Building Social Business: A quick Review

Last year I got “Building Social Business” by Nobel Laureate Muhammad Yunus. I knew him as an economist and Founder of Grameen Bank, Bangladesh. But after reading this, I got more interest on his writing. During the recent NE Book Fair I purchased his Biography and now searching “Creating a World Without Poor”

Let’s have a quick overveiw on “Building Social Business”: Micro credit pioneer Professor Yunus introduced a new business model and termed it as ‘The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs’. Professor Yunus unearth the idea Social Business when the capitalism witnessing its worst form. His idea of social business is quit different from conventional money making businessmodel as well as NGO and CSR (Corporate Social Responsibility).

NGO and other charitable organizations are mainly dependable on the donation, so as soon as the donated amount is utilized they have to wait for another donation. In this way they are fully dependable on the will of the donators. But in social business model, the company revolves the invested amount. This recycling process gives maximum outputs (social outputs) and after a certain period of time the investors can get back their invested amount. This also encourage the maximum investors to invest on the social business ventures to change the world not to make money.

The Social Business is aimed to address a particular social problem like poverty, illiteracy, health, malnutrition etc, not to maximize profit. Professor Yunus has given the example of Grameen Danone. The ventures was started by Grameen and Danone group to address the malnutrition of Bangladeshi children. The company is providing low cost Shakti Doi to the poor children of Bangladesh at a affordable price. Grameen group has started many other ventures on Social Business model to address the social problems. The Social Business runs on ‘no loss, no dividend’ basis, where the owner or the investor gets no profit and get-back the invested amount over a certain period. Professor Yunus said that there a numbers of people in our society, whose are concerned about the poverty and other social problems and they have a burning desire to work for development of the society and alleviate poverty. The owner or the investor of a Social Business Venture get mental satisfaction in lieu of financial gain. Professor Yunus also urges that the concept of Social Business has opened a new avenue for investment diversification. Professor Yunus also proposed a separate stock exchange for the social business. He is optimist that people will purchase a share through social stock exchange to change the society not to gain financial benefit.

Professor Yunus has taken seven principles of Social Business:

1. The business objective is 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 their invested amount. No dividend is given beyond the return of 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 work force gets market wage with better-than-standard working conditions.

7. Do it with jay!!!

Though the book talks about business and all, yet the reader gets a satisfaction and eagerly waits for the next chapter. The language and description is vivid. Interestingly the writer catches up readers state of thinking.

Published in an online journal on 4/2/12

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