Social Entrepreneurship For Systemic Change: The Case of Southeast and South Asian Countries

Journal of Asian Public Policy
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rapp20
Social entrepreneurship for systemic change: the

case of Southeast and South Asian countries
Meng Zhao
To cite this article: Meng Zhao (2020): Social entrepreneurship for systemic change:
the case of Southeast and South Asian countries, Journal of Asian Public Policy, DOI:
10.1080/17516234.2020.1796325
To link to this article: https://doi.org/10.1080/17516234.2020.1796325
Published online: 22 Jul 2020.
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JOURNAL OF ASIAN PUBLIC POLICY
https://doi.org/10.1080/17516234.2020.1796325
RESEARCH ARTICLE
Social entrepreneurship for systemic change: the case of

Southeast and South Asian countries
Meng Zhao
Nanyang Business School, Nanyang Technological University, Singapore
ABSTRACT ARTICLE HISTORY

This paper distinguishes two levels of system elements that accom Received 3 March 2020
modate social entrepreneurs’ strategic role in driving systemic Accepted 9 June 2020
change while also recognizing their limitation of doing so. Relying KEYWORDS
on the dynamics of system elements to operationalize systemic Social enterprise; social
change, I explore how social entrepreneurs can drive systemic entrepreneurship; systemic
change. This paper identifies 84 “systemic-change companies” out change; systemic impact;
of 191 leading social enterprises in 12 Asian countries. The analysis asia
specifies mechanisms through which three systemic change strate
gies organize four types of social enterprises’ business models to
make systemic change happen. The findings generate implications
for practitioners and public policy makers.
Introduction
Guiding businesses into a force for social good is on the agenda of policy makers around
the world. Policy incentives to social entrepreneurship ranges from providing dedicated
legal status (Terjesen, Bosma & Stam, 2015) to administrative and governance support
(Nicholls, 2010). Meanwhile, a growing community of social entrepreneurs in the business
sector try to make changes in the public sector agenda (Waddock & Post, 1991) and
address intractable social problems. Policy makers and ambitious social entrepreneurs
have a common interest in transforming business models into an engine for generating
large-scale, lasting and comprehensive social impacts.
However, an increasing number of studies suggest the limitation of treating social
entrepreneurs as a strategic initiator of fundamental social change (e.g., Ganz et al., 2018;
Teasdale et al., 2020). It is argued that social entrepreneurship has done little to solve
systemic social problems, partly because they tend to compete with state and citizens for
public resources rather than enabling a democratic system that involves and mobilizes
public actions for change (Ganz et al., 2018). This point echoes Chandra’s (2018) finding
that, while the narratives of (Ashoka) social entrepreneurs contain a subtle message of
changing power relations among different stakeholders, this message was never
expressed explicitly.
Recognizing these critics, this paper proposes that social entrepreneurship can
drive systemic change and also recognizes its limitation in doing this. A system is
CONTACT Meng Zhao mengzhao521@yahoo.com Nanyang Business School, Nanyang Technological University.
Block S3, 50 Nanyang Avenue, Singapore 639798.
© 2020 Informa UK Limited, trading as Taylor & Francis Group
2 M. ZHAO
an interconnected set of elements coherently organized to generate meaningful

outputs (Green, 2016; Meadows, 2008). Systemic change describes a collective process
designed to alter the elements and the inter-element relationships of an extant
system related to a social problem. This paper conceptualizes two levels of system
elements that are interrelated. In particular, first-level system elements involve indi
vidual and structural ones that directly enable or constrain the resolution of a social
problem. An example is a social housing system that includes beneficiaries, resource
providers, approaches of organizing and allocating resources, and related policies.
Second-level elements involve worldviews and moral assumptions that guides the
forms and objectives of first-level elements. An example is the capitalism ideology
that defines purposes and assumptions of social housing policies. Social entrepre
neurs’ strategic role applies better to first-level elements than second-level ones. By
driving first-level systemic change, social enterprises are able to generate ‘systemic
impacts’. Systemic impacts are lasting effects on multiple dimensions of a social
problem ranging from the welfare of individual beneficiaries to government policies.
First-level systemic change, however, does not necessarily challenge second-level
system elements.
Following on this discussion, the empirical part of the paper explores how social
entrepreneurs can organize business models to make first-level systemic change happen.
This paper builds on an original database of 191 domestic social enterprises operating in
12 Southeast and South Asia countries. Nanyang Centre for Emerging Markets (CEM) at
Nanyang Business School compiled this database. The author identified 84 out of the 191
companies as ‘systemic-change companies’ on the ground that they are changing or have
changed both system elements and inter-element relationships and also show evidence
of generating systemic impacts.
The paper starts with distinguishing two levels of system elements and operationalizing
systemic change, drawing on the literature of system, systemic change and social move
ment. Then, data and methods are introduced. Next, the paper explores the ‘systemic
change strategy’ in two stages. First, the analysis of 191 social enterprises identifies four
popularly adopted business models that are aimed to address a social problem and prove to
be commercially viable. They include alternative technological solution, community circular
economy, supply-demand linkage platform and last-mile solution. These models describe
a conceptual framework defining how a company creates, extracts and delivers business
value while they solve a social problem. Second, the analysis identifies three strategies that
companies have applied to these models to drive systemic change. They include peer-based
value chain, collective solution development and embedded mobilization. The author explains
what they mean and elucidates how they organize each business model to change a system
associated with a social problem. Finally, this paper proposes an analytical process that
helps guide practitioners through a journey of driving systemic change. The paper also
provides suggestions on how policy makers could apply these findings to support and work
with social enterprises as a force for addressing intractable social problems.
Understanding systemic change

