Complex Systems and Sustainable Leadership: Enhancing Resilience and Sustainability of Community-Based Social Enterprises in Soweto, South Africa

Abstract

In urban South Africa, community-based social enterprises (CBSEs) face challenges at the intersection of financial and environmental sustainability and social purpose. These enterprises address social exclusion and community development within complex institutional environments. Despite increasing governmental support, CBSEs struggle with historical inequalities, resource limitations, high poverty levels, inadequate infrastructure, and complex social dynamics. These challenges contribute to a high failure rate among SMMEs, including CBSEs, which represent approximately 71% of community-level businesses. This study examines how complex system dynamics in marginalized South African suburbs impact the sustainable leadership and resilience of CBSEs. Utilizing a qualitative approach, the study conducted 15 in-depth semi-structured interviews with CBSE leaders. The findings revealed that effective leadership in CBSEs requires extraordinary abilities to traverse complexity, adapt to changes, and engage in dynamic organizational change. The key themes identified included adaptive and flexible leadership, interdependencies and network collaboration, community engagement and co-creation, continuous learning and feedback loops, policy influence and response, and resource utilization and constraints. By applying complex systems leadership theory (CSLT) and sustainable leadership principles, the research offers insights into the mechanisms enabling CBSEs to thrive in challenging environments. These findings contribute to Social Enterprise Management and Leadership Studies, providing practical implications for policymakers and practitioners to support CBSE development and sustainability in marginalized urban communities.

1. Background

In urban South Africa, community-based social enterprises (CBSEs) operate at the intersection of financial and environmental sustainability and social purpose, a triality that presents unique challenges and opportunities. CBSEs as a subset of social enterprises (SEs) address social exclusion and community development by operating in defined communities through engaging with residents [1,2]. The hybrid nature of these enterprises, as identified by Doherty et al. [3], often leads to a clash of missions, exacerbated by the complexities of their institutional environments where diverse influences and norms coexist [4,5,6]. This is further complicated by the transfer of public service responsibilities to these organizations [7], rendering leadership in these contexts particularly complex [8]. This complexity is exacerbated by the complex nature of sustainability itself [9].

In South African cities, CBSEs face multifaceted urban challenges, especially in marginalized areas. Historical inequalities, resource limitations, high poverty levels, inadequate infrastructure, and complex social dynamics are among the key factors influencing their operations [10]. Despite increasing governmental recognition and support, as well as a robust support ecosystem, CBSEs still grapple with challenges that impede their long-term survival and growth [11]. This is evident in the broader landscape of small to micro and medium enterprises (SMMEs) in South Africa, where a high failure rate of 70% to 80% in the first five years has been documented [12,13,14,15]. This statistic is significant given that SMMEs, including CBSEs, represent a substantial proportion of all the businesses operating at the community level, approximately 71% [16]. The high incidence of failure in these enterprises represents not only a waste of resources but also contributes to the perception that their contributions to socioeconomic development are temporary or short-lived [17,18].

The complex nature of these challenges emphasizes the need for effective leadership and strategic decision-making within CBSEs. This study supports Metcalf & Benn’s [9] remark that “leadership for sustainability requires leaders of extraordinary abilities. These are leaders who can read and predict through complexity, think through complex problems, engage groups in dynamic adaptive organizational change, and have the emotional intelligence to adaptively engage with their own emotions associated with complex problem-solving”. This necessity aligns with the theoretical frameworks of complex systems leadership theory (CSLT) and sustainable leadership practices, which can bolster the resilience and sustainability of these enterprises. CSLT emphasizes the interconnectedness within systems and the importance of adaptive strategies in dynamic environments [19]. This perspective is crucial for CBSEs facing a spectrum of challenges that demand holistic and adaptive responses. Sustainable leadership advocates for long-term viability through the integration of environmental, social, and economic considerations in decision-making, a principle highly relevant to the operation of CBSEs [20].

Despite extensive research on the survival and operational challenges of CBSEs in urban South Africa, there remains a lack of understanding about how complex system dynamics influence sustainable leadership and resilience in CBSEs, especially those operating in marginalized South African suburbs. While the principles of complex systems and sustainable leadership have been identified as crucial, there is limited empirical evidence on how these are actualized in the context of marginalized South African suburbs. Additionally, the influence of unique contextual factors such as socioeconomic conditions, cultural dynamics, and external pressures on the implementation and effectiveness of sustainable leadership practices within these enterprises remains underexplored. This knowledge gap signifies a critical area for investigation, particularly to understand how leadership can effectively contribute to the resilience and sustainability of CBSEs amidst their complex operational landscapes. Therefore, there is a need for new leadership models, methods, and tools for implementing organizational change for sustainable development [21].

Addressing this identified knowledge gap necessitates a methodological inquiry into the dynamics of leadership within CBSEs in urban South African contexts. To this end, this study poses the following research question: “How do complex system dynamics in marginalized South African suburbs influence the sustainable leadership and resilience of community-based social enterprises?”. In the context of South African CBSEs, understanding complex system dynamics involves recognizing how various elements within these systems interact in unpredictable and often non-linear ways. Particularly, leadership within SEs presents distinctive challenges and opportunities, with empirical research highlighting key lines of inquiry into leadership practices within these entities [8]. Furthermore, exploring what influences social enterprise leadership development reveals critical facets that underpin effective leadership within these entities, providing a baseline framework for leadership development in the social enterprise sector [22]. Therefore, enhancing resilience and sustainability in South African suburb CBSEs requires a multifaceted approach that involves fostering local leadership, promoting communal participation, and adopting sustainable practices.

