EXECUTIVE SUMMARY
Internship is the one of the most
integral part of Bachelor of Business Administration. I have completed my three
month internship period made the output and input analysis of between Social
business and Social Entrepreneurship. Based on the knowledge that is gathered
from practical field and prepared my Internship report entitled “Relation
between Social business and Social Entrepreneurship”.
Social business is a cause-driven
business. In a social business, the investors/owners can gradually recoup the
money invested, but cannot take any dividend beyond that point. Purpose of the
investment is purely to achieve one or more social objectives through the
operation of the company; no personal gain is desired by the investors. The
company must cover all costs and make profit, at the same time achieve the
social objective, such as, healthcare for the poor, housing for the poor,
financial services for the poor, nutrition for malnourished children, providing
safe drinking water, introducing renewable energy, etc. in a business way. The
impact of the business on people or environment, rather the amount of profit
made in a given period measures the success of social business. Sustainability
of the company indicates that it is running as a business. The objective of the
company is to achieve social goals.
Social entrepreneurship in modern
society offers an altruistic form of entrepreneurship that focuses on the
benefits that society may reap.Simply put, entrepreneurship
becomes a social endeavor when it transforms social capital in a way that
affects society positively. [2] It is viewed as advantageous because
the success of social entrepreneurship depends on many factors related to
social impact that traditional corporate businesses do not prioritize. Social
entrepreneurs recognize immediate social problems, but also seek to understand
the broader context of an issue that crosses disciplines, fields, and theories.
[6] Gaining a larger understanding of how an issue relates to society
allows social entrepreneurs to develop innovative solutions and mobilize
available resources to affect the greater global society. Unlike traditional
corporate businesses, social entrepreneurship ventures focus on maximizing
gains in social satisfaction, rather than maximizing profit gains.[3]
Both private and public agencies worldwide have had billion-dollar initiatives
to empower deprived communities and individuals.[4] Such support
from organizations in society, such as government-aid agencies or private
firms, may catalyze innovative ideas to reach a larger audience.
INTRODUCTION
1.1: Introductory Thought:
Most economists and academics support the notion that
entrepreneurship is becoming a crucial factor in the development and well-being
of societies. Whether the entrepreneurial activities are practiced in
factor-driven, efficiency-driven, or innovation-driven economies (Porter &
Jhone, 2002) the
ultimate results continue to exhibit: i) lower unemployment rates; ii) increased
tendency to adopt innovation; and iii) accelerated structural changes in the
economy. Entrepreneurship offers new competition, and as such promotes improved
productivity and healthy economic competitiveness (UNCTAD, 2004).
Social entrepreneurship is the field in which entrepreneurs tailor
their activities to be directly tied with the ultimate goal of creating social
value. In doing so, they often act with little or no intention to gain personal
profit. A social entrepreneur “combines the passion of a social mission with an
image of business-like discipline, innovation, and determination commonly
associated with, for instance, the high-tech pioneers of Silicon Valley” (Dees,
1998).
The use of the term social entrepreneurship is gaining increased
popularity. However, confusion and uncertainty are constantly noted about what
exactly a social entrepreneur is and does. The term social entrepreneur is
ill-defined (Barendsen & Gardner, 2004) , it is fragmented,
and it has no coherent theoretical framework (Weerawardena & Mort, 2006) . The absence of
consensus on a research topic usually results in researchers working
independently and failing to build upon one another’s work, therefore knowledge
cannot be accumulated (Bruyat & Juline, 2000) .
The terms
'social enterprise' and 'social entrepreneurship' were used first in the
literature on social change in 1960s and
1970s.The terms came into widespread use in the 1980s and 1990s, promoted by
Bill Drayton the founder of Ashoka: Innovators for the public and others such
as Charles lead beater. To describe worker and community co-operatives that
used the 'social accounting and
audit' system developed at (Beechwood & Ashoka, 1980) – a US foundation –
where during the 1980s Bill Drayton established a program to support the
development of social entrepreneurship. Other formative influences were the
Italian worker co-operatives that lobbied to secure legislation for 'social
co-operatives' in which members with mental or other health disabilities could
work while fully recovering. The first academic paper to propose worker
co-operatives involved in health and rehabilitation work as a form social
enterprise was published in 1993.
Social business is a cause-driven business. In a social business,
the investors/owners can gradually recoup the money invested, but cannot take
any dividend beyond that point. Purpose of the investment is purely to achieve
one or more social objectives through the operation of the company; no personal
gain is desired by the investors. The company must cover all costs and make
profit, at the same time achieve the social objective, such as, healthcare for
the poor, housing for the poor, financial services for the poor, nutrition for
malnourished children, providing safe drinking water, introducing renewable
energy, etc. in a business way.
Non-profit, a Social Business is not dependent on donations or on
private or public grants to survive and to operate, because, as any other
business, it is self-sustainable. Furthermore, unlike a non-profit, where funds
are spent only once on the field, funds in a Social Business are invested to
increase and improve the business' operations on the field on an indefinite
basis. Per Yunus' quote: "A charity dollar has only one life; a Social
Business dollar can be invested over and over again."
A Social Business is sometimes used interchangeably or in
comparison to a Social Enterprise - some have described this as a spectrum,
ranging from profit-first corporations to non-profits or charities, with Social
Enterprises closer to non-profits and Social Businesses closer to for-profits.
Through this OCP report program, I come to know about the Social
Entrepreneurs of Bangladesh covering the area of school, Book Shop, pharmacy,
Community center, Laundry Service.
1.2: Objectives of the study:
Broad
Objectives:
This study is aimed at providing me
invaluable knowledge about the Social Business and Social Entrepreneurship. It
will also help me to develop my concept of Social business and Entrepreneurship
and their operations .The study undertaken as an assignment for fulfillment of
the requirement for completion of the graduation on Finance and Banking system.