Systemic change embraces diverse theoretical traditions such as the ‘systems thinking’
theory (Barton et al., 2004; Senge, 1990), an evolutionary change model (Fullan & Miles,
JOURNAL OF ASIAN PUBLIC POLICY 3
1992) and an intentional design view (Foster-Fishman et al., 2007). There is no single
agreed-upon definition of ‘system’ (Hargreaves, 2018). This paper grounds the concepts of
system and systemic change in ongoing discussions in the areas of business sustainability
and social innovation. System is broadly understood in these areas as an interconnected
set of elements, coherently organized to achieve desired goals (Green, 2016; Meadows,
2008). This paper defines systemic change as a collective process designed to alter the
elements and the inter-element relationships of an extant system related to a social
problem. This strategic view of systemic change allows us to explore what practitioners
and policy makers can do about systemic change.
This view comes with a price. It may sound too agent centred, overestimating social
entrepreneurs’ role in leading and contributing to social change (Ganz et al., 2018; Garrow
& Hasenfeld, 2014 ; Ruebottom, 2013). Social entrepreneurs’ forms, processes and out
comes of change-making are subject to the lasting influence by social-political paradigms
(Nicholls & Teasdale, 2016). Governments, for example, could use social enterprises to
serve arguable political agendas such as the privatization of the health sector in the UK
(Roy et al., 2013). Teasdale et al. (2020) question social entrepreneurs’ potential to make
transformative change. They suggest that Ashoka Foundation’s philosophy of ‘Everyone
A Changemaker’ reflects a biased focus on social entrepreneurs’ lack of change-making
skills rather than fundamental development patterns of the capitalism system as the
source of social problems. Systemic change is therefore less ‘strategic’ even though social
entrepreneurs may challenge parts of social-political structures that constrain the resolu
tion of a social problem.
To clarify how strategic social entrepreneurs are, this study distinguishes two levels of
system elements. It is a tricky task to set boundaries for systems and their key compo
nents. Systems are nested and interrelated, so do their elements (Von Bertalanffy, 1955).
A too wide boundary can overwhelm and paralyze interventions in systems, while a too
narrow boundary can exclude important system elements and perspectives (Hargreaves,
2018). This paper suggests that elements at a certain level are more subject to interven
tions than others by social entrepreneurs and policy makers. Discussion about social
entrepreneurs’ strategic role in altering the former should also recognize their possible
limitation in changing the latter.
First-level system elements involve individual and structural elements such as key actors’
mindset and behaviour, the relationship between actors, or government policies that
directly enable or constrain the resolution of a social problem. For example, the Freedom
Fund identified first-level system elements that support slavery (Vexler, 2017). These
elements include dysfunctional governments, civil society organizations and business
leaders; the absence of collective bargaining; inadequate legislative and policy frameworks;
and flawed public perceptions such as harmful attitudes towards specific groups. Social
entrepreneurs play a strategic role in altering first-level system elements. This enables
social entrepreneurs to more effectively address a social issue than existing solutions.
The following case demonstrates the first-level systemic change. A construction com
pany can apply a new technology to building affordable houses for vulnerable people.
This company can also train vulnerable people to learn this technology and organize
them to provide house-building services to other members in a community. The former
approach explores a new market segment while helping the poor. The latter approach
instead challenges an existing system of supporting vulnerable people that relies on top-
4 M. ZHAO
down government initiatives. The latter approach demonstrates more ‘systemic’ change,
resulting in deeper impact on beneficiaries’ individual and community development. This
approach changes beneficiaries’ role from a resource receiver in the current system to
a resource provider. It also establishes a peer-based model to reshape the relationship of
beneficiaries in the current system for expediating community development.
Second-level system elements are composed of worldviews and moral assumptions
that define the legitimacy and purpose of a system (Ulrich & Reynolds, 2010). These
elements can manifest themselves in moral principles (Teasdale et al., 2020) or policy
paradigms (Nicholls & Teasdale, 2016) that give meaning to and guide the objective of
first-level system elements. An example of second-level system elements is the capitalism
ideology that defines the legitimacy of certain purposes and means of distributing
resources and benefits. The capitalism model may guide first-level elements such as
poverty alleviation policies.
Changes in first-level elements do not necessarily challenge second-level ones. The
peer-based social housing solution in the previous case, while driving first-level systemic
change, is not designed to address market failures that suppress resource distribution to
vulnerable people. Many social entrepreneurs, while providing an alternative solution to
a social problem, may fail to challenge or even reinforce the capitalism model under
pinning the problem (Teasdale et al., 2020). The strategic role of social entrepreneurs does
not easily apply to second-level system elements that involve upstream fundamental
causes of social problems (Roy & Hackett, 2016). Addressing these causes involves self-
reflexive and comprehensive effort across political, social and business sectors, which
goes beyond social entrepreneurs’ leadership.
Acknowledging the limitation of social entrepreneurship in changing second-level
system elements, this paper highlights the value of carving out an analytical path for
practitioners and policy makers to better make sense of and take action on the first-level
systemic change. This standpoint echoes the system thinking theory that supports the
possibility of intervening in systems through a comprehensive understanding of compo
nents and interdependencies within systems (Senge et al., 2015). Drawing on studies of
systemic change and social movements, the next section conceptualizes system elements
that enable the operationalization of the first-level systemic change.
Operationalizing system change

Following academic and practitioner insights (Geofunders and Packard Foundation, 2016;
Hargreaves, 2018), this paper operationalizes systemic change by focusing on the
dynamics of (first-level) system elements. Studies of systemic change and social move
ments provide direct insights to conceptualize such elements. The Oxford’s Systems
Change Observatory initiative at Skoll Centre for Social Entrepreneurship, through
a comprehensive literature review and a content analysis of extensive systemic change
initiatives, teased out several features of a system that account for a root cause of social
problems (Savaget & Ventresca, 2019).
First, privileged actors in a system are often either intrinsically problematic or prevent
ing problems from being addressed. Resourceful actors such as governments and com
panies tend to defend conventional and ineffective approaches of addressing a social
problem. Meanwhile, systemic change is unlikely to happen when affected people are not
aware of the source of social problems rooted in a system. Therefore, a key system
element constraining and enabling problem resolution is the mindset and behaviour of
actors affected by or affecting a social problem.
Second, solutions to addressing complex and intractable problems such as climate
change necessarily involve actions by stakeholders across multiple sectors and levels
(Hargreaves, 2018). Weak coordination among stakeholders associated with a social
problem is a critical barrier of the implementation of solutions (Savaget & Ventresca,
2019). On the side of people affected by a social problem, their self-organization and peer-
to-peer support strengthen relationship transparency that is a common feature of effec
tive systemic change initiatives (Walker, 2017). The lack of a coordinated relationship
among actors is therefore a key element that holds a social problem in place.
Third, conventional solutions for social problems tend to rely on top-down resource
provision. Systemic change initiatives commonly ask for the shift of power from resource
providers to beneficiaries (Grady et al., 2017). These initiatives empower people affected
by a social problem to take responsibilities to address the problem. The exiting model of
generating and allocating resources is therefore an element to shift through systemic
change initiatives.
The literature on social movements also provides direct insights for understanding
system elements associated with a social problem. Social movement studies explain the
source and development of collective actions, primarily among under-privileged change
makers, that drive institutional change (e.g., McAdam et al., 2001). This literature high
lights the role of the formal rules of the game and informal cultural-cognitive forces in
maintaining and changing a system. For example, social movement scholars have speci
fied how change makers alter the institutional system by exploring a state system’s
political opportunity structures and shifting social cognition to shaken the political,
legal and cultural pillars of a social problem (Goldstone & Tilly, 2001; McAdam,
McCarthy & Zald, 1996; McCarthy, J. D. 1996).
The above discussion recognizes five key system elements: actor, relationship,
resource, rule and norm. This categorization is consistent with practitioner insights
(Thorpe, 2014; Vexler, 2017). The actor element refers to the mindset and behaviour of
focal populations affected by a social problem, and the major stakeholders such as
governments, companies or international organizations who provide resources and gov
ern the rules of the game related to a social problem. The relationship element involves
the inter-beneficiary relationship (e.g., the self-organization of rural women), the inter-
stakeholder relationship (e.g., the coordination of governments and companies) and the
stakeholder-beneficiary relationship (e.g., the interaction between disadvantaged people
and government agencies). The resource element describes how resources (e.g., energy,
raw materials, financial capital) are created, acquired, allocated and exchanged. The rule
element indicates the formal rules of the game such as policies, regulations and industry
standards that define and regulate actors’ behaviour and social relationships. The norm
element describes public values and cultural norms that incentivize, punish or constrain
the behaviour of actors. Systemic change not only involves changes in separate elements,
it also features mutual reinforcement between elements.
The following example demonstrates changes in system elements. To address an issue
of declining freshwater fish diversity and fishermen’s income, changes in the actor
element takes place when fishermen adopt new practices that favour river conservation.
6 M. ZHAO
The change of the relationship element takes place when fishermen are organized and
trained to disseminate new practices among themselves. The change of the resource
element happens when fishermen reinvest revenues generated by the new practice into
the replication of this practice rather than rely on external funding and government
subsidies. The change of the rule element occurs when the government revises policies
to facilitate the adoption of new fishing practices. The change in relationships among
these elements takes place when these elements start reinforcing one another. For
example, the growing adoption of new fishing practices incentivizes the government to
develop new policies, which in turn encourages more fishermen to change fishing
practices. As a consequence of these changes, an innovative and more productive fishing
technology is likely to generate lasting and large-scale impacts on the fishing industry.
Systemic change produces systemic impacts along three dimensions: scaling out,
scaling up and scaling deep (Riddell & Moore, 2015). These dimensions involve impacts
on beneficiaries (e.g., individual, family and community development) and on surround
ing environments (e.g., laws and cultural norms). Scaling out refers to the replication of
practices to more locations and new contexts so as to influence more people. Scaling up
refers to changing ‘rules of the game’ such as laws and policies to enlarge impact from the
top down. Scaling deep generates lasting and profound impacts such as transforming the
mindsets of beneficiaries and major stakeholders or shifting cultural norms. This paper
identifies a social enterprise as a systemic-change company on the basis that it has
changed or is changing system elements and relationships among elements, and these
changes generate multi-dimensional impacts. Table 1 summarizes how this paper oper
ationalizes systemic change and systemic impact.
Methods
This paper uses a comparative case method. Understanding how a company organizes its
business model to alter system elements and generate multi-dimensional impacts requires
a refined analysis of processes and activities. Case studies are appropriate for drawing
patterns from process information and address such a ‘how’ question (Yin, 2003). This
paper builds on an original database of 191 domestic social enterprises operating in 12
Southeast and South Asia countries. CEM compiled this database which collected extensive
information about each company from web pages, media reports and organizational
documents.
These companies are awarded and/or funded by leading social venture-supporting
agencies such as Ashoka Foundation, DBS Foundation, Mulago Foundation, Schwab
Foundation and Skoll Foundation. They demonstrate leading social enterprise practices
in the region. The dataset applies well to the research purpose of this paper. Well-
Table 1. Operationalizing systemic change and systemic impact.

