Nobel laureate Mohammed Yunus from Bangladesh defines social business as a self-sustainable business created, designed to address the social problems. The social business is a not a new model per se, but it is a new approach of looking at the business with a different perspective to create maximum social impact in the society. The social business model requires new thinking with the aspect of creating maximum value in the society taking the community and the people together for a common good. When the business entity starts focussing the new path it bounds to create altruist impact in the society. However, it should be based on acceptance, embrace the problems faced by the society through collective action with an objective to bring perceptible changes in the quality of life of people. This new approach could create a lasting impact on the society by accepting, collectively to create opportunities for everyone in the community. Besides, that approach has the potential to create an environment of right balance and hence can act as a catalyst for change. Also, the new role if adopted can alter the existing business’ equation significantly in the society by becoming more inclusive in approach & behaviour.
Social business a moment of truth
Time has come for business houses to realise the moment of truth by thinking the way it conducts its business. The moment of truth means business houses need to think and behave as if they are part of the environment and society in which it operates. The moment they see themselves as a separate entity from the society, it leads to the creation of more friction with its external stakeholders and also cannot strike a right chord with the society.
Importance of shared value creation
The current business practices have created enough mess on the environment and society, So the situation certainly calls for a shared value creation means business houses need to extend their hands towards society in which they operate. The decision makers and the employers should internalise themselves the consequence of their action on the society. Henceforth a constant effort and need of the hour is to bring business and society together. Also social business to a great extent can create social harmony and sustainable growth.
Nestle the Global multinational giant has redesigned its coffee procurement process working extensively with small farmers who were trapped in low productivity and poor quality due to environmental degradation. The role of Nestle as a company in giving advice on new farming practices, providing the farmers with plant stocks, distributing fertilizer and pesticides and last but not least company paid the farmers in premium for cultivating quality coffee beans. The social impact created by this move has helped the small farmers in distress and improved their economic benefits and also helped to improve their quality of life.
Impact investment via social business.
Resourceful action seriously can create an impact in the society and could solve the problems faced by society at large, provided stakeholders of the company to act creatively with a mind to usher maximum positive impact in the society. The existing capitalistic business models has been creating unequal scenarios and sapping resources with no remorse has already weakened the nature and society . So going forward if they continue to do same means it would create detrimental effects on the community, natural resources and economy. So social business is the new model of capitalism where owners decide not to take the dividends but keep reinvesting the financial resources for new social business ideas in order to a create much larger impact in the society. Besides, that concentration of wealth in the hands of few can be reduced and effective deployment of resources to the population at the bottom of the pyramid.
Governments’ role as a facilitator
Elected government through its administration alone cannot suffice the role in bringing radical changes in the society and it has proven beyond doubt that collective effort from business houses and industry leaders could bring a very positive and impact full change in the status quo. So Government as a dispensation should become more of a facilitator in framing new laws and policies for a smooth operation of social business models across different areas. Since the magnitude of the problems faced by the majority of the population is huge, it is also equally important that all stakeholders in the society should think and act with empathy to get rid of the issues faced by the society. Hindsight issues at hand certainly ask for fundamental changes the investment made on business and how the profits made out of the business get redeployed to create maximum social impact. The government should come forward with policies to create an environment for such a smooth transition. When proper policies are in place might pursue business houses and its owners to proactively take up the most pressing issues in the society and unitedly find solutions by giving the opportunity for everyone’s sustenance.