This research employs a qualitative case study approach complemented by document analysis to answer the research question. This approach offers an in-depth, contextually rich understanding of how leadership practices within CBSEs adapt and respond to complex socioeconomic environments. The research primarily enriches the field of Social Enterprise Management and Leadership Studies, with a specific focus on the challenges and practices within the context of developing economies. The findings of the study could inform theory and policy decisions related to the support and development of CBSEs in urban South African environments.

2. Theoretical Foundations

2.1. Complex Systems Leadership Theory

CSLT represents a significant shift in leadership paradigms, moving away from traditional hierarchical models towards a focus on emergent processes within organizations. Rooted in complexity theory, CSLT views organizations as complex adaptive systems (CAS) that require continuous evolution to manage internally and externally [23]. This approach is particularly adept at managing “wicked problems”, leveraging the adaptive capacities of these systems to cope with changing environments toward adaptive outcomes [24].

A central concept within CSLT is emergent leadership, which arises from the interactions and interdependencies within the system rather than being centred on individual leaders [25,26,27]. This perspective showcases the role of leaders as facilitators who encourage autonomy and self-responsibility among team members, thus fostering organizational change and innovation [27,28]. Additionally, CSLT integrates the principles of complexity theory and adaptive systems to promote sustainable leadership practices, highlighting the dynamic and interactive nature of CAS within traditional organizational frameworks [29,30].

In the context of urban CBSEs, CSLT provides a profound framework for understanding leadership dynamics and their influence on resilience and sustainability. By focusing on emergent opportunities and adaptive leadership, CSLT assists leaders in facing and overcoming the complexities of CBSEs, fostering innovation, and promoting sustainability [31]. Applying CSLT to CBSEs highlights that outcomes in rapidly changing environments are not directly deterministic from leader actions. Instead, leaders in CAS evolve from command-and-control roles to become enablers of learning, creativity, and adaptive capacity within self-organizing systems [28]. Furthermore, the concept of distributed intelligence within CSLT aligns with the collaborative and networked nature of CBSEs, emphasizing the importance of fostering collective intelligence and leveraging social capital assets for organizational success [32].

Moreover, the concepts of sustainable leadership, resilience, and sustainability closely align with CSLT principles, offering a robust framework for understanding the dynamics and mechanics of how leadership functions in complex systems in which CBSEs operate. Sustainability stresses the importance of creating lasting value while considering environmental impacts and social responsibility, reflecting the holistic approach advocated by CSLT in managing complex organizational landscapes [28]. Boyatzis [33] noted that sustainable leadership development involves essential components of behavior, thoughts, feelings, and perceptions related to leadership effectiveness as a complex system. Sustainable leadership encompasses multidimensional dimensions that overlap with transformational, ethical, and responsible leadership, aligning with the diverse and adaptive nature of CSLT [34,35]. Resilience, a key component of sustainable leadership, is essential for challenges and promoting organizational effectiveness [36]. CSLT, with its focus on emergent opportunities and adaptive leadership, complements the resilience aspect by providing leaders in CBSEs with the tools to address dynamic urban environments and promote sustainability.

2.2. Sustainable Leadership in CBSE

Sustainable leadership is a crucial concept in CBSEs, essential for achieving resilience and sustainability by integrating economic, social, and environmental dimensions [34,37]. Recent studies have placed sustainable leadership alongside transformational styles as the most discussed leadership styles, emphasizing its role in fostering organizational success and long-term viability [38].

Research indicates that leadership in CBSEs is often co-constructed through social interactions, enabling effective collaboration and community engagement [22]. This study supports Onyx & Leonard’s [39] leadership of emergence: Rather than leadership “being in” a specific manager or CEO, it emerges throughout the organization as a positive influence, novelty, and outcomes. According to Hallinger & Suriyankietkaew [40], sustainable leaders are characterized by their visionary guidance towards sustainability, ethical and environmental integration in organizational values, and a focus on long-term over short-term gains. They emphasize participatory decision-making, ethical leadership that drives innovation, and foster strong labor relations for community sustainability, extending their goals beyond just profit to include social and environmental responsibilities.

Gerard et al. [35] highlighted that trust, transparency, and robust stakeholder relationships are foundational to sustainable leadership. Such attributes guide organizations toward achieving high performance while considering broader impacts on society and the environment. Moreover, this leadership style also influences organizational culture by promoting psychological safety, essential for sustaining performance and resilience [41]. These practices highlight the importance of strategic thinking, systems thinking, interpersonal skills, anticipatory capabilities, and ethical competencies, which are crucial for resilience and sustainability in SMEs [42].

Sustainable leadership’s transformative potential is still being explored and holds significant promise for the future of leadership studies. This holistic approach, as detailed by Liao [34], aligns with the sustainability principles that CBSEs aim to uphold, fostering a balance that enhances both organizational and community well-being. Moreover, resilience in SEs is linked to flexibility, adaptability, and agility—qualities essential for confronting uncertainties [43]. Strategic decision-making is critical for sustaining enterprise relevance, and shared value creation through strategic leadership significantly contributes to delivering both social and financial value, thereby reinforcing the sustainability of SEs [44,45].