Systemic Change Systemic Impact Systemic-Change Company
1. Changes in system elements 1. Scaling out the number of beneficiaries 1. Driving changes in system
including actors, relationships, 2. Scaling up to change the formal rules of the elements and inter-
resources, rules and norms game such as laws and policies element relationships
2. Changes in inter-element 3. Scaling deep to generate profound impacts at 2. Generating multi-
relationships different levels such as individual mindset, dimensional impacts
community development and cultural change
performed and internationally recognized social enterprises are good candidates for an
analysis of viable business models creating social and business values. Public outlets
contain extensive information about these companies’ strategies, activities and impacts.
This allows the author to analyse whether or not and how they engage in systemic
change. The analysis identifies 84 out of the 191 companies as systemic-change compa
nies. Table 2 shows the country distribution of sample companies.
The author and a research assistant conducted a three-step coding to inductively
identify these companies’ viable business models, and systemic change strategies if
any. The first step is the open coding of business models. A business model in this
paper describes how a social enterprise creates, delivers, and extracts both social and
business values (Skarzynski & Gibson, 2008). It is an integrated expression of target
beneficiaries and customers, the products and services created for generating both
business and social values, the organization of value chain activities for engaging with
beneficiaries and stakeholders, and the approaches of producing and delivering products/
services. The analysis of business models identified each company’s form of organizing
these components to achieve commercial viability while it creates social value.
The author and a research assistant independently coded the data. They discussed the
coding and resolved discrepancies particularly in underlying concepts that could capture
the varying interpretations. This process led to the identification of four viable business
models: alternative technological solution, community circular economy, supply-demand
linkage platform and last mile solution. Each business model captures unique sources of
commercial viability. The finding section provides details on how each model creates
social value and achieves commercial viability. One company can employ multiple busi
ness models.
Second, the research team conducted open coding of whether or not and how each
company altered elements and inter-element relationships inherent in a system associated
with a social problem. For example, we coded if a waste management company changed
the way beneficiaries and stakeholders understood and acted on waste management (i.e.,
actor element), reorganized beneficiaries or coordinated previously uncoordinated stake
holders (i.e., relationship element), shifted the way financial resources were generated and
allocated to support waste management (i.e., resource element), or changed policies (i.e.,
rule element) and public perceptions (i.e., norm element) about waste management.
Table 2. Country distribution of companies.

Number of Companies Number of Systemic-Change Companies
Bangladesh 11 9
Cambodia 9 2
India 91 51
Indonesia 37 11
Laos 1 0
Malaysia 5 1
Myanmar 2 0
Pakistan 4 1
Philippines 13 0
Sri Lanka 7 7
Thailand 7 2
Vietnam 4 0
Total 191 84
8 M. ZHAO
We identified systemic impact by coding if a company has scaled impact along more
than one dimensions including scaling out, scaling up and scaling deep (Riddell & Moore,
2015). The scaling out dimension is indicated by the number of reached beneficiaries and
the expansion of operation locations. Scaling up is indicated by changes in government
policies and initiatives. Scaling deep is indicated by beneficiaries’ income growth, their
personal, family and community development, and public perception change. At the end
of the second step, we understood each company’s business models and their involve
ment in driving systemic change. 84 companies have or are changing system elements
and have generated multi-dimensional impacts. They are hence identified as systemic
change companies.
The third step involves the axial coding of the connections between business models and
systemic change activities both within a company and across 84 companies. A connection
demonstrates the approach(es) through which a company organized a business model to
alter one or more system element. For example, a company adopted a new house-building
technology (i.e., alternative technological solution) and used a peer-based system to orga
nize previously unorganized vulnerable people (i.e., relationship element) to implement the
technology. In this case, we coded a connection as a ‘peer-based approach’ that enables the
business model of alternative technological solution to change the relationship element of
a conventional system of supporting vulnerable people. This coding resulted in a concept of
‘peer-based approach’ that connects two concepts of ‘alternative technological solution’
and ‘relationship element’.
We aggregated recursive connections (or approaches) to describe a systemic change
strategy. Therefore, a systemic change strategy is about an approach or a set of approaches
that organizes a particular business model to drive systemic change. To arrive at
a representative and parsimonious set of strategies, we reduced a strategy’s level of nuances
and kept a strategy that makes sense to key features of systemic change found in existing
studies. For example, we stopped categorizing different types of peer-based approaches
and instead used ‘peer-based approach’ to inform a strategy. This is because that different
peer-based approaches commonly decentralize power to solve a social problem, which has
been found important in effective systemic change initiatives (Grady et al., 2017). One
systemic change strategy can serve different types of business models and drive the change
of different system elements. Our analysis resulted in three systemic change strategies: peer-
based value chain, collective solution development and embedded mobilization.
Viable Social Enterprise Business Model

