The book Creating a World without Poverty: Social Business and the Future of Capitalism by Muhammad Yunus is about the social business, which aims to help poor people improve their living. Primarily, its objective is to meet a social goal. The idea of social business is a business that pays no dividend. The business’ products are sold at prices that enable the company to thrive. The owners of the company can regain the amount they have invested over time, but the investors will not receive any profits or dividends. The profit made stays in the business for expansion, to develop new services or products, and to do more good to the world. The concept of social business emerged to alleviate poverty in Bangladesh where the author saw how unbridled this problem is in the country and all over the world.
The book of Yunus is an eye opener for what has been going on around the world in business. A country may have a progressive economy, but it also brings social problems to the country. For instance, Yunus pointed out that Chinese officials allowed foreign investors to establish businesses in their country but they turn the other cheek when these investors pollute their air and water, making their life worse. These businesses and companies should help make the lives of the people better instead of making them more miserable.
Yunus emphasizes the benefits of social business in the economy of a certain country as well as that of private companies, NGOs, and government. The author seamlessly connected the government, non-profit organizations, and other institutions as well as the corporate social responsibility of private companies. Yunus explained that the government can do something about the poverty of a country. In his example, he illustrated how the government of Bangladesh, -- an overpopulated country -- was able to alleviate poverty, diseases, and social problems. Together with the NGOs and other private sector entities, the government was able to implement programs to alleviate poverty in the country became. These became tools for decreasing the level of destitution in Bangladesh. However, Yunus also said that the government can be powerful but that for some reason, they were not able to see this power being used to continue helping the poor. First, the government can be self-perpetuating, bureaucratic, prone to corruption, slow, and inefficient. According to Yunus, these are all the effects of a government being able to access most of the things in the country. People who want to take advantage of the country use this power of the government.
Yunus presented the concept of social business to people to let them know that they have to pursue social goals. This new kind of business is almost similar to profit- maximizing business (PMB) but with different goals. It is just like the typical company, however the investors cannot take more than what they have invested since it will be used for the other projects of the company. A social business is a cause-driven company rather than a profit-driven one, as it acts as a potential agent of change. According to Yunus, there are two types of social businesses. The first one was described earlier, that is, the social-driven company r. The second one is the profit-maximizing company where the owners are the underprivileged people. This second type of social business is more helpful since the dividend or profit and equity growth are distributed. This will alleviate their scarcity.
Both types of social businesses will eventually help the disadvantaged people. For the first type of social business, private companies will give discounts or even sell some shares at a lower rate to the less fortunate people. When they are lent money from the bank, the bank will just give them a very small interest or even without interest to help them put up a small business. This type of social business has a direct effect on the poor people. The implication of social business to the global world is that it enables underprivileged people to feel that they can still get out from their pitiful situation.
However, corporate social responsibility also plays an important role in decreasing the number of poor people. Banks may not be too trusting to lend money to the less fortunate, but big private companies can always provide job opportunities for these people. The social responsibilities of companies, the effective action of the government to combat poverty, and the aid provided by the banks are precursors for social business, which will be an agent of change in a country.
