SOCIAL BUSINESS DILEMMAS IN BRAZIL: <i>REDE ASTA</i>CASE

Social businesses seek financial, social and even environmental results. Academic knowledge on how such organizations operate, however, has emerged more recently. This article sought to investigate qualitatively the main tensions and dilemmas occurring throughout the history of Rede Asta, a pioneer social business in direct catalog sales of artisanal products in Brazil. Results indicate the Rede Asta managers have experienced tensions and dilemmas in three of the four categories identified by Smith, Gonin, and Besharov (2013)Smith, W. K., Gonin, M., & Besharov, M. L. (2013). Managing socialbusiness tensions: A review and research agenda for social enterprise. Business Ethics Quartely, 23(3), 407-442. doi:10.5840/beq201323327
https://doi.org/10.5840/beq201323327... : social and financial performance, organizational aspects and learning. One of the dilemmas involves organizational aspects and learning, since Asta achieves feasibility with two organizations: a nonprofit association and a for-profit corporation. On perceptions of belonging, stakeholders declared they felt they were a part of the organization’s social and environmental goals; some even as activists.

KEYWORDS |
Social entrepreneurship; social businesses; tensions; dilemmas; Rede Asta

Types of tensions	Social and financial dimensions that explain tensions	Emerging issues for social businesses
Related to performance: Goals, metrics, meeting stakeholder expectations	Social impact is generally difficult to measure/compare; financial results, however, tend to be simpler to measure/compare.	How do leaders define success, given the diverging goals (and the risk that economic success may entail social failure)?
Related to organizations:	To reach social and economic goals, there is a tendency to hire professionals with different, and not necessarily convergent capabilities.	How can hiring be managed so as to engage different professionals to work harmoniously?
Related to organizations:		To what degree do organizations differentiate and integrate social mission and business?
Diverging dynamics due to different structure, culture, practices and processes		What organizational form/structure should the organization adopt?
Related to the feeling of belonging: Divergent identities between groups, subgroups and the organization	Employees and other stakeholders are usually divided into those who identify more with the social mission and those who identify with the business.	How can the organization manage diverging identities and expectations?
Related to learning:	Social goals tend to aim at long-term scenarios; as opposed to business, which focuses on short-term results	How does the organization deal with shortand long-term schedules?
Timelines are different in the processes of change, growth and scaling.	.An increase in social impact may diminish financial results and vice-versa.	How has the organization sought short-term financial results so as to expand its social results?

	2008	2009	2010	2011	2012
Salespeople/catalog	52,179	122,959	295,689	215,257	237,454
Corporate gifts	126,680	155,283	188,292	268,147	337,563
Internet	0	0	0	11,740	77,695
Rio de Janeiro store	0	0	0	75,622	47,942
Total	178,859	278,241	483,981	586,957	755,812

Stage 1 – 2002 to 2004	Stage 2 – 2005 to 2010	Stage 3 – 2011 onwards
The network began to operate in 2002 with Instituto Realice – first as an NGO focusing on capacity-building and training for artisans.	In 2005, Rede Asta launched sales of corporate gifts and acknowledges the need to issue invoices to their clients – the NGO and a business began to coexist.	In 2010, Rede Asta had received support from Ashoka and McKinsey for building its strategic plan. In 2011, the network broadened its sales channels.
Absence of tensions and dilemmas.	Virtual absence of tensions and dilemmas.	Tensions and dilemmas began with the increase in profitable activities and need for production scale.

Types of tensions	Facts related to Rede Asta’s history and operations
Performance	- Asta attempts to disseminate the concept of fair trade throughout the production chain;
	- Financial results alone are not enough to define priorities among sales channels;
	- The network&'s stated target audiences are inconsistent (focusing on women or valuing diversity?).
Organizations	- Each group&'s singular production speed may compromise the delivery schedule for requests of large quantities of items;
Organizations	- The network needs to operate with two organizations: an association and a corporation (also applicable in learning).
Belonging	- The Rede Asta cause, based on the triple bottom line, has so far served as the means to create a feeling of belonging to the organization, especially considering that the expectations of different internal stakeholders are as yet being met.
Learning	- The sales team worked hard for years to combine financial return with their social and environmental causes:
	- Starting in 2011, the network realized the need to strengthen its brand in order to consolidate itself as social business and has been investing in this purpose;
	- Meanwhile, Asta also understood the importance of production scale in order to establish itself in the market.

Fundação Getulio Vargas, Escola de Administração de Empresas de S.Paulo Av 9 de Julho, 2029, 01313-902 S. Paulo - SP Brasil, Tel.: (55 11) 3799-7999, Fax: (55 11) 3799-7871 - São Paulo - SP - Brazil
E-mail: rae@fgv.br

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[TFN01] Source: Adapted from Smith et al. (2013)Smith, A. M. (2013). What does it mean to do fair trade? Ontology, praxis, and the "Fair for Life" certification system. Social Enterprise Journal, 9(1), 53-72. doi:10.1108/17508611311330000
https://doi.org/10.1108/1750861131133000... .