FABINDIA CASE STUDY

What is a "double bottom-line"? What are the conflicting operational constraints that
arise in such a social enterprise (that management faces)?
Double bottom line is the extension of conventional bottom line which measures fiscal
performance. Second bottom line is to measure a for-profit business’s performance in terms
of positive social impact.
Conflicting operational constraints
 To keep the growth trajectory aligned with their primary commitment in creating
social impact (Fabindia- providing artisans with market access).
 Problems in gaining trust of stakeholders.
 Sometimes have to take decisions that seem uneconomical( Fabindia is forced to
accept delayed delivery)
 Growth is dependent on development of their suppliers(Unless Fabindia suppliers
develop their skills and products Fabindia cannot find growth)
 Difficult in differentiating products from others (Fabindia should differentiate itself
from government funded Khadi outlets)
 Creating awareness in consumers and market about their social mission
 Difficult to compete with competitors which have deep pockets.
 Difficult to change their business model and strategy ( Fabindia cannot go for
machine made products)
 They can only act as middlemen.
 Difficulties in measuring impact- There is no comparable standard for social impact
accounting.
 Difficulty in accessing funding from Venture capitalists- VCs may be sceptical on
returns on their investments.