social bisiness

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5.0 Future of the Social Business:

Development and growth of social Business in future: Social Business concept is the most thriving

concept in todays world. Peoples intention to help other people and remove social problems are now

breeding the new social entrepreneurs around the world. A global infrastructure of social business is in

the making for the development of social business. Dr Md. Yunus, in his book Building social Business,

pointed out several prospects of social business that are delineated below.

5.1 University Centers for Exploring and Nurturing Social Business:

According to Dr. Yunus, Social business will flourish in future if a strong global infrastrucure is created.

Universities can play an important role in developing the future of social business. They are centers

where enormous pools of experise are locate-Knowledgeble professors and researchers who have

studied and participated in practically every field, from business and econmics to healthcare,

government, social serivices, engineering, information technology, and so on. Students can also play a

great role in building future social business infrastructure. They are a lot of university centers being

established for future social business development. Several projects are already under way at Kyushu

Universy, japan, Including:

One village, one portal- an experimental program for using high-tech information systems tocollect and organize all kinds of social, economic, educational, agricultural, and cultural

information about a particular village in Bangladesh, as a way of facilitating creative thinking and

planning for sustainable solutions to social problems.

E-Healthand E-Agriculture projects for managing health records and agricultural information andmaking the data readily accessinle by individuals and the institutes that serve them.

An E-passbook system that could be used by Grameen Bank borroewers for managing theirsavings, borrowing, and other financial services.

Alternative power source experiments, testing new ways of genrating, storing, transmitting, andusing sustainable energy sources-solar, wind, beiofuel, and so on.

Solutions devised by the students and faculty at Kyushu University will be applied first in Bangladesh,

then adapted for use in other developing countries.

5.2 Social Investment Funds:

To support the growth of social business, it will be important to create a number of investment funds

committed to supporting social business. Such funds will offer a number of services. They will study and

evaluate fledgling social businesses, measuring their effectiveness in pursuing social goals and their

financial and mangerial efficiency, so that investment funds can be channeled to the most promising

new ventures. They will serve as clearing houses for information and ideas about social business, as their

managers will quickly become some of the worlds leading expertss in what works, and what doesnt in

the social business arena.


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Several socia business funds are already in the works. One is being developed in the pricpality of

Monaco under the sponsorhip of Prince Albert, that countrys hereditary ruler. Known as the Yunus

Monaco Fund, it will be a joint venture between the Yunus Centre and the Monaco Venture Capital and

Private Equity Association The intial funding target will probaby be set around 100 million dollars.

Another fund is being planned in Germany. And the Islamic Development Bank in jeddah, saudi Arabia,

has announced plans to lauch the IDB grameen Social Business Initiative with an initial investment of

more than 10 million dollars.

5.3 Social Stock Market:

future, Social Business will continue to greow, gradually forming a parallel world alongside the familiar

universe of profit-max-imizing businesses. Social business companies will spring up in every country

where free enterprise exists, and they will operate in almost every market and business arena, from

consumer goods and services to corporate services, supplying, and outsourcing; and from finance and

banking to information technology and heavy industry. Investment funds focused on social business will

continue to mltiply, and so will providers of services and products to help support this expanding

universe-for example, investment sources that concentrate on news and analysis about social business

companies.

According to Dr. Yunus, there will be two different kinds of shares being traded in the social stock

market: Shares on which the original investment amount has already been repaid, and those where this

is not the case. The first categoryof shares might be called mature on the analogy of bonds. When an

investor buys a mature share in a social business, he or she cannot expect to receive any dividend from

the company, because the original investment money has been fully repaid. However, a share that is not

yet mature will carry with it the expectation of repayment, whichof course will affect the shares value.

Shares that are partialy paid out will have their own demand and supply shcedules. This is one reason

we need a social stock market; it will facilitate discovery of the market price for shares in a given

transaction.

