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Social enterprises in China: the case of Canyou Group

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Over the past few years, there are two trends blurring the boundaries between nonprofit organizations and commercial firms - Many nonprofit organizations have successfully sold their products and services in the marketplaces, and become better at investing in financial markets. Meanwhile, many commercial firms have actively taken part in socially beneficial activities to demonstrate their corporate social responsibilities.

With the development of these two trends, the concept of social enterprises has emerged. A social enterprise is a form of organization which aims to make a significant social impact by using economic means to address social issues.

With the primary objective to solve social problems, such as employment, education, and public health, social enterprises play a critical role in meeting the needs of vulnerable groups in a society.

To that end, Canyou Group Company, or "Friends of the Disabled" (残友集团) is one of the growing social enterprises in China. Based in Shenzhen, Canyou Group is a high-tech company with businesses in software development, animation production, website design and electronic commerce.

With over 90 percent of physically disabled employees, the company offers a series of unique employment solutions, including two major innovations in its management.  

Innovation 1: Integration of Employment and Logistics

Canyou Group has launched many logistic practices with its disabled employees in mind. For example, since most employees reside in the company’s dormitories, non-obstacle facilities are equipped throughout the dormitories and the office building. All bathrooms are also disabled-friendly and designed for employees to take a shower while sitting on their wheelchairs.

The company was among the first in China’s social enterprises to have built a professional non-obstacle transport fleet for disabled employees. All vehicles in the company are equipped with standard hydraulic-pressure wheelchair lifts and foldable stairs.

Moreover, both dormitories and canteens are built close to the office building with accessibility to elevators. The company has also recruited a specialist from Hong Kong to manage the dormitories.

"The requirements in a working environment for disabled people are different from that of healthy people. Hence, it is important to provide them convenient accessibility and transportations,"said Liu Haijun, Canyou’s general manager. Liu is disabled himself and needs a wheelchair to move around.

Canyou also takes care of employees’ daily needs by providing a free laundry service for them. “They just need to put their dirty laundry into a basket in the morning, and they can have clean and dry clothes back in the evening,” said Liu.

Innovation 2: Early Retirement Policy

According to China’s current social insurance system, an individual can only receive his or her retirement pension after working for 15 years. “But for some disabled employees, they may not be able to work for over 15 years, and when they can’t work anymore, they will have to return home and wait to die without dignity,” Liu said.

"Many disabled people have a short life because of worsening genetic diseases, but that is not to say they can’t find their values, live fully and leave the world with respect," he said.

In light of this, Canyou has launched an early retirement policy which allows his employees who need to retire early to continue to receive their salaries in the same highest amount that they could earn when working.

Besides, Canyou has purchased medical insurances for clinical care and hospitalization for all employees to enjoy the same benefits as those with urban household registrations (i.e., hukou).

This retirement policy makes up the deficiency of China’s social security system for vulnerable groups, alleviating their worries about the future.

Liu believes that by adopting such policy, the company also motivates its employees to work hard to achieve better performances in order to obtain higher salaries after retirement.

However, Canyou isn’t perfect. There are still many hurdles and setbacks as they grow. While receiving a considerable amount of positive feedback from the society, the company has also faced criticism, such as comments about the low salary level offered in the company.

Liu admitted that the company’s wage is lower than that in other IT companies but said “it’s a trade-off for having to implement the early retirement program for employees”.

"Moreover, there are some employees with a relatively low productivity, and we need to transfer part of the compensation for the star performers to them. But we are happy to help send our employees to other companies if they possess stronger skills and are keen to earn more,"he added.

While there is always room for improvement, Canyou offers an example of how innovation in management can help develop the potential of the disabled, and contribute to the social and economic well-being of people with disabilities in China.

This article has been reproduced with permission from CUHK Business School.

PhD candidate, Department of Management, CUHK Business School

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