Aarong: An iconic rural collaborative social business of Bangladesh.

Background

The concept of social entrepreneurship (SE) is emerging and have managed to gain attention in
numerous local individuals and communities based on common resources utilization and civil
rights (

However, the lack of appropriate supporting establishments in such countries, rural and
underprivileged talents living in the communities cannot involve themselves in any socio-
economic development. The ultimate objective of SE denotes to creating solutions of social
issues utilizing the innovative skills, enhancing social value as well as searching for new
opportunities to benefit the communities other than focusing on financial gain. The prominence
of businesses is the key device of economic and social advancement. As noted by Schumpeter
and Nichole (1934), the interrelation between entrepreneurial activities and financial progress,
personal success and assets generation go hand in hand. Yet for the betterment of humanity
conventional business can offer less prospects to standardize the living of human, from which the
social enterprise start operating.

Social enterprise address the issues existed in the context and engage themselves to find
solutions of it, also initiate various entrepreneurial activities keeping the focus on fulfil social
needs. Looking at what going around us, social entrepreneurship mitigate the distresses through
innovation. Numerous evidence around the world evident that, the presence of social
entrepreneurs. The gradual development of these new forms of business framework, with
influential social impact. In most cases, such social organization acted substitute or
corresponding of regulatory or global institute to address issues such as poverty or connected
concerns within underprivileged group.

This study reflects upon the discussion of the motivation or (social mission) behind starting such
venture and the significances (social changes) of certain entrepreneurial practices in Bangladeshi
context, which ensure community participation and collaboration. Aiming on the non-profit firm
of Bangladesh specifically Aarong as a case in point.

Henceforth, the aim of this study is to answer the following research question:

 What is the aim initiating this pioneering project in Bangladeshi context?

 What is the holistic implication of such entrepreneurial exercise in the community?

