Case Detail

Case Summary

Micawber Capital: For Mission or Profit?

Case Number: 5-112-005, Year Published: 2012

HBS Number: KEL712

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Authors: David Austen-Smith; Jeffery C Burrell

Key Concepts

Ethics, IPO, Organizational Design, Organizational Structure, Reputations, Social Responsibility, Society and Business Relations

Abstract

In July 2010 Robert Drake, senior director at Micawber Capital, one of India’s largest microfinance organizations, needed to recommend a corporate structure and organization for Micawber after its scheduled IPO in August 2010.

The IPO would bring to Micawber new stakeholders, primarily financial institutions. Drake was skeptical that the new investors shared Micawber’s commitment to help alleviate poverty in rural India through microcredit loans; he assumed their primary interest was a good return on their investments. The two objectives—increasing ROI and meeting the financial needs of the poor—seemed at odds with each other.

Drake had to consider how the interests of clients and investors would be represented in strategic decisions so that they balanced the conflicting values of the stakeholders.

Learning Objectives

• Balance stakeholder commitments to business objectives and social mission
• Understand the expectations of both commercial investors and mission-conscious investors in social enterprises
• Discuss the challenges and opportunities of structuring an organization and key partnerships based on a long-term values strategy
• Identify organizational policies and business processes that can be changed to encourage an appropriate balance of values-based and financial-based decisions

Number of Pages: 12

Extended Case Information

Teaching Areas: Management, Non Profit

Teaching Note Available: Yes

Geographic: Mumbai, India

Industry: Microfinance

Organization Name: Fictional

Decision Maker Position: Senior Director

Year of Case: 2010