that was presented at last week’s convention which brought together members of this association as well as a few drawn from our affiliates. The highlight of the event was the speech given by the guest of honor. Unlike other events where the speech passes as a formality, this one was quite dynamic and active in nature in that the audience was actively involved throughout the process. The speaker also touched on current issues as well as the future plans that we have made in light of the prevailing circumstances. He was also so bold as to tactfully tackle the internal conflicts that at one point threatened to become a roadblock to the progress we have been making.

Summary of the speech

The speaker began by greetings in which he expressed by addressing the audience members in order of their seniority. After this he introduced himself as the president of the country’s most successful hotel chains. He was however quick to dispel any feelings that he might be a pompous man by owing the success to the hundreds of men and women who work tirelessly on a daily basis to ensure the hotels are performing in tip-top condition. He quoted himself as being the captain of the team and this was indicative of the fact that he plays an active role in the running of the establishments. He also talked about how he got word of the request out institution made to have him as the guest speaker. He states how he was initially hesitant considering the fact that the last time he addressed a group outside of the company he runs was three years back. What motivated him however was the fact that out of many possible individuals he was the one who was picked and this meant that there is something that we saw in him. He said though he does not know what It is, he will give his best and hope to have added value by the end of the event. Satisfied that he has introduced himself to us, he went straight to the rest of the speech.

The speech he gave was not semi-formal in that he did not present his issues in point form. The reason for that according to him was that he has noticed from his staff that they concentrate more in informal conversations that in formal speeches that are given to them. He then praised us as an association for organizing such a colorful event on limited resources. This, he said was the way to go for future organizations. We are living in an environment of scarcity yet the demands are ever expanding at a rate faster than we can compensate for. He also lauded the manner in which the individual members have managed to balance their academic obligations and the commitments they have in the association considering both are equally challenging and demanding of one’s time, energy and resources. This was a clear indication that the individual attributes of members had been translated into the group’s image.

While praising us for our successes, he briefly digressed to tell us a story. To ensure that he does not lose his audience at this stage, he reassured the members that this story was extremely important to the rest of the speech. In his view, this was what would hold what he had just said and what he was about to say together. He then narrates the story of this old lady who suffered the misfortune of being stolen from by a young man. When she discovered that it was him who had robbed her, he was initially defensive and afraid. She however reassured him that all had been forgiven so long has he promised to change his ways and be a better person. Surprised by the old woman, the boy reflected on what he did and changed from that time onwards.

He then likened this to the situation in which there was a serious conflict in this group. Some of the details even made it a far as the local daily and he happened to get wind of it. The root cause of the problems was the fact that a group of newer members decided to run a project similar to one that had been done before. The only difference is that theirs was more successful than the initial one. They also took all the credit instead of acknowledging the owners. The moral of his story was that we have a better shot of continued success if we work together collaboratively rather than have negative competition split us and render all the hard work we have done null and void.

At this he once again thanked the association for considering him worthy of giving us a speech and concluded his speech to the applause of the audience members who were in attendance.

The type of speech he gave was ceremonial because he spent a great deal of time talking about present issues and abit of the future. He also involved the audience through engaging them consistently (Corbett and Connors, 1999).

 

 

Reference

Corbett, E. P., & Connors, R. J. (1999). Classical rhetoric for the modern student.

 

Social Enterprise: Criticism of Definition

 

Introduction

According to the Department of Trade and Industry, social enterprise refers to a business whose primary objectives are targeted towards social development that directly benefits the community, rather than being driven by the need to maximize profits(Great Britain, 2002). This definition is not far from that which has been suggested by various economists around the globe. All commercial strategies of a social enterprise are targeted towards community development (Alter, 2006). This concept of business has been used by many organizations over the past periods, and continues to be applied in today’s economy. A social enterprise can take the form of either a for-profit or non-profit organization, but the main distinguishing characteristic is that its main focus is not profit-making. It may be structured as a charity organization, co-operative, social business, or mutual organization. But does this definition hold much weight? Are social enterprises structured as is assumed by the Department of Trade and Industry? The author of this paper develops a criticism that social organizations are not entire focused on community development as many economists purport, though there are a few legitimate ones that have brought real changes in their respective communities, thus befitting the definition.

