Sweets and Sours of Social Business
SWEETS AND SOURS OF SOCIAL BUSINESS: A CASE STUDY ON GRAMEEN DANONE FOODS LTD.
Mehdi Hussain, Dr. Abdul Hannan Chowdhury and Bashir Hussain
The number of people suffering from severe undernutrition and food insecurity recently reached one billion, and most of those affected live in developing countries (Lean, 2009). The economic and financial crisis is stimulating discussion about the future role of business in case of major social problems likes hunger. There is growing acceptance of the need to develop new business models that simultaneously generate financial profits critical for long-term growth and improve both population health and the environment — PepsiCo CEO Indra Nooyi (2007) terms this "performance with purpose, Bill Gates, (2008) Chairman of Microsoft and Co-Chair of the Bill and Melinda Gates Foundation, calls it "creative capital-ism," and Muhammad Yunus, (2006) the founder of Grameen Bank, refers to the evolution of "social business” that address the most pressing problems of the society with a self-sustainable business model. A social business is a non-loss, non-dividend company with a social objective. The intention is not to make money for oneself, but to solve a problem,” says Yunus. In a social business an investor aims to help others without making any financial gain himself. A social business is a business because it must be self-sustaining—it must generate enough income to cover its costs. It is outside the profit-seeking world but the goal is to solve a social problem using business methods like the creation and sale of goods and services. There are two kinds of social businesses, Type I and Type II.
Type I Social Business
This kind of social business is a non-loss, non-dividend devoted to solving social problem and owned by investors who reinvest all profits in expanding and improving the business. The investors can take back their original investment over a period of time, but cannot take any profit (Yunus, 2010).
Type II Social
Mehdi Hussain, Dr. Abdul Hannan Chowdhury and Bashir Hussain
The number of people suffering from severe undernutrition and food insecurity recently reached one billion, and most of those affected live in developing countries (Lean, 2009). The economic and financial crisis is stimulating discussion about the future role of business in case of major social problems likes hunger. There is growing acceptance of the need to develop new business models that simultaneously generate financial profits critical for long-term growth and improve both population health and the environment — PepsiCo CEO Indra Nooyi (2007) terms this "performance with purpose, Bill Gates, (2008) Chairman of Microsoft and Co-Chair of the Bill and Melinda Gates Foundation, calls it "creative capital-ism," and Muhammad Yunus, (2006) the founder of Grameen Bank, refers to the evolution of "social business” that address the most pressing problems of the society with a self-sustainable business model. A social business is a non-loss, non-dividend company with a social objective. The intention is not to make money for oneself, but to solve a problem,” says Yunus. In a social business an investor aims to help others without making any financial gain himself. A social business is a business because it must be self-sustaining—it must generate enough income to cover its costs. It is outside the profit-seeking world but the goal is to solve a social problem using business methods like the creation and sale of goods and services. There are two kinds of social businesses, Type I and Type II.
Type I Social Business
This kind of social business is a non-loss, non-dividend devoted to solving social problem and owned by investors who reinvest all profits in expanding and improving the business. The investors can take back their original investment over a period of time, but cannot take any profit (Yunus, 2010).
Type II Social
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