Social Business - A field of dreams? Or the next big thing?

Replies to This Discussion

Permalink Reply by Nita Nehru on December 1, 2010 at 11:32am

Wow, thats great Liza. Thanks for putting this on our radar.

But do you think "impact investing" and "social business" are just phases that the world is going through right now, and will soon lose traction? Or do you think they're around to STAY?

• ▶ Reply

Permalink Reply by Nita Nehru on December 1, 2010 at 11:58am

I agree. And another change that makes me hopeful that social investing/social business etc is here to stay is the popularity of Jumo - www.jumo.com

The fact that the servers were completely overloaded after the launch leads me to believe that increasing numbers of people are getting passionate about doing something more than their typical day to day life. Social investing and social business provides the opportunity to give back in a new way!

• ▶ Reply

Permalink Reply by Sasidhar Thumuluri on December 1, 2010 at 6:15pm

It is an interesting question Nita because we dumped socialism and embraced capitalism not too long ago. About a century ago most part of the world was following social business model, controlled by governments though, and those models started falling apart and we were told that right incentives were lacking in social businesses. Now we talk about social business again more than ever. Neo-liberal social business idea is about marrying the principles of capitalism with social philosophy. This is a good idea but unless incentives are properly aligned I am afraid this would stay within the circles of rich people trying to place some money in "good" deeds.

I wouldn't say it is booming yet but is making progress and lot needs to be done to make it sizable. Microfinance is a good example of social business but the problem is everyone is accusing it of making too much money. The challenge would be how to balance the two elements of the game - financial and social?

• ▶ Reply

Permalink Reply by Nita Nehru on December 2, 2010 at 5:02pm

Agreed that it is easy to get mission drift when involved in a social business -- how do we ensure that neither one, financial profits and social good, overshadows the other? One way would be to get the right individuals on the social enterprise's board. Individuals as interested in the social mission as the profit margins. Accountability and transparency would also be important in my opinion, so that shareholders are constantly aware of the tradeoffs being made between achieving social value and financial value.

What are some other ways??

• ▶ Reply

Permalink Reply by Tonie M. Kendo on February 23, 2011 at 5:45am

Thank you so much to share this blog with us and it is indeed a reality and no Field of Dreams. The way I see it, as someone who has experienced first hand poverty and also reach where I am right now as working in addressing issues affecting rural communities, you can not speak about development, business while you are ignoring the majority of people barely making ends meet. The reason why the sector is booming is because those on the top earning field have finally realized what we have been saying and trying to get acknowledge that the contribution of the grassroots and vulnerable in access to profitable businesses, is the way to insure sustainability.

In my own work, we have been trying to bring change in the way we deliver assistance to the communities by motivating initiatives that empower income generating activities.

Bringing it even to the most basic language, being rich and having a neighbor fighting with debts and unemployment, will affect you at the long run because that person and you share the same environment.

The concept you are bringing on the discussion is very true and this is also something that WIN (Women's Initiatives Network) wishes to embrace.

• ▶ Reply

Permalink Reply by Raj Kumar Jani on February 25, 2011 at 4:49am

A further thought in doing 'social good' by creating 'shared value' has been provided by celebrated Managament Guru Michael E. Porter together with Mark R. Kramer in their article - The Big Idea: Creating Shared Value. (One can access the link here- http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1 and also a pdf file is attached herewith to read full case). They provide a useful insight in the way the businesses are losing their legitimacy despite of their increasing thrust on CSR, for the reason that their vision is too narrow-to optimise the short-term goals (read financial performance and visibility) mainly for their shareholders and customers respectively. The solution lies in creating 'shared value' which involves creating economic value in a way that also creates a value for society by addressing its needs and challenges. I believe the idea provides a definite stimulus to the ongoing debate as to how the businesses should indulge themselves in societal affairs. One idea could be to see if societal resources (for example idle youth and neighbouring communities) can be optimized by applying same business principles and tools, that have been the hallmark of success for the business. Any further thoughts on this would be welcome!    

Attachments:

• The Big Idea Creating Shared Value - Harvard Business Review[1].pdf, 263 KB

• ▶ Reply

Permalink Reply by Nimesh Singh on February 27, 2011 at 5:57am

 i wnat to know about your all programs due to which i get guideline to oprate them in my locality.

• ▶ Reply

Permalink Reply by Nita Nehru on February 28, 2011 at 11:30am

Thanks for re-starting this discussion, everyone!

 

I think in recent months, social enterprise has been gaining traction and getting much more attention than in the past, but there is a concern abuzz that the microfinance crisis which transpired in late 2010 will affect the positive reception of social businesses. While I disagree with this view (I think social business is here to stay, because it is an effective way to address many of the global challenges we're currently facing), I'm interested in hearing other thoughts on the matter.

 

Thanks!

• ▶ Reply

▶ Reply to Discussion