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Research on the Alw

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How can you explain the interest of the local politicians at the municipality to support the creation of ALW?

The development of such a social organization will help the economy to grow. It will bring innovations and new job offers in the community. The competition will be increased, so more ideas will start to exist and be developed. In order to work efficiently in this business, many local businesses need corporate, so the whole social network of the Vimmerby will contribute to the operation of this organization. All these factors have a result, the growth of the economy, which is the main purpose of the government as I mentioned before. As the government is responsible for a country, so the local politicians are responsible for the area that they manage and this is the reason why they support this new idea. Through it, they identify some prospects for their city’s development. In a great political system, the contribution of the politicians in such citizens initiatives has as the main purpose to exhort the citizens to be active.

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By supporting such citizens’ initiatives, politicians aim at:

  1. Encouraging citizens to participate in upgrading their quality of life.
  2. Awareness of the private initiative and the participation of the citizens in the community issues.
  3. The realization of the citizens that the quality of their lives is not the only the obligation of the states but also their duty to upgrade.

This specific idea of the families to create this theme playground for the children, with the proper support of the municipality and other agencies with sensitivity to children’s healthy development issues, especially in urban subjects can evolve into a non-profit organization which would also give its example to other citizens around this issue in a wider region and even more internationally.

Also, the non-profit character of the organization will also promote the area and more and more families from the surrounding areas will start to visit the theme park to bring their children there and see the social work that the ALW does. If this idea generates good results, maybe the whole city will be seen as an incubator where people from all over the world will want to be a part of it and try to discover their opportunities and chase their future. As we saw from the first case study “The entrepreneur and the incubator”, an entrepreneur feels more confident about his idea in a place where many startups businesses have begun because he will also be inspired by them and will understand that he has the same possibilities as the other for his idea to find a lucrative land. So, the creativity of all these new entrepreneurs will generate a new market capable of optimizing the economic and social level of the region and will give it the “push” that the area needs in order to grow her economy. In this point I want to refer a sentence from the book which says that “This milieu allows social capital to be built” and that’s how all this project will have a good impact to the people, which will be preserved in time and will add some new data to the cultural wealth of Vimmerby.

The ALW has experienced some real crises during its development and has been far from a straightforward success. Explain to the politicians and other stakeholders why ventures normally fail and how they can view the failures during the process from a learning perspective.

Generally, no one can predict from the beginning of the operation of a business that it will fail. We have to take risks in the entrepreneurial environment and give time to our business to grow before we see the desired results. But sometimes things don’t come as we would like to, and that’s happening because the failure of the enterprises is part of the “business game”. There are many causes of the entrepreneurial failure and also some ways to deal with it.

First of all, one of the most important cause is the lack of capital or even the lack of knowledge on how to manage the capital. Many businesses sometimes start their operation using all the capital they already have in order to bring their idea to the level they have imagined and unfortunately, they haven’t secured their future in case their idea fails and the bankruptcy comes. Except for the mismanagement of the original capital, another important cause is the mismanagement of cash flow. That move will probably be a fault of the management of the business, so that’s a third important cause: lack of good leadership. As Beaver (2003: 120) said: “the primary cause of business failure in the USA is due to management incompetence of the business owner”. So, I will make it general and say that it is possible the owner himself can be harmful to his own business when he cannot control it in a proper way or he doesn’t follow the right strategy or even when he isn’t able to judge the people and collaborates with people who deceive him, so this leads to the concept of fraud or collusion. In my opinion, another important cause of business failure is the inadequate communication of the business with the customer. The venture has to be friendly to the client in order to know about his needs and prevent his complaints with its services. So, as long as the client is happy, the business will be “rewarded” by them with their preference for this specific business.

Concerning the ways to deal with the failure as I mentioned before, the basic solution is to learn from it and then find success out of it. As Tom Kelley said “Fail early, fail often in order to succeed sooner” [1]and that’s what I also believe. In order to move forward with our lives, we need to collect knowledge from everywhere, even from our failures. On this occasion when we experience a venture failure, we can learn from our mistakes and improve our future performance. We must not give up but go and gain our next goal. In that way, we will move to our next business with more confidence and more experience. We have to see ourselves as a portfolio entrepreneur. They collect many businesses and every time they collect more knowledge for each one to apply it to the next one. So, we learn from our previous mistakes and the reasons that our venture didn’t flourish and avoid to do the same.

