User:Jochenade/socialbusiness

Social business is a theory put forward by 2006 Nobel Peace Prize winner Muhammad Yunus of Bangladesh, which, according to him, could immensely benefit many of the poor nations in the world.

Category:Sociology

Definition
Social business can be defined as follows: Social Businesses seek to profit from acts that generate social improvements and serve a broader human development purpose. A key attribute of social businesses is that an increase in revenue corresponds to an incremental social enhancement. The social mission will permeate the culture and structure of the organization and the dual bottom lines - social and economic will be in equal standing with the firm pursuing long term maximization of both.1

Yunus argues that capitalism is too narrowly defined. The concept of the individual as being solely focused on profit maximising ignores other aspects of life, religious, emotional, and political. Failures of this system to address vital needs, that are commonly regarded as market failures are actually conceptualisation failures, i.e. failures to capture the essence of a human being in economic theory.

Yunus postulates a new world of business in which profit maximising enterprises and social benefit maximising enterprises coexist. He calls the latter social business enterprises

Social Business Enterprises
Social Business Enterprises are based on the benefit maximisation principle. They are operated as a business enterprise with the objective to pass on all the benefits to the customer. SBEs are non-loss-non-dividend companies that compete with profit maximising enterprises and other social business enterprises.

Key ingredients to the success of the approach are education, institutions to make social businesses visible in the market place (a social stock market), rating agencies, appropriate impact assessment tools, indices to understand which social business enterprise is doing more and/or better than others so that social investors are correctly guided. The industry will need its Social Wall Street Journal and Social Financial Times.