2.3. CSLT in the Context of Resilience and Sustainability in CBSE

CSLT offers a robust framework for enhancing resilience and sustainability in CBSEs. Integrating CSLT principles helps in understanding the complexity of systems, adaptive processes, and challenges within CBSEs. CSLT emphasizes adaptive leadership, crucial for managing the complexities of social-ecological systems and driving transformative change [46]. This approach is particularly relevant in CBSEs, where leaders must foster adaptability and innovation to ensure organizational sustainability. Further supporting this notion, Ungar [47] discussed the resilience principles and processes necessary for leadership in adverse contexts. These principles underline the importance of adaptive leadership and the capacity for self-organization, which are central to CSLT.

Hennessy et al. [48] explored the integration of complex systems methods in advancing community-engaged research, emphasizing the leadership roles of stakeholders. This perspective aligns with CSLT by underscoring the importance of decentralized leadership and stakeholder engagement in fostering sustainable outcomes within CBSEs. Additionally, McKim and Goodwin [31] examined emergent opportunities at the intersection of complexity, leadership, and sustainability. They advocated for leadership styles that are adaptive and consider ecological dynamics, which resonate with the CSLT principles.

Organizations are increasingly recognizing the need for sustainable leadership due to significant changes in the business environment and evolving stakeholder expectations. The global shift towards sustainability is challenging the traditional profit-oriented leadership models that dominated until the 1970s, which primarily focused on economic growth without considering environmental or social impacts [49,50]. Today, leaders must traverse and balance the interconnected pillars of sustainable development—environmental, social, and economic goals—to ensure long-term organizational success and responsibility [51]. This shift necessitates a redefinition of leadership practices to effectively integrate these diverse objectives and guide organizations toward sustainable futures [38].

In the context of CBSEs, the principles of CSLT are particularly relevant. CSLT emphasizes the emergence of leadership within complex systems, highlighting the co-construction of leadership within intricate organizational dynamics [52]. When applied to CBSEs, this theory stresses the importance of understanding the cultural context, as seen in Indigenous communities in Canada [53].

Additionally, CSLT aligns with the concept of community-based enterprises, emphasizing the need for a theory that considers the unique characteristics and challenges faced by such organizations [54]. Leadership within SEs faces distinctive challenges, especially in the context of community-based initiatives. These challenges include addressing the complexities of creating leadership structures that align with the values and goals of the community while ensuring organizational sustainability [8]. Furthermore, CBSEs often interact with common resources and face unique circumstances, such as those observed in the case of San Juan Nuevo Parangaricutiro in Mexico, highlighting the importance of understanding the factors that contribute to their success [55].

This study, therefore, opines that CSLT provides a robust framework for comprehending the dynamic and adaptive nature of leadership in CBSEs. This approach aligns well with the intricate and ever-evolving nature of CBSEs, emphasizing the importance of collective efforts, adaptive responses, and systems thinking in driving positive change within communities.

3. Research Methodology

3.1. Research Design

This study employs a qualitative research approach to explore the influence of Complex Systems and Sustainable Leadership on CBSEs in marginalized urban communities in Johannesburg, South Africa. Through qualitative research, researchers can gain insight into the personal and leadership experiences within these organizations, leading to a comprehensive understanding of how Complex Systems and Sustainable Leadership influence their operations and outcomes [56,57]. The research is both exploratory and interpretive. While exploratory research uncovers new insights and relationships, especially in areas where theoretical frameworks are still evolving [58], interpretive research provides a deeper understanding of phenomena within their context, emphasizing the influence of culture, practice, and language on human experiences [59,60]. By merging these approaches, researchers can generate valuable insights, contributing to a deeper comprehension of how to support and enhance the sustainability of CBSEs in Johannesburg’s marginalized communities. CSLT provides the theoretical framework, emphasizing the importance of interactions and adaptability within complex systems.

3.2. Area of Study

The research itself was undertaken in Soweto (or the South Western Townships). Drawing its name from the Southwestern Corridor of Johannesburg, Soweto is arguably one of the best-known and largest townships in South Africa [61]. Soweto’s past is inextricably linked to the brutality of apartheid through violent repression, struggle, and uprising. Home to approximately 1.8 million people, the township is today seen as a connotation of diverse cultures from South Africa and the continent. It is, however, further reflective of deep social and class divides, with the wealthy living alongside the largely unemployed poor [62]. Figure 1 shows the location of Soweto within the City of Johannesburg, highlighting the popular areas where participants come from.

The choice of Soweto as an area of study was thus driven by its representation of marginalized urban suburbs where CBSEs operate under particularly challenging socioeconomic conditions. Soweto’s context allows for an in-depth exploration of how these enterprises deal with and thrive in the face of adversity, shedding light on the strategies and mechanisms that enable them to address community needs effectively and sustainably within a challenging socioeconomic environment.