Specific Objective:
The objective of the study has been categories as follows:
●To identify the history of Social Business and Social
Entrepreneurship
●To identify the similarities of Social Business and Social
Entrepreneurship
●To examine the difference of Social Business as well as Social
Entrepreneurship
●To find the some problem of Social Business and Social
Entrepreneurship and provide the sustainable solution of Social Business and
Social Entrepreneurship.
1.3: Methodology of the study:
1.3.1: Sampling Design:
This report is fully qualitative and
completed by secondary sources of data analysis. To accomplish the report
secondary data is necessary. Secondary data is collected through different files,
manual, books, statement, journals, articles, and website and so on.
1.3.2:
Methods of Data Collection:
Consider the secondary data from the
following sources:
●Different Books and Articles are written
on Social Business and Social Entrepreneurship.
● Relevant Books, Papers Publications
and Journals were regarding Social Business and
Social
Entrepreneurship policies.
● Find the data on Social Business and
Social Entrepreneurship development Organization website.
1.3.3:
Data
analysis:
Method of data analysis is for the
analysis; Person’s decision and many social organization website were used. It
is an index that describes the direction and strength of linear relationship
between two measurements, Social business and social entrepreneurship in a
collection of data and also Relevant
Books, Papers Publications and Journals regarding Social Business and Social
Entrepreneurship policies.
This research on such as important
topic is not really sufficient. Moreover this is an individual research work
where only one individual researcher need to undertaken the whole process done
alone but the time frame work did not permit me and my work done is a
scientific manner and also it is very difficult for the researcher to make a
comprehensive qualitative survey within a borrow. In all respect some
limitation and weakness remain within which I failed to escape by any means.
These are follows:
This study was limited by the availability
of the data. Unwillingness was providing data due to confidentiality. Website
of the company was not up to date gather valuable information. Most of the data
could not verify that available. Without verification have most of the data on
the company website. This study continues in such a vast are requires a big
deal in time. As new researcher I had only 3 months time, which is not enough
to me. As new researcher I had many costing and spend many times.
1.5:
Boundaries of Social Entrepreneurship:
This section distinguishes between social entrepreneurship and
other non-entrepreneurial, mission-driven initiatives. As discussed earlier,
the term social entrepreneurship is becoming more popular and is attracting
growing amount of resources. It is frequently observed in the media, used by
public officials, and is commonly referred to by academics. This is in part
because of the support social entrepreneurs are receiving from complex network
of organizations that highlight their work and contributions to society.
However, the lack of consensus on the definition of social
entrepreneurship means that other disciplines are often confused with and
mistakenly associated with social entrepreneurship. Philanthropists, social
activists, environmentalists, and other socially-oriented practitioners are
referred to as social entrepreneurs. It is important to set the function of
social entrepreneurship apart from other socially oriented activities and
identify the boundaries within which social entrepreneurs operate.
According to the Skoll Centre for Social Entrepreneurship, the
definition of social entrepreneurship should not extend to philanthropists,
activists, and companies with foundations, or organizations that are simply
socially responsible. While all these agents are needed and valued, they are
not social entrepreneurs.
1.6: Boundaries
of Social Business:
Social Business has
also invested in three poultry farms and a bakery that aim to improve access to
nutrition and necessities in a country that depends heavily on imports for
basic food and raw materials. Furthermore, the profits of these social
businesses are used to subsidize seven local schools educating over 900 children
in remote rural areas.SB has also invested in a jatropha plantation which
secures income for 200 farmers. The planting of jatropha prevents soil erosion,
and grows edible jatropha fruits that are processed into biofuel and animal
feed. Moreover, SB has partnered with multinational organizations in developing
joint venture in Haiti.
Social Business of
Albania a social business is a business whose mission is to address a social or
environmental need in a financially sustainable way. Profits are reinvested in
this or another social business.
SB, working together with the African Development Bank (AfDB)
Department of Human Development (OSHD), and financed by the Policy and Human
Resource Development Grant of Japan (PHRDG), launched a Holistic Social
Business Movement in Africa in (Jhone, 2012) . As part of this
movement, YSB and AfDB organised National Conferences on Social Business in
Tunisia and Uganda to raise awareness and they are in the midst of establishing
Social Business incubators and funds in these two countries.
The National Conference on Social Business in Tunisia took place
in March 2013, at IHEC in Carthage with the presence of AfDB
President Donald Kaberuka, Prof. Muhammad Yunus and over 500 attendees. The
National Conference on Social Business in Uganda took place in July 2013, at
Makarere University Business School (MUBS) Kampala, Uganda. Training and
workshops on Social Businesses have also been conducted for the staff of AfDB.
YSB is also planning to expand this movement into other African countries such
as Togo.
Figure 1. The
entrepreneurship spectrum illustrating the boundaries of social
entrepreneurship
1.
Non-profit with earned income strategies: a social enterprise
performing hybrid social and commercial entrepreneurial activity to achieve
self-sufficiency. In this scenario, a social entrepreneur operates an
organization that is both social and commercial; revenues and profits generated
are used only to further improve the delivery of social values.
2.
For-profit with mission-driven strategies: a social-purpose
business performing social and commercial entrepreneurial activities
simultaneously to achieve sustainability. In this scenario, a social
entrepreneur operates an organization that is both social and commercial; the
organization is financially independent and the founders and investors can
benefit from personal monetary gain.
LITERATURE
REVIEW
2.1: Defining
Social Business and Entrepreneurship:
● Social Business:
Social business is a cause-driven business. In a social business, the
investors/owners can gradually recoup the money invested, but cannot take any
dividend beyond that point.
