Part 1
1-What are the core competencies of Mountain Hazelnuts? Which are the ones that are sustainable for long-term competitiveness?
There are different core competencies of Mountain Hazelnuts based on which success has achieved. Some of these competencies are given below:
- The Mountain Hazelnuts was started as a mission-driven company that was given a root to gain success in Bhutan. The overall mission of the company was divided into three parts. These were included to be sustainable and profitable at a commercial level, to help the rural communities and farmers by providing them with economic opportunities and providing environmental benefits.
- The second core competency of the company is that it was established as a socially based company to strengthen the people of Bhutan economically.
- As Spitzer, who was the founder of the company, had a pioneering forest background had led him to gain success.
- The effective process of hiring and managing employees was another core competency of the company.
- The ability to use new technological and advanced techniques, for example the development of hazelnut hardening method was another core competency of the company.
The forest-based background helped the founder of the company to build best practices that helped in attaining success and competitive advantage in this growing and large niche business. The company was established on providing social help, and the competency of the company was sustainable for longer-term competitiveness because it helped the company to attract the Bhutanese people to work hard for the company. It was one of the competencies that developed trust in the people of Bhutan because the company had given long-term financial security to the people. The effective management of human resources helped the company to gain a competitive advantage because the company provided training and educated the people of Bhutan that helped in building motivation and encouragement to the people to remain in the company for a long period. The employees’ management competency was enough to sustain long-term competitiveness.
2-Explain how Mountain Hazlenuts designed its value chain from tissue culture to distribution and sales (i.e., whether to own the operation in-house or outsource it and where the operation was carried out), in light of the core competencies you identified in Question 1.
The tissue culturing was started in KATC (Kunming Advanced Tissue Culture) by the strong relationship of Spitzer with KATC. Tissue culturing was considered to generate a plantlet by using a small amount of tissue. The company attained industrial scale faster by using the tissue culturing technique, and it was also cost-effective for the company. Tissue cultures were then transported to the nursery which took four days. To protect the plantlets, the company designed shipping materials with great care. The plantlets after reaching at nursery through different roots and location were processed to grow in the form of a tree of 20-30 cm. The next stage in creating value chain was to deliver the tree to farmers for plantation. Proper training was provided by the Mountain Hazelnuts to the farmers for planting it properly. After three years of planting, the trees would first produce nuts to harvest, and full yield took 5 to 6 years. The collection of nuts was carried in the collection centers by using a 8-ton truck. The next stage of creating value chain was processing. The processing process included quality inspection, defect checking and drying. The next stage was the delivery of ready products to the market. The delivery was carried out by packing the products into 20-foot containers. A comprehensive system of tracking the trees was instituted by Mountain Hazelnuts.
3-What incentive alignment strategies are in place to ensure that the government, farmers, investors, and company can all win in this enterprise?
Some key incentive alignment strategies of the company are given below:
- The first alignment strategy is vigorous hazelnuts seedlings and larger volume production of high quality. To produce hazelnut plantlets from tissue culture, Mountain Hazelnuts has partnered with one of the top-class laboratories to produce plantlets in a controlled and safe environment. This collaborative incentive strategy of the company helped in producing wide varieties and hazelnuts because of the rapid reproduction carried out in the laboratory. The production of plantlets in the laboratory enabled the plantlets optimal for their planted environment.
- Another alignment strategy of the company was the provision of trees to farmers by charging no charge for them. The farmers benefited from the company because of the reason that the economic strength is given to the farmer. The farmers were getting an understanding of the challenges and opportunities for raising orchard from the Outreach team of the company. The company is also helping the farmers to secure proper planting sites by arranging landowners of the local community or through the lease of government land.
- The creation of a partnership was another important strategy to get government support. For this purpose, a memorandum of understanding has been negotiated to specify the responsibilities of both the government and the company. The government by giving support to the company in the identification of locations and helping the company regarding the lease sites could achieve the objective of betterment of the people of Bhutan. It ensures that the company has aligned interest with the government in the context of poverty alleviation trust.
- The company’s strategy was aligned closely with the employees’ ideas that develop motivation and courage in the employees to work for the success of Mountain Hazelnuts.
4-What are the biggest risks to the success of Mountain Hazelnuts? How would you mitigate those risks?
The success of Mountain Hazelnuts could be affected by some of the risks which are given below:
The local people have no exposure to international business, and they lacked strong management experience due to which company hired people from outside of Bhutan that could be risky if these people denied living in Bhutan. This risk could be mitigated by the company by providing high-quality training to the local people. To develop professional skills in local people, the company needs to invest in providing education and training to local people from the high standard institute.
The company is also facing certain environmental risks like the practice of shifting cultivation from the local people and the collection of firewood is another risky element for the crops of the company in Bhutan. To mitigate the environmental risks, the company needs to take environmental protection measures. New technological measures would be important for protecting the crops from any level of damage.
A third important risk is the moral problems faced by the company regarding the hardening process of plantlets. Although the company has taken good steps to satisfy the governmental officials regarding the agricultural operations, it could be risky for the company if it could happen again then the credibility of the company could be affected. To mitigate this type of risks, the company should have to create a team with the responsibility to ensure that Lingmethang facility is taking place on a regular basis and with great care.
