Third-place winner of the 2015 Next Billion competition. The hybrid organization Runa has built the world’s first guayusa tea supply chain in Ecuador. The CEOs of the company have proposed a new hybrid structure to scale operations to Peru consisting of Runa LLC (the business in Brooklyn, New York), its foundation, and an impact investor, giving the foundation a stable source of income. The executive director of the foundation faces a dilemma: Keep the foundation an independent watchdog for the business side of operations, scale its operations in Ecuador, or expand to Peru. The foundation is imposing its best practices on an indigenous culture of subsistence farmers that has been growing the sacred crop for thousands of years, getting the farmers to dedicate, in some cases, more than 1 hectare of land to the crop and paying them on average $160 a year. Students are ultimately asked to consider if the organization is benefitting or exploiting the culture.
Runa: Creating Value in the Amazon
by: Lindsey Hiebert, Kara Sheppard-Jones, Taylor Valentine
Core Disciplines: Base of the Pyramid, Economics, Leadership/Organizational Behavior, Marketing/Sales, Operations Management/Supply Chain, Social Impact, Sustainability
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Description
Teaching Objectives
After reading and discussing the material, students should:
- Weigh the risks and opportunities of scaling socially responsible supply chains and evaluate the importance of financial and social timeliness in the decision.
- Identify the challenges of decision-making within a complex hybrid structure.
- Assess the efficacy of an independent foundation acting as a watchdog for business operations.
- Discuss the responsibility associated with commercializing a sacred crop and doing business with indigenous populations.