Social Business: Ridding The World Of Its Evils One Misfortune At A Time.
Muhammad Yunus’ “Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs” is a book that discusses Yunus’ idea of a “social business”, his numerous collaborations with companies in order to rid poverty in some form from the country of Bangladesh, and also advice on how to formulate and get your very own social business out there. The idea of social business began when Yunus was teaching Economics in the country Bangladesh in the early seventies, when Bangladesh was going through a very hard patch in its history. After the War of Liberation, there was an endless amount of destruction caused by the Pakistani army. Along with this were floods droughts, and monsoons. These inadequate conditions resulted in a large part of the country living in famine. Yunus saw what was happening and decided he needed to do something to help. He began spending time with those living in the neighbouring village Jobra, and made some shocking discoveries. He discovered individuals from the village were taking loans from a moneylender and trader, and that the interest rates on these loans were very high, at 10 percent per week. He saw that these loans made these individuals slaves to those that leant them the money. He then made a list of all those who had borrowed money. There were 42 people on this list, and the cumulative total of these loans came to 856 taka, which translates into 27 dollars American. Yunus decided he would free these individuals from their poverty and took the money out of his own pocket to pay their loans. This led Yunus to become a guarantor for loans, and he then took his idea and went big and opened a bank for the poor, and created microcredit that lifted countless numbers of families out of poverty. Yunus mainly worked with the poor to help them out of poverty, and through the years he has combined his idea of social business with companies such as Adidas, Danone, Veolia water, and many more. Countless social businesses have been created and poverty is decreasing, slowly, but surely. The types of inequality Yunus mainly dealt with economic inequality, as well as gender inequality. Economic inequality is on more of a global scale, the gender inequality he dealt with took place in the village and the reason he loaned money to mostly women, because all other conventional banks refused to lend money to women, and this way their children would benefit from the money directly. In his book he tries to answer the seemingly impossible, how to end poverty. Yunus’ ideas began first and foremost on his own selflessness. His internal need to help others was the motivation for the beginning of his social businesses. Yunus, along with Hans Reitz created the Seven Principles of social businesses. The Seven Principles of social businesses are as follows: 1. The business objective it to overcome poverty, or one or more problems (such as education, health, technology access, and environment) that threaten people and society—not to maximize profit. 2. The company will attain financial and economic sustainability. 3. Investors get back only the invested amount. No dividend is given beyond the return of the original investment. 4. When the investment amount is paid back, profit stays with the company for expansion and improvement. 5. The company will be environmentally conscious.
6. The workforce gets market wage with better-than-standard working conditions. 7. Do it with joy!!! (Yunus, 2010).
These principles are what Yunus believes to be the core of social businesses. When he meets with new investors or possible business partners to discuss social business they enlighten them about the seven principles as well....