Other key risks that could be faced by the company include the financing risks and the risks associated with the complex and lengthy process of delivery of plantlets to the nursery and then plants to farmers and then to market delivery. The financial risks could be mitigated by using suitable sources of finances, and the risks of the supply chain could be mitigated by using technological tools or by taking the whole process in Bhutan.
Essay Part-Option 1
An analysis of social business and its potential impact on global economic inequality and extreme poverty
Social business could be defined in different ways because different dimensions are touched by it in social and connected reality. A social business plays a very important role in solving the problem of income inequality, and it is the best way to lift people out of extreme poverty. Social business could be a huge driver of inequality and extreme poverty by selecting the right business and running that business in the right direction. A value driven business would be a great engine that could lift billions of people out of poverty. The challenge of conducting social business is immense because the typical base of the pyramid customers for these social businesses is living in rural areas where they are facing the issue of electricity and water.
Social business also has an impact on global economic inequality. Democracy and political systems, prosperity and economic growth, environmental and social conditions and health and individual behavior are four domains that could be affected by rising and high levels of economic inequality. Economic inequality has negative impacts on the efficient use of the available resources and economic growth.
Social businesses and entrepreneurship are an engine for transparency, sustainability, and inclusive growth. The social businesses have a positive impact over reducing global economic inequality because it promotes the diversity and inclusion in the economies region through the development and producing products and services that fulfill the needs of poor people of the society. Social business can bring an array of accessible financial services to enable the poor people of society to save their money and build long-term assets for them. Although a certain level of progress has been made around the world for managing the economic inequality issue, still it can be seen that a vast majority of people around the world are facing the issue of economic inequality.
According to the report economic inequality across the countries is at the highest level. A larger-scale change is needed by a modern world which should be based on principles of sustainable development, social justice, water and education, access to basic healthcare, poverty alleviation and inclusive economic growth. Social business is the solution to this required larger-scale change because it is true that enterprising individuals to solve economic inequality issue is the best way of resolving pressing social problems in society.
Social business believes in the empowerment of the poor people of society by giving opportunities of employment and access to services that make their life better. Social business can impact global economic inequality by focusing on empowerment rather than exploitation of workers (Wesley & Peterson, 2017). As the social businesses are based on a problem-solving approach that helps in providing rewarding opportunities to poor people of society that make them happy because they social business enable poorer people to generate money from hard work rather than through sympathy.
There is a higher level of inequality between men and women, but social businesses are playing a very important role in providing quality employment to women around the world. In this way the contribution of social businesses in providing better representation to those people who are at higher risk of being excluded from the economic benefits and opportunities.
Social businesses use their profits for the betterment of poor people and social good. It helps poor people to get an opportunity to develop their skills and capabilities to include themselves in the race of the modern world. All the above impacts of social businesses proved that social business is a solution to income and economic inequality in today’s global world (Woodman, 2015).
Poverty is one of the major challenges faced by underdeveloped and developing countries of the modern world — extreme poverty results in a higher rate of unemployment in developing countries. Special business is considered to be a solution to extreme poverty which is one of the pressing social problems facing developing countries. The availability of opportunities has attracted people towards the special business because it involves recognizing, evaluating and exploring these opportunities, which develop social value for the unemployed and poor people.
In the context of ending extreme poverty at the global level, social businesses are providing impactful innovations. Social business is considered as a way of ending poverty, and this is the reason that governments of different countries around the world are supporting the social business. The main thing regarding the extreme problem is that it is not only the problem and the issue of poor people, but it has implications and consequences for all of us because of the reason that all the human beings are living in the interdependence and increasingly open world (Bersin, 2018).
Social business brings value for resolving the issue of the global extreme poverty issue that could not be produced by corporations, government, and NGOs. The owners of the social business have a unique mindset by which they used the grassroots approach to get the people out of poverty. Social businesses have focused on resolving and empowering others to help them in resolving their issues and challenges and to make them economically strong. It is common to think that the enhancement of employment programs and the creation of income opportunities are important to poverty eradication. These programs would be helpful in eliminating the disease of poverty from the world when they will stimulate by poor people themselves by taking the support of social enterprises (Cheng, 2014).
In the end, it can be concluded in these words that poverty and inequality are distinct but related concepts. The summing up of this essay as people are poor because they have limited and insufficient resources to be able to live their social life while inequality is the wrong distribution of well-being, prestige, wealth and income among the people of society. Social business is concluded as the best way to manage and take control over the two huge social problems of economic inequality and extreme poverty because social businesses help the poor to become strong economically.
References
Bersin, J. (2018, April 3). The Rise Of The Social Enterprise: A New Paradigm For Business. Retrieved from Forbes:
Cheng, M. (2014, March 24). 5 Insights From Social Entrepreneurs On How Business Can Lift People Out Of Poverty. Retrieved from Fast Company:
Wesley, E., & Peterson, F. (2017). Is Economic Inequality Really a Problem? A Review of the Arguments. Social Sciences, 6(4), 1-25.
Woodman, P. (2015, May 22). Income inequality: is social enterprise the solution? Retrieved from British Council:
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