SEMINAR

BUILDING SOCIAL BUSINESS

COURSEWORK SUBMITTED TO AIU
 Table of Contents

TITLE Page Number

Cover Page ------------------------------------------------------------1

Table of Contents ----------------------------------------------------2

Title Page ---------------------------------------------------------------3

Introduction ------------------------------------------------------------4

Description -------------------------------------------------------------5

General Analysis -----------------------------------------------------6

Discussion -------------------------------------------------------------9
 Eric Akpo

ID:UM51636SAR60592

COURSE NAME

CMS-021: SEMINAR ADMINISTRATIVE DEVELOPMENT |

BUILDING SOCIAL BUSINESS

SUBMITTED BY:

ERIC AKPO (ID:UM51636SAR60592)

AS A REQUIREMENT FOR THE AWARD OF A MASTERS DEGREE IN

ARCHITECTURE

SUBMITTED TO:

ATLANTIC INTERNATIONAL UNIVERSITY

 INTRODUCTION

This seminar which is based on the book; Building Social Business

written by Mohammad Yunus attempts to exhibit my own understanding
and opinion about the author’s concept of Social Business as a new type
of capitalism. It is not a full review of the book, but an x-ray of the subject
with a view to critically analyse it in comparison to other forms of
businesses targeted at the poor, needy and vulnerable populations in
our communities.

Yunus in the book tries to differentiate Social Business from other profit
making and profit taking organisations focused also on the poor and
vulnerable. He further makes an effort to explain how even though
Social Businesses can make profit; the proceeds therefrom must be
reinvested for the social cause or interest of the business.

He also identifies how a social business is similar to any other capitalist

business out there, how economic or market forces also influence the
success or operability of a social business.

Social businesses are designed to meet certain needs while at the same
time better the welfare of the needy and the poor for whom the business
is designed to serve.

Readers are encouraged not compulsorily to start new businesses but to

convert their existing businesses into social business for it is said that
“service to humanity is the best work of life”(a clause in the JCI Creed).
 DESCRIPTION

If man’s needs were not endless, and perhaps, if all men or all of
humanity have in perfect measures all of what they need, then, there
would be no need for a social business. Yunus and Weber (2010, cover
page) refer to Social Business as “the new kind of capitalism that serves
humanity’s most pressing needs”.

The importance of social businesses is highlighted by the common

economic cliché or principle that human wants are permanently
insatiable. And because the degree of needs vary from person to person
and some classes of persons lack the purchase power to afford their
own basic needs necessary for daily existence, it becomes ultimately
necessary to fill the vacuum of necessity by creating a social business to
carter to the needs of the poorest of the poor and the vulnerable. Yunus
(2011, pg.vii) goes on to describe a social business as “a kind of
business dedicated to solving social, economic and environmental
problems that have long plagued human kind.

One can rightly say that social business is driven by the determination to
do something at least to stand in the gap be useful to people in need.
For Yunus (2010, pg. vii), he says “I gave up my academic position and
founded a bank – a bank for the poor.” Yunus started a bank as a social
business propelled by his own personal poverty experience and has
remained on that path as clearly detailed in his book. He named the
bank “Grameen Bank – or Village Bank”, Yunus (2010, pg.x)

Yunus’ passion and commitment to his social business was spurred by

the excitement he generated when he redeemed people in a town
known as Jobra from the clutches of debt which had enslaved them to
money lenders.
 GENERAL ANALYSIS

It is worthy of note that Yunus’ Grameen Bank has stayed sustainable

despite giving loans only to the poorest of the poor and the most
vulnerable of people who ordinarily are classified as non-creditworthy.
The bank helps to convert beggars to entrepreneurs who deliver goods
and services to people in their homes. According to Yunus (2010),
Grameen Bank accommodates over 100,000 converted beggars under
this programme. In the like manner, over 50,000 students are able to
fund their education with support from Grameen Bank. These students
are committed to be employers of labour as entrepreneurs after
graduation and never to be job seekers, Yunus (2010).

Those who borrow from Grameen Bank are the source of funds for the
bank as they are expected to save a certain amount every week. With
this approach, jointly they have a deposit base of over 500 million USD,
Yunus, (2010).

Understandably, Yunus (2010) believes that the poor did not choose to
be poor, they did not invent poverty, poverty happened to them
circumstantially, therefore, there is more about people’s individual
potentials. That everybody is born physically and perhaps mentally
equipped to care for themselves is not a question, but the reality is that
some have the privileged chance to explore and exhibit these potentials
and some do not; they chance does not just happen to them.
 ACTUALIZATION

In Yunus (2010, pg.xiii), Yunus gives a very strong illustration with the
Bonsai tree whose seedling grows exact replica of the mother tree only
difference being in size of the tree as a function of the size of land base
in which it is planted, the growth potential of the tree is limited by the
size of its growth environment.