5.4 Some Social Business in their Infant stage:

There are some Social Businesses that are in the making and yet to be materialized. Social Business are

now spreading all the industries including technology , health and textiles. Here we describe some of the

future social business examples that are in the making.

1) BASF GrameenIn 2008, Grameen Healthcare Trust and BASF (Germany) got together and created BASF Grameen: a

joint venture to develop an affordable and efficient mosquito net. And as an addition to the mosquito

net project, this joint venture has also started the production of micronutrient sachets to sprinkle on

food, in order to provide to poor people daily diet with essential nutrients to prevent contagion.


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Model ofBASF Grameen

The activities of BASF Grameen can be summarized in the following way:


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2) Grameen ReebokThe joint-venture social business, Grameen Reebok, will design and market shoes that are

affordable even to the poor, and it is currently test-marketing its first prototype product. The test

marketing has been very successful; the responses of the village consumers to the design and style have

been positive. For the first time, the rural poor are being seen as a sought-after consumer base, and

they have been very involved in the development of all of our social business products.

The activities of Grameen Reebok can be summarized in the following diagram:


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3) Otto Grameen TrustOtto Grameen Textile Company is an example of a Type II social business. It will be a for-profit company

that will operate in the conventional market, producing clothing in Bangladesh for export sale. It is

unique in that it is owned by a trust, the Otto Grameen Trust, and profits generated from the textile

company will be held by the trust and used for a pre-determined cause that will benefit the employees

and the local community. In addition to receiving the benefits of the Trust, the workers will have


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dignified working conditions and social services, representing a greater company investment in the

employees.

4) Grameen FiberglassGrameen Fiberglass is a joint venture with IHS Fiberglass, which is owned by a Bangladeshi ex-pat who

wanted to give back to his country in a sustainable manner through social business. It is the first

Grameen partnership with a Bangladeshi business owner. This joint venture company will introduce

fiberglass products to Bangladesh. The first product offered will be biogas tanks, to popularize the use of

biogas as a sustainable, ecologically sound source of renewable energy. Grameen Fiberglass will also

expand to produce fiberglass roof tiles, which can be assembled into a raft during the annual monsoon

season. It will also produce pipes to improve sanitation and sewerage, as well as fiberglass building

materials, boats, and furniture.

5) Grameen IntelThe Intel Corporation has created a social business company called Grameen Intel to bring information

technology-based services to the poor in healthcare, marketing, education, and remittances. In two

clinics in Savar, Bangladesh, mobile healthcare workers equipped with smart phones provided by

Grameen Intel are using technology to assess the risk profiles of pregnant mothers who have limited

access to medical care in their home villages.

6) Grameen Yukiguni MaitakeJapans leading agro-company Yukiguni Maitake Co. (YMC), Ltd signed a joint venture agreement with

Grameen Krishi Foundation (GKF) for establishing a new social business in the field of agriculture. The

joint venture aims to produce high quality mung beans in Bangladesh for both domestic consumption

and export to Japan. This joint venture social business undertook production of the mung beans by local

farmers affiliated with GKF.The objective of this social business joint venture idea is to enhance incomeof the farmers, particularly for the village women who will be engaged in the processing of mung beans

for export market. The company is offering healthcare services and scholarships to children of farmers,

as well as bringing new technologies to the farmers.


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7) Grameen FelissimoThis joint venture company will produce clothing in Bangladesh with a specific pattern similar to

Grameen Check for sale by Felissimo, a popular mail-order marketer of clothing. Earlier this year,

Felissimo launched an international design competition where the winning design will be used as

signature pattern for the clothing line. The Grameen Felissimo fabric will be hand-woven by

impoverished rural women. This new initiative will create many jobs for people that have previously

been considered "unemployable", giving them a change to lift themselves and their families from

poverty.

5.5 Growing importance of social business in achieving MDG goals

Seven actions that social business companies can take to contribute to the MDGs:

Conduct core business operations responsibly. Fight inequalities in business operations. Develop trust by ensuring responsible policies and practices are consistent throughout the

business.