Purpose of the investment is purely
to achieve one or more social objectives through the operation of the company;
no personal gain is desired by the investors. The company must cover all costs
and make profit, at the same time achieve the social objective, such as,
healthcare for the poor, housing for the poor, financial services for the poor,
nutrition for malnourished children, providing safe drinking water, introducing
renewable energy, etc. in a business way.
●Created and designed to address a social problem
● A non-loss, Non-dividend Company.
●It is financially self-sustainable
●Profits realized by the business are reinvested in the
business itself.
● Social Entrepreneurship:
Social entrepreneurs are individuals with innovative solutions to
society's most pressing social problems. They are ambitious and persistent,
tackling major social issues and offering new ideas for wide-scale change.
Social entrepreneurship is the attempt to draw upon business
techniques to find solutions to social problems. This concept may be applied to
a variety of organizations with different sizes, aims, and beliefs.
Social entrepreneurship is attracting growing amounts of talent, money, and
attention.
Social entrepreneurship is the field in which entrepreneurs
tailor their activities to be directly tied with the ultimate goal of creating
social value.
2.2: Principles of Social Business and Social Entrepreneurship:
Seven Principles of Social Business:
These were developed by Professor Muhammad Yunus and Hans Reitz,
the co-founder of Grameen Creative Lab:
·
Business objective will be to overcome
poverty, or one or more problems (such as education, health, technology access,
and environment) which threaten people and society; not profit maximization
·
Financial and economic sustainability
·
Investors get back their investment amount only; no dividend is
given beyond investment money
·
When investment amount is paid back, company profit stays with the
company for expansion and improvement
·
Environmentally conscious
·
Workforce gets market wage with better working conditions
·
Do it with joy
● Principles of Social Entrepreneurship:
·
Familiarity with major works in the
social entrepreneurship literature
·
Knowledge of social entrepreneurship
methods and practices
·
Understanding of laws, standards, and
guidelines applicable to social entrepreneurship
·
Experience in analyzing social
entrepreneurship dilemmas and proposing responses
·
Experience in developing or critiquing
social entrepreneurship plans
·
Familiarity with resources useful for
further investigation of social entrepreneurship
2.3: Types of Social business:
There
are two types of Social Business:
Type I
Focused on business is dealing with
social objectives only. E.g.: The product produced is for the benefit of the
poor or targeted to solve a specific social problem. Grameen-Danone is an
example of Type I social business. The Shokti Doi yogurt produced in the plant
in Bogra, Bangladesh, is fortified with micronutrients that are missing in the
poor children and it is targeted to fight malnutrition. If malnourished
children eat two cups of Shokti Doi per week for approximately 8-10 months,
they grow healthy.
Type II
Can taken up any profit maximizing
business so long as it is owned by the poor and the disadvantaged, who can gain
through receiving direct dividends or by some indirect benefits. E.g.: The
product could be produced by the poor but exported to an international market
while net profits would go towards workers benefits. Examples of Type II social
business are Grameen-Otto and Grameen Bank. Please note that Grameen Bank is
both Type I and Type II social business, as it is owned by the poor people and
it provides a financial service (microcredit – loan without collateral for
income generating activities) which was previously unavailable to poor people,
especially women.
2.4: Types of social entrepreneurship
In The Power of
Unreasonable People, John Elkington and Pamela Hartigan describe social
entrepreneurs’ business structures as falling under three different models,
applicable in different situations and economic climates:
1.
The Leveraged
Non-Profit:
This business model leverages resources in order to respond to social needs.
Leveraged non-profits make innovative use of available funds, in order to
impact a need. These leveraged non-profits are more traditional ways of dealing
with issues, though are distinguished by their innovative approaches. An
example of a leveraged non-profit is Barefoot College.
2.
The Hybrid
Non-Profit:
This organizational structure can take on a variety of forms, but is
distinctive because the hybrid non-profit is willing to use profit to sustain
its operations. Hybrid non-profits are often created to deal with government or
market failures, as they generate revenue to sustain the operation outside of
loans, grants, and other forms of traditional funding. An example of a hybrid
non-profit is Rick Aubrey’s Rubicon Programs.
3.
The Social Business
Venture:
These models are set up as businesses designed to create change through social
means. Social business ventures evolved through a lack of funding—social
entrepreneurs in this situation were forced to become for-profit ventures. In
places like the United States, this model is friendly to environmental
entrepreneurs, due to the available market opportunities. An example of this is
the Whole Foods chain grocery store.
Many social entrepreneurs move between these models as they look
for a fit that fulfills their mission for changing the world.
2.5: First international Institute for SOCIAL BUSINESS:
Social
Business – the intelligent combination of economic and
social objectives – has the power to initiate this process. The GENISIS
Institute has committed itself to paving the way for this.
Think & Inspire
Social Business Campaign
Social Business Campaign
Studies and Publications
Connect & Teach
VISION SUMMIT
Social Business Academy
VISION SUMMIT
Social Business Academy
Innovate & Create
Projects and Commissions
Partners
Projects and Commissions
Partners
2.6: The mother of Social Business
Inspired by the experience of how much can be achieved with
lending a small amount of money, Prof. Yunus founded the Grameen Bank for
the purpose of lending money (microcredits) to people who had no access to
capital. Grameen is the Bengali word for "village" and therefore
describes the very character of the social business philosophy - starting
small. The Grameen Bank became a great success and enabled many people to get
out of poverty.
The microfinance business model soon spread from Bangladesh around
the world. At the same time, in Bangladesh, Grameen has constantly been
devising new entrepreneurial solutions to the problems of the poor. They not
only need access to capital, but many other things to work their way out of
poverty: Health and education, clean water, good food and access to electricity
- to name just a few. Various kinds of social businesses are dedicated to
address these issues. By the way: The Grameen Bank also happened to be a social
business.