3.3. Sample Selection

Participants for the study were selected using purposive sampling, a method commonly employed in qualitative research to target specific individuals who possess the desired characteristics or experiences. Creswell & Creswell [63] explained that purposive sampling is a strategy in which particular settings, persons, or events are selected deliberately to provide important information that cannot be obtained from other choices. In this case, leaders within CBSEs actively engaged in sustainable practices were chosen as participants. The inclusion criteria required a minimum leadership tenure of one year and direct involvement in strategic decision-making within their organizations. The sample encompassed a diverse range of organizations, including cooperatives, social businesses, trusts, and NGOs, with a focus on well-established entities that had been in existence for over five years.

South Africa, despite having a rich and diverse landscape of SEs, still lacks a clear and agreed-upon definition of a social enterprise. We identified CBSEs who combined both social mission and profit maximization using the three main legal forms used in South Africa [64]. The three forms are “(a) non-profit entities, including voluntary associations, trusts and non-profit companies (NPC); (b) for-profit entities, including co-operatives and private companies; or (c) hybrid structures where SEs “divide their aims, objectives, and activities between two or more legal entities” [65] (

Table 1. List of CBSEs’ participants.

Participant ID	Type of CBSE	Year Founded	Person Interviewed	Tenure	Services They Provide
CBSE01	Private Company	2012	Director (M)	12	Horticulture, Waste, Management Construction
CBSE02	Private Company	2009	Director (M)	14	Youth Skills Development and Employment Training
CBSE03	NPC	2012	General Manager (F)	9	Horticulture and Training
CBSE04	NPC	2007	Founder and Director (F)	16	Clothing and textile
CBSE05	Private Company	2011	Founder and Manager (M)	13	Waste Management
CBSE06	Private Company	2014	Founder and Director (M)	10	Construction and Recycling
CBSE07	Private Company	2017	Director (M)	5	Community finance and informal lending
CBSE08	Cooperative	2019	Founder (M)	5	Horticulture, Recycling
CBSE09	NPC	2012	Founder and Director (F)	12	Sewing and skills training
CBSE10	NPC	2018	Founder and CEO (M)	7	Vocational training and skills development
CBSE11	Cooperative	2011	Operation Manager (F)	4	Vegetable gardens
CBSE12	Cooperative	2016	Project Manager	8	Cleaning parks and waste management
CBSE13	Trusts	2008	Programme Manager (F)	10	Provide scholarships, funding educational programs
CBSE14	Private Company	2013	Founder (M)	11	Private security for households
CBSE15	NPC	2015	Director (F)	8	Community health outreach programmes

(F): Female and (M): Male.

).

3.4. Data Collection

Data collection involved conducting 15 in-depth semi-structured interviews with leaders from CBSEs. We used an interview guide but chose a flexible approach during the interviews to be able to follow up on developing themes. The interview questions started with a broad and open-ended question: “Can you describe your experiences as a leader within your social enterprise, particularly in the context of the challenges and opportunities you face in the community?”. This allowed the participants to share their stories and experiences. Depending on their responses, follow-up questions asked included: “What specific strategies have you employed to ensure the resilience of your enterprise in the face of the complex challenges in your community?”; “Can you share an instance where your enterprise faced a significant challenge due to external factors within the community, and how you go about that situation?”; “In what ways do the broader socioeconomic conditions in Soweto influence the sustainability and leadership decisions of your enterprise?”; “How do relationships with other organizations, government bodies, or community members shape the way your enterprise functions and survives in this complex environment?”; “What role do you think policy changes at the local or national level have played in either supporting or hindering your enterprise’s sustainability and resilience?” The interviews were audio-recorded to capture the participants’ responses accurately to gain insights into the practices and operations of the CBSEs.

Ethical approval for this study was granted by the Wits University Human Research Ethics Committee (non-medical). All participants provided written informed consent, were informed of the study’s purpose, assured of their right to withdraw at any time, and their responses were kept confidential to encourage honest and open communication.

3.5. Data Analysis

In the data analysis process, the interviews were transcribed verbatim, ensuring that the original spoken content was accurately captured in written form. This step is crucial in maintaining the integrity of the data and allowing for a detailed analysis to be conducted. The use of Atlas.ti software, version 24, for the analysis of the transcribed data is a common practice in qualitative research, as it provides a systematic and efficient way to manage and analyze large volumes of qualitative data. Following the transcription process, the data analysis proceeded according to Saldaña’s [66] recommended stages, including initial coding, focused coding, and theme development.

4. Findings

This section reports the findings on how complex system dynamics in marginalized South African suburbs affect the leadership and resilience of CBSEs. Our analysis explores the interaction between systemic dynamics and local contexts, revealing their critical influence on CBSE leadership. The findings presented here are organized into categories and themes (see

Table 2. Overview of the data structure.

First Order Categories	Second Order Theme
Responding to emergent challenges	Adaptive and flexible leadership
Adapting to both anticipated and unforeseen changes
Aligning operations with community needs
Adjusting to volatile funding and shifting economic demands
Adapting to policy changes
Adapting operations during COVID-19
Cross-sector partnerships	Interdependencies and network collaboration
Resource sharing
Government and municipal support
Academic and corporate contributions
Informal support from social networks
Mentorship within socio-cultural contexts
Financial support from local savings clubs
Deep understanding of local contexts	Community engagement and co-creation
Strong ties with the community
Outreach activities and workshops
Involving community in project design
Tailoring initiatives to community needs
Skills development and training	Continuous learning and feedback loops
Gathering feedback from internal and external sources
Refining programs based on feedback
Balancing community commitment and operational needs
Adapting to evolving community needs
Adapting to new regulations	Policy influence and response
Adjusting focus due to funding policy changes
Resilience during COVID-19
Compliance with grant requirements
Navigating complex policy landscapes
Strategic use of limited funds	Resource utilization and constraints
Training and development of staff
Repurposing materials
Managing operations with constrained resources
Maximizing impact through resource allocation

Source: Authors.