You have read a lot about the first phase of ALW in the press and now you try to analyze the story in order to understand the entrepreneurial process of the founders. How would you characterize the entrepreneurial process and was the approach appropriate considering the circumstances?

In this case study, the 3 families use the approach of “effectuation” which is a logical process where you have the means to do something and you have a general vision of what you want to achieve but you don’t have an exact plan of the result. At this point, I will use the example which is mentioned in the book in order to connect it with our case and make my thesis clearer. For example, we are working in a restaurant as a chef. The client will not ask us about a specific plate or a menu but he will ask us to make something nice from the available ingredients and we have to choose one of the different meals that we can cook with these ingredients. [2]In this case study, the 3 families have the ingredients, like space, their own financial capital, and their social network but they didn’t know what to do with them. At first, they wanted to make a playground inspired by the characters of Astrid Lindgren fairytales for their children, then for the children of their neighborhood and later for the children of the surrounding areas as Sweden, Germany, and the Netherlands. So, that means that they didn’t have a specific plan, they just had a vision for making better the lives of their own kids but then when they realized that more and more children were attracted by this idea they tried to adjust it to the new data.

The steps of the creation of ALW were 2:

  • The discovery
  • They had built their houses next to each other, so they had already created a common environment between them and their children which also included the area for the playing ground. That’s how their kids started playing together, then more kids came and as I referred previously that’s how their idea got created.

  • The exploitation
  • The process of the exploitation of their original idea started when they discussed with Astrid the rights of her characters and asked her to give them her permission for using them for their own playground. But the exploitations of the venture started when they borrowed the 30,000 Swedish Crowns. They also tried to convince the municipality to help them financially but that didn’t happen from the beginning. Then they used whatever means they had to make the idea real.

As a result of all these, I think that the entrepreneurial process of effectuation was the most suitable in this case. First of all, this approach is the most sufficient for startups in contrast with the other approach (causation) which is better for more mature businesses. Second, the loss with this process in case of failure is affordable because they don’t rely just on their capabilities but also to their social capital and finally effectuation is better for the cases where uncertainty is the key factor like in this case where they didn’t have a specific plan and also, they weren’t sure if they could find the appropriate financial support in time.

Ultimately, the founding families decided to sell the majority of their shares because of a very uncertain future. The investor wanted to change the concept a bit if he would commit to the new venture. What are the possible responses from the families when a potential stakeholder wants to change something in the venture? What would have been your recommendation to the families in this case?

The 3 founding families were forced to sell the majority of their shares because of the uncertain future. That’s why they were asked to invest more money in the business, money that they didn’t have and that’s the point where financially stronger entrepreneurs needed to come to the frame and be in charge. This is also the point where with the entry of the entrepreneurs the business will be more commercial and they didn’t want to participate with something like that because they were still emotionally attached to the ALW project and Astrid Lindgren as it is referred to the case study.

Generally, the possible response to a potential stakeholder who wants to change something in your venture could be different depending on how capable you are to predict the future.

  1. The first response could be “no”. That would mean that you are a visionary entrepreneur, you know and you trust your vision and you are ready to seek and find more people who think like you. You are not willing to abandon your vision and that’s why you believe that you can control the future!
  2. The second response could be “cooperation”. That would mean that you are an effectual entrepreneur, you have a vision but it’s not so clear. You are willing to hear some new ideas and connect them with yours, to co-create with others in order to still keep alive your business.
  3. The third response could be “yes”. That would mean that you are an adaptive entrepreneur. Your vision is not that strong, you are open to hearing new ideas and you are willing to leave yours in case the others are more promising. You like to be adjusted to the new circumstances and to be incorporated into the new data that the stakeholders are asking for.
  4. The fourth response would be “yes” again. In this occasion, the entrepreneur thinks a little bit different than the adaptive. He is a casual entrepreneur, he has a clear vision, he wants to follow this vision but he is also aware of his capabilities. He doesn’t have a complete control and that’s why he is seeking of possible stakeholders who have the necessary information that he needs.

In this occasion, I would have recommended the second response to the families. They are effectual entrepreneurs, they have a vision about the theme park in this phase but they don’t know exactly what to do with it, it’s not that clear. That’s why they need some new ideas to work on it in order to preserve the character of their business. They need some financial support because they are not capable to run the business alone after reaching the goal of the 100000 visitors because the needs now are bigger but they also want to keep the venture in a low-profit level. That’s why they have to talk to the new stakeholders and co-create.