The analysis of 191 companies identifies four widely adopted and viable business models:
alternative technological solution, community circular economy, supply-demand linkage
platform and last-mile solution. These models, while addressing social problems, contain
sources of business competitiveness such as cost-efficiency advantages, product/service
differentiation and strong access customer acquisition. Table 3 summarizes the sources of
each model’s social and business values.
Alternative technological solution

(ATS) provides technology-based products/services tailored to the needs of beneficiaries
and customers, more cost-efficiently and/or emotionally appealing than existing options
Table 3. Viable business model for creating social value.
% of Companies
Business Model Source of Social Impact Source of Commercial Viability Adopting the Model
Alternative technological Providing technology-based products/services tailored to the needs of 1. Cost-efficiency due to non-frilled designs 52
solution beneficiaries 2. Cost-efficiency due to local sourcing of undervalued
inputs
3. Product and service differentiation
Community circular Creating jobs for beneficiaries and reinvesting profits into community 1. Cost-efficiency due to local sourcing of undervalued 36
economy development inputs and direct procurement
2. Cost-efficiency due to tailoring supplies to local
demands
Supply-demand linkage Facilitating collaborations and transactions among beneficiaries and 1. Cost-efficiency due to low-cost product/service 13
platform between beneficiaries and resource providers management
2. Cost-efficiency due to resource synergies across
platform users
Last-mile solution Completing a value chain to enable beneficiaries to gain access to products Strong access to a large and growing customer basis 15
and services
9
10 M. ZHAO
in the market. Companies adopting this model generate competitive advantages in

several ways. First, the customized no-frill products/services design is cost-efficient. This
is similar to the existing insight about ‘no frills service’ that meets the basic needs of the
poor at ultra-low prices and still generates profits through high volume, high asset
utilization and service specialization (Karamchandani et al., 2009). For example, Prakti is
an Indian company that produces and sells biomass cook stoves to address rural women’s
health issues resulting from harmful cooking practices. Their no-frill product designs
generate overall advantages in fuel efficiency, emission and smoke reduction, affordabil
ity and durability. ModulusTech is a Pakistani company that developed a flat-packed
housing technology. Intended as a solution to global refugee and housing crises, the
result is also commercially viable since it is highly cost-effective, quick to set up and
relocatable and it provides decent living conditions.
Second, the ATS model typically relies on local sourcing of undervalued inputs, which
improves cost-efficiency and input accessibility. HelpUsGreen is an Indian company that
recycles temple flowers that contaminate local rivers. Their product is 100% biodegrad
able packaging materials and bio-leathers. HelpUsGreen’s inexpensive flora foam solu
tions offer superior fire resistance and biodegradability. The company enjoys a cost
advantage through its acquisition of a vast amount of used temple flowers at low
expense.
Third, a marketing and sales model with embedded social value drives product and
service differentiation and emotional appeal. Greensole is an Indian company that
refurbishes discarded shoes and worn out shoe soles into trendy slippers. They donate
footwear to children in need and encourage consumers to donate to children through the
company. The social mission enables the company to differentiate its brand and build
a strong consumer base through campaigns among celebrities, companies and interna
tional agencies.
Community circular economy

(CCE) earns revenue from products produced by beneficiaries in a community, and
reinvests profits into community development. Companies in our database adopted
this model to produce diverse products from food, cosmetic products, artworks, and
apparel to tourism services. This model derives cost-efficiency through local sourcing of
low-cost inputs such as waste materials and labour, and bypassing intermediate markets
in favour of direct procurement from local producers. For example, Sukkha Citta is an
Indonesian company that works with artisans in local villages to design, produce and sell
handcrafted clothes. The company gains a significant cost advantage by sourcing local
natural fibres, partnering with cost-competitive and capable local craftswomen, and
skipping middlemen. The majority (56%) of their revenues go directly to villages to
build craft schools and provide training to craftswomen.
Another source of cost-efficiency involves precisely tailoring supplies to local needs
to avoid oversupplies. Swayambhu Innovative Solutions is an Indian company that
recycles local community wastes into biogas. They build small factories in local com
munities to generate biogas to meet local energy demand. Each factory avoids over
capacity by matching its acquisition of waste and generation of biogas to the updated
local demand.
The viability of the CCE model also derives from product and service differentiation.
Accessibility to local knowledge and raw materials enables a company to provide pro
ducts/services that have unique features and social value appreciated by a niche market.
For example, Hilltribe Organics works with hill tribes in northern Thailand to pioneer the
production of organic free-range eggs. The company is among the first in the country in
providing biodegradable packaging. They continue to be the number one organic free-
range egg brand in Thailand to this day.
Supply-demand linkage platform

(SDLP) generates social value by providing a platform to facilitate collaborations and
transactions among beneficiaries and between beneficiaries and resource providers.
A platform is an environment that provides governance structures and standards for
people to interact more effectively with each other at scale (Hagel & Mortensen, 2018).
Companies can establish a platform to link supply and demand sides of a market through
online tools or offline organizing processes. The SDLP model can achieve high operational
cost-efficiency and strong product and service differentiation, hence becoming commer
cially viable.
Local Alike is a Thai company that provides an online marketplace platform to offer
sustainable tourism services. This platform enables individual communities to efficiently
manage their tourism businesses and connect with clients worldwide. The company’s
social mission is to help vulnerable community residents achieve financial independence.
Their platform maximizes resource synergies across local communities, allowing them to
share valuable resources such as sleeping facilities, multi-lingual tour guides and licenced
trek leaders. Meanwhile, the platform enables communities to design travel packages
based on local attractions and carrying capacities. Because of high cost performance,
unique travel products and customer experiences, Local Alike prospers in Thailand’s
highly competitive tourism industry. Within in the first two and a half years, Local Alike
increased partnerships from eight to more than 30 communities. It is expanding to other
countries in Southeast Asia such as Indonesia and Vietnam.
Last-mile solution
(LMS) specializes in completing a value chain so as to enable beneficiaries to gain access
to previously inaccessible products and services. A company adopting this model can
directly provide a last-mile solution such as microfinance and entrepreneur training
services or collaborate with external agencies who provide these services. The LMS
model empowers beneficiaries to participate in a previously inaccessible market as
customers. Effective operation of the LMS model resorts to building a trust-based relation
ship with beneficiaries to expand the customer pool. This model allows a company to
convert a large number of disadvantaged people untouched by mainstream products and
services into loyal customers with growing consumption power.
Kruosar Solar is a Cambodian company that integrates the ATS and LMS models. This
company designed and sold solar home systems to meet the needs of off-grid house
holds. Through these systems, users are able to extract more productivity from energy
efficient appliances for the same amount of power and cost. The company established
strategic partnerships with major Cambodian micro-finance institutions to provide end-
12 M. ZHAO
user financing. This last-mile service leveraged these MFIs’ extensive networks and social
capital to substantially increase its customer numbers.
Findings: Systemic Change Strategies

The analysis identifies three core strategies that the 84 social enterprises have adopted to
effectively drive systemic change. They are peer-based value chain, collective solution devel
opment and embedded mobilization. These strategies distinguish a company from others
working in the same industry and addressing the same social issue. These strategies have
distinct features, enabling a company to alter system elements in different ways. Meanwhile,
these strategies are complementary to each other, allowing a company to combine multiple
strategies in practice. The following sections explain the key features of systemic change
strategies and demonstrate how they alter system elements. Table 4 summarizes how each
strategy organizes the four business models to drive systemic change.
Peer-based value chain (PBVC)