) that reflect the core aspects of leadership and strategy within CBSEs, offering insights into how CBSEs respond to and manage local complexities and enhancing our understanding of sustainable leadership.

The conceptual framework (Figure 2) below presents the key themes influencing sustainable leadership and resilience in CBSEs in Soweto, South Africa. It highlights the roles of adaptivity, flexibility, networking, co-creation, continuous learning, policy influence, and effective resourcing as critical components. These elements interact within complex systems, ultimately shaping the leadership and affecting the sustainability and resilience of CBSEs.

4.1. Adaptive and Flexible Leadership

Adaptive and flexible leadership is crucial for CBSEs operating within the multifaceted and often unpredictable environments of urban South Africa. This leadership style allows CBSEs to respond flexibly to the changing dynamics and challenges that arise in their operations. Our findings reveal that leaders of CBSEs frequently encounter emergent challenges that require immediate and innovative responses. The leaders highlighted the necessity of adapting quickly to both anticipated and unforeseen changes within their environments. For instance, one leader said “Leadership is really about staying on your toes in this ever-changing game. Just when you think you’ve got the rhythm, the tune changes” (CBSE01). While CBSE07 shared “Adapting isn’t just a choice, it’s our daily reality. We tweak our approaches continuously to align with what our community needs and what resources we can access. This is necessary to keep our mission on track”. The leaders of CBSEs emphasized that they operate in volatile funding environments, shifting economic demands, policy changes, and changing community needs. The researchers observed that these enterprises are immersed in a city characterized by rapid urbanization, economic variability, and cultural diversity, which present both significant challenges and opportunities. To maneuver all these complexities, the agility and adaptability of the CBSE leaders are crucial in ensuring their sustainability and effectiveness.

Adaptive leadership in CBSEs also involves not only a responsiveness to external changes but also an internal capacity to foresee and manage these changes strategically. One leader focusing on youth employment highlighted the necessity of adaptability in their operational strategy. He noted “We constantly have to tune our ears to the ground and adapt swiftly. Just last year, we shifted our training modules to include more digital skills, responding to the spike in demand nowadays. It is the only way to be relevant” (CBSE02), while a cooperative leader owning a vegetable garden responded “As a community food garden, our operations are deeply affected by changes in weather patterns and market demands. We’ve learned to be highly adaptive, shifting our crop rotations and planting schedules based on real-time weather data and community feedback. This flexibility helps us ensure a consistent supply of fresh produce to our community” (CBSE11). These quotes highlight the importance of continuous adaptation in response to labour market trends, ensuring that they remain resilient and sustainable.

Moreover, the adaptability of CBSEs often extends to more than just programmatic adjustments; it encompasses a broader strategic agility. Another leader described their experience during the COVID-19 pandemic: “Throughout the COVID-19 pandemic, we had to quickly adapt our community health outreach. Instead of our usual in-person workshops, we implemented virtual health sessions and distributed health kits to households. These adjustments were crucial to keep our community safe and also maintained our engagement at a time” (CBSE15). This instance exemplifies adaptive leadership in action, where the leader not only reacts to immediate challenges but also proactively aligns the organization’s strategy with future needs and opportunities.

These examples reflect the core principles of adaptive leadership within CBSEs—namely, the ability to anticipate changes, swiftly adjust strategies, and implement new practices that address both current and future demands. By fostering an organizational culture that values flexibility and proactive change, CBSE leaders can better manage the complexities of their environments, enhancing their resilience and long-term sustainability.

4.2. Interdependencies and Network Collaboration

The interviews conducted revealed that sustainable leadership in CBSEs is deeply influenced by the ability to leverage extensive networks of support structures. The types of collaboration and networking in the context of CBSEs vary, encompassing cross-sector partnerships, integrative collaboration, or social networks. Insights from interviews revealed the importance of building strong networks and strategic partnerships across various sectors, enhancing resource sharing, expertise, and support. These connections, combining formal and informal resources, are crucial for CBSEs to succeed in dynamic urban environments.

The leaders highlighted how these multifaceted support structures significantly enhance the resilience and operational capacity of their enterprises. The collaborations with government institutions, municipalities, academic entities, and private companies provide crucial support that enables these leaders to manage the legal, financial, and managerial complexities inherent in running a social enterprise. For instance, one leader operating a clothing and textile business described the impact of such support, noting “SEDA (Small Enterprise Development Agency) has been a game-changer for us. When we started, we barely understood the legalities of running a cooperative. SEDA provided us with clear policy guidelines and legal advice, making our journey smoother. Their workshops on business management were invaluable” (CBSE04). This testimony emphasizes the vital role that formal support plays in building the foundational knowledge and skills necessary for sustainable operations. The leaders shared experiences of how these resources not only provided the necessary capital to initiate projects but also equipped them with crucial financial management skills critical for long-term sustainability. As one CBSE manager expressed, “As a young entrepreneur, securing funding was my biggest hurdle. NYDA’s (National Youth Development Agency) funding program helped us kickstart our project. They offered not just funds, but also financial management training, which was crucial for us to sustain our business in the long run” (CBSE06).

