Social Business & its Chemistry
Imagine a genie that has enormous power, enormous capacity but confined into a tiny jar than he has no more power, no more capacity. In this way all human being specially poor people confined by their social and economic status since they have much potential as anybody else to contribute society to make change but our current economic system doesn’t give them chance. That creates problems like poverty, unemployment and carbon emission.
As I told the problem lays on our current economic system. Our global economic system recognizes one type of business – business to make profit and this theory driven by the Selfish part of a human being.
No doubt human being is selfish being but at the same time they are selfless being too. If only selfish part works there wouldn’t be no Church, no mosque, no charity, and no philanthropy.
The social business is motivated by the selfless part of human being It’s kind of enterprise dedicated to solving Social problems around us.
As Nobel Laureates Professor Muhammad Yunus who is the Father of Social Business Says “making money is happiness but make other people happy is super happiness”
Any business can be a social business if it follows the seven principles
1. The main objective is to overcome one or more social problems like poverty, education, health, environment instead of maximize profit.
2. Financial and economic sustainability ( You have to follow the market mechanism to make the business sustainable )
3. Investors get back their investment amount only. No dividend is given beyond investment money. ( If you invest $100 you can take $ 100 only when the business be able to pay you the same)
4. When investment amount is paid back, company profit stays with the company for expansion and improvement. (No one can take profit gained from the business. Since you are working to address a particular social problem if the business expand well the problem will be solving accordingly)
5. Gender sensitive and environmentally conscious. (Your business couldn’t create a problem for solving a social problem. So you have to be award)
6. Workforce gets market wage with better working conditions. ( Worker have to working happily)
7. Do it with joy! (You have to do this business for joy. Not for grabbing profit into your pocket)
Social Entrepreneurship vs Social Business
1. Very broad idea
2. Any innovative idea that helps people may be described as social entrepreneurship.
3. The initiative may be economic or non-Economic, for profit or not for profit.
4. All social business is social entrepreneurship but all social entrepreneurship are not Social Business
Why Social Business?
Government has much power to solve social problems than anyone else but if this approach were effective, the problem would have been solved long ago The core duty of a government to make and enforce law for the wellbeing of the country. Suppore government makes Traffic rules. The rules can make a place for small cars, trucks, buses even for rickshaw in a global highway. But what about the millions of people who don't have modest vehicle?
We have to think that rather than government. Government has many limitations like, Inefficiency, corruption, politics.
1. Relying on donations create another problem. The good initiative may be stopped due to lack of fund.
2. Where the social needs are greatest the resources available for charity are usually very small. It's quite difficult to get donations from richest country where they may never have visited, to benefit people they will never know.
1. Week CSR- Don't harms people or the planet unless it means sacrificing profit.
2. Strong CSR- Do good for people & the planet as long as you can do so without sacrificing profit.
Where will the money come from to create a business has no intention of generating profit?
1. One source is the money that currently goes to support philanthropy (In USA the annual revenue of non-profit org. in a recent year amounted to over $ 1.1 trillion)
1. Nonprofit organization
2. Divert some of money from profit making business to Social Business
3. Government Social program Fund
1. Danone: to solve malnutrition by selling affordable yogurt
2. Veolia Water: To solve arsenic water problem by selling affordable pure drinking water.
3. BASF Grameen: To solve mosquito borne disease by producing mosquito net