Affirmative business: examining the relevance of small business research

Journal of Rehabilitation, Jan-March, 2007 by Lisa Easterly, Philip McCallion

Affirmative business has been defined as an entrepreneurial enterprise that provides supported employment to individuals with developmental disabilities by competing with other for-profit businesses to sell products or services (Bellamy et al., 1988; Granger et al., 1997). These affirmative businesses are typically established as small businesses (Coker et al., 1995; Granger et al., 1997; Krupa et al., 2003). Small businesses are defined as firms that hold a relatively small share of the market, are managed by its owners or part-owners without formalized management structures, are separate from outside control by larger enterprises, and hire 500 employees or less (Curran & Blackburn, 1994). Since affirmative businesses attempt to operate as competitive businesses, this study investigated the relevance of taking a business perspective in addition to a person-centered vocational rehabilitation approach toward their operation. This exploratory study examined the business and person-centered practices vocational rehabilitation program directors and staff perceived as contributing to the financial viability and success of their business at providing employment for individuals with disabilities. Their responses were analyzed to begin to determine if small business practices used in the for-profit business arena are relevant to the operation of affirmative businesses operated within the vocational rehabilitation community.

The Challenge to Create Employment Options

Despite the fact that most individuals with severe disabilities want to attain jobs in the community, approximately 65% remain unemployed (Harris, 2004). The majority of those who do receive vocational services remain in segregated sheltered settings that typically do not foster integration through interaction with coworkers and customers without identified disabilities (Rizzolo et al., 2004). These concerns have led many vocational rehabilitation service provider agencies to start affirmative businesses in an attempt to create employment that fosters greater integration and inclusion within the community for the individuals they serve (Coker et al., 1995; Granger et al., 1997). In line with these person-centered goals, some agencies have converted their sheltered workshops into affirmative businesses by using the resources from the workshop to start the business venture (Coker et al., 1995, Krupa et al., 1999, Krupa et al., 2003). Such affirmative businesses are designed to provide exposure to the demands and rewards of a genuine working environment on either a transitional or permanent basis (Coker, 1997; Granger et al., 1997; Krupa et al., 2003). They create employment through competing in the broader community with other for-profit businesses that sell the same goods and services (Bellamy et al., 1988; Coker et al., 1995; Granger et al., 1997; Krupa et al., 1999).

There are excessive risks to starting any new small business, and between 50% to 80% will fail in their first five years of operation (Berle, 1990; Dees, 1998; Lovelock & Weinberg, 1993). In addition, nonprofit and public sector organizations face multiple institutional and legal constraints that limit their ability to act strategically in the competitive business market (Bryson, 1995; Perlmutter, 1990). Of concern is that overhead costs are not always covered by programmatic funding, and the lack of funding for needed worker training and support may strain business efforts to perform against its competitors, a key to business survival (Coker, 1995; Krupa et al., 2003). Research on various vocational models suggests that agencies struggle in making business decisions that meet the need for employment services for individuals with disabilities and the business' need for profitability (Granger et al., 1997; Yip & Ng, 1999). This study responds to this dilemma by seeking to understand the elements that affirmative business operators perceived to be to key to their affirmative business' financial viability and person-centered values implementation success. In this endeavor, findings taken from the small business literature were used to begin to identify if use of small business practices were related to affirmative business success.

Research on Affirmative Business

Very little has been written on the critical elements that contribute to affirmative business success or failure when employing people with developmental disabilities. Drawing upon a single case study, DuRand (1990) stated that affirmative businesses should operate according to standard business practices with quality leadership and business management in the areas of finance, sales, marketing, market competitiveness, operations, and human resources. No detail on the types of businesses, business practices, or decision-making strategies that were needed to run a financially viable business were given in the account. Also, it is important to note that the low wages, lack of integration, and lack of career advancement associated with the particular business model described by DuRand (1990) has been criticized by the vocational rehabilitation community (Coker et al., 1995).