The PBVC strategy manages value-chain activities through a peer-to-peer support system of
organizing beneficiaries. This strategy replaces the conventional top-down approach of
reaching, engaging with and organizing beneficiaries. The strategy decentralizes resource
generation and allocation associated with a social problem. The resultant shift of power
from resource providers to disadvantaged beneficiaries indicates a key feature of systemic
change (Grady et al., 2017). Drinkwell System is a social enterprise that provides clean
drinking water in Bangladesh through a low-cost technology. Its peer-based approach of
organizing beneficiaries distinguishes itself from industry peers. The company identifies
local villagers as franchisees and works with them to build up water filtration systems that
serve the local community. Then, local franchisees are responsible for maintaining
the day-to-day operations of water filtration plants. The company also trains local villagers
to work as ‘customer success teams’ to solve technical issues for users in the community.
The technological solution becomes a vehicle that triggers a self-driven process of
individual and community development.
The PBVC strategy enables each business model to alter the actor, relationship and
resource elements of a system. Social enterprises adopting the ATS model have used the
strategy to promote their solutions, acquire inputs and implement solutions.
Disadvantaged people, as a result of the strategy, change from the victim of a social
problem to a solution of the problem. The strategy relies on disadvantaged community
members to explain and promote a technological solution to other members.
Disadvantaged people are also organized to collect raw materials from community
members. Waste Concern is a social enterprise that transforms organic wastes into
fertilizer in Bangladesh. It hires rural women to collect kitchen waste for producing
organic manures and bio-pesticides. HelpUsGreen in India hires community members to
collect temple-flowers contaminating Indian rivers and recycles them into 100% biode
gradable packaging materials.
The PBVC strategy is popularly used to implement a technological solution, including
building and maintaining facilities, manufacturing products, delivering products and
services, and managing inter-customer interactions. Drinkwell System organizes
Table 4. Transforming Business Models to Drive Systemic Change.
Application to Business Model
Alternative techno Community circular Supply-demand
Systemic change strategy logical solution economy linkage platform Last-mile solution Target Systemic Change
Peer-based value chain Managing value-chain activities through Peer-based Peer-based Peer-based Peer-based supply, Actor: Shifting beneficiaries
a peer-to-peer support system of promotion and beneficiary- resource sales and from victim to value creator
organizing beneficiaries operation of enabling services exchange via distribution Relationship: Reorganizing
a technological and community a platform systems beneficiaries as a peer-to-
solution development peer system
Resource: Decentralizing
resource provision,
enabling beneficiaries’
resource independence
Collective solution Coordinating major stakeholders Coordinating Coordinating Coordinating Coordinating Actor: Changing stakeholders’
development associated with a social problem to stakeholders stakeholders stakeholders stakeholders mindset and behaviour
study the root cause of the problem around around through through last-mile Relationship: Coordinating
and develop a locally specific solution a technological community a platform services uncoordinated
solution development stakeholders; rebuilding
the stakeholder-beneficiary
relationship
Rule: Changing government
policies and initiatives
Embedded mobilization Conducting awareness-raising activities Using Using beneficiary Using a platform Using an alternative Actor: Changing beneficiaries
and driving collective actions around technological products to raise to raise value chain to raise and stakeholders’ mindset
a common purpose through daily solutions to raise awareness and awareness and awareness and and behaviour
business operations awareness and drive collective drive collective drive collective Relationship: Coordinating
drive collective actions actions actions unconnected stakeholders;
actions rebuilding the stakeholder-
beneficiary relationship
Rule: Changing government
policies and initiatives
Norm: Reshaping public
perception of beneficiaries;
reducing social prejudice

13
14 M. ZHAO
community members to build and operate water filtration systems. Life-Labs in India uses
ICT-based toolkits to train students to take responsibility for teaching other students and
tracking their performance.
Social enterprises adopting the CCE model leverage a peer-based system to organize
and deliver services to beneficiaries and expedite community development. Community-
based social enterprises such as Mashal in Pakistan have organized women in disadvan
taged communities to provide peer-to-peer learning of handicraft skills. These women
also work in groups to develop education and healthcare activities in their communities.
Social enterprises adopting the SDLP model build on intermediary platforms to facil
itate peer-to-peer resource exchange between beneficiaries. ME Solshare is a Bangladeshi
company that sets up mini-grid networks in Bangladesh’s rural communities. Local house
holds generate their own electricity and buy and sell excess power through these net
works. Users can buy, sell, and make money on this power-trading platform.
Social enterprises adopting the LMS model use a peer-based system to fill in value
chain gaps that leave a large number of people underserved. They leverage local knowl
edge and people to develop low-cost alternatives to mainstream values chains (e.g.,
supply and distribution systems) that are missing in disadvantaged markets. For example,
JITA is a social enterprise in Bangladesh that develops a peer-based distribution mechan
ism to resolve the issue of impoverished rural women’ last-mile accessibility to affordable
and high-quality products. They empower beneficiaries to participate in a value chain as
suppliers, salesperson or customers.
The above activities replace the conventional top-down approach of supporting dis
advantaged people, transforming them from resource receivers to resource creators (i.e.,
the actor element of a system). Beneficiaries are reorganized to serve one another, which
alters the conventional relationship among beneficiaries (i.e., the relationship element).
The peer-based system reduces beneficiaries’ reliance on governments or external agen
cies for resources (i.e., the resource element). The PBVC strategy also enables mutual
reinforcement between system elements. For example, the trust-based relationship
between beneficiaries is able to motivate more beneficiaries to adopt an alternative
solution and hence change their behaviour.
The case of Waste Concern demonstrates how the PBVC strategy drives systemic
change. This company hires impoverished women to collect organic kitchen waste from
local communities and slums. These women explain and promote the solution while they
collect kitchen waste. The company sets up composting plants near each community and
involves local people in plant operations. These policies change community members’
behaviour and relationship by making them routinely participate in waste management
and serving other members. Disadvantaged members turn into an asset of their commu
nity. Income generated through waste management flows back to disadvantaged mem
bers and community development. This reduces beneficiaries’ dependence on
government and external funding which is typical of traditional waste management
initiatives. The PBVC strategy triggers mutual support between system elements. For
instance, the strengthened peer-support relationship between community members
attracts more members to join in the business and change their behaviour.
These changes enable Waste Concern to scale out and scale deep. The company
replicated its model in 26 Bangladesh towns and in other Asian and African countries,
benefiting about 2.9 million people. The company has substantively improved disadvan
taged community members’ life quality and created jobs for around 1,000 urban poor.
Collective solution development (CSD)