Overview of the Concept of Social Enterprise

The concept of social enterprise has been in use for a long period. The origin of the word can be traced to early 1978 in Beechwood College, England, where tutors freely helped co-operatives formed by workers to acquire skills in social auditing(Austin, Leonard, Reficco& Wei-Skillern, 2006). Ever since, the concept has been under various applications with different names and trends. During these antique times, social enterprises used not to seek help from the state, and came up with independent ideas and strategies to help the community. Today, many businesses in form of social enterprises are either affiliated to a given government program/project, or request for fiscal help in one way or another(Dey&Steyaert, 2010). This means that the original decency and meaning of the word has been distorted over time.

A business can be classified as a social enterprise based on three main determinants: the extent to which it reviews ethical nature of its goods and services, as well as the entire production process; the extent of how it provides evidence of its social impact, and defines it social purpose; and the extent to which its leadership system is democratized,including governance and management as passed to its social, human, and financial capital in the absolute benefit of the community. Therefore, the primary purpose of social enterprises is the common good, which in turn acts as their major revenue driver.

Social Enterprise: Criticism

As many economists and scholars battle with the correct definition of the word “social enterprise”, critics have had their fair share of the bargain, marveling at the correctness of such definitions. What is perfectly clear is that social enterprises are formed by entrepreneurs; in fact, the word itself seems to have a close relationship with the term “entrepreneurship”(Austin, Leonard, Reficco& Wei-Skillern, 2006). It is this part of the business concept of social enterprise that brings a lot of contention. Critics tend to think that the definition put forth by the Department of Trade and Industry does not heed to the entrepreneur part, since the understanding of the latter points to an ego-maximizing initiative, rather than promoting the social aspect (Say 2001). Moreover, it is also a general belief that entrepreneurship is interchangeable with profit-making, which is not the primary objective of social enterprises. It therefore leaves one with the question whether the definition was blind to the meaning of the word entrepreneur, or if it is myopic in a critical sense.

Apart from the contention about the entrepreneurial aspect of the definition, it can also be argued that generally, the purpose of the current social entrepreneurs has been diluted since there is no succinct demarcation of their boundaries, as much as there is no consensus on their forms, domains, and meanings (Austin, Leonard, Reficco& Wei-Skillern, 2006). This lack of unison has given room for all kinds of businesses and entrepreneurial minds to venture into the field of social entrepreneurship, which can be graded in a broad spectrum from corporations, charitable organizations, to for-profit organizations. In this regard, instead of the concept giving power to the poor and the powerless in the community, it has become a market entry strategy, heralded by stiff competition to catch the attention of the public(Dey&Steyaert, 2010). However, this disclaimer should not be taken as a criticism of the current state of business among corporations; rather, it is meant to pronounce the incomprehensive nature of the definition put forth.

It is clear, at least from a critical perspective of what social enterprises really do, that the bottom line that determines whether a particular entity falls under the field or not, is its ability to combine entrepreneurial/business interests with its service to the community. This idea develops from the philosophy of a “common good”, which holds that in all that a business does, the interests and well-being of the community is considered. Based on these inclinations, the purpose of social enterprise – so it appears – is not purely focused ondirectly benefiting the community, but also generating profits. An entity will only be gauged based on its impact on social change, and that is what determines its commitment to the concept of social enterprise. For instance, Google, which has made tremendous efforts in making global information accessible from every part of the world could be considered a social enterprise, but based on the above definition, it does not perfectly fit in.

In another aspect, it is arguable that since the inception of the concept of communism, the animus against its predecessor, capitalism, has not subsided (Pirson, 2011); indeed, much more attacks have been lodged against social enterprises, as there is no modest replacement in the market that has challenged its purpose(Alvord, Brown & Letts, 2004). Instead, several duplicates have arisen which tend to put them out of the market, and as Porter conceives, the economic environment is a competitive one where only the innovative entities survive (Porter& Kramer, 2002). Thus, it is difficult for an entity to exist and operate purely on one purpose, and therefore the principle of share value makes more sense. In this regard, enterprises formulate their objectives to include profit-making, creation of economic value, sustaining competitiveness, and giving value to the society. If this concept is anything to go by, then corporations have to adopt an intelligent way of shifting interests from service to the society to sustaining competitiveness. An entity that adequately serves the interests of the society must have an impressive and competitive organization structure, as well as good economic profile (Alvord, Brown& Letts, 2004). This is only possible if it engages in healthy and innovative competition, through targeting the external market different from the interests of the community. This analogy disputes the inclusiveness of the above definition, since the latter does not focus on the how of social enterprises, but centers purely on the what.

