The Business Case of Social Business

Bachelor Thesis from the year 2010 in the subject Business economics - Business Ethics, Corporate Ethics, grade: 1,5, EBS European Business School gGmbH, language: English, abstract: During recent years, much has been written about Corporate Social Responsibility(CSR), sustainability, sustainable and ethical supply chains, and the power oforganizations that reaches beyond their core business activities. Social Business, a rathernew form of using corporate power in order to act in a socially desirable manner, wasfirst established by Professor Yunus, Noble Peace Prize winner (2006). It is in contrastto charity because it is not a donation or charitable giving but a real investment into abusiness. The important difference is that with a social business the entrepreneur or theparticipants in a social venture business do not intend to maximize profits but willalways reinvest profits into the business and will keep costs and prices low so a broadrange of non-affluent consumers can afford the product or service (Yunus, Bertrand, &Lehmann-Ortega, 2009, p. 5). Yunus (2006) calls this "doing business for others insteadof for oneself" (p. 4).Since Social Business is a very new concept, little has been written about it yet. There isnot even a generally accepted and shared definition of the term "Social Business".Millions of small social start-ups, whose founders intend to do something sociallybeneficial and who only take out from the business the money they need for their ownupkeep, already exist. However, to differentiate between charity projects and real socialbusinesses is difficult. For this reason, it is impossible to collect empirical data aboutthese start-ups and projects. Much more in the focus of the public eye are socialbusinesses founded by multinational companies (MNCs) or at least renowned nationalcompanies. This often includes a product relating to the key competence of the firmwhich is adapted to the needs of less-well-off consumers and thereby solves a sharedsocial problem. MNCs often use the know-how and competence of non-governmentalorganisations (NGOs) or similar institutions and start social joint-ventures. Since it ismuch easier to collect data about this kind of social business and since their influenceand recognition in industrialized countries at the moment is much bigger than of thenumerous small start-ups, this paper is going to focus on social businesses initiated bybig companies.[...]