Yunus (2010, pg. xv) establishes that all of the world’s global crises such
as financial crises, food crises, health care crises etc are all by-products
of “a fundamental flaw” in “the theoretical construct of capitalism”. He
explains this by stating that human nature is misrepresented in
capitalism, he frowns at the notion that humans are only engaged in
business in a one dimensional nature just to make profit. He argues that,
humans are naturally multi-dimensional and that their source of
happiness couldn’t only be by making money but from many other
diverse sources.

A social business is characteristically different from other non-

governmental organizations and those classified as social enterprises
which are known to rely basically on philanthropy or charity or that
maximize profit and then embark on socially responsible projects as a
show of social responsibility, Yunus (2010). On the contrary, “a social
business is completely outside the profit-seeking world”, Yunus (2010,
pg. 1). [Emphasis mine].
 DISCUSSION

The core objective a social business is to meet a social need as

deduced from the text, applying business methodology to achieve this
which also includes provision and marketing of products and / or
services. Creatively, such goods and services could, in the first instance,
be tailored as a solution to a social problem, these product is then sold
at a very affordable rate to the poor populations for an income which is
then reinvested either to meet the same need or to address another still
in tandem with the social responsibility of the social business. Yunus
(2010) exemplifies this in the case of Grameen Veola Water which is
designed to rescue the people from the danger of consuming the
available Arsenic contaminated water but sold at a price affordable by
the poor.

Yunus (2010) identifies two types of social businesses as;

a. Non-loss, non-dividend company; and

b. A profit making company owned by the poor people either directly
or through a trust.

Quite interesting to note about a social business is the fact that the
company is environmentally conscious. And also the guarantee that the
workforce gets a market wage which Is better off than the prevailing
market standard.

Yunus (2010, pg. 3) says, “Social Business is all about joy, once you get
involved with it you continue to discover the unlimited joy in doing it.

In a country like mine (Nigeria), with a high rate of unemployment, social

businesses would thrive and would boost the country’s GDP.
It is emphatically stressed that social enterprise and social
entrepreneurship and other like terms are completely different in concept
from what Yunus (2010) refers to as a social business even though they
are all focused on addressing poverty and other social problems. The
understanding and clarity of this is put clear when one clearly outlines
the main objectives of a social business; to my understanding, solving a
biting social problem rather than profit making is the core objective of a
social business while an entrepreneurship or an enterprise is centred on
a proprietor who is in business for profit and personal enrichment.

It is worthy of note as opined in Yunus (2010) that social businesses

could also take profit but only on the grounds that the profit must also
revolve within the company to enhance and expand the social impacts of
the company.

Legal and tax rules may apply depending on the country where business
is established, Yunus (2010).

Beneficiaries of a social business tend to receive more respectful and

dignifying treatment and they are sometimes, the masters of the
business. Yunus (2010).

A legal business is more like seeing a need and taking the lead to meet
that need and then keeping the process sustainable.
 GENERAL RECOMMENDATIONS

Yunus (2010) justifies his inclination to social business by arguing on

moral grounds that he believes it is immoral to make and take profits.
And even worse for me, to maximize profit, and particularly that majority
of the consumers from which these profits are usually the poor masses.
It is saddening of course to think that due to high profit margins, some
poor people cannot afford their basic needs and thereby suffer want and
for the little they could afford, some entrepreneur makes huge profits
and the commoner suffers.

It is established and I concur with entrepreneur makes huge profits and

the commoner suffers.

It is established and I concur with Yunus (2010) that Social businesses

operate within the same sphere as other capitalist businesses and must
also prepare to respond effectively to market challenges.

I also agree that the determination to start a social business is driven by

one’s personal determination to create a positive change.

It is agreeable also that the success of a social business depends

wholely on its’ positive impact on the target people; if a social business
gives hope and a new lease of life to its beneficiaries, then you can be
sure of itys sustainability and growth.

The Grameen Danone Shokti Doi Yogurt exanple, Yunus (2010),

typically exhibits that economic realities and change in market conditions
can also affect a social business like they do any other capitalist venture.
The concept of the Shokti Doi Yogurt was effective because it addresses
a common malnutrition problem amongst children in Bangladesh.
 CONCLUSION

In conclusion, one of course agrees that there is a need the adopt social
businesses on the basis of Yunus’ (2010) moral justification, with a focus
not on profits for the initiator but with a clearly identified objective to
solve a social problem and impact positively on mankind.

It is my opinion, that Yunus (2010) in describing the concept of social

business as a new kind of capitalism has somewhat merged capitalism
with communism but in this context, the private sector driven
communism where the capitalist initiates businesses with a communist
mindset thinking of the good of the society much more than the personal
aggrandizement which follows profit making.

It is pertinent to learn from the Grameen Danone difficulties that proper

training is of essence for the success of a social business and of course
that grassroots enlightenment would promote the acceptability and
understanding of the cause of a social business.