Although it is in the public knowledge that social entrepreneurship has gained substantial momentum, its true objectives brew a lot of distrust among people. Besides, the concept of shared value or shift of interests has considerable accountability and governance risk, since economists argue that hybrid organizations that have come to be classified under social enterprises cannot perfectly balance the need to remain competitive with societal interests (Boschee, 2006). If such paradigm were to be followed, these organizations would certainly succumb to insolvency, mortality, or dispute among the stakeholders. Thus, the only correct way seems to agree with the Department of Trade and Industry’s definition, which Pirson(2011), says is not meaningfully manageable. Actually, this notion brings a question about the real objective behind the surface purpose of current social enterprises. The reason many organizations engage in activities that create social impacts is purely to develop their public profile, and enhance their cordial relationship with community members, at the interest of creating customer loyalty and goodwill (Domenico, Haugh& Tracey, 2010). For this reason, hybrid organizations have been labeled as social enterprises, but are they? There would be a very sharp division of ideas over this question, as critics would argue that such corporations are not in any case social enterprises, while non-skeptics would agree that so long as an organization minds the welfare of the community around it, it is a social enterprise (Bosma&Levie, 2010). The blueprint is that the definition of the word appears strict and curt, but it fails to define the principle boundaries that should demarcate the extent of the activities carried out by a social enterprise.

Further the definition dictates that a social enterprise must have its “surpluses principally reinvested in achieving social objectives…..” (Great Britain, 2002). A critical distinction between an enterprise and a charitable organization, which has since lost touch with the current classification of social enterprises, is its ability to sustain their value proposition. The principle of sustainability is key to the continual existence of an enterprise (Porter& Kramer, 2006). Therefore, just as a for-profit organization would want to generate profit, so does a social enterprise. To most people, an organization is represented by the value of its brand, and it is what carries its image across vast geographical market segments (Freireich& Fulton, 2009). However, enterprises that entirely invest and reinvest all their resources in the interest of the society cannot achieve this desired level of quality. Unless they are fully funded by the government or a philanthropist, an organization cannot meet and adequately address the demands of the society as the above definition envisages. As derived from its wordings, social enterprises require constant update of innovation, unrelenting pursuit for new methods and ways of solving things, and being at the top of the market to ensure satisfaction of society members (Dey&Steyaert, 2010). This level of innovativeness cannot be achieved by reinvesting surpluses for the primary purpose for which the enterprise was set, but shifts in interests and allegiance must be employed in order to balance economic demands with community service.

An illustration offered by Mohammad Yunus, a social entrepreneurship guru, brings a clear understanding of why the rigid definition above cannot hold much weight any more in the current world. In his social work, Yunus decided to lend $27 from his own savings to 42 women residing in the village of Jobra (Bacq& Janssen, 2011). He saw an opportunity especially in the system of borrowing, where unsalaried people (who incidentally are the neediest) do not have easy access to credits unless they consent to being charged exorbitant interests. From his meager lending, Yunus realized that the women could use the small amount of money to invest in small business which in turn could finance their daily meals, pay school fees, and still have enough to pay back. Through this initiative, the Grameen Bank was founded, primarily as a non-profit organization that principally served the interest of the community. Later as the rate of lending and demand from clients rose, Yunus realized that the low interest rates he was charging could not sustain the business, hence raised them and transformed the bank into a for-profit organization, at the interest of sustainability(Bacq& Janssen, 2011). With this kind of restructuring, the bank was able to spread its wings to various parts of the world, and has been able to advance its services to many individuals and societies across the globe. Through this bold adventure, Yunus proved the possibility of courage, inspiration, fortitude, direct action, and viability of the social enterprise field.