Local government initiatives were also pinpointed as a key actor in enhancing the adaptability and reach of their projects. For example, a cooperative project manager (CBSE12) detailed their positive interaction with the Johannesburg City Parks and Zoo (JCPZ), which facilitated access to municipal tenders and provided practical training, thus opening up new avenues for business growth and community engagement. Similarly, the leaders utilized academic and corporate contributions such as the South Africa SME Fund and the Gordon Institute of Business Science’s Entrepreneurship Development Academy, which runs the Social Entrepreneurship Programme (SEP) (CBSE05), and corporate social investment (CSI) funding (CBSE02 and CBSE10), which were highlighted as key contributors through funding and mentorship supporting SEs beyond government initiatives.

A founder and CEO of vocational training and skills development CBSE detailed the profound benefits of strategic partnerships with corporations. “Our alliance with [Corporate Name] merges our social objectives with their CSR initiatives, significantly boosting our projects through their CSI funding, expertise, and the hands-on involvement of corporate volunteers” (CBSE10). The leader emphasized how this collaboration enriches their resources and integrates their efforts with the corporate workforce, dynamically propelling their community initiatives forward.

Apart from the formal support and network structures, the interviews revealed that the informal support structures within CBSEs are popular and represent a diverse array of non-institutionalized assistance. These structures range from deeply rooted social networks to communal support systems, including family, friends, community networks, mentorship programs, and knowledge sharing with other CBSEs. Studies have shown that such support structures serve as a substitute for weak formal institutions [67,68]. CBSEs can access valuable resources, information, and emotional support while fostering a sense of belonging and solidarity among CBSEs, creating a supportive ecosystem that builds resilience.

A director of youth skills development and employment training at CBSE elaborated on the importance of these networks: “We rely on each other, avoiding traditional banks for a more personal, interest-free approach to financial support” (CBSE02). Similarly, a cooperative founder said “But the department does not have money to buy tools for the cooperatives. So, we share our tools with other coops. But these are only hand tools” (CBSE08). Another salient example is the local savings club, which one SE founder described as a crucial lifeline for their business, saying “Our local savings club has been a lifeline for my business, providing both financial support and valuable advice” (CBSE07). This statement highlights the critical role of informal financial systems like savings clubs, “stokvels”, or microcredit, which are not just monetary aids but also sources of communal knowledge sharing.

Networking and collaboration in CBSEs often extend beyond mere cooperation and resource sharing; they are vital tools for mentorship, which is particularly significant within the socio-cultural contexts of townships like Soweto. Here, mentorship is deeply integrated into the community fabric, enhancing both personal growth and organizational trust. A founder of horticulture and waste recycling posits that “My mentor, with years of experience in our community, guided me through tough decisions, and since he is trusted by the community helped us to also build trust with the community” (CBSE08). Furthermore, support from the community is well laid by a cooperative maintaining parks and doing waste management: “The support we received from our community in waste collection has been phenomenal. Their trust in our initiatives is the backbone of our success. It’s more than just a service; it’s about taking pride and ownership in our local environment” (CBSE12). These informal support systems, as vividly illustrated by the experiences of Soweto’s residents, transcend mere structural frameworks. They embody the spirit and resilience of the community, offering more than just financial aid but also serving as vital sources of guidance, overall support, and collective wisdom.

Through these insights, it becomes evident that successful leadership in CBSEs is largely dependent on the ability to effectively harness and utilize a broad spectrum of supportive relationships and resources.

4.3. Community Engagement and Co-Creation

The influence of the community context was a dominant theme affecting sustainable leadership. Leaders expressed how deep understanding and integration into their local contexts were crucial for their effectiveness and longevity. Most CBSEs maintain strong ties with the community they serve, a foundational element that greatly enhances their resilience. These community connections are vital for the organization’s ability to understand local needs, tailor its initiatives, and foster meaningful change. This is evident from the interview responses provided, highlighting the positive impact of community engagement and support. For instance, the Director of community health outreach programmes and women empowerment responded “I am convinced that our role in the community is crucial because we serve the community we come from—a community we deeply understand. And in turn, they understand us too; they get our methods because we’re coming from this community” (CBSE15). This quote emphasizes the importance of being part of the same community, which allows the organization to understand the community’s unique needs, challenges, and preferences.

The organization also actively engages with community members through various outreach activities, workshops, trainings, and events. CBSE01 Director continued to emphasize that the board members are well equipped to carry the organization’s vision forward, ensuring alignment with the community’s values and goals. The Director of youth skills development and employment training pointed out “We started back in 2009 with a clear focus on empowering the youth through skills development. By closely working with local schools and community centres, we tailor our training programs to meet the actual career aspirations and job market needs of the young people in our community” (CBSE02).