The CSD strategy coordinates major stakeholders associated with a social problem to study
the root cause of the problem and develop a locally specific solution. The strategy coordi
nates previously uncoordinated stakeholders. It allows stakeholders to see their interests
and agendas being fulfilled by pursuing a common purpose of addressing a social
problem. Coordinating key stakeholders across social sectors is a necessary component
of systemic change. Solutions for addressing complex and intractable problems such as
climate change involve the coordinated action by multiple stakeholders across multiple
sectors and levels (Hargreaves, 2018). Systemic change requires the capability of actively
influencing major stakeholders to change their ways of working. This goal cannot be
achieved alone and requires a coalition of multiple stakeholders such as governments,
private sector actors and industry associations (Grady et al., 2017).
Ujjwal is an Indian toy manufacturer that demonstrates the CSD strategy. The company
uses teaching toys as a tool for integrating handicapped children into normal schools. The
company has built a large network of stakeholders around its toy products and teaching
aids services. The network includes non-profit organizations (NPOs), companies, schools
and government agencies. Some members include the Spastic Society of India, the
Association for Mentally Handicapped, the National Institute for Visually Handicapped,
the National Association for the Blind, the Department of Special Education and the Child
Guidance Clinic and Delhi University. Network members help Ujjwal test product proto
types, receive teaching aids trainings and provide suggestions to keep improving its
solution.
The CSD strategy enables each business model to alter the actor, relationship and rule
elements of a system. Social enterprises adopting the CSD strategy have brought on board
a variety of stakeholders to develop a locally specific solution to address a social issue. They
strengthen stakeholders’ communication with people affected by the social issue and
involve stakeholders in solution development. A common practice of social enterprises
adopting the ATS model is forming a committee comprised of local government represen
tatives, civil society organizations, business leaders and community leaders to identify
project sites and educate the technological solution in a community. Committee members
may try out product prototypes and provide improvement suggestions.
Social enterprises adopting the CCE model and the LMS model link a multi-stakeholder
group with disadvantaged beneficiaries, in addition to their major businesses such as
making weaving products or small loans. They regularly invite local elites, brokers and
government representatives to attend meetings where they discuss with disadvantaged
people about issues of community development and product/service accessibility. They
coordinate different parties to find out solutions that are implementable in local commu
nities and are supported by resourceful stakeholders.
Social enterprises adopting the SDLP model involve stakeholders and beneficiaries as
platform users and facilitate their communication and collaboration. EPIC Home is
a Malaysian company with innovative house-building technology. It sets up an online
platform that allows individual people to launch a project to solve social issues. These
16 M. ZHAO
issues could be anything from a homeless man around the street corner to someone
struggling with his business. The platform includes functions specific to individual people,
NPOs, organizations and government agencies, enabling them to efficiently build partner
ship for addressing social issues.
The CSD strategy strengthens stakeholders’ understanding of and participation in the
resolution of social problems. This empowers the actor element of a conventional system
that is inefficient in addressing a problem partly due to the lack of participation by major
stakeholders. The strategy coordinates uncoordinated stakeholders and facilitates the
stakeholder-beneficiary communication, altering the relationship element of a system.
Change in the rule element is expressive. The strategy enables social enterprises to
influence the development of new policies and government initiatives. Several cases
show changes in the inter-element relationship. For example, the government’s deep
involvement in solution development and the recognized effectiveness of the solution
encourage policy change for supporting the solution.
EPIC Home shows how the CSD strategy drives systemic change. It developed
a collaborative ecosystem involving community groups, NPOs, government agencies,
companies and educational institutions. These parties work together to recognize
a community’s resources that they can leverage on to address community problems.
They identify a group of local champions who are responsible for implementing and
promoting the company’s house-building technology.
The company enables major stakeholders to better understand and take actions on
community problems. This alters the actor element of the conventional system of sup
porting the vulnerable. The company changes the relationship element by coordinating
previously under-coordinated stakeholders and strengthening the stakeholders’ commu
nication with the vulnerable people. The Department of Orang Asli Development includes
the company’s solution in the government agenda of house-building and community
development. This suggests the company’s impact on formal rules that define the
approach for addressing the housing issue. The company alters the inter-element rela
tionship considering that the government’s engagement with beneficiaries and other
stakeholders in developing a solution facilitates policy change.
The CSD strategy helped EPIC Home scale out. It built over 100 homes in 10 villages
within five years and replicated its model overseas. The company scaled up by working
with the government to formally replicate its model. It scaled deep by empowering
vulnerable people to grow into house-building specialists and champions for community
development.
Embedded Mobilization (EM)

Social enterprises adopting the EM strategy conduct awareness-raising activities and drives
collective actions around a common purpose through daily business operations. Mobilization
describes a process of bringing people together to inspire them to take collective actions
to achieve a common purpose. Mobilization is a key part of systemic change. Systemic
change is unlikely to happen when the source of a social problem rooted in the incum
bent system is invisible to affected people. Neither can it happen when people maintain
conventional mindset and behaviour that prevent them from addressing the problem.
Sample companies have engaged in large-scale awareness-raising activities to make
visible deeper causes of a social problem. These activities inspired beneficiaries and
stakeholders to adopt a proposed solution to tackle the problem.
Karo Sambha is an Indian social enterprise that demonstrates the EM strategy. It
develops a movement for people to responsibly recycle electronic wastes. In addition to
providing an innovative technological solution for e-waste management, the company
invests extensively in building awareness and encouraging actions among schools and
consumers. The company has established partnership with 1,100 schools, 1,450 waste
aggregators and 2,200 waste pickers. This work tries to change the waste management
behaviour of young people and mass consumers who are major electronic product users
and e-waste generators.
Social enterprises have built on different business models to raise awareness and drive
collective actions to address a social problem. As a result, the EM strategy enables each
business model to alter the actor, relationship, rule and normative elements of a system.
Social enterprises adopting the ATS model invest in education and training activities
among community members, school students or the general public. They explain social
problems and encourage people to take actions on the problem through their proposed
solutions. For example, Prakti, the Indian biomass cookstove producer, provides extensive
healthcare education to a large number of rural women. Products and services, therefore,
are tools for mobilizing behavioural change related to a social problem.
Social enterprises adopting the CCE model builds on a community-based business to
develop collective actions among beneficiaries, stakeholders and the general public.
These companies regularly launch or attend awareness-raising activities where they
exhibit beneficiaries’ products and stories to spread messages about social problems
and solutions. These activities build networks of sympathetic people across social sectors,
which sets up an infrastructure for organizing large-scale collective actions. Mashal is
a Pakistan social enterprise that trains women in mountain tribes to design and produce
art crafts. Their routine showcase of products in nationwide and international exhibitions
raises the public attention of social problems in the region. The company hence builds
a large network of supportive people and organizations to address these problems.
Social enterprises adopting the SDLP model uses intermediary platforms to raise
awareness and drive collective actions. A technological platform can serve as
a mobilization tool. Such a platform enables the low-cost dissemination and exchange
of information and the organization of collective actions at a large scale. EPIC Home
created an open source platform to present house-building designs that the company
and its partnering construction and design firms have created. The platform has become
a collaborative space that educates and attracts a large number of people all over the
world, particularly urban change makers. People share, improve and use design solutions
for building homes for disadvantaged rural people.
Social enterprises adopting the LMS model harnesses the local value chain they build
up to raise awareness about social problems and drive collective actions. They train
suppliers, salespersons and clients involved in the value chain to conduct formal and
informal awareness-raising activities, such as yard meetings and school campaigns. The
scale of collective actions grows fast when more people are mobilized to join the value
chain and become part of a new solution for an old problem. Several social enterprises
applying the EM strategy to sell goods or make loans to the rural poor were able to
acquire hundreds of thousands of clients every year.
18 M. ZHAO
The EM strategy shifts beneficiaries and stakeholders’ mindset about how to alterna
tively approach a social problem, altering the actor element of a system related to this
problem. The strategy alters the relationship element by aligning a diversity of previously
unconnected people and organizations around a common purpose. Social enterprises
adopting the EM strategy actively lobby for policy change to influence the rule element.
The norm element changes when mobilization activities reshape public perception of
beneficiaries and reduces social prejudice against them. The strategy also alters the inter-
element relationship. For example, government officials’ improved understanding of
a social problem and the changing public perception can facilitate the development of
new policies.
The case of Toraja Melo shows how the EM strategy drives systemic change. Toraja
Melo seeks to reverse Indonesia’s long-standing pattern of women migrating from rural
areas in search of jobs. The company recognizes that the issue is rooted in economic (e.g.,
lacking business skill providers) and cultural (e.g., social discrimination against rural
women) systems that deprive rural women of employment opportunities. Its strategy is
mobilizing social changes to revive traditional weaving culture and techniques in remote
communities.
Toraja Melo trains disadvantaged women traditional weaving techniques, sells their
products and reinvests revenue in the community. The company develops extensive
awareness-raising campaigns through nation-wide exhibitions of weaving products and
through education activities. These activities influence people’s understanding of the
problem of rural women migration and motivate them to support traditional weaving
as a viable solution. The company co-founded Wastra Indonesia that leverages the
influence of high-impact individuals from different social sectors to educate young people
on local textile. The company also built an alliance of government officials, movie stars,
fashion icons and other stakeholders who have impact on social culture. This alliance
works for a common vision of reviving weaving culture and empowering women.
Toraja Melo shapes rural women’s perception of traditional weaving as a promising
career option. This empowers the actor element in social-economic systems related to
women migration. The company coordinates major stakeholders and facilitates stake
holders’ engagement with disadvantaged women. This alters the relationship element.
These changes enable the company to scale out to replicate the business in 20 provinces
and overseas, and influence thousands of women weavers. The company alters the rules
of the game and hence scales up the impact by changing local government policies to
mandate the use of local textiles in ceremonies and civil services. The company alters the
social norm and scale deep the impact by reducing social discrimination (due to the local
caste system) against lower-status women. Many women weavers at the bottom of the
caste system have become main breadwinners in their families.
Integrating Strategic Change Strategies