Overview of Social Entrepreneurship

Social entrepreneurship considered as a method taken by the individual or group of encouraging
people, start-up ventures, where they create solution by identifying social issues or dilemmas.
Since social businesspersons and the initiatives both formulate wave in the market, numerous
research are going around understanding the method of socio-business prospered. Social
entrepreneurship is the mixture of both commercial activities and social issues. According to
Zahra et al. (2008), the main objective of entrepreneurship is to discover, identify and utilization
of prospects. Social entrepreneurs view social challenges as an opportunity to solve with realistic
innovative ideas resulted modification into the societies through value creation. Various scholars
define social entrepreneurship from various perspectives, so there is no such universal definition
of it. Whereas the conventional business leads and diversified the global business world.
Social entrepreneurship aim to create social resources without assessing the profits or money-
return. However, entrepreneurs require capital to run entrepreneurial actions and to bring the
progressive changes in the community. According to Mair and Marti (2006), social
entrepreneurship evolves around forming business focusing on creating ventures that meet the
social needs. In addition, Jhonson (2000), SE noted as pioneering method to deal the intricate
social-needs. As Dees (1998) stated, SE is societal mission oriented and centered, here mission is
social value creation other than wealth generation. Social entrepreneurs emphasized upon value
creation though their participation in the society. These individuals inspire others to join for the
social cause. (e.g., Peredo & McLean, 2006; Shaw & Carter, 2007). Conversely, lacking of
appeal of possible input, social entrepreneurs could possibly encounter more obstacles in
manufacturing economic possessions. Founding a new social entrepreneurial action based start-
up demands the recognition of funding opportunities that based to create – non-economic
(communal) - values. Luckily, a development of the present along the topic of social
entrepreneurship (following the start-up welfare providing) has been completely designing the
field of the aforementioned social entrepreneurship in a new and exciting way. Philanthropy-
oriented firms for instance, Ashoka contribute finance for consultation and building structural
relations for innovative collective projects. Social establishments suffer in terms collecting
funding cash (Boschee, 1995). In addition, financial viability cannot be achieved if any business
fail to generate sufficient assets to construct value necessary for targeted societies. Since, the
fact, should not be neglected, that social value creation leads economic benefits by generating
economic –resources, which can promote other social initiatives (Acs et al. 2013). Hence, one
can argue that social value creation process certainly connected to economic value creation, no
matter if it is mentioned in the commercial-mission declaration.
Social entrepreneurship includes actual instances and causes for better understanding the critical
challenges social firms across the world. Social entrepreneurship highlighted as a singular vision,
movements against the odds to bring changes in the society. Paying attention in individual effort
cause mistreat collective effort which can bring answer to distress. Innovative concept requires
collective combination of skills that hardly found in individual. A significant numbers of social
entrepreneurs are living at this age all over the world to make a difference through creative
works.
Social Entrepreneurship in Bangladeshi context
Entrepreneurship changes its form accordingly to the context its operation. The context
diversified the entrepreneurial actions taken by the individual for socio-economic development.
Rising numbers of facts recommend that the presence of relation of entrepreneurship, financial
advancement and social issue minimization. Unlike any other countries, Bangladesh has an
extraordinary example full of social innovative enterprises, which contributed greatly to achieve
sustainable development. Here, social entrepreneurship comprehends the extensive usage of
ethical exercises for example, influential investment, and awareness through consumerism and
CSR practices.
According to Fowler (2000), social enterprise creates opportunities to generate societal aids for
the maintenances of other active organizations to achieve the targeted goals. For instance, BRAC
(Bangladesh Rural Advancement Committee) not only provide assistance to other associated
foundations of it but also empower the underprivileged so that they can bring profits to form new
social enterprises like this. BRAC provided these privileges via the handcrafts of the
aforementioned women in Bangladesh. BRAC’s leadership has lead the organizations to new
heights as a social enterprise and in the field of e-commerce. The revenue of Aarong assisted the
other small, individual low-paid manufacturers and to fund the BRAC programs for the poor and
underprivileged (BRAC, 2020). The general belief of the scholarly is that initiating social
entrepreneurial functions to resolve quite a lot of communal issues encounter by the communities
of low-income people. Simultaneously, reduce the issues by participating for community
development. Undoubtedly, Bangladesh is in the frontline promoting social enterprises around
the globe. Applauding foundations like BRAC focused on poverty elimination begin the journey
and developed in this land of innovation.
In Bangladesh, the social enterprises operate within development and business market, focusing
the inadequacies of market services that fail to meet the underprivileged, also formulate
innovation framework for financial benefits of stakeholders (Chowdhury, 2020).
Moreover, Ali (2020) mentioned, Bangladesh known to be the origin of microcredit (Grameen
Bank) the communities living here heartedly welcome the ideologies of SE. However, favorable
legitimate and monitoring terms required for the sustenance and advancement of these firms.
Thus, proper engagement from all the investors highly required to balance the facilitation
programs.
Studies conducted by the British Council demonstrates, the promising community initiative
program of Bangladesh steered by the youth associating with others less than 35 years old. Also
noted, nearly 90 percentage of social ventures engaged in socio-economic activities with the
destitute populations, most significantly females commanded 20 percentage of the Social
Corporations of Bangladesh (British Council, 2016). The uniqueness of the social enterprise
environment in Bangladesh illustrate that social organization get substantial assistance from
(from BRAC bank, Grameen Bank etc.) resulted rising number of social enterprises in Dhaka,
Bangladesh, offering jobs and huge output. According to Dhaka Tribune (2016) social firms
established in this country launched using different name and form and function within the
regulatory.
Consequently, the decision to choose the correct form of mechanism and mandatory sincere
measures increase confusion amongst the entrepreneurs. Moreover, there is a lack of
authoritative regulations and policies in Bangladesh to monitor the growth of social ventures and
summarize the double objective of persistence and turnover. An incorporation with the UK and
USA few legislative rules are forming to provide guidelines to future entrepreneurs (Rahman,
2020). On the other hand, there is also a tendency to criticize the potential of social enterprises
like Grameen Bank with the allegation of exploitation of poor people. Because of less knowledge
over the founded rules to observe the activities done by these social entities.
Methods and Materials
The purpose of this paper is to analyze the motivation and impact of a social entity to the
community. For this specific article, the qualitative approach case study method used to collect
an extended knowledge within the given context. The case study research design assist to keep
the project focused. In this study, both primary and secondary data used. Primary data collected
by analyzing the social enterprise BRAC and Aarong’s official webpages. Also several
secondary data used for describing and illustrating recent situation of social entrepreneurship in
Bangladesh. All necessary secondary data collected from e-books, journal articles and other
available online materials. Later collected data analyzed with the appropriate theories and
present in this study.