Co-creation has emerged as a critical strategy for building resilience within these organizations. The majority of the leaders highlighted that they involved community members in the design and implementation of projects or through collaborative decision-making. Respondent 1 explained that, rather than imposing preconceived solutions, the organization actively seeks input from the community to design programs that are relevant and impactful. She explained, “We work with communities, we go to them. The way our programs are structured is that we do not impose what we want to do with them…. we tell them about our services, and we find out from them how they would want to be assisted” (CBSE15). Co-creation sessions lead to solutions that are tailor-made for specific community challenges, often revealing innovative approaches that the management alone might not have considered.

4.4. Continuous Learning and Feedback Loops

The role of continuous learning and feedback loops in CBSEs cannot be understated, especially when addressing the skills and training challenges they face. For instance, one leader noted the transformative impact of skill enhancement programs: “Our workers did not even know how to work with a spade,” (CBSE08), highlighting the basic level at which training begins. Another leader reflected on their personal growth: “When I started this, I didn’t know how to make compost… I just knew that vegetables come from the ground”, illustrating the learning curve involved in managing a CBSE (CBSE11).

The significance of such training extends beyond individual skill enhancement to the overall sustainability and scalability of CBSEs. The lack of foundational business and technical skills was frequently cited as a barrier, with one participant articulating “Most of our workers join the organization with no experience or training. Look here, we love our community and we hire most of our workers from here, but as a business, this is risky if we want to succeed…..we have made it our priority to continuously train them, especially since our textile industry is very competitive and so we train them with technical skills not only covering sewing and design but also the business aspects of running a sustainable business” (CBSE09). This highlights the complexity of balancing between community commitment and operational needs, emphasizing a strategic investment in human capital, which is expected to have a long-term positive impact on both the organization and the community it serves.

The leaders pointed out that feedback mechanisms were crucial for the continuous improvement of the enterprises. This could range from internal sources such as employees, volunteers, leadership, and operational processes, which assess program effectiveness and organizational efficiency, to external inputs from community members, beneficiaries, partners, and funders, enhancing strategic adjustments and collaboration. As one leader expressed, “We use post-training surveys to gather feedback after every session, helping us understand the impact of our courses and continually refine our programs to meet our learners’ evolving needs” (CBSE02), while a CBSE working on women empowerment said “We constantly listen to the women we help to make sure our programs work for them. Their feedback guides us in fine-tuning our efforts, making sure we’re truly empowering them to lead better lives” (CBSE15).

In summary, the interplay of innovative solutions and continuous learning processes within CBSEs highlights their adaptability and resilience in complex systems. These capabilities are essential for not only confronting the current challenges but also for laying a foundation for future sustainability and growth.

4.5. Policy Influence and Response

Our research highlights the significant role that both internal and external policies play in shaping the operations of CBSEs in Johannesburg. The leaders within these organizations demonstrate adept navigation through complex policy landscapes, crucial for maintaining operational viability and compliance. For example, one leader mentioned “When new regulations come into play, we have to change quickly to align with them without losing sight of our mission” (CBSE10). This adaptability is essential for sustainable leadership, reflecting the dynamic interplay between CBSEs and regulatory frameworks.

Furthermore, changes in funding policies often compel CBSEs to adjust their focus and strategies. The executive director of a CBSE noted “Recently, our main funder shifted their support towards environmental sustainability projects, and we had to quickly seek alternative funding to sustain our education programs. Since then we are seriously considering ways of diversifying our funding base” (CBSE13). Compliance with funding and grant requirements also demands flexibility, as changes in grant conditions require CBSEs to adapt their spending and reporting to continue securing necessary resources.

On another note, the COVID-19 pandemic policies tested the resilience of these enterprises further, particularly those providing essential services like counselling. Adapting swiftly, a counselling coordinator described their response: “The lockdown forced us to rethink how we deliver support. We couldn’t have our usual office sessions, so we switched to in-home counselling, ensuring we could maintain privacy and safety for the women we help. It was a swift change, driven by necessity, but it allowed us to keep offering crucial support during such a critical time” (CBSE15). This quick adaptation to health safety regulations exemplifies the CBSEs’ ability to modify service delivery in crises.

These findings reveal that the sustainable leadership and resilience of CBSEs are profoundly influenced by their capacity to manage and adapt to policy changes, ensuring their activities remain relevant and compliant within their operational environments.

4.6. Resource Utilization and Constraints

Effective resource management is another theme that emerged strongly from the in-terviews. The leaders spoke about the challenges and strategies related to managing both human and material resources in constrained environments. For example, a leader explained the critical nature of resource optimization: “Every resource counts in our operation; strategic use of limited funds and materials is crucial for our survival and impact. We’ve become experts at stretching every rand to its limit” (CBSE14). Another leader, running a community education program, emphasized the importance of human resource management: “Our staff are our most valuable asset. We invest heavily in training and development to ensure they can deliver maximum value to the community, despite our financial constraints.” (CBSE13). From Soweto, a director of a food security initiative shared their approach to material resources: “We repurpose everything we can. Whether it’s reusing water for our vegetable gardens or finding second-life uses for donated materials, we ensure nothing goes to waste” (CBSE11).

These quotes from leaders of CBSEs across South Africa reflect their continuous effort to manage resources effectively. They illustrate a commitment to maximizing their impact through strategic resource allocation and adaptation, ensuring that their operations remain sustainable and aligned with the needs of their communities.