The benefits of employing social business reach across the
business to advance strategy, improve marketing, recruit and collaborate, gain
competitive intelligence and enable innovation. Along with it come a slew of
new risks and issues: reputation management, inappropriate use of content, loss
of data or intellectual property and regulatory complications and penalties.
As companies formulate strategies for using social media, it is
important to think of the risks involved and the impacts on regulatory compliance.
The information on corporate social media sites may be subject to similar
regulatory requirements as traditional content, but social-sphere activity may
create situations not covered by traditional rules and risk frameworks. The
challenge companies—and their employees—now face when using social media tools
in their business is managing their risks effectively.
The degree of that challenge was reflected in responses to polls
taken during a recent Deloitte webcast, “Social Business and Regulatory Compliance:
What New Challenges Could You Face?” According to 23% of the almost 1,500
respondents, employees not educated in social-media matters pose the greatest
risk when it comes to social business, followed by disgruntled customers (17%)
and loss of intellectual property (14%). Yet, despite the seriousness of those
risks, there is little consensus over who should own their mitigation: in the
poll, 19% of respondents said that the social media team was responsible for
managing social media policy and regulatory compliance, 17% pointed to legal
and 11% said no one was in charge (30% didn’t know or the question was not
applicable).
2.8: Develop a Social Business Governance Strategy:
Managing the potential regulatory
risks related to the use of social business tools starts with incorporating
social business risk into risk management and compliance programs. Some
companies, for example, have established a social media working group,
comprised of employees across the organization, from risk, talent, information
technology and the business units. This group brings together diverse
perspectives to address and set policy on the various risks and issues that
come up around using social tools and technologies.
To govern social media effectively,
however, companies should work closely with employees to help them understand
the role that social media plays in the company and the ways that it can be
leveraged to help achieve strategic goals. In addition to detailed social media
policies that clearly communicate the “dos and don’ts” of social media usage,
governance around social business should address the company’s vision as well
as policy, training, monitoring and enforcement. Specifically, social business
governance should:
- Educate employees, and then empower them.
- Help employees understand and own the
risks.
- Hold employees accountable.
- Address organization social media account
“ownership” and handoffs when spokespeople leave.
Furthermore, companies should educate
their employees on how violating rules of confidentiality and professional
discretion can lead to regulatory noncompliance and legal difficulties that can
have far-reaching consequences for those involved.
Employees should understand the nature
of the regulations in place, why they exist and the potential consequences of
violating them. Some employees may think that because current regulations were
not written specifically to address social media, that somehow social media is
exempt from traditional oversight. As many companies have learned, that is not
the case.
2.9: The Social Business Accelerator:
The social business accelerator being
launched by Yunus Social Business Foundation Uganda Ltd (YSB Uganda) is a
tailored program designed for exceptional social entrepreneurs in the early or
growing stages of their businesses who are eagerly searching for financially
viable ways of producing and delivering products and services that bring social
change and demonstrate models for scaling within their communities or
replication elsewhere.
This launch follows a successful pilot
phase lasting nearly two years, which has been implemented with the African
Development Bank (AfDB). The launch also builds on Yunus Social Business’s
global experience in other countries, including Albania, Bangladesh, Brazil,
Columbia, Haiti, India and Tunisia. Accelerator in Uganda will enable
entrepreneurs to develop business and personal skills, build networks and
create innovative business solutions to solve social challenges. Our teams will
help them to fast-track their ideas to the next level through coaching, access
to experts and mentors, piloting support and trainings on key business skills.
Specifically, the Accelerator will offer:
- Through a 3-month program, you will
attend workshops tailored to your business’ needs, such as developing your
sales pitch or enhancing your leadership skills. You will have sessions
with inspiring entrepreneurs as well as experts in leadership and business
acumen
- You will be matched to mentors and
experts, who will help you grow your social business. YSB Staff will
support you on the key topics you agree on and connect you to the
resources you need to develop your social business
- We will help you develop your value
proposition to customers and will help you connect to clients and markets.
We will provide you with reliable service providers to support you on
legal/accounting or branding of your company
- Getting ready for funding – the most
promising social businesses will get the opportunity to pitch to our
Investment Committee, and potentially receive funding ranging from USD
50,000-350,000. They will be able to pitch to other potential funders
during demo day.
- Joining the Yunus/Grameen community –
connecting social entrepreneurs with a community of over 400 Social
Businesses in the Yunus/ Grameen network around the world
2.10: The value of Social Business:
As the rapid
growth of social networking and mobility has erased some of the boundaries that
separated individuals in the past, people increasingly use their relationships
with other people to discover and use information to accomplish innumerable
tasks.
New
opportunities for growth, innovation and productivity exist for organizations
that encourage people – employees, customers and partners – to engage and build
trusted relationships. Individuals are using social networking tools in their
personal lives, and many are also incorporating it into their work lives –
regardless of whether it’s sanctioned by their employers.
Astute organizations will embrace social
software and find the most effective ways to utilize it to drive growth,
improve client satisfaction and empower employees. In fact, Social Business
software has gained significant momentum in the enterprise, and this trend is
expected to continue, with IDC forecasting a compound annual growth rate of 38
percent through 2014. 5 However, becoming a Social Business is not simply a
matter of deploying some collaboration tools and hoping for the best. It is a
long-term
2.11:
Clarifications on Social Business:
I am not opposed to making profit.
Even social businesses are allowed to make profit with the condition that
profit stays with the company; the owners will not take profit beyond the
amount equivalent to investment. Social business is a new category of business.
