Social Business: An idea can change the world
While sustainability has become increasingly important, the question of what the future world will be should be raised. This research paper will focus on a new way of sustainable development which may change the world. Professor Muhammad Yunus, who received Nobel Peace Prize in 2006 for his efforts and success in creating Grameen Bank aimed at offering microcredit to the poor, is the key proponent of the social business concept. This term was also first defined by Yunus in his book Creating a world without poverty —Social Business and the future of capitalism: a social business is a non-loss, non-dividend business benefiting social problems such as poverty, education, health, environment etc. Why we need social business?
The biggest failure of the capitalism, as being claimed in Yunus’s book, is that it failed to serve humanity’s most pressing needs. Some might argue that the advantage of capitalism is to satisfy human’s needs, however, the over-competitiveness of existing economic system had excessively widened the gap between the rich and poor and affects us throughout numerous social problems all over the world. A new kind of capitalism is highly appealed which can serve the basic humanity’s needs beyond the material needs—recognition, respect, love and dedication. It is widely assumed that solving social problem is not the responsibility of market but a duty of government. After all, the government is supposed to re-allocate the resources and control the society on the macroscopic scale. But facts and realities have proved that while government must play its role to alleviate problems, it alone could not eradicate them. Charity, which is rooted in basic human concern for other people, is another possible way to ease social problems. The most representative form of charity is NGOs. However, as the saying goes, giving a man fish is not better than teaching him to fish. Charity is not always the best way to eradicate problems like poverty for example. Another response to the global social problems is the claims of companies for sustainable development or the prevailing movement of Corporate Social Responsibility (CSR). The businesses are trying to contribute some social interests while conducting their business or, on the other hand, to better conduct their business through social contributions. Therefore, the business activities still mainly serve the goal of profit-making. Yunus believes, basing on the belief that the poor have inherent ability to help themselves once they are given opportunity, that poverty can be thoroughly eliminated in our lifetimes if we handle it in the right way. This had been proved in action through his experience with Grameen Bank, who received Nobel Peace Prize together with Yunus in 2006.This case will be illustrated below. Key concepts
profit-maximizing enterprises and social-benefit-maximizing enterprises coexist
Professor Muhammad Yunus, the key proponent of the social business model, argues that capitalism is too narrowly defined. The concept of the individual as being solely focused on profit maximizing ignores other aspects of life.
Essentially it is a non-loss, non-dividend business aimed at social objectives – education, health, environment, whatever is needed to address the problems faced by society. http://en.wikipedia.org/wiki/Social_business
A more commonly used and better understood concept is the related model of social enterprise. In Yunus’ book Creating a World without Poverty—Social Business and the Future of Capitalism, two different types of social businesses are proposed: * A Type I social business focuses on providing a product and/or service with a specific social, ethical or environmental goal. A prominent example is Grameen Danone. * A Type II social business is a profit-oriented business that is owned by the poor or other underprivileged parts of the society, who can...
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