Modest Commencement of Aarong

Aarong has been popularized as they combine new innovative talents with traditional
Bangladeshi handcrafts. In 1978, this corporation founded to provide unprivileged women with a
stable income, employment and social development possibilities as to grow society in a better
way. Within three decades, from a single market, Aarong hugely inflated into a notable
organization and of the most influential in the entire history of Bangladesh. Aarong, one of the
most pioneering social enterprises, which singularly supports the pastoral artificers and one of
the most dominating lifestyle-chain shop. As a business, the profit accumulated over the time
allowed Aarong to become commercially feasible enough to sustain in the competitive market of
fashion. Foundations like Aarong (BRAC’s retail project) came in frontline to bring the positive
wave of society modification for the betterment.
Vivid colors, sophisticated designs and broad collection of textured fabric Aarong located in
Bangladesh as a dominating life-style store. Nevertheless, this attention grabbing product line,
the real story behind this even more inspiring. The core foundation of BRAC (world’s largest
non-profit foundation) in 1976 few years after the wining of devastating liberation war with
Pakistan. The founder Sir Fazle Hasan Abed and his wife Aysha Abed introduced this platform
to train few group of talented women trained them with craftsmanship and sericulture such as
fabric block-print, embroidery in a rural village of Manikganj and Jamalpur. From the moto to
serve the rural intelligence with fair payment, Aarong open its first outlet in 1978 in a prominent
location of Dhaka (Future startup, 2020).
As per the report by BRAC (2016), the ultimate vision of this retail brand had unified
sustainability and fair-trade ethics into its inventive corporate strategy 40 years ago. Now
comprises 22 outlets (21 physical-store and one online- store), employed more than 65 thousands
of rural artists, empowering 85 percent of aesthetic rural-women. Aarong attempts to deliver
social value through creativity and consistency. Today Aarong attained the mission and
encounter challenges from the intense competition around. Even after the Rana Plaza crisis in the
garment industry, Aarong kept its place through maintaining sustainable practices within the
firms. Indeed, such crisis pressurized leading brands to reconsider the moral performance.
Aarong aim to support poverty driven rural women to enhance the abilities, this remain same
until today to serve the neglected urban market of rustic aptitude.
Few years ago social business only refer to system change.

http://www.brac.net/brac-enterprises/item/878-aarong

https://futurestartup.com/2018/10/28/aarong-turns-40-a-brief-history-of-aarong/

Business Model of Aarong

Aarong came with distinctive policies to employ in terms of designing, manufacturing,
advertising and strategies.
Various scholars expanded the notion ‘business model’ and transformed it in many different
ways; these ways include terminology that puts further depth in the aforementioned concept of
‘business model’. Strategy, business-concept, revenue-model, financial model and the business
model itself have been used to express and further unearth the, what was then, nontangible idea
of the ‘business model’ (Zott et al. 2011).
The business model introduced through market studies and categorization of traditional art
practices. Experienced and skill artists hired by Aarong to train the women. Fabric designing
facilities start experimenting with traditional materials, expertise, sewing, knitting, and coloring.
Brilliant designers of Aarong combined traditional and modern fashion where the direct
participation of urban, semi-urban, and rustic workers appealed the dynamic consumers.
Aarong’s core aim is to provide equality in the community workers, for which they rejected the
idea of cheap labor, bad working condition. For social sustainability, Aarong followed BRAC’s
model employed 85% of women artisans to support the vulnerable part of society.
An interview session with current chairperson of Aarong’s, Aded (2018) added,
“….Aarong, believes that the craftspeople are the backbone of Aarong, and it is to them that she
dedicates the revelry.”

To survive in a particular field, SE needs to exploit opportunities for social change and
progress with
Hoque and Nahid Journal of Global Entrepreneurship Research (2015) 5:25 Page 4 of 17
the primary objective of creating social values and a secondary goal of creating economic
value (Mair and Marti 2006).

To resist extinction in a particular point of expertise, SE needs to utilize and recognize

possibilities for the execution of social change and also to move forward for progress; with
the main goal of manufacturing social value, and a secondary objective of creating capital
value.

Reflective Analysis:

Social entrepreneurship sees the widespread use of ethical practices such as impact investing,
conscious consumerism, and corporate social responsibility programmes. Social entrepreneurs
are often willing to take on the risk and effort to create positive change in society through their
initiatives.