The above discussion treats systemic change strategies separately to clarify how each
strategy works. In reality, a company tends to integrate multiple strategies to drive
systemic change. The analysis finds out three popular approaches of integrating systemic
change strategies. Figure 1 illustrates these approaches.
Figure 1. Integrating systemic change strategies.
Adopting PBVC to facilitate EM

Companies have used the PBVC strategy to facilitate the mobilization of large-scale
collective actions. The PBVC strategy relies on beneficiaries to conduct awareness-
raising activities and organize collective actions in their communities. The trust relation
ship between local people improves their acceptance of new products and services.
Bangladesh company JITA trains women from marginalized communities to conduct
door-to-door education and promotion activities for socially responsible consumer
brands. It also adopts a mobilization approach based on routine peer-to-peer exchange
in real life. JITA’s Bottola Centres (Bengali for ‘a place under the shade of a Banyan tree’)
provide a daily gathering location that serves as a one-stop retail, service and community
meeting point. Women meet and exchange business experiences and also trade products
in Bottola Centres. This model proves to be effective in mobilizing a large amount of rural
women to join JITA’s business network as a product supplier or a consumer. The PBVC
strategy enables JITA to reach more than six million consumers.
20 M. ZHAO
Adopting EM to motivate CSD

Companies have leveraged their rising social influence as a result of large-scale mobi
lization activities to bring important stakeholders on board. Bank Sampah Gemah Ripah
is an Indonesian company that runs waste banks. They collect waste materials from
household waste producers for resale to waste buyers or recyclers. Mobilization activ
ities are inherent in their business activities. The company adds the revenue generated
by waste banks to the household client’s ‘waste bank savings account’. This creates an
economic incentive for a large number of people to routinely participate in collecting
and recycling waste. The company provides incentives to a large number of waste
pickers (previously often illegal) to join the business by training them into formal waste
buyers, clients or transporters. The company also raises awareness among the new
generation by working with schools to integrate waste management practices in
student activities. The extensive network of waste suppliers and buyers and strong
social trust enable the company to reduce 30 to 40% of plastic waste and eliminate
illegal dumping in several cities. Their achievement, as a result of embedding mobiliza
tion in the business model, motivates the Indonesian Ministry of Environment to adopt
and replicate the company’s model nationwide.
Adopting CSD to endorse PBVC

Companies have adopted the CSD strategy to improve the credibility and feasibility of
their peer-based solution in local communities. The involvement of government autho
rities and resourceful stakeholders in the process of solution development and promotion
helps reduce potential local resistance to solution implementation. Dishari is an Indian
company that restores fish populations in the Muhuri River in northeastern India while
increasing local fishermen’s income. The company provides fish breeding technologies for
non-endangered fish species that are commercially valuable. Dishari tries to organize
fishermen in teams to provide peer-to-peer trainings to their community members. But,
persuading local people to change the traditional way of fishing is difficult. The company
resorts to including influential stakeholders in their work to overcome the inertia of
change. They invite local people with authorities such as school teachers and government
officials to promote river conservation. They invite community elders to participate in
solution development and convince naysayers. As a result of strong local acceptance, the
company has replicated its model in other rivers throughout India, influencing hundreds
of thousands of people.
Impact of systemic change

The 84 systemic-change companies have unanimously generated multi-dimensional
impacts. In terms of scaling out, 84% of companies were able to replicate their model in
multiple locations. A substantial number (19%) reached more than one million benefici
aries. In terms of scaling up, 18% of these companies succeeded in changing policy at
local and national levels. In terms of scaling deep, 40% of companies measured and
publicly reported substantive growth of beneficiary income. All companies showed
evidence of social and economic development of individual beneficiaries, families or
communities as a result of their work. All these indicators are well above the average
level for companies that did not explicitly adopt a systemic change strategy. Table 5
Table 5. Comparing impacts between systemic-change and non-systemic-change companies.

% Systemic-
Impact % Non-Systemic- Change
Dimension Impact Indicator Change Company Company
Scaling out Within-country expansion (e.g., communities, cities, regions) 48 84
International expansion 1 16
Beneficiary scale1 7 0
1–100 people
100–1,000 people 13 19
1,001–10,000 people 31 35
10,001–100,000 people 17 18
100,001–1 million people 19 9
> 1 million people 13 19
Scaling up Policy change at local and/or the national level 6 18
Scaling deep Beneficiary income growth (stated the size of income 16 40
growth)
Beneficiaries’ personal, family and community development 62 100
(e.g., improvement on economic or family status, family
healthcare, child education) or public perception change
Note: 50% of non-systemic-change companies and 89% of systemic-change companies have available information on
beneficiary scale.
shows that 84 systemic-change companies generate advantageous impacts across multi