It does not stipulate the end of the existing type of profit-making business.
It widens the market by giving a new option to consumers. It does not intend to
monopolies the market and take the existing option away. It adds to the
competition. It brings a new dimension to the business world, and a new feeling
of social awareness among the business community.
When we approach the concept of social
business from the philanthropy side, it looks very convincing and logical. Why
should everything in philanthropy be given away? If some of these goals can be
achieved more efficiently and sustainably in a (social) business format, then
why not take that route? After all our purpose are to achieve the social goal.
But when you approach it from
the orthodox business side, it tends to look a bit out of tune. Why on earth
give up profit? Why should anyone run a business without profit? I understand
the surprise perfectly.
Let me clarify: I am not asking
any businessperson to give up any of their businesses. Nor am I asking them to
convert some of their businesses into social business. The idea of "giving
up" something creates this shock wave. I am not asking anybody to
"give up" anything. All I am saying, if you are worrying about a
social problem (while totally engaged in your routine business) I have a
message for you, you can make a significant contribution in resolving the
problem. If you put your mind seriously into it, you may even open the door to
eliminate the problem globally. You can do both: conventional business and
social business.
It is all up to you to decide
whether you want to do such thing or not. Nobody will raise an accusing finger
at you if you do no such thing. But you may feel happy if you do it. I am
suggesting a way which may make you a happier person.
2.12:
Social Enterprise Areas:
Social Enterprise is a broad term
covering a number of areas that span several different industries and all
sectors (business, nonprofit, and government). Major areas include: public and
nonprofit management, corporate social responsibility / sustainability,
international development, and social entrepreneurship. A further breakdown of
these areas is provided below. The common thread uniting social enterprise
related careers is the desire to blend business skills and personal values to
achieve financial, social, and environmental benefits.
Nonprofit and Public Sector
Management:
these organizations extend into many different sectors of domestic and
international economies, and business skills are becoming increasingly
important in these organizations. Management positions are typically in areas
such as finance, development, operations, and administration.
Nonprofit Consulting: applying consulting skills to
nonprofits. Consulting specialties include: management and strategy consulting,
fundraising, financial management, board development, in-house training and
development, new program creation, program evaluation, and corporate-nonprofit
relations. Consulting organizations can be for-profit or nonprofit and range in
size from small but very entrepreneurial companies, to larger more established
organizations. Most prominent management consulting companies offer pro-bono
services to nonprofit organizations and several have divisions dedicated to
nonprofit clients.
Foundation Management: MBA careers in this area involve
managing the assets or the disbursement of funds to grantees according to
program criteria set up by the foundation or corporate funder, and working with
grantees to ensure program goals are met. As a unique function apart from CSR, many
large corporations maintain foundations. However, there are also family trust
foundations, community foundations, private foundations, and others. Common
functions in foundations include external relations officers, program officers,
and program staff. The role of such personnel is to manage the programs of
their foundation and to work with grant recipients on progress reporting and
development.
Social Entrepreneurship: starting or working for for-profit
or nonprofit ventures seeking to apply entrepreneurial business principles to
provide social benefits in areas such as the environment, workforce
development, education, health, community, and international development.
Achieving social as well as financial returns is essential for the
sustainability and growth of these ventures.
Venture Philanthropy and Social Venture Capital (a.k.a. Impact Investing): applying a venture capital model
and social return focus to for-profit funding. Social Venture Capital seeks to
fund for-profit ventures in a wide range of sectors and businesses that provide
social / environmental as well as financial returns. The venture philanthropist
applies a venture capital model to non-profit grant making, by managing a
"portfolio" of organizations, and seeks to increase the social impact
of that portfolio by providing management support and by expecting results and
accountability from the organizations they fund.
International Development: working to promote the economic and
social well-being of the world's poorest countries, whether through CSR (see
below) in multinational corporations, management of international
nongovernmental organizations, business and enterprise development in emerging
economies, or through traditional and non-traditional forms of finance: public
finance, private equity, hedge funds, microfinance etc. International
development career paths for MBAs span the entire spectrum from corporate
finance to nonprofit.
Microfinance: providing financial services to
poor individuals, households, and communities by delivering financial services
on the "micro" level as a means to promote economic development (e.g.
very small loans, savings accounts for small deposits, etc.). Microfinance
institutions (MFIs) are active mostly in the developing world, although some have
established themselves in the U.S. and Europe. Opportunities for MBAs are most
plentiful at such domestic organizations, and at the management level within
international development agencies, donor agencies, and policy / advocacy
groups.
Corporate Social Responsibility
(CSR) / Sustainability: working within companies to ensure socially and environmentally
responsible and sustainable business practices on issues such as social audits
and accountability, business ethics, environment, and workplace procedures.
Although some corporations have a CSR/Sustainability division, these issues
typically arise in management and functional areas such as finance, strategy,
operations, and human resources.
Socially Responsible
Investing:
an extension of assets management, where funds apply screening criteria to
potential investments, and/or assess a company's CSR track record across a
number of areas. Screening criteria can exclude companies in sectors such as: tobacco
weapons etc; examine how companies interact with communities on environmental
and social concerns; and assess the pro-active management of issues such as
employee relations and diversity.
Corporate Philanthropy: Please see Foundation Management
above.
2.13: Social Business
and Social Enterprise diagrams:
We used to have a definition for each of
these different phrases. We knew underneath both simply meant an organization
that seeks to be financially successful while creating social and/or
environmental impact. It has commercial goals and it has impact goals – it is
really not that complicated.
But sometimes it has felt pretty complicated.
We’ve all made diagrams – like this one:
FINDINGS AND ANALYSIS
The rise of the successful concept of social business began with
Prof. Muhammad Yunus and a small amount of money, worth about $27 in the mid
1970s.
We write around the year 1976, Muhammad Yunus, a professor in
economics, has been appointed head of the Economics department and professor at
the University of Chittagong, Bangladesh. A terrible famine raged across the
country at the time, causing Yunus to feel less and less at ease teaching
sophisticated economic models, while his countrymen were dying outside the
university gates. Feeling the urge to help Yunus resolved to leave the safe
confinement of the Chittagong campus and visited the nearby village of Jobra
with a mission to make himself useful by helping at least one person there each
day.
While in the village, Yunus became aware of an appalling practice
that was taking place there; loan-sharks loaned many to the poor villagers, who
had no other sources of credit, at very high interest rates of 25% or even 100%
at times, while adding restrictions that stated that any person who took such a
loan was obligated to sell some, or all, of their produce at a fixed price to
the loan-shark. The low income of the villagers, combined with the extreme
interest rates, caused anyone taking such loans to fall into a perpetual circle
of debt and poverty, binding them to these loan-sharks in a way that can best
be described as modern slavery.
Yunus, upset by, what he saw set out to document the number of
people in the village? Who had taken such loans and took note of the size of
their individual debt. When he had finished his inquiries he added up the loans
and found out that the size of all the loans involving the villagers had a
total sum that was equivalent to no more than $27.
Staying true to his resolution to help the villagers Yunus paid the money out of his own pocket, releasing the villagers from their financial burden.
Staying true to his resolution to help the villagers Yunus paid the money out of his own pocket, releasing the villagers from their financial burden.
Yunus’ actions created a wave of gratitude and happiness from the
villagers, who felt that they were repaid with their freedom to make their own
choices once again. Yunus was amazed with the amount of happiness and joy
that he was able to bring about with so little money, and started to think
about ways to further his initiative. This resulted in the birth of
microcredit, the extension of financial loans to the poorest people of
Bangladesh without collateral, and the social business movement. The
initiative took shape by multiplying the micro-credit concept, applying it to
more and more people and led to the creation of Grameen bank (village bank) in
1983, the world’s first bank devoted to servicing the poorest people in
society. (Yunus, 2010)
Grameen bank operated using a groundbreaking business model, which
provided those people in the lowest regions or even those at the bottom of the
economic pyramid with micro-credits to help them set-up independent
self-sustaining businesses that allowed them to provide a source of income for
themselves and their families. These loans were provided under fair conditions,
fitting the economic situation of these people, without a requirement for
collateral to manage the risk on these loans. (Social Business Tour 2010
3.2:
Histories of Social Entrepreneurship:
Social entrepreneurship is distinct from the concept of
entrepreneurship, yet still shares several similarities with the classic
concept. Jean-Baptiste Say, a French economist, defined an entrepreneur as a
person who "undertakes" an idea and shifts perspectives in a way that
it alters the effect that an idea has on society. The difference between
"entrepreneurship" and "social entrepreneurship", however,
stems from the purpose of a creation. Social entrepreneurs seek to transform
societies at large, rather than transforming their profit margin, as classic
entrepreneurs typically seek to do.
The concept of "social entrepreneurship" is not a novel
idea, but it recently has become more popular among society and academic
research, notably after the publication of "The Rise of the Social
Entrepreneur" by Charles Leadbeater. Many activities related to community
development and higher social purpose fall within the modern definition of
social entrepreneurship. Despite the established definition nowadays, social
entrepreneurship remains a difficult concept to define, since it may be
manifested in multiple forms. A broad definition of the concept allows
interdisciplinary research efforts to understand further and constantly
challenge the notion behind social entrepreneurship. No matter in which sector
of society certain organizations are (i.e. corporations or unincorporated
associations and societies), social entrepreneurship focuses on the social
impact that an endeavor carries. Whether social entrepreneurship is altruistic
or not is less important than the effect it has on society.
The terms social entrepreneur and social
entrepreneurship were used first in the literature on social change in the
1960s and 1970s.The terms came into widespread use in the 1980s and 1990s,
promoted by Bill Drayton the founder of Ashoka: Innovators for the Public, and
others such as Charles Leadbeater (Drayton,
1970) .
From the 1950s to the 1990s Michael Young was a leading promoter
of social entrepreneurship and in the 1980s, was described by Professor Daniel
Bell at Harvard as 'the world's most successful entrepreneur of social
enterprises' because of his role in creating more than sixty new organizations
worldwide, including the School for Social Entrepreneurs (SSE) which exists in
the UK, Australia, and Canada and which supports individuals to realize their
potential and to establish, scale, and sustain, social enterprises and social
businesses. Another notable British social entrepreneur is Andrew Mawson OBE,
who was given a peerage in 2007 because of his regeneration work including the Bromley
by Bow Centre in East London (Mawson, 2007) .
Although the terms are relatively new, social entrepreneurs and
social entrepreneurship may be found throughout history. A list of a few
noteworthy people whose work exemplifies the modern definition of "social
entrepreneurship" includes Florence Nightingale, founder of the first
nursing school and developer of modern nursing practices; Robert Owen, founder
of the cooperative movement; and Vinoba Bhave, founder of India's Land Gift
Movement. During the nineteenth and twentieth centuries some of the most
successful social entrepreneurs effectively straddled the civic, governmental,
and business worlds. Such pioneers promoted ideas that were taken up by
mainstream public services in welfare, schools, and health care.
3.3: Social Business, Social Entrepreneurship
and Social Enterprise:
The Social Platform hosted an
in-depth discussion of what is meant by social enterprise, social business and
social entrepreneurship during its working group on 4th October. The discussion
was led by CEDAG vice president Ariane Rodert who is also rapporteur for an
opinion of the EESC on the subject, and by Bruno Roelants, General Secretary of
CECOP. (Reminder: CEDAG will develop this
theme further in an open meeting taking place on 25th November in Brussels)
The exploratory opinion by the EESC stems from the Single Market
Act: social enterprise is one of the 12 levers; it’s also mentioned in the
European Platform against Poverty, one of the flagship initiatives of the
Europe 2020 strategy. In the opinion the
preferred term used is social enterprise, not social entrepreneurship. The
thinking behind this is the desire to support all sections of lifecycle - not
just the stage of entrepreneurship, is only one part of the whole concept of
social enterprise.
The key criteria linked to the definition of social
enterprise are:
1. The
primary objective of the action is a social goal, it is not profit driven. This
does not mean that profits or revenues cannot be generated, but any profit must
be primarily reinvested to enhance the achievement of or expand the enterprise’s
social objectives, and not going to owners or shareholders. A social
enterprise does not exist to remunerate capital.
2. It is characterized
by a strong component of independence, democracy, participatory governance, and
acting in general public interest. There is a very close tie to social services
of general interest (SSGI). Social enterprises often stem from or are closely
linked to a voluntary organization, or a civil society organization (CSO).
Ms Rodert underlined the
difference between social enterprise and social business. Having a “social
profile’ doesn’t mean that its primary aim is social. A pertinent example is
the Body Shop, which is associated with campaigning and doing good works, but
which is on the London Stock Exchange. This for us is not social enterprise.
The EESC
opinion will identify five areas of importance:
1.
Taking social
enterprises into account when designing competition or internal market measures
at the level of member states (MS).
2.
Better access to
finance. Social enterprises typically have difficulty in accessing loans or
credit. Specifically tailored instruments suitable for social enterprises are
needed. Involving microcredit, philanthropic funds, social banking, etc.
Crucial too, is that the structural funds be geared towards supporting these
enterprises.
3.
Modernizing
public funding - issues such as state aid, public procurement techniques, and
tax regimes need to be considered.
4.
Development programmers
to be set up, hubs existing in many countries that support sharing good examples
and transferring skills and know-how to where they are needed.
5.
Raising
awareness, recognition and trust for social enterprises themselves. This should
be done by measuring the social results and impact of these enterprises, not
just economic
Mr Roelants of CECOP talked
of social enterprise as something quite tangible, which is defined already by a
variety of normative texts in up to 12 EU member states. If Commissioner Barmier
wants to about this, Mr Roelants said that he cannot brush aside this existing
body of concept development. CECOP has produced a significant body of research
in the field and has found that the common denominator of the way this kind of
enterprise is defined in the different countries is that these enterprises have
the direct and primary mission to produce goods or services of general
interest, so term “general interest” is fundamental. The aspect of mission is
also fundamental: not only do the enterprises generate these things, but it is
in fact their primary mission to do so.
On the question of whether there should be EU legislation, CECOP
notes that there is no European legislation concerning national enterprises, it
only concerns international, cross border ones, so there is perhaps no need for
cross border legislation. However, having a common policy for something that is
recognizing a common denominator in many EU countries would be a good idea. One
of the participants at the meeting said that it is somewhat surprising that
there is no definition of entrepreneurship put forward by the commission. DG
Enterprise has worked on this for 10 years or so and they tried to establish a
definition in 2000.
On the question of what is motivating organizations, such as the
OECD and of course the EU to be interested in social enterprise and social
entrepreneurship, it was recalled that in the mid 1990s it was a theme which
reoccurred wherever the target what reduction of national budgets, with a
background of privatization, liberalization, restructuring of national budgets.
It was applied a lot to Africa and Latin American in a very heavy handed way by
IMF. Now in the EU there is suddenly a big discussion on budget cuts and in
same way the social enterprise debate comes up again. It seems quite clear that
States, IOs and the EU are looking ways to cut budget, not that they suddenly
take an interest in the social worth of these enterprises, just aiming to do
things at lowest possible cost.
The point is that they must understand that these enterprises
cannot be willed into existence, they need to have in place the right
environment to support them. For example, social cooperatives would never had
developed without specific tax régimes for the costs they incur doing their
social work. Our message is: we are here to give jobs to people for years, and
to invest over years in social bettering: You have to change regulatory
environment if you want to support us. But we must also remember that the EC
does not have input into that level of legislation.
3.4:
Similarities of Social Business and Social Entrepreneurship:
ü Business objective will be to
overcome poverty, or one or more problems (such as education, health,
technology access, and environment) which threaten people and society; not
profit maximization.
Social
entrepreneurship is the attempt to draw upon business techniques to find
solutions to social problems.
ü Social Business are
working for decrease poverty and minimizing the negative effects on the
environment.
Social enterprise most
of the time search any disadvantaged / poverty people then provide their financial service and
other service for that remove the negative effects on the environment.
ü Social Business provide
market wage with
better working conditions for the environment workforce people.
Social Enterprise also provide good
place market wage with better working conditions for the environment workforce
people.
ü Social Business wants to increase
their organization profit and helped the environmental people.
Social Enterprise also wants to achieve more profit of their company and want to helped environmental
people.
ü Social Business identifies and apply
practical solutions to problem. Combining innovation, resourcefulness and
opportunity.
Social Enterprise attracting
growing amounts of talent, money, and attention draw upon business techniques
to find solutions to social problems.
ü Social Business view
to reach goal, to improve quality of life in society the social business need
to have a specious relationship with the public.
Social Enterprise
want to reach goal, improve their quality service and increase the society
relationship with the public.
3.5:
Dissimilarities of Social Business and Social Entrepreneurship:
ü In Social Business Investors get back
their investment amount only. No dividend is given beyond investment money.
In Social Enterprise investors get
back their investment amount with dividend and other advantages of the company.
ü When Social Business organization investment
amount is paid back to the investors, company profit stays with the company for
expansion and improvement.
When Social Enterprise organization
investment amount is paid back to the investors, but company profit divided
into the investors.
ü Social Business is not dependent on
donations or on private or public grants to survive and to operate, because, as
any other business, it is self-sustainable.
Social Enterprise is dependent on
private or public grants to survive and to operate because this organization is
not self sustainable.
ü Social Business focuses first and
foremost on social value creation and, in that spirit, is willing to share
their innovations and insights for others to replicate.
Social Enterprise at first focuses
their own company development and then thought social value creation and social
development.
ü Social Business always tries to
improve social development and remove the social poverty.
Social Enterprise always tries
improving their won company development and wanting more personal profit.
ü Social Business helped the society’s
people and always time developing the society.
Social Enterprise most of the time
thought about their own company after thought society’s development.
3.6:
Relationship between Social business and Non-profit-orientated Organization:
ü Public Affairs
The Non-profit
organizations recognized for long time ago that it is their interest as well,
to establish good relationship, with different stake-holder groups in their
environment, like with the civil sphere. By this the aim of the company is to
protect own social and economic interests, and to validate them and set their
principles.
ü Issue Management:
The company’s
issue management keeps the relation between the companies and their stake holders.
This issue is the difference between the company’s activity and the stake
holders’ expectations, which difference can be eliminated by issue management,
which beside solves the problem, come from this difference, and also creates
value and advantage for the company.
ü Sponsorship and Donation:
RECOMMENDATION
AND CONCLUSION
Recommendation:
To ensure the proper role of social
empowerment through social entrepreneurship and social business development the
following policies are suggested for consideration of the concerned
institutions including the government:
1.
Education
policy should be designed so as to expand the economic opportunities for all
class peoples in Bangladesh.
2.
Poverty
eradication program will specially address the needs and the problems of
specific geographical region at extreme level on priority basis.
3.
To
encourage social enterprise and all financial institutions should be asked to
provide respectable amount of their investment for social business.
4.
Created
special training course should be offered for social entrepreneurs to improve
their skill, efficiency and efficacy.
5.
Made
social institutions where all poverty people will be work and taken any
opportunities.
6.
Risk
or interest free consumption credit for vulnerable people should be provided by
government, Banked and financial institutions and wealthy individuals.
7.
Provide
special assistance for any disadvantaged groups like disable and women in
extreme poverty, destitute population, women in conflict situations, women in
less developed regions, the disabled widows, women handing household etc.
8.
Most
of the time tries to improve social development and provide many opportunities
for the society’s poverty people.
Conclusion:
Social entrepreneurship has recently emerged as a field of
academic inquiry, but the lack of a common definition of social entrepreneur
impedes research in this field. In this article, we reviewed literature that
defined profit-oriented entrepreneurship and social entrepreneurship in order
to extract the core characteristics of each type. We then proposed a definition
of social entrepreneurship, which contributes to the literature on social
entrepreneurship by clarifying and bounding the scope of research in this
field.
Social entrepreneurship has flourished significantly at the
practical level, but not at the theoretical level. Future research should focus
on linking social entrepreneurship as a new discipline and research field to
the theory of entrepreneurship. Scholars should also focus their attention on
introducing new research questions that are meaningful to the different domains
that intersects with social entrepreneurship, including social innovation and
the management of non-profit organizations.
You are doing things which you never did before. You are thinking
in a way which you never did before. You are surprised to see you are enjoying
it a lot. You start digging into your experiences to see what is relevant for
the task. You check through the reservoir of technology that you are familiar
with, start contacting the pool of experts that you have gotten to know in your
business, to achieve your new goal. You start exploring a new world which was
totally unknown to you. You realize that you are now wearing "social
business glasses" on your eyes, you see things which you never saw before.
You start sensing that your eyes were fitted with "profit-maximizing
glasses" all along, while you thought these were your natural eyes in your
economic world.
Social business is about making complete sacrifice of financial
reward from business. It is about total delinking from the old framework of
business. It is not about accommodation of new objectives within the existing
framework. Unless this total delinking from personal financial gain can be
established you'll never discover the power of real social business. Sometimes
you can set up a technically correct social business with the purpose of making
profit through your other companies by selling products or services to this
social business company. This will be a clear sabotage of the concept. There
may be many other subtle ways by which one can weaken the concept and practice
of social business. A genuine social business investor must make all efforts so
that he does not walk into this trap unwittingly.
REFERENCES
Barendsen, & Gardner. (2004). The term social
entrepreneur is ill-defined.
Beechwood, &
Ashoka. (1980). Social Accounting and Audit. In Beechwood, & Ashoka, Bill
Drayton Established a Program to Support the Development of Social
Entrepreneurship. New York: US Foundation.
Bruyat, & Juline.
(2000). Social Entrepreneurship and Research Independently . The absence of
consensus on a research topic usually results in researchers working
independently and failing to build upon one another’s work, therefore
knowledge cannot be accumulated , pp. 40-50.
Drayton, B. (1970). Literature
On Social Change. Innovators for the Public.
Jhone, P. (2012,
December). Human Resourch Development Grant of Japan(PHRDG). Holistic
Social Business Movement In Africa .
Mawson, A. (2007). Social
Entreprises and Social Business. Est London: Bromley By Bow Centre.
Porter, & Jhone.
(2002). Most Economists and Academices Support of Entrepreneurship. Entrepreneurial
Activities and Practiced .
Weerawardena, &
Mort. (2006). It is fragmented, and it has no coherent theoretical
framework. France: Development Center of Economic .
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