The modern social entrepreneur is of course motivated by profit but also take a more holistic
approach to business and is seemingly more concerned with the fate of the planet and humanity.
These agents of change deploy entrepreneurial tactics to provide systemic solutions to social and
environmental problems. Often, social entrepreneurs drive the production of environmentally
friendly products, meet the needs of an underserved community or focus on philanthropic
activities. Through non-profit, for-profit and hybrid enterprises, social entrepreneurs promote a
broad range of solutions focused on sustainable development. Programmes such as providing
clean water, increasing access to renewable energy, increasing financial inclusion and offering
high-quality educational resources are the sorts of projects that social entrepreneurs and social
enterprises would prioritise.

As employees and consumers become increasingly concerned with environmental, social and
governance (EGS) issues, social entrepreneurship will play a prominent role in driving future
economic growth. ESG is attracting support from some of the world’s biggest investment
banking and asset management organisations.

One of the most obvious and striking impacts of social entrepreneurship relates to job creation,
particularly among the less fortunate, underserved or ignored groups of society. According to the
Organisation for Economic Co-operation and Development (OECD), social enterprises act as an
“intermediate between unemployment and the open labour market”. From a purely numerical
perspective, significant social and financial benefits can be gained from reintegrating large
groups of workers into the labour market. Social economy organisations (SEOs) account for
around 6.5 percent of aggregate employment in the European Union (EU), according to the
OECD.

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Social enterprise model and framework-400

Methodology-200
Analysis and discussion-500
Conclusion and limitation-450
Conclusion and limitation
Social entrepreneurship has recently emerged as a field of academic inquiry, but the lack of a common
definition of social entrepreneur impedes research in this field. In this article, we reviewed literature
that defined profit-oriented entrepreneurship and social entrepreneurship in order to extract the core
characteristics of each type. We then proposed a definition of social entrepreneurship, which
contributes to the literature on social entrepreneurship by clarifying and bounding the scope of research
in this field.

Social entrepreneurship has flourished significantly at the practical level, but not at the theoretical level.
Future research should focus on linking social entrepreneurship as a new discipline and research field to
the theory of entrepreneurship. Scholars should also focus their attention on introducing new research
questions that are meaningful to the different domains that intersects with social entrepreneurship,
including social innovation and the management of non-profit organizations.

The future of social entrepreneurship in Bangladesh

Bangladesh is home to a vibrant social entrepreneurship scene. Social enterprises in Bangladesh are
relatively young, with an average of six years in operation. A fifth of the social enterprises are run by
women, compared to five percent in mainstream business. As many as 69 percent of their leaders are
under 35 years of age.

“Young people in particular are eager to make a positive social and environmental impact with their
ideas,” says Minhaz Anwar, founder of Better Stories, the first incubator in Bangladesh. “However, they
are not completely aware of the financial health of their enterprises. We help them reconfigure their
business models,” says Anwar.

“Due to less funding from bilateral and multilateral donors, non-profits are gearing towards profit-
bearing organisations or more self-sustainable business models,” explains Anwar.

Social enterprises are increasingly turning to more businesslike models, for which Better Stories provides
an incubation platform. Through ecosystem exercises, immersion journeys and financial modules, social
entrepreneurs can learn how to operate businesses and pitch for funding to investors and banks.

Though several types of social enterprises exist, self-sustainable models are currently trending. Social
entrepreneurs are creating jobs and solving urgent social and environmental problems, increasingly
using ICT, in Bangladesh. Any great idea for a new product or service can, if nurtured and executed well,
grow into a sustainable social enterprise that can significantly improve Bangladeshi people’s lives.

Along with social problems, social entrepreneurship also focuses on environmental problems. Child
Rights foundations, plants for treatment of waste products and women empowerment foundations are
few examples of social ventures. Social entrepreneurs can be those individuals who are associated with
non-profit and non-government organizations that raise funds through community events and activities.

In the modern world, there are several well known social entrepreneurs who have contributed a lot
towards the society. The founder and manager of Grameen Bank, Muhammad Yunus is a contemporary
social entrepreneur who has been awarded a Nobel Peace Prize for his venture in the year 2006. The
venture has been continuously growing and benefiting a large section of the society.

Some of these entrepreneurs may need help to become fully engaged,

full time. Others may simply need a boost in visibility and financial support to move through

scale-up and sustained impact. And still others

may need more coaching and teaching