Drawing from Yunus’ adventure, it is clear that for an entity to advance its social impacts to the society effectively, it must be profitable. Yunus himself is renowned globally as the father of microcredit, and was one of the wealthiest entrepreneurs of his age. Without changing his objectives to include profit-making, it could not have been possible for him to expand the coverage of the bank to other parts of the world. This logic defies the straightforwardness of the above definition, which has a very clear stance on reinvestment of surpluses. Without breaking the definitive sphere, the capabilities of a social enterprise would be constrained and confined to a small group of people, thereby limiting its scope (Dacin, Daci&Matear, 2010). In a nutshell, if the definition put forward by the Department of Trade and Industry is anything to go by, then social enterprises would be the worst performing organizations in today’s economy, attracting little attention even from the unfortunate members of the community, who constitute their primary targets.

Conclusion

The current definition of social enterprise has defied original meanings and the economy has made necessary adjustments which give room to other forms of co-operations to be classified as such. In this regard, any organization that includes among its core objectives, service to the society, is amenably a social enterprise. The concept of sustainability and competitiveness does not allow any entity to exclusively offer its services to the society without compromising its validity and value. The definition put forth, therefore, reflects an unstained aspect of the field, but fails to give solid constructs of achieving such divine objectives.

List of References

Alter, S. K., 2006, “Social Enterprise Models and Their Mission and Money Relationships”, in A. Nicholls (Ed.), Social Entrepreneurship. New Models of Sustainable Social Change, Oxford University Press, Oxford, 205-232.

Alvord, S., Brown, L. & Letts, C. 2004, “Social Entrepreneurship and Societal Transformation: an Exploratory Study”, Journal of Applied Behavioral Science, 40:3, 260-283.

Austin, J., Leonard, H. B., Reficco, E. & Wei-Skillern, J. 2006, “Social Entrepreneurship: It Is For Corporations, Too”, in A. Nicholls (Ed.), Social Entrepreneurship. New Models of Sustainable Social Change, Oxford University Press, Oxford, 169-204.

Bacq, S. & Janssen, F. 2011, “The multiple faces of social entrepreneurship: A review of definitional issues based on geographical and thematic criteria”, Entrepreneurship & Regional Development: An International Journal, 23:5, 373-403.

Boschee, J. 2006, “Social Entrepreneurship: The Promise and the Perils”, in A. Nicholls (Ed.), Social Entrepreneurship. New Models of Sustainable Social Change, Oxford University Press, Oxford, 356-390.

Bosma, N. & Levie, J. 2010, “A Global Comparison of Social Entrepreneurship”, in GEM (Ed.), Global Entrepreneurship Monitor 2009 Executive Report, GERA, London, 44-51.

Dacin, P. A., Dacin, M. T. & Matear, M. 2010, “Social Entrepreneurship: Why We Don’t Need a New Theory and How We Move Forward From Here”, Academy of Management Perspectives, 24:3, 37-57.

Dey, P. & Steyaert, C. 2010, “The politics of narrating social entrepreneurship”, Journal of Enterprising Communities: People and Places in the Global Economy, 4:1, 85-108.

Di Domenico, M., Haugh, H. & Tracey, P. 2010, “Social Bricolage: Theorizing Social Value Creation in Social Enterprises”, Entrepreneurship: Theory & Practice, 34:4, 681-703.

Freireich, J. & Fulton, K. 2009, Investing For Social and Environmental Impact: A Design for Catalyzing an Emerging Industry, Monitor Group, New York.

Great Britain, 2002.Social enterprise: A strategy for success: An introduction. Department of Trade and Industry.

Pirson, M. 2011. Social Entrepreneurs as the paragons of Shared Value creation?A critical perspective. Massachussets: Fordham University Schools of Business; Harvard University.

Porter, M. E., & Kramer, M. R. 2002.The Competitive Advanatge of Corporate Philanthropy.Harvard Business Review , pp. 5-16.

Porter, M. E., & Kramer, M. R., 2006. Strategy and Society: Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review , pp. 78-94.

Say J. B., 2001. “The Meaning of ‘Social Entrepreneurship,’” reformatted and revised, http://www.fuqua.duke.edu/centers/case/documents/Dees_SEdef.pdf.