Throughout the history of ALW, there has been a tension between the social values of Astrid Lindgren and creating a profitable business. Describe the development and explain what created this tension. Is it possible for ALW to successfully combining these goals?

From the first day that the three families decided to involve Astrid with their idea, she made clear that she wanted it to be a non-commercial project. She wanted all the children to have access to that place, that’s why she demanded it to be free of charge for the kids. That happened because her main purpose, from the beginning until the end, was to maintain her social values. But during the years and the development of the project, the whole concept tried to change due to the new circumstances and then it is where the tension started.

  1. The first time where I think that the tension created was in phase 2, in 1988 when the target of 100,000 visitors was reached. This is the point where the other entrepreneurs realized the potential of the ALW and they wanted to exploit it commercially. Now the business needs are bigger and they cannot be supported financially just from the 3 founding families, so they are now obliged to find new investors, who unfortunately they don’t share the same social vision with Astrid but they care more about their financial gain.
  2. Again, in the second phase, there was a tension when the new owners brought some new items in the park’s store. Astrid characterized them as too commercial for her and that’s why they were literally taken away by her, as it is referred to in the case study. She wouldn’t change her opinion about preserving her social intentions and that was the main source of the tension that existed between her and the owners.
  3. Another point where I can find the tension is when the financial crisis came in phase 3. Astrid had made clear that she didn’t want her name to be connected with a bankruptcy and that’s why she demanded from the municipality to do something in order to avoid such a scandal. She believed that they were just using her and that was the time where they had to support her.
  4. Finally, in phase 4, for the viability of the park new owners had to be found, but Astrid couldn’t find one who would have the same beliefs as her and also the local businesses didn’t find any interest anymore in ALW.

The venture could have easily combined both the social values of Astrid and a profitable aspect of the business if they had run the principle of Hybridity. This is the way where the organizations straddle both commercial and social realms by adopting elements of each to achieve optimal social outcomes[3]. One way to be implemented this principle is by the government. In this case, the local politicians could have granted some facilities to the ALW in order to extend the theme park and the ALW could have created a small-price ticket for the users of these facilities in order to make some profit out of it.

A classic example for Hybridity is the Parent Earth foundation. The for-profit Parent Earth and the non-profit Parent Earth have the same purpose but acting in a different way. Their main mission is to educate the public about healthy eating habits, but they are doing it differently. The non-profit Planet Earth produces educational videos about food while the for-profit Planet Earth generates advertising revenue on their website and gain some sponsorship offers. In that way, the for-profit foundations are able to help the non-profit exist as long as it waits for grant funding[4].

Would you characterize ALW as community entrepreneurship? How could you as an employee at the municipality act as an entrepreneur to support the local community in Vimmerby?

At the beginning, the ALW started as a social-profit entrepreneurship. It was social due to Astrid’s vision of a free of charge theme park for all the children, she wanted to create social wealth for all the kids, and it was profit because they didn’t have enough capital to create this all just by themselves (the 3 families), but they also needed to corporate with their social network and the locals. Some years after the creation of the ALW the circumstances tried to change its concept and turn it into a commercial enterprise but these are the points where the tension created and Astrid didn’t let them do it. Finally, all this project evolved to a community entrepreneurship where the local politicians and the local community worked together for the best of this venture. Particularly, this is called Public community venture and that means that it runs also by a public body in this occasion the local politicians and the municipality. [5]

If I was part of the municipality, I would propose to the local business community to grab the chance and participate in this project. I think that with the proper management, this concept could evolve into something bigger. It could have been profitable for the town, both in a financial and cultural way with a social impact on all the people.

At first, I would propose to them to invest in the tourism. For example, they could create some hotel facilities where the families from the surrounding areas, who wanted to visit the theme park, could stay for more than one day in the city and in this way, they could explore more places of the city. They could also an entry into the food market by creating restaurants which would promote the local flavors and some traditional dishes. They could also open some souvenir shops where they could sell local products and stuff inspired by the characters of Astrid and generally the theme park. Additionally, I would propose them to establish a volunteer organization which would be responsible for the transmission of the social values that the ALW represents through some educational programs for the schools.

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