SEWA Trade Facilitation Center: Changing the Spool

Posted: 2 Feb 2012

See all articles by Mukti Khaire

Mukti Khaire

Harvard Business School

Kathleen McGinn

Harvard Business School - Negotiation, Organizations & Markets Unit

Date Written: June 23, 2011

Abstract

The case is about the decision to convert a not-for-profit organization into a for-profit company. STFC, which is part of a larger non-profit organization - the Self-Employed Women's Association (SEWA) - works to improve the livelihoods of very poor rural and urban women in India. It does so by translating traditional Indian embroidery skills into contemporary apparel and home furnishings that STFC then helps to market and sell around the world. Organized as a producers' cooperative, STFC is owned by its artisan-members. STFC is thinking of changing to for-profit status because it would enable faster and more sustainable growth by providing access to outside funds, and also allow the payment of dividends, which would further improve the women's livelihoods. The legal and financial implications of such a move aside, it is not clear that STFC would be able to withstand the changes such a transformation would entail. Most importantly, would an organization accustomed to taking decisions based solely on social benefit criteria be able to adjust to a for-profit mentality? And, would customers accept the change?

Learning Objective: To help students understand the implications of choosing a for-profit or non-profit model and the implications of changing an element of the business model.

Subjects Covered: Economic growth; Entrepreneurship; Innovation; Social enterprise.

Suggested Citation

Khaire, Mukti and McGinn, Kathleen L., SEWA Trade Facilitation Center: Changing the Spool (June 23, 2011). Harvard Business School Entrepreneurial Management Case No. 810-044. Available at SSRN: https://ssrn.com/abstract=1997152

Mukti Khaire (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Kathleen L. McGinn

Harvard Business School - Negotiation, Organizations & Markets Unit ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-6901 (Phone)
617-496-7379 (Fax)

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