Samapti Guha

Firm growth and its determinants

Enterprise growth has been studied by researchers for many years. Different terms have been used by different authors to define the stages of an enterprise growth, but the events through which each enterprise passes remain more or less the same. Most of the researchers suggest that each enterprise has to start, then grow while facing various challenges and crises, and finally mature and decline. There are many factors which will contribute to an enterprises success. There are many precursors also, which will allow an enterprise to move from one stage to another. There are two sets of thought prevailing among researchers; some suggest that the growth path followed by the enterprise is linear or predictable, and others suggest that the growth is fairly opportunistic or unpredictable. The understanding of the growth of an enterprise depends on the definition of what the firm is, how much has it grown, and what it offers to the market? What assets it controls and what is its legal form. It is critical to study how an enterprise manages its growth transitions and what pattern they follow. In this paper, a framework has been designed to study the path followed by small and medium enterprises (SMEs). This framework considered the influence of internal and external environmental factor on the growth patterns of SMEs. The paper encompasses literature review on various theories of enterprise growth. It highlights that though there are many studies on the stages of enterprise development, there is a dearth of literature on finding patterns of growth followed by the small and medium enterprises. Also, there is lack of literature on the effect of environmental factors in determining growth path. There is a need of a framework which can help the industry to empirically test enterprise growth patterns under different conditions.

Efficiency and Mission Drift—Debate Revisited in Indian Context

The twin objectives of MFIs are to serve the poorest clients and to become financially self-reliant. It is difficult for the MFIs across the nations to maintain the balance between the social mission of serving the poor and marginalised section such as women and the goal of achieving financial sustainability. To achieve the financial sustainability, MFIs focus on the efficiency indicators and neglect their social mission of serving the poor clients. This phenomenon is known as ‘mission drift.’ In this paper, we have analyzed the technical efficiencies and cost efficiencies of microfinance institutions in Indian context using stochastic frontier analysis in order to get an idea about mission drift mainly by studying the relationship of efficiencies with respect to the percentage of woman borrowers and the average size of the loan. In the literature on mission drift of MFIs, it is ascertained that an increase in loan size could be an indicator of mission drift. We have obtained efficiencies of 86 Indian MFIs for the period 2010–2014. In this study, it is observed that if the loan size increases, both technical and cost efficiency are increased which is a case of mission drift as large loan size is an indicator of targeting on poor clients. Technical efficiency is positively related to the regulation dummy. Both the efficiencies are positively related to age as well as the asset of the MFIs. It implies that experienced MFIs and MFIs who own the assets achieve both the efficiencies. This finding along with the increase in loan size establishes the fact that MFIs who are gaining efficiency in terms of operation are diverting their objective of serving poor clients. We can conclude that efficiency and mission drift are positively correlated in Indian microfinance sector.

Creating Social Change Through Entrepreneurship Education: An Effectuation Model at Tata Institute of Social Sciences (TISS), Mumbai, India

This chapter presents a descriptive analysis of the effectuation model of social entrepreneurship programme at the Tata Institute of Social Sciences (TISS). This innovative post graduate programme was pioneered in 2007. The main objective of the TISS’s Masters of Arts in Social Entrepreneurship Programme is to train a cadre of entrepreneurs who can create employment, assets, and wealth for the poor in innovative ways. It is expected that the graduates of this programme will become instrumental in filling the gap left by the withdrawal of States from supporting social programmes and the failure of markets to meet the needs of marginalized communities in both rural and urban India. This pioneering programme is an instrument for social change in communities where financially sustainable ways of solving problems, creating employment opportunities, and improving lives of locals is most in need.

Technology and Innovation for Social Change: An Introduction

Tension exists between technologists and social thinkers because of the impact technology and innovation has on social values and the norms which are often viewed as damaging the cultural fabric of a nation or society. Global business environment being the context in which implementation of technology and innovation takes place is widely accepted as the major reason for such conflicts. The current debate in India for and against the globalised and liberalised economic policies is the best case to cite. Social values and norms are dynamic constructs of economic development and social entrepreneurs are the actors to drive such changes. Though the outlook of economic development must be modern and contemporary, it should address all-round growth and well-being in the society. Growth is expected to be inclusive in nature, without any bias towards particular socio-economic groups. However, data on the development and growth trajectories of many developing countries reveal undue favours to some specific groups, which have resulted into some kind of divide. The divide between rich and poor, rural and urban, educated and uneducated, upper and lower castes, indigenous and modern societies and technologically forward and backward societies are common in these countries. At times, high cost of technological innovation, access and ease of adoption of technologies are considered to be the chief reasons for such non-inclusion. Information technology being the most adopted and accepted technologies is at the core of this debate which on other hand has also affected the major changes in social and political systems in many countries in the recent past. Also many other product and process technologies have affected favourably or otherwise the skill, livelihood and social norms in specific regions. This almost necessitates a fresh discourse, beyond anti-globalisation debates and bottom-of-pyramid market phenomenon. This volume is one such first attempt to identify the relevant areas of new search, and research into them without labelling social entrepreneurs, the social change agents, as heroic figures. In developing countries, social entrepreneurs have already established innovative and inclusive methods and systems such as micro-finance to impact social change. They are trained within the existing institutional set-up to practice social entrepreneurship processes; innovative educational models are developed for such focused training. These social entrepreneurs design systems and processes for high social impact while adapting in countries, societies or communities and adjusting to the specific local cultural norms or traditions or vocations. In this volume, an attempt has been made to compile many independent research cases by the authors from across the globe. India, Mexico, Ethiopia, Nigeria, Thailand, Cambodia, Laos, Vietnam and other African countries are selected as contexts to report on multiple aspects of social change.

Relevance of Social Enterprises for Micro-entrepreneurial Growth: A Case-Based Discussion on Indian Microfinance Models

Social enterprises have contributed immensely in the area of micro-entrepreneurial growth and development. The popular example of such enterprises is microfinance institutions in developing nations. This study uses the theoretical concepts of ‘Financial Depth’ and ‘Financial Breadth’ used in microfinance literature, to demarcate Indian microfinance service providers into semi-formal and formal microfinance institutions. Within this demarcation, two case studies are conducted, to understand how the philosophical and approach diversities among Indian MFIs result in two different microfinance models, having diverse impact on their clients’ micro-entrepreneurial growth. By understanding these contradictory views that exist at the interface of microfinance and micro-entrepreneurial growth, this study depicts that a welfare-oriented demand-driven microfinance model has more potential to foster entrepreneurial growth than a mere minimalist supply-driven microfinance model.