Building Social Business: The New Kind Of Capitalism That Serves Humanity's Most Pressing Needs Hardcover – May 3 2010
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CHOICE, September 2010
“In nine short, well-written chapters, Yunus provides genuine insight into global poverty and a unique perspective on the ways in which social businesses can coexist with traditional businesses to alleviate poverty and improve the lives of the world's citizens.”
“There are times when Professor Yunus' aims for Glasgow sound like something out of the Conservative's "Big Society" pitch. His latest book, Building Social Business, is 300 pages of Big Society pleading for people to go out there and create businesses which generate cash and contribute to the greater good at the same time.”
“Yunus’s approach is balanced and practical. There is no sermonising or the usual ‘we are from the not-for-profit sector and do gooders so we know best’ approach… one cannot but marvel at Yunus’s intense attempts to champion the cause of eradicating poverty. His is a case of a noted economist making a journey into the real world to face real problems and happily using his personal brand to strike tie-ups with leading multinationals to solve these problems. He needs to be read, understood; and he needs to be judged not only on his results, but on the sheer weight of his efforts. In India, good writing on the social sector is woefully inadequate. While high profile outfits such as the Bill & Melinda Gates Foundation have helped raise visibility in the sector, there is still little understanding of social business. This is an excellent read in that space.”
About the Author
Karl Weber is a writer based in Irvington, New York. He co-authored Yunus’s best-selling book, Creating a World Without Poverty.
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Top Customer Reviews
Premise and foundation are good, but details and execution are lacking.
Overall found it excessively boring and ultimately not helpful.
Most Helpful Customer Reviews on Amazon.com (beta)
Yunus takes great pains to explain the concept, addressing many questions he frequently gets. It is different from a regular business in that all profits are rolled back into the business to create more social benefit, rather than paid out as dividends to investors or owners. He compares Social Business to many other efforts and kinds of organizations devoted to creating social good. For example, unlike a charity, Social Business is financially self-sustaining, not having to devote major resources to getting donations. It is attractive for people who wish to support social causes because the money they invest in a social business comes back to them, and can be re-invested to get further social returns. He also discusses NGOs, Social Marketing, Social Entrepreneurism Corporate Social Responsibility and various new kinds of organizations that are popping up.
After expanding on the definition given in is last book, Creating a World Without Poverty: Social Business and the Future of Capitalism, Yunus goes on to give a comprehensive update of what has been going on in the past three years -- which is quite a lot! For example:
* An update on the Grameen-Danon joint venture to produce affordable nutritious yogurt was given. Mistakes were made, lessons were learned, and the future now looks good.
* A new venture between Grameen and Veolia has gotten started to provide safe arsenic-free water in Bangladesh
* A few health care related Social Businesses are described along with the creation of a nursing school to train locals who then work in the villages or overseas.
* Other separate organizations that are cooperating with Grameen are popping up to disseminate knowledge and expertise in Social Business -- e.g. in Germany, Scotland and California.
* Universities are creating programs. There is a Social Business Chair at HEC, a presigious business school in Paris. This is a step closer to Yunus's dream of having a MBA program focused on Social Business entrepreneurship.
* The first annual Social Business Summit was held in November 2009
Yunus also gives a lot of ideas in many different sectors for how you might start your own social business, along with a lot of
nuts and bolts practical advice. One interesting pattern that is emerging in various social businesses is what he calls the "cross subsidisation" business model. The prices are kept very low in the villages where people cannot afford them, and the full market rate is being charged in the cities where people are better off. This is working for health care, yogurt and water.
Overall this is a great book, telling of what might evolve into a massive shift in how capitalist economies operate. Social Business fills an important gap left by capitalism and can also sit comfortable alongside it.
Yunus has spent his whole adult life thinking about these things, and it shows. He even talks about a separate stock market for social businesses.
Oh, the book is also well organized, clear and easy to read.
We run a social business in conjunction with the Yunus Center, the book inspired us to change how our company was structured resulting in amazing gains. My major criticism is however, major. Yunus describes various Grameen businesses, though he does not make the distinction which ones are social businesses and which are for profit. The context leaves one to believe that they are all socially structured and the only way one would know to the contrary is to have an on the ground knowledge of Grameen operations. What could have been interesting would be to instead embrace the truth and launch a chapter on why some Grameen companies became for-profit. He would have done well to tackle this ambiguity head on.