5. Discussion and Conclusions

This study has explored the complex dynamics of CBSEs in marginalized suburbs of Johannesburg, focusing on how these dynamics influence sustainable leadership and resilience. The findings reveal adaptive and collaborative leadership as fundamental in managing the intricacies of operating within these challenging environments.

5.1. Interpretation of the Findings

The adaptive leadership styles observed in CBSEs align well with the principles of CSLT, which emphasize the importance of adaptability and responsiveness in complex, interconnected systems [26]. The leaders in this study demonstrated a capacity to adapt and innovate in response to external changes and internal challenges, a key trait necessary for dealing with the complexities of urban South African communities. This adaptability not only supports organizational sustainability but also enhances community resilience, critical in settings characterized by socioeconomic instabilities.

Reflecting on the concept proposed by Onyx & Leonard [39], we see leadership of emergence within these CBSEs, where leadership is not centralized in a specific manager or CEO but rather emerges throughout the organization as a positive influence, novelty, and outcome. This emergent leadership is particularly effective in settings that require rapid adaptation to changing circumstances prevalent in cities like Johannesburg and highlights the importance of distributed leadership capabilities across the organization.

Moreover, the emphasis on community engagement and co-creation mirrors the insights by Sengupta et al. [53], who highlighted the importance of cultural and contextual understanding in leadership within their communities. This approach is also reflective of the broader trends in sustainable leadership, where the focus is on long-term viability and community-centric practices [20,53]. It aligns with the sustainable leadership model, which integrates economic, social, and environmental goals into organizational decision-making processes, echoing the principles highlighted by [42]. This study extends this notion by demonstrating that, in urban CBSEs, leaders must also engage actively in co-creating solutions with their communities, thus incorporating a broader, more inclusive approach to leadership [8].

The leaders’ emphasis on continuous learning and the integration of feedback loops are essential for the evolution and adaptation of CBSEs. This finding resonates with the literature on complexity leadership, which suggests that continuous learning is crucial for organizations operating in dynamic and uncertain environments [46,48]. The feedback mechanisms allow organizations to remain agile and responsive to both internal and external changes, supporting the adaptive capabilities necessary for long-term sustainability [19]. Furthermore, the influence of policies on the operational dynamics of CBSEs was evident, with leaders demonstrating a high degree of adaptability to changing regulatory environments. This aspect of the findings underlines the complex interplay between leadership and policy environments, highlighting the need for leaders who are not only reactive but also proactive in anticipating and responding to policy changes [9].

The interplay between leadership, resilience, and community engagement explored in this study complements the findings by Piwowar-Sulej and Iqbal [38], who argued that sustainable leadership must integrate economic, social, and environmental goals to ensure long-term success. Our findings extend this by showing how these integrations are manifested in the daily operations of CBSEs, especially within marginalized urban contexts.

5.2. Theoretical Implications

The findings from this study challenge traditional leadership models that often emphasize hierarchical, top-down approaches. Instead, they highlight the effectiveness of emergent, distributed leadership practices that encourage resilience and adaptability [26,27,32]. This supports the expansion of CSLT into the field of SEs, suggesting that these complex adaptive systems benefit significantly from leadership that can harness collective intelligence and foster collaborative networks.

5.3. Practical Implications

For policymakers and practitioners working with CBSEs, these insights highlight the importance of supporting leadership development initiatives that focus on adaptability, community engagement, and co-creation. Policies should aim to strengthen these aspects, potentially through training programs that enhance leaders’ abilities to manage change and uncertainty effectively. Additionally, fostering environments that encourage network collaboration and resource sharing can amplify the impact and sustainability of CBSEs in these urban areas.

For stakeholders within CBSEs, embracing a leadership approach that is adaptive, participatory, and responsive to the nuances of their operating environments can enhance their impact and sustainability. Training programs that focus on developing these skills will be crucial for future leaders of SEs.

In conclusion, this study not only reaffirms the relevance of CSLT in understanding the dynamics of leadership within CBSEs but also expands it by integrating the essential elements of co-creation and community engagement. These findings offer valuable insights for both theory and practice, suggesting a nuanced approach to leadership that is suited to the complex challenges of marginalized urban settings.

5.4. Limitations and Future Research Directions

This study acknowledges several limitations that may affect the interpretation and generalizability of the findings. Firstly, the small sample size of 15 CBSE leaders in Soweto limits the diversity of the leadership experiences captured. Additionally, focusing solely on Soweto restricts the transferability of results to other urban or rural settings with different socioeconomic and leadership dynamics. Future research should aim to expand both the sample size and geographic coverage, including other urban and rural areas, to enhance the robustness and generalizability of the findings.

Secondly, the use of a qualitative approach, while valuable for capturing in-depth insights, is inherently subject to subjective interpretation and may introduce bias in the data analysis. Future research should consider incorporating quantitative methods alongside qualitative approaches or conducting longitudinal studies, which would provide a more balanced perspective, offering both immediate and long-term insights into CBSE leadership and sustainability.

In conclusion, while the study offers valuable insights into CBSE leadership and resilience in Soweto, addressing these limitations through expanded samples, geographic diversity, and mixed-method approaches could provide a more comprehensive and generalizable understanding of the interaction between complex systems and sustainable leadership, contributing to the resilience and sustainability of CBSEs.