Guayaki Company was founded in 1996 in the central coast of California by Alex Pryor and David Karr both from Northern California. They were friends who coincidentally were passionate of Yerba mate. They recognized the market gap where people were in need of nourishing source of energy as well as a healthy dose of optimism. The aim of the establishment is making organic and fair-trade yerba mate as the energy source of choice. Guayaki Company has proved that an organization can operate sustainably and become economically viable. The core mission of this company was to safeguard as well as restore the rainforest in South America and to empower the local people.
The present market environment has become aggressively competitive resulting to significant changes. These changes have lead to an emergence of new types of organizations that no longer focus their competitiveness to the quality of the goods and services produced. However, they focus on their ability to have a positive impact on the social as well as environmental aspects. The hybrid organization can either be profit making or non-profit making entities. For instance, Guayaki produces shade-grown yerba mate hence helps the South American rainforests as well as the inhabitants. The thin line of difference is as a result of emulating both social and environmental variable; the assertion is that neither the profit making nor the non-profit organizations has been able to address the social and environmental issues adequately (Billis, 2010).
The Guayaki have been a result of the emergence of new market demography. The demographic of individual have changed their tastes and preferences. Hence, the organizations have to shift their objective to meet the market segments needs. Organizations are not only striving to maintain high profitability levels but also are attempting to address some emerging issues that are of importance to humanity, for instance, healthy living, ecological sustainability of products and services and the environmental as well as social justices.
The hybrid model that most of the organizations have adopted has widely been referred to as being sustainability-driven. In contrast to focusing mainly on the reduction of the adverse social as well as environmental impacts due to business activities, the Guayaki strive to generate notable improvements both social and environmental through the products and services offered. This contrasts the traditional notions of sustainability that entails the tradeoffs among the social, environmental as well as economic systems. These Guayaki are real nonconformist that outline the mutual and intimate connection between the organization and the communities in the environments and the natural environment that supports them all. Positive relationships underpin Guayaki, and the system that runs them is facilitated by sustainability-oriented organizational values, slower growth due to long-time horizons and positive leadership approach.
Similar to traditional organizations, Guayaki intends to offer high-quality products and services that are on demand in the market segments that they serve. However, Guayaki upholds a unique perspective of their responsibility in both social as well as environmental systems. They aim at using the market that they are used to restore the social and ecological systems for mutual gains of the organization, society, and the environment. This approach facilitates the intended outcomes both social and environmental that are according to the organization's objectives, and they are communicated through the products and services produced.
The strategies employed by the Guayaki results to them operating on long time horizons. Sustainable development is associated with stable, slower as well as limited growth. They seek autonomy from the different stakeholder as a way of ensuring the organizational goals remain achievable. Hence, they mostly shun from standard venture capital that has more control (Thomasson, 2009).
Guayaki strives to create positive relationships with the surrounding community in various ways, for instance, employing local people, training the local community on sustainable techniques, and paying high wages. Such relationships are mainly built on trust, compassion, positive regard as well as vitality that are all crucial for organizations learning, innovation and resilience. The close and strong relationships assist the Guayaki to revive the local social as well as environmental systems. In return, these systems provide high-quality resources that are crucial for the Guayaki to attain the market expectations as well as remain economically viable.
Guayaki strives to ensure that their business models are accepted in all the markets they operate. They endeavor to be the marker leaders within the industry, however, unlike other organizations that strive to manipulate industry institutions to reduce the standards as well as regulations, the hybrid highlight their products and service in an order and as a result, other groups can copy them for the societal benefit. Additionally, contrary to the other organizations that create barriers for new entrants, the Guayaki actively encourage new entrants into the market (Velamuri, 2013).
- Guayaki Sustainability-Driven Model
- Non-profit with income Generating Activities
- Social Enterprise
Purpose: Social Value Creation
Sustainability Strategy: Commercial methods supporting Social Programs
Guayaki Company is located in Sebastopol, California, and strives to ensure there is mutual gains for the company and the locals. The company pays farmers living wage and use resources and time to train the farmers on sustainable farming methods, instead of going for low-cost suppliers who are paid fewer salaries and never use sustainable farming techniques. Guayaki guarantees economic prosperity for the farmers and also ensures they have a stable supply of the Yerba Mate for future using the significant secure agricultural methods as well as good suppliers relations.
Challenging the Business Norms
Guayaki acts contrary to the business assumption that the market needs unlimited as well as steadily increasing economic growth. Hence, they advocate for the development industry and market stability that can hold a positive change as well as a future economic feasibility. Their economic growth is anchored on the need to ensure there are positive and sustainable social and environmental changes as well as safeguarding the autonomy.
Most of the organizations externalize community as well as natural environment issues as a way of avoiding their costs. However, Guayaki focuses on creating healthy personal relationships with the community and also consider their environmental and social issues to ensure there is a mutual benefit (Thomasson, 2009).
Most of the organizations have their primary objective as increasing the profit to maximize the shareholders wealth. On the contrary, Guayaki managements tend to establish entities whose sole aim is not only to make profits but also be in a position to create societal value.
Challenges Facing Hybrid Organizational Model
The Guayaki have secured a large share of the market as well as increasing their competitive advantage over the other organizations. This is a positive outcome of their efforts to attain social change. However, due to the complexity of the hybrid organization that is double edged on being for-profit and non-profit, there arises a conflict as they seek to avoid competition and at the same time strive to capitalize on their market segments.
The hybrid organization tends to acquire the most prominent presence in their market segment and the industry contrary to their size. Most of the Guayaki end up becoming the market leaders. The aspect of large prominent presence and becoming the market leaders attract fierce head-to-head competition with other vibrant mainstream organizations. The mainstream groups tend to produce identical products and services to compete with the Guayaki. Additionally, there has been massive growth of smaller companies that serve the local markets hence reducing the client base for the Guayaki (Velamuri, 2013).
Also, to mainstream organizations producing identical products and service to those of Guayaki, they started targeting them for acquisition. Despite the fact that most of the Guayaki resist being taken over by other organization to maintain their autonomy, large entities have already acquired some.
In conclusion, the issue of sustainability has raised a lot of debate among different schools of thoughts, and they remain persistent and complex. The Guayaki are a new business vehicle that integrates both the profit aspect and the non-profit aspect to ensure social and environmental changes. It is through their sustainability-driven model that Guayaki are rejuvenating social and environmental renewal and at the same time establish businesses that are economically viable.
Billis, D. (2010). Guayaki and the third sector. Basingstoke, Hampshire: Palgrave Macmillan.
Ciesielska, M. (2010). Hybrid organization. Frederiksberg.
Thomasson, A. (2009). Navigating in the landscape of ambiguity. Lund: Lund Business Press.
Velamuri, V. (2013). Hybrid value creation. Wiesbaden: Springer Gabler.
Link to companys website: http://guayaki.com/
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