Reviewed by: Dr. Joseph S. Maresca
This book is an excellent rendition on how to invest in
poor countries while getting a modest return and doing
much good at the same time. The classic profit maximization
model does not produce optimum results because many
working poor simply cannot afford the higher prices.
To some extent, this phenomenom is happening in the
USA. Hence, there are Grameen branches in Brooklyn
and Queens, New York.
Yunus guarantees loans to the poor ; thereby acting as
an intermediary. This is not much different from the
USA government guaranteeing certain loans to
borrowers. The result is that bankers are much more
willing to lend money due to the guaranteed payment.
Borrowers repay in small weekly amounts. Women
have great drive to overcome poverty. The Grameen
Bank lends $100 million dollars a month in
collateral free loans averaging $200 apiece .
The repayment rate is an astounding 98%.
Grameen lends money to beggars to sell toys,
households and foodstuffs door-to-door.
There are 100,000 beggars in the program.
Since implementation of the program, over
18,000 beggars have quit begging.
Grameen offers children of borrowers money to go
to school. And so, 50,000 students are pursuing
medicine and engineering coursework. This program
is microcredit or microfinance at its best. In some
cases, a mother may be illiterate and her children
go on to become physicians and engineers
due to the Grameen Bank.
Grameen Violia Water sells pure water at a price
that the poor can afford. In the future, the
"Artificial Sun" coupled with desalination
may be able to accomplish a similar feat.
The objective of the Grameen program is to
overcome poverty, have a sustainable economy
and have a modest return on the investment.
When loans are paid back, profits are plowed
back into the company not unlike the function
of retained earnings in a for-profit company.
Fabio Rosa has brought solar energy to nearly
750,000 Brazilian homes with no electricity
previously. There is a similar opportunity to do
so for the Palestinians, if the various strategic
constituencies can agree on a workable
Currently, Grameen Telecom, Grameen Energy
and Grameen Well Being serve the poor.
Grameen and Pfizer have a joint cooperative
venture to bring affordable health care to
village clinics through Grameen Healthcare.
A similar cooperative arrangement could be
brought to the Medicaid program here in the
United States in places like Appalachia and
other rural communities where professionals
are hardly ever seen practicing their craft.
The first major attempt to outline Appalachia as a
distinctive cultural region came in the 1890s through
the tireless efforts of the Berea College President .
William Goodell Frost coined the phrase
"Appalachian America" which encompassed 194
counties in 8 states.
The Grameen organizations seek to promote social
business under the umbrella of charitable
organizations and non-profit groups. Universities
and think tanks are another great resource for
Grameen and its people. A successful program
has been underway to cross-fertilize the poor
and the wealthy to deliver affordable bone marrow
transplants for everyone. The assignment algorithms
in linear programming and operations research may
be utilized to bring together donors and patients
Overall, the book is well written by a popular
Nobelist- Dr. Muhammad Yunus. The ideas contained
in this book could be applicable to both
poor and rich countries since virtually every
country on this earth has poor people in
every walk of life .
The rest of my points: 1- Cross-subsidization IS a form of charity. When you charge one person more for an item SPECIFICALLY so that another can buy it much cheaper, you are instituting charity into the transaction. Exploitation is exploitation. 2- The "grameen ladies" work off commission, PROFITing off their efforts. Unless you are impoverished, everyone else in the world who does this is self-centered & shallow, UNLESS of course you invest money in Grameen and waive your right to a profit...huh? 3- Social businesses, charities, etc. DEPEND on the success & subsequent altruism of the so-called "profit-maximizing" businesses they criticize and behave self-righteous towards. Funny, when the bangledeshi's wouldn't buy the highly nutritious yogurt at the fair price Grameen offered it at, Grameen upped the sugar content and reduced the portion size in order to increase profits so they could survive. Really? They made it more unhealthy in order to increase profits? Interesting! More examples like this abound in the book, especially when he covers the competitive salaries offered at Grameen companies. Profit by another name is still...
Regardless of the tone suggested here, I am a humanist and support the eradication of poverty, and the improvement of life. Overrall, I enjoyed this book, as it facilitated deep introspection. I believe in value for value. I believe in choice. I am not of the social business mindset as HE strictly defines it. I believe that profit is a way of saying "thank you" for a job well done. I do not aim to simply survive. I can forgo a 60% profit margin for a 40% one in the best interest of humanity, as I believe many business people would also do without much thought. I have done this. What I will NOT do is pretend that I do not have a right to define & improve the quality of life sought for myself and my family, simply because I already have electricity.
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