ple dimensions over 107 non-systemic-change companies.
Discussion
This paper learns from leading social enterprises in Southeast and South Asian countries
about how social entrepreneurship could drive systemic change. The findings identify
three strategies as viable options: peer-based value chain, collective solution develop
ment, embedded mobilization. First, systemic-change makers use peer-based approaches
to organize comprehensive value chain activities. Second, they coordinate major stake
holders and facilitate their communication with beneficiaries to develop locally specific
solutions to social issues. Third, they leverage daily business operations to raise awareness
and drive large-scale collective actions to address social problems.
As specified in Table 4, different strategies can alter different system elements and alter
the same element through distinctive mechanisms. Different business models allow each
strategy to influence systemic change through different means (i.e., technological solutions,
community-based businesses, platforms and alternative value chains). Systemic change
strategies commonly enable a social enterprise to scale up and scale deep social impacts,
beyond scaling out to reach more beneficiaries. This helps systemic-change companies as
a group produce stronger social impacts than the non-systemic-change group.
Based on the findings, this paper generates implications for both social entrepreneurs
and policy makers. This paper proposes an analytical process of ‘Impact-System-Strategy’
as a general guidance for engaging with systemic change. This process includes three
components of analyses: 1) the target social impact, 2) the type of systemic change
required to achieve the impact, 3) the choice, development and execution of strategies
for driving systemic change.
In the ‘impact’ component of the analysis, managers clarify the target social issue
and the type of impact they want to make. Managers can pursue multi-dimensional
22 M. ZHAO
impacts as a combination of a larger number of beneficiaries influenced by their

business, a deeper influence on beneficiaries’ individual, family and community devel
opment, an influence on government policies and initiatives, and an influence on
cultural norms.
In the ‘system’ component, managers analyse the type of systemic change required to
resolve or alleviate the target social issue, as well as the systemic change’s implications to
their business viability. Answering the following questions helps clarify the former point.
First, what are the key elements and inter-element relationships in a system underlying
the target social issue? Second, how do these elements and relationships constrain the
resolution of the issue? Third, what specific changes in these elements and relationships
will potentially resolve the issue? One tool to explore the boundaries and elements of
systems is Critical Systems Heuristics (Ulrich & Reynolds, 2010).
Managers also need to clarify how systemic change may contribute to the social
enterprise’s commercial viability. For example, social enterprises providing technological
solutions to serve the rural poor may wonder how improving beneficiaries’ awareness
about a social issue (i.e., actor element) and lobbying for policy support to the proposed
solution (i.e., rule element) could influence customer acquisition. For social enterprises
that organize disadvantaged people to produce and sell products, managers may discuss
how building peer-to-peer support among beneficiaries (i.e., relationship element) could
reduce management cost and improve productivity.
These questions identify areas of synergies between a social enterprise’s social impact
and business growth potential. The four business models identified in this report contain
synergies that allow systemic change to support business growth and at the same time
leverage business growth to drive systemic impacts. Managers may refer to these models
to explore synergy opportunities in their work.
In the ‘strategy’ component of the analysis, managers make strategic decisions on how
to formulate and implement a business model to drive the type of systemic change they
seek. The key question to answer is which mechanisms and approaches a company
should use to organize the business model so that it can drive systemic change while
supporting business growth. The three strategies identified in this report and their
application to different business models could provide insights for managers to answer
this question.
While suggesting social entrepreneurs to deepen social impact through systemic change,
this paper by no means rejects the possible unintended negative effects of this change. The
unintended consequence is rooted in complicated, emergent and indeterminate features of
systemic change. The process and outcome of systemic change can go beyond what the
organization driving the change is responsible for (Savaget & Ventresca, 2019). Given that
a social enterprise enabled rural women to become main breadwinners in their families,
critics may argue that if these women have actually been emancipated as a result of this
change? Or has this change shifted them into a different form of oppression? While this
study does not have data to answer this type of question, it encourages social entrepreneurs
to remain cautious and humble when they evaluate the impact they try to generate.
This paper suggests that policy makers have several options to encourage social enter
prises to drive systemic change. These options add complementary insights to existing
public policies that tend to focus on enlarging a sector of social enterprises and sustainable
businesses (Wolk, 2007). First, policy makers may draw on systemic change processes
elaborated in the paper to provide guidance and incentives for social enterprises to engage
in systemic change. Governments can provide systemic-change skill trainings on leadership,
partnership skills and business model innovation. It can be useful to include the analytical
process of ‘Impact-System-Strategy’ in such trainings. Specific guidance can be provided
about how to identify system elements and their relationships, formulate and implement
business models to alter system elements, and measure multi-dimensional impact.
Second, policy makers may participate in social enterprises’ systemic change activities
as a partner, which helps strengthen these activities’ credibility, quality and influence.
Systemic change strategies suggest several places where governments can fit in a social
enterprise’s business model. For example, governments can play a key role in a cross-
sector network of solution development, coordinate major stakeholders related to a social
problem, or endorse an alternative technological solution or a peer-based system of
supporting disadvantaged people.
Finally, policy makers can build an ecosystem for supporting social entrepreneurs to
strengthen their systemic change capability. This ecosystem enables and funds the
development, adoption and dissemination of systemic change strategies in different
social sectors. It is essential to note that, to effectively develop an ecosystem of social
entrepreneurs, policy makers need to make their interventions specific to the features and
relational structures of stakeholder networks in the local context (Hazenberg, Bajwa-Patel,
Mazzei et al., 2016b, 2016a).
Disclosure statement
No potential conflict of interest was reported by the author.
Notes on contributor
Dr. Zhao Meng is a visiting associate professor at the Nanyang Business School (NBS), Nanyang
Technological University (NTU), and a senior research fellow at the NBS Center for Emerging Market
Studies. He was an associate professor at the Renmin Business School and the founding director of
Yunus Center for Social Business & Microfinance, Renmin University of China. He holds a PhD in
organization theory and strategy from the Said Business School, Oxford University. His research on
multinational corporation strategy, stakeholder management, corporate social responsibility and
social entrepreneurship has appeared on Journal of International Business Studies, Journal of
Business Ethics, Business Horizons, Stanford Social Innovation Review, Journal of Social
Entrepreneurship, Financial Times, etc. He is the chief editor of two books on Social
Entrepreneurship. Not Started Completed Rejected
ORCID
Meng Zhao http://orcid.org/0000-0001-7199-272X
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Social Entrepreneurship For Systemic Change: The Case of Southeast and South Asian Countries

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Social entrepreneurship for systemic change: the case of

ABSTRACT ARTICLE HISTORY

an interconnected set of elements coherently organized to generate meaningful

Understanding systemic change

Operationalizing system change

Table 1. Operationalizing systemic change and systemic impact.

Table 2. Country distribution of companies.

Viable Social Enterprise Business Model

Alternative technological solution

in the market. Companies adopting this model generate competitive advantages in

Community circular economy

Supply-demand linkage platform

Findings: Systemic Change Strategies

Peer-based value chain (PBVC)

reducing social prejudice

Collective solution development (CSD)

Embedded Mobilization (EM)

Integrating Strategic Change Strategies

Figure 1. Integrating systemic change strategies.

Adopting PBVC to facilitate EM

Adopting EM to motivate CSD

Adopting CSD to endorse PBVC

Impact of systemic change

Table 5. Comparing impacts between systemic-change and non-systemic-change companies.

shows that 84 systemic-change companies generate advantageous impacts across multi­

impacts as a combination of a larger number of beneficiaries influenced by their

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shows that 84 systemic-change companies generate advantageous impacts across multi