Ensure social value and benefits to poor people are key drivers. Make initiatives sustainable. Anticipate any adverse consequences that their decision-making might have on poor vulnerable

communities.

Support governments in achieving the MDGs.


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Findings:

The variability of the opinions of many experts provides huge scope for policy and learning interventions

to promote and strengthen Social Business all over the world. The objectives of social business must

match with the findings delineated in the whole report. Our overall findings are given below:

1) A social business is a non-loss, Non-dividend Company designed to address a social objectivewithin the highly regulated marketplace of today. The theory is- profits are used in a manner in

which they may expand the companys reach and improve the product or service to a greater

extent than a traditional for-profit corporation.

Social Businesses sell products and services that contribute to poverty reduction. They integrate the rationales behind both the private and social sectors.2) Social Business and traditional for profit business are in found different the following ways:

Traditional Business:-

Profit maximization. Market oriented.

Social Business:

Community development. Social oriented.


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Traditional Business Model:

Social Business Model:


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3) From this report we found that the financing of social business may be in the following ways: Companies. Philanthropy. The General Public and Employee Saving.

a. Solidarity Funds.b. Shared-return funds.

Institutional investors. Public Corporation Agencies. State support.4) The key principles of social business direct the business operations. The key principles are 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 sustainablity. 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 expansionand improvement.

Environmentally conscious. Workforce gets market wage with better working conditions. ...do it with joy5) Social Business and Non-governmental organization are distinguished in the following in the

way:

NGO:-

Depends fully on charity or donation. Uncertain existence. Limitation of working scope (unable to continue multiple supports by a single N.G.O). Suffers from deficit of fund.


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Social business:-

Starts with investment generous group. Longevity. It can be expanded to innumerous social problems.6) Social Business can remove social problems especially poverty in the following ways:

Employing or creating job for the poor. Supplying good value products at minimum price. Offering standard education to the poor. Ensuring habitation to the poor. Improving financial solvency. Ensuring food security.

Social Business development strategy are same as the traditional business. The investors are to conduct all

the same activities that are generally done in profit seeking business like:-

Market research. Segmentation. Targeting. Funding. Product development. Product in the market. Positioning.

7) Social Business branding is the most important part for this success. Socia business, like anyother business, requiers to build a successful brand image in the market. Brand awareness is the

key to social business promotion. Besides, identifying the brand mantras and brand equity factors

will play a great roles in achieving long term goals of business.

8) Social Business is commercialized following unique marketing strategies and Promotionalcampaign. The key maketing system of social business is comprised of demographical, societal,

physical, economic and politicial elements. The marketing mix including product, price, place

and promotion must be applied in commercialization of social business. A coherence of these

elements will result in success in building long term customer value in the market.


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9) Though social business benefits the society through removing social problems, a thoroughanalysis of the report finds out some of its limitations including:

Hard to make understand for the poor. Hindered by non profit stigma. Do not attract the talent. Social business investment lacks a definition for success. Simultaneously not collaborating and not competing. Seeking for widespread reputation very soon by the investors Unequal service in the eye care hospital for rich and poor. Crating traffic jam by introducing a rickshaw project. Lack of financial solvency. Not available support by the government.

But all of these limitations can be overcome if the effective measures are taken for the societys greater

benefit. Besides, the limitations are always overshadowed by the value we get from this business.

10)As it is in the infant stage, experts dont have clear concept about Social Business yet.11)As it is run as like as traditional business sometimes price fluctuation may affect poor people.12)Motivating investors is the crucial factor in managing fund.13)Most of the employees and investors of social investment feel satisfied as they are serving for the

betterment of the community.

14)There is no uniform guideline by the governing bodies regarding Social Business.15)Social Business are now integrating itself with different industries such as technology, healthcare,

clothing, and others. As the problems in society are on the rise, the prospect of social business

seems to be bright.

16)Finally, we can say that Social Business are playing a very vital role in are alleviating poverty andachieving MDGs.


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