Prakariti Foundation: Exit or Loyalty?

In early 2022, Rajendra Jaiswal was in a quandary about the future of the collective enterprise Diwak Mata Farmer Producer Company Limited (Diwak Mata), which his organization, Prakriti Foundation for Natural Resources Regeneration (Prakriti), had helped incubate and grow. Since Diwak Mata’s registration in 2018, Prakriti had helped it develop connections with various value chain participants and overcome the disruptions caused by the COVID-19 pandemic. With a supportive Board of Directors (BoD) and an able chief executive officer (CEO) in Rakesh Sen, Diwak Mata was recognized as one of the better-performing producer companies in the region and had growing revenues with fluctuating profits. Looking at the figures of the audited balance sheet, Jaiswal wondered whether Prakriti should withdraw its support to the producer company. Were Diwak Mata’s BoD of farmers and the CEO strong enough to chart the organization’s own path? Could they create sufficient ownership from the stakeholders for sustained growth in Prakriti’s absence? Should Prakriti remain loyal to Diwak Mata or exit and continue its core activities with other communities?

This case can be used in graduate and executive education courses on strategic management to introduce managerial challenges faced in social enterprises or dual-purpose organizations. It also adds to the growing use of cases and insights on stakeholder theory and management, and fits well with the increasing number of programs and courses on agribusiness management, managing co-operatives, or non-profit management and social entrepreneurship. The case works well after preliminary courses on functional areas of management and could be used in the first year to introduce the need for collaborative approaches to management. After working through the case and assignment questions, students will be able to do the following:<ul><li>Understand the rationale for collective enterprises in emerging markets and differences between these institutions and investor-owned firms (IOFs).</li><li>Appreciate the managerial challenges faced by these hybrid enterprises that suffer from both capital and capability constraints as both members’ equity and basic managerial skills are low.</li><li>Apply stakeholder theory and perspectives, recognizing the importance of the promoting institution as a key stakeholder.</li><li>Assess the performance of the enterprise and appreciate the dynamics of growth amid the COVID-19 pandemic and cessation of project support.</li><li>Appreciate the importance of engaging with stakeholders early to enable farmer producer companies (FPCs) to build or co-evolve their networks and become resilient.</li></ul>

• stakeholder theory
• producer organisation